It irritates me to no end that when the economy was booming and housing prices were exploding analysts spoke glowingly of how it all was supported by “solid market fundamentals.” Now, with everything sliding, these same analysts blame the “consumers’ mood” and the lay person’s “lack of confidence” in banks and markets, as if everything that has gone wrong can be attributed to a global-sized case of the Mondays.
That’s right, dum-dum. It’s all your fault.
You can see a case of this fashionable idiocy here. However, if you have better things to do, like figuring out how to pay down the massive consumer debt you’ve amassed like most Canadians, you can probably make do with the following example from the Globe and Mail story linked above:
Dominique Strauss-Kahn, who heads the International Monetary Fund, has suggested that the world’s major economies are “already in depression.” Economist bad-boy Nouriel Roubini warns that the United States is in a “near depression.”
Such seemingly casual use of the D word has many analysts balking, warning of the effect such a mindset can have in an already fragile economy plagued by a lack of consumer and business confidence… as confidence in the banking system continues to falter, jittery investors drive down stock markets and inflation hovers close to zero…
Catch that? Nouriel Roubini is an “economist bad-boy.” Yep, he’s so bad that he warned of the potential for collapse three years ago and nobody listened. The story is just another symptom of a deep problem - reporters are still regurgitating the opinions of the idiots that got us here in the first place. The fact is that credit markets are frozen because the elite members of the financial class - these chattering analysts included - all thought they were smarter than the next guy and could get away with massive amounts leverage so long as it was securitized by a housing market fiction.
Millions of retirement investors have lost billions of dollars in a few short months, in large part riding the tidal wave of doom in what the suits told them was “the best boat possible” (thanks for that kernel of wisdom, Ms. Evans). Can you blame them for being shy about jumping head-first back into the stock market? Any analyst or financial reporter who blames this recession on the worries of regular people who trusted their advice year after year, plowed money into loser mutual funds and bought homes they couldn’t afford because they were told they could, should be whipped with a millwall brick made out of their own publication and then forced to watch this gem from CNBC’s organ-grinding market monkey, Jim Cramer.
Every business editor should force every business writer to actually read Nassim Taleb’s “Fooled by Randomness” and/or “The Black Swan.” Maybe we could then expect some responsible reporting on this disaster. As it stands the signal to noise ratio is very poor when it comes to financial reporting. Look for a similar post from me the next time I read about how the markets reacted to President Obama passing wind in public - if my head hasn’t exploded by then.
