If you are not interested in left wing political blogs, or don't know anything about the blog Bonddad and I come from, or have no interest in Confirmation Bias, just pass on. This post shouldn't concern you. I promise that boring data analysis will resume shortly.
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Watching an old friend or family member sink into alcoholism, psychosis. or some other self-destruction is sad, but at some point you half to accept that they are lost to insanity. Yesterday Daily Kos reached that point. The issue goes way past the issue of a blog post being right or wrong, but rather of economic blogging that isn't a laughingstock. Sadly, it is clear that the largest number of participants there have completely abandoned the ability or desire to think critically when it comes to the economy, and are so invested in bad news that any story, no matter how nonsensical, that fits into that narrative, will be showered with accolades.
At 2:17 am Pacific time yesterday, a writer posted an entry including the following lede:
This is a major, breaking story of first magnitude if true. One of the country's largest banks is possibly going to be bankrupt within days, due - according to the writer - to a NJ lower court decision about foreclosures, or publication next year by Wikileaks of some internal emails.
The story swiftly became the top-ranked post on that site, and stayed there for hours. Hundreds of people recommended it and over 500 commented about it.
Not one of those hundreds of people questioned its premise.
Not for a full 9 hours and 11 minutes until a poster named Papicek who has occasionally commented here as well, put up the following:
It isn't the first time that writer has been wrong. It isn't even the 20th or 50th. In fact, it isn't even the first time his prediction of Doom due to a corporation going bankrupt has been wrong. Over a year in May 2009 he claimed that there were going to be
At 2:17 am Pacific time yesterday, a writer posted an entry including the following lede:
... (you probably will start noticing it in the MSM soon, if not this morning), it appears that over the past 18 hours our country's largest bank, Bank of America, may have entered into the final stage(s) of a fairly swift implosion. Obviously, the economic, political and social implications of an event of this nature and magnitude occurring right now--if it does continue along its apparent trajectory even for a few more days--are nothing less than horrific.(my emphasis)
....
Yesterday, MSM and blog stories started surfacing concerning two separate issues ... with either one providing more than sufficient cause to drive the two-trillion-dollar behemoth into receivership, or worse--that place where almost all divine oligarchic institutions have gone of late: taxpayer exponential bailout hell.
This is a major, breaking story of first magnitude if true. One of the country's largest banks is possibly going to be bankrupt within days, due - according to the writer - to a NJ lower court decision about foreclosures, or publication next year by Wikileaks of some internal emails.
The story swiftly became the top-ranked post on that site, and stayed there for hours. Hundreds of people recommended it and over 500 commented about it.
Not one of those hundreds of people questioned its premise.
Not for a full 9 hours and 11 minutes until a poster named Papicek who has occasionally commented here as well, put up the following:
DJIA is up 249.76 points today and I've yet to hear anything on this from CNBC. If BoA's in trouble and it hits the MSM, it'll hit the markets hard, unless BoA has one of those special lending facilities sweetheart lines of credit available from Treasury, the Fed and/or the FDIC.
So far, all I'm hearing is market rally cheerleading on CNBC.
BTW, Bob Pisani reports that the market buzz is that all the Bush tax cuts will be extended. So, it looks like the US Chamber of Commerce Brotherhood of Thieves and Pickpockets think they're going to get what they paid for from the GOP and corpradems.
BAC shares went up 0.34 today as well, as did all 30 Dow companies.
Another two hours passed, and then a poster named Escamillo said:
You guys should take advantage by shorting BoA stock. It's not just rich fat cats that are "investors", normal people are as well, and you can be too. And if you guys are so sure that BoA is going to tank, you'd be a bunch of saps not to take advantage.
To me, this diary smells like wishful thinking in the guise of objective analysis, but for those of you taking this diary as objective truth, you can make a huge killing.
I know that there are many people who read both that blog and this one. If you do, riddle me this:
If Bank of America is potentially within days of going bankrupt, and its stock going to zero, why are the following statements all true?
- that possibility was never mentioned on CNBC.
- it was never mentioned on Bloomberg
- it was never mentioned on CNN Money
- it was never mentioned on the Calculated Risk blog
- it was never mentioned on The Big Picture blog
- it was never mentioned at Seeking Alpha (investment site)
- it was never mentioned on Mish's blog (and Mish has been a Doomer for ages)
- it was never mentioned at The Automatic Earth (uber Doomers)
- it was never mentioned at Zero Hedge (specializing in short selling stories)
- it was never mentioned at Financial Armageddon (another Doomer site)
- not one short seller like Bill Fleckenstein wrote an article nor appeared on any financial channel to try to panic investors so that they could cash in their short positions for a hefty profit.
In short, why was the first - and only - person who broke this First Order Magnitude Story somebody who has no particular investing acumen, who has no financial position, who is not an economist or advisor, but rather an obscure public relations flak who apparently has a small credit-checking business on the side?
Because the story is ludicrous, that's why. The story was based on a major factual error by the writer. He relied upon this Business Insider story that said that BofA shares were down 1.7% on Tuesday, and misread it as 17%. With that mistake, he assumed BofA was beginning a death spiral. Even though ultimately his factual error was pointed out to him, all he did was delete the reference, but he did not change his story at all - even though its premise was completely undercut.
And so invested in any story of Doom were his hundreds of readers that it never dawned on them that the story might be wrong. They made it the number 1 story for hours on end at a supposedly "reality-based" site.
This isn't about whether the economy is "good" or not. It is close to the worst level in 70 years. This also isn't about whether the economy is "improving" or not, and for what percentages of people, although I think the evidence is that it is improving for most people who are employed. Further, I claim no special knowledge of BofA. Who knows what unknown events might lurk in the future.
No, this is about basic rationality. BofA isn't going bankrupt because of Wikileaks, nor because of some lower state court decision about foreclosure improprieties. And it is absolutely not going bankrupt in the next week.
If Bank of America is potentially within days of going bankrupt, and its stock going to zero, why are the following statements all true?
- that possibility was never mentioned on CNBC.
- it was never mentioned on Bloomberg
- it was never mentioned on CNN Money
- it was never mentioned on the Calculated Risk blog
- it was never mentioned on The Big Picture blog
- it was never mentioned at Seeking Alpha (investment site)
- it was never mentioned on Mish's blog (and Mish has been a Doomer for ages)
- it was never mentioned at The Automatic Earth (uber Doomers)
- it was never mentioned at Zero Hedge (specializing in short selling stories)
- it was never mentioned at Financial Armageddon (another Doomer site)
- not one short seller like Bill Fleckenstein wrote an article nor appeared on any financial channel to try to panic investors so that they could cash in their short positions for a hefty profit.
In short, why was the first - and only - person who broke this First Order Magnitude Story somebody who has no particular investing acumen, who has no financial position, who is not an economist or advisor, but rather an obscure public relations flak who apparently has a small credit-checking business on the side?
Because the story is ludicrous, that's why. The story was based on a major factual error by the writer. He relied upon this Business Insider story that said that BofA shares were down 1.7% on Tuesday, and misread it as 17%. With that mistake, he assumed BofA was beginning a death spiral. Even though ultimately his factual error was pointed out to him, all he did was delete the reference, but he did not change his story at all - even though its premise was completely undercut.
And so invested in any story of Doom were his hundreds of readers that it never dawned on them that the story might be wrong. They made it the number 1 story for hours on end at a supposedly "reality-based" site.
This isn't about whether the economy is "good" or not. It is close to the worst level in 70 years. This also isn't about whether the economy is "improving" or not, and for what percentages of people, although I think the evidence is that it is improving for most people who are employed. Further, I claim no special knowledge of BofA. Who knows what unknown events might lurk in the future.
No, this is about basic rationality. BofA isn't going bankrupt because of Wikileaks, nor because of some lower state court decision about foreclosure improprieties. And it is absolutely not going bankrupt in the next week.
It isn't the first time that writer has been wrong. It isn't even the 20th or 50th. In fact, it isn't even the first time his prediction of Doom due to a corporation going bankrupt has been wrong. Over a year in May 2009 he claimed that there were going to be
upcoming six-figure job losses certain to occur throughout the auto industrydue to the presumed liquidation and disappearance of both General Motors and Chrysler.
The long, long record of blown predictions by that writer isn't even the point any more. Rather, the slightest amount of critical analysis would have led one to the questions finally posed by Papicek a full 9 hours after the story was published. But no such critical analysis was to be found, and those who could provide it no longer will do so at that site.
At at some time you go beyond simply being wrong to being looney. Not just the writer, but all those who were so psychologically invested in bad news that they uncritically accepted and endorsed yesterday's lunacy, have reached that point.
At at some time you go beyond simply being wrong to being looney. Not just the writer, but all those who were so psychologically invested in bad news that they uncritically accepted and endorsed yesterday's lunacy, have reached that point.
27 comments:
DKOS is a pretty sad place for sane econmic commentary with a few exceptions.
...it was never mentioned on Bloomberg
it was never mentioned on CNN Money...
You SEE!!? That's proof of how deep the conspiracy is to keep the Real Story of DOOM concealed.
And we KNOW that bonddad is on the take from Big Banks. And New Deal democrat is just another one of his accounts.
WAKE UP SHEEPLE!
Sigh. I used to enjoy DailyKos.
I'd say your analysis is true of any politically ideological site. Seems like people on those sites basically let go of critical thinking and rationality for madness. That's why Bonddad is one of the few economic blogs that I respect because it's just about the facts.
I can certainly appreciate your concern that unfounded rumors can get too much attention on blogs, DailyKos included. As your post suggests, the mechanism for shooting down those rumors is the critical comment. Unlike here, the blog author there isn't able to directly approve or disapprove a comment and so those comments can serve to shine a little daylight on a blog entry and they force the blog author to defend his assertions.
So I have to ask you, did you make your points against the author of the post there or only from your perch here? Had I seen the post and your comments, I would have likely been persuaded that the post was bunk... And that's the way its supposed to work.
But I think it's a little much that you paint so much of the DailyKos community as insane or looney simply because it took 9 hours for somebody to say the emperor had no clothes.
I think the real bottom line to it all is that we need you there as much as we need you here.
I'm certain many were just like me.. They see the diarist's name and the foreword and they skip it knowing it's going to be full of crap. For a microsecond I considered commenting but didn't waste my time.
Just one quick note but after all the records created to the downside of housing we actually made a record to the upside in pending home sales by increasing 10% in one month. Just something to keep the doom in perspective.
It's sad and disappointing to see that place devolve into a looney bin, but the crazy has been percolating to the surface for some time.
Reality based no more.
5 years ago DailyKos was hourly reading for me. I didn't comment much, but I could usually find something there that would interest me. For me that changed during the 2008 election, some of the stretches of logic were hard to take, and it sounds like things have just gotten worse since then. Now when I check to see if there's anything that might interest me, I rarely find anything on the front page or in the recommended diaries to click on.
Thank you for this. I have about given up on that site, which has almost entirely been given over to hysteria and irrationality lately, particularly on economic matters. The doomer you reference has been predicting various forms of apocalypse for years now, none of which has actually come true, but for some reason he retains a loyal following. I guess that's the benefit of being a doomsayer--the end times never quite get here, so you're free to keep predicting them until...well, the end times, I guess.
It's worse than that. Like the Boy who Cried Wolf, the impact of the shrill makes news that IS a big deal difficult for people to take seriously.
For example, the word "conspiracy" is taboo these days. Suggest anything is a "conspiracy" and you're automatically regarded as a kook. Yet the dictionary definition is quite modest. A bunch of people secretly coordinating to screw someone over? Yeesh, that happens thousands of times every day. It just doesn't involve extraterrestrial experiments or secret cults.
Now, much of that is due to corporate and government PR whores using ridicule to deflect criticism, but extremist kooks lend them credibility. When they can point to DailyKos lunatics making baseless predictions that BoA is about to implode, the next time a big bank the size of, say, Bear Stearns goes under, it'll be that much more difficult to make sure people get accurate information because there's no simple way for laymen to separate fact from hyperbole.
I started following Bonddad on DK a couple of years ago. He was one of the few sensible economic commentators there. After he left the ideological trolls took over. The same thing seems to be happening in other content areas now,so I decided a few days ago to stop going there.
Most of the political blogs are, well, political. Good for a laugh when they try to talk about economics or the markets.
I know who you're talking about, of course. I regard him as a fine muck-raker and a piss-poor economist. The problem is that he doesn't know he's a muck-raker and he thinks he's an economist. He was dead wrong today, of course.
Meanwhile, I'd really like to know how you guys think the cut-off in unemployment benefits will affect the economy.
When Bonddad left DKos, rationale economic thought left. I still check for interesting stuff -- but never for economics. I skip those entries.
That said, thanks for the good analysis done here. It is very useful.
muckdog -
A little context is in order; we didn't come from just any blog. The media was already working overtime to get the country to hate Al Gore, but after 9/11 the entire country went full retard right-wing. It's like the people were going to impose a fascist state themselves. Some of the things said by the Bush Administration were -- with no hint of exaggeration -- Goring-esque. And for their creepy rhetoric they enjoyed approval ratings in the 90s. Honestly, for a while I thought the country was permanently broken.
Kos was always partisan, but back then DailyKos was actually a safe haven for anyone who wasn't crazy. Economists, scientists, even veterans who wouldn't drink the Kool-Aid (including Kos himself) were pretty much isolated from the national discourse and replaced on TV with neutered talking heads like Alan Colmes who supposedly represented liberalism, but really just cowed to the likes of Sean Hannity. Kos gave everyone else a voice, and his site exploded in popularity. Back then, even a level-headed guy like bonddad could really only find an audience on DailyKos.
Was it so long ago? No, it was only 2002; yeesh, how quickly people forget. The GOP showed their true colors and it was so ugly they managed to go from "permanent majority" to losing Congress in four years despite unprecedented cynical gerrymandering. As rational people were forced out and found other ways to be heard, DailyKos degraded from being a safe-house for rational people to a shrill echo chamber. Now it's the openly partisan Kos who's the lonely voice of reason on that site.
I'll be eternally grateful to Kos for giving so many people a voice at a time when few would, and for that reason I take Net Neutrality VERY seriously. At the same time, I can't go back to that place as it is; it really is a nuthouse now.
It's a political website, what did you expect? The Rec List always had it's share of crazies, but Kos keeps it for when the great stuff bubbles it way to the top.
Without Bonddad, there are no serious economic bloggers on DKos.
And to be fair, dragonchild, I don't think political sites lend themselves well to an open-minded discussion on most any subject.
If someone wants to go on about black swan events, they might at least try events that make moderate sense. That seems not to be happening on Daily Kos.
For example Speaker Boehner probably has not yet figured out that some fraction of his newly-elected tea party Republicans actually mean what they say about not increasing the National Debt any more. Adequate pigheadedness, the deepening era of bad feelings, and Boehner insulting Democrats can lead to a position where the votes for a debt increase are actually not there. This does not lead to default, but it does drop Federal spending remarkably.
For example, further Wikileaks make clear that the current German government was rather more complicit than believed in not prosecuting the people who kidnapped and tortured the innocent German citizen who had the name of an alleged terrorist. The German Free Democratic Party, which as close as Germans have to a Libertarian party, namely they are classical liberals, exits the governing coalition and forces new elections, leaving a paralyzed German government ... just in time for the Italian and Spanish bailouts to need strong German leadership.
Happy New Year!
I still go there...and unfortunately against my better judgement,I've posted out of anger and frustration at the crap that gets posted. Even some of the frontpagers
have seemed to have lost their minds. I almost feel like it is a conspiracy of LaRouchians and Alex Jones followers who have infiltrated the place.
You mean that Ron Paul is not a great progressive economics analyst? By gum, that's a shocker.
For all intents and purposes, the rule against conspiracy theories has been inoperable at Daily Kos for quite some time.
It's one big circle jerk of hysteria, including much of the front page. Too much group think. The few sane people that are left post less frequently.
Daily Kos, like all political blogs, has always been home to some crazy people, but the crazies used to be balanced out by those interested in rational discussion. The latter have moved on to other blogs, Twitter, and/or offline political activism.
At some point, the netroots folks will realize that the path towards respect, sustained influence and more progress isn't coddling crazies but being inclusive of those who bring knowledge, analysis and sanity.
DKos is Redstate on estrogen...
Both have completely devolved into blubbery pools of ignorance and bias.
Utterly useless....except for providing occasional laughs....like one laughs at ethnic jokes....you usually feel a little dirty afterwards....
Joe Sayers: The whole point of people being "psychologically invested" in a position is that they cannot be reasoned with. Look at the other commenters in this thread who have also given up. I am under no obligation wahtsoever to walk, high-noon-like, solitarily into a hive of retarded killer bees.
I left DKos after the Healthcare fiasco. I followed Bonddad here because his postings are based in facts and rational analysis. DKos is now off my favorites list and I no longer visit there. I visit few political blogs now as most are on either side of the spectrum (full left or full right).
Hmmm, let me guess. You're probably referring to a daily poster there with the ironic initials "BS." That guy is a fucking clueless first class hack! His "diaries" are cut and paste jobs and he rarely has any original thoughts. His predictions suck - he was wrong about Elizabeth Warren not being appointed to CPA, he was wrong about Geithner being indicted, and he was wrong about the stock market collapsing again this past summer. LOLZ!!! There are still idiots over there today predicting a double-dip recession! They are clueless.
Confession #1: I still read dKos, even some of the wackier diaries, and I will most likely continue to read dKos until Republicans actually embrace sanity again. (Not holding my breath on that one.)
Confession #2: I thought Bondad was just cheer-leading for Obama for the past two years, and so I missed a wonderful opportunity to make money with my investments, rather than sitting on cash. (and gold, but that's a another story.) In short, I have finally come to realize that BD calls them as he sees them, and doesn't let politics cloud is vision. That's no guarantee he'll always get things right, of course, but I'm definitely paying more attention to his (and NDD's) analysis now than I did earlier. Keep up the good work!
I happen to be one who listened to Bonddad in fall-winter 2008, invested based on his (and W. Buffett, and a few other people whose judgment I've come to trust) prediction that the worst was behind us, and have seen a 65 pct increase in my portfolio. So I am thrilled to find this blog - and I think it's my fault Dkos has jumped the shark. Member since 2003 ... I finally bought my lifetime subscription about a month ago, at which point all the front pagers lost their minds and it became an anti-Obama site. D'OH! I hope sanity will return, as it generally does.
Glad to find you all here. You should post your blog link weekly on Kos just so others like me can find Bonddad and yourself.
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