Friday, April 15, 2016

Now, MarketWatch Takes a Swipe at Zero Hedge

Yesterday,  in the New York Times, Paul Krugman took a swipe at Zero Hedge.

Now it's Steve Goldstein, D.C. bureau chief of the Wall Street Journal owned MarketWatch, turn.

In  a piece titled,  The IMF is turning into the ZeroHedge of economics, he writes:
Does Christine Lagarde in her spare time use the pen name of Tyler Durden?

Durden is the name assigned to every author on ZeroHedge, a relentlessly negative — if sometimes prescient — financial news blog.

Lagarde is the managing director of the International Monetary Fund, and she and her colleagues at the international agency have taken a pretty pessimistic outlook on the global economy this week...there’s a danger in making every economic hiccup sound like 2008 all over again. Lagarde risks sounding like Chicken Little — or Tyler Durden.
To be sure, when the question on the economy is: Is the glass half full or half empty? The Zero Hedge answer is likely to be that it is only 10% full but leaking.

That said, ZH is refreshing in its anti-establishment perspective. One wonders if the establishment has had enough of this tone and has determined that it is time to take sniper shots at ZH. Or is it just a coincidence that both The New York Times and Wall Street Journal in separate articles have decided to swipe at ZH?


Also see: Paul Krugman Takes a Swipe at Zero Hedge


  1. The refreshing data and Analysis on Zerohedge has disabused of any belief in a boom. I'm increasingly of the opinion that everything is running on fumes and may fall apart like in the last months of the Bush Administration. I believe the risk of a significant economic and market event increases the closer we get into summer and fall.

  2. You would think that Krugman and Goldstein know their publicity for ZH, no matter how they spin it, means more traffic to ZH.

  3. Well...never you fear Wenzel. Your talk that the economy is hunky dory is inline with the Obama narrative, "so keep up the good work,'re doing a hecka of job, Austrian-know-it-all."

  4. I agree with the ZH perspective that this thing is a house of cards. Although Henry Hazlitt was fretting over $200 billion in Federal debt back in his day. It sometimes seems like they can print and expand credit indefinitely.

  5. Austrian "boom" does not equal "hunky dory". When someone is high on crystal meth there is a flurry of activity and they FEEL great. With all that extra energy they can do the laundry and the dishes(both useful things), but they don't stop there. Most of the activity is arbitrary, if not outright destructive, and the euphoria prevents the user from receiving important messages from his body(eat! sleep!). If he takes more and more meth to get more energy, he will delay eating and sleeping longer and longer until his body is exhausted.

    Similarly artificial monetary expansion creates a flurry of activity. There's more cash available to do things in response to actual market signals, but the activity doesn't stop there. During the boom people do all sorts of arbitrary things (let's all build houses and sell them to each other!) or outright destructive things (let's go to war!). Meanwhile the easy credit disrupts the normal market signals that would tell people to liquidate the arbitrary or destructive projects, and save and invest rather than borrow and spend(eat! sleep!).

    When an Austrian looks around today and says "boom," he's saying "This is a wild party! Everyone's high on meth, dancing and having fun!" He is not saying, "This is healthy and sustainable."

  6. The difference between Wenzel and others of the Austrian persuasion is that he STILL sees the BOOM this year going. The party is still going with no end in sight according to him. Why do you think he keeps posting BLS lagging indicators?

    When does the party end you ask? Well, according to Wenzel and his interpretation of ABCT, that depends on the M2 and the unemployment numbers, and GDP numbers. He relies on statisticians to tell him the good times are over.

    I and other Austrians do not rely on M2 to tell us the economy is headed for the bust. The bust is inevitable for those that really understand ABCT, it is a matter of time before the Entrepreneurs in the economy realize that their malinvestment will not yeild the returns they thought. There are triggers that the economy is beginning to realize this, that the BOOM phase is ending. But Wenzel is insisting that the party is on......he believes that the economy is so booming that the FED will raise rates to slow things down this year. Wenzel, believes they will raise rates 3 to possibly 4 times this year, because the economy is overheating.

    1. This is my understanding as well. Retail sales, industrial production, wholesale inventories to sales, auto inventories, ISM, etc. are at levels indicating seriously bad things to come. Of course, I'm just peddling fiction. Sigh...shakes head.