Quell the Commentary!


If only no one had mentioned Fannie or Freddie over the weekend . . .


After a Yahoo Tech Ticker appearance earlier this month (Battle Over the Bottom in Financials) I received one of my all time favorite pieces of email.

It was so damned good I simply had to pass it along:

From: DG
Address: NJ
Email: noone@anywhere.com

Tue 8/12/2008 4:01 PM

Investor Type: Individual
Investor Assets: Less than $1 Million
Interested in: FusionIQ Investor service

Heard about at: Yahoo.

Additional comments:

Dear Barry Ritholtz

I just heard your commentary on Yahoo’s Tech Ticker.  It’s this type of commentary that creates the psychological reaction that is the \”real\” cause and effect of these troubling times and rapid swings in the market.  Granted, there are fundamental difficulties in the market, but perhaps you should just report on the known facts and not on pure speculation that you are probably using to profit from.

I’m just a concerned individual investor, who just like the countless millions of other investors, see their investments get zapped every time an analyst makes a comment unfounded by actual facts.

Quell the commentary!


Before dissecting the content, a few errata worth noting: The emailer was anonymous (as cowards often are). I love the utter refusal to acknowledge
reality, and the blame shifting — classic! It may as well have been Phil “Mental Recession” Gramm himself.

Now let’s move onto this bit of ignorant, foolish, BenSteinery:

1) The Yahoo chat was a mostly factual discussion of Financials, and how 3 different analysts saw them; (Of course, anything discussing a bad sector is negative and should therefore be ignored!)

2) What is opinion and what is fact is clearly defined (assuming you are even half intelligent);

3) The opinion portion is the same old song and dance I have been discussing for the the better part of 3 years — and its why we have avoided owning the Financials for so long; Why should this old perspective be having an impact now — but not in 2005/06, when it was virtually ignored?

4) I move markets? I don’t think so;

5) Had our emailer done their homework, perhaps they might not be so buried in financials, banks and brokers. If they weren’t blind speculators throwing darts, that might not be getting slaughtered.

6) Seeing commentary as the problem, as opposed to the fundamental issues as what’s wrong, is a form of denial. Its the same intellectual failure as refusing to admit there is a recession.

7) All of the above is OK, as it helps a prime function of the market: It is the markets’ job to reallocate money from the ignorant to the intelligent, from the lazy to the hard working and studious; from the naive to the educated, and from the speculator to the investor.

Quell the Commentary? Never!


The Battle Over the Bottom in Financials (August 2008)

Street Fight: Analysts Battle Over the Bottom in Financials
Henry Blodget
Yahoo, August 12, 2008

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What's been said:

Discussions found on the web:
  1. siv commented on Aug 19

    Sounds like you got trolled.

  2. sysin3 commented on Aug 19

    methinks that could have been Krudlow ;-)

  3. Chris commented on Aug 19

    It’s almost hard to blame them….especially when banks are still sending out emails like this.

    “As a ShareBuilder Customer, you’re already accustomed to simple and affordable ways to invest. What if getting a mortgage worked the same way? Meet the Orange Mortgage. With no surprises and an easy application process, the Orange Mortgage is a great way to make a house your home:

    * Rates as low as 5.50% (5.665% APR) for the first five-year fixed rate period for loans up to $500,000. The rate for the Orange Mortgage adjusts annually after that.
    * Low closing costs, no bank fees and no points
    * Options that match most homeowners’ needs
    * You can save thousands in interest and pay down more of your principal”

    I received this in today’s junk box.
    Banks are still peddling ARMs to suckers.

  4. HCF commented on Aug 19

    > 4) I move markets? I don’t think so;

    Au contraire! BR, you are solely responsible for the implosion of FNM/FRE, along with Russia’s invasion of Georgia, global warming, oil going to $145, and Nastia Luikin getting screwed out of the gold medal on the uneven bars. I think if we go back and watch the tape, you may also be the second shooter on the grassy knoll…

    Keep up the good work! =)


  5. Chris commented on Aug 19


    Sharebuilder is ING Direct.

  6. Marcus Aurelius commented on Aug 19

    Barry, if that goddamned gorilla in the living room hears YOU talking about him, he’ll kick MY ass.

    We don’t acknowledge the gorilla ’round here.

    There is no gorilla.


    – anonymous

  7. RJ commented on Aug 19

    “and from the speculator to the investor.”

    With all due respect, Barry, I believe you have misused the word ‘speculator’. I would suggest saying “from the gambler to the investor.” There does indeed exist a segment of market participants that are consistently successful speculators.

  8. Namazu commented on Aug 19

    I’ll bet if you don’t talk about the market, AND you don’t watch the market, then it will never go down. No peeking! What, you don’t trust me?

  9. polizeros commented on Aug 19

    Does he squawk when a commentator says something he perceives as dumb and his stocks go up?

  10. Click Broker commented on Aug 19

    Barry: Enough with the technically insolvent, mark to market and foreclosures. Give me new information. Tell me about FNM and FRE cash flow, profitability of new business, and when or if they will actually run out of cash. The fact that FRE paid 117 BP over Treasuries is meaningless; it’s still very cheap financing. And a 6.5% to 7% mortgage rate is historically very good. And finally, tell me what’s on Bill Miller’s mind.

  11. John B. commented on Aug 19

    Don’t be so upset. Without people like your emailer, who would be there to donate their money to the forces of good?

  12. JayDawg commented on Aug 19

    I’m impressed. I had no idea Thain knew how to use e-mail.

  13. Jeff M. commented on Aug 19

    I had no idea McCain knew how to use email but I digress –

    Barry – you should be flattered that this emailer thinks that you move markets. Now that’s real influence!

  14. Eric commented on Aug 19

    Cramer also discussed today the weekend mention of Fannie/Freddie. The gist was eerily similar to his self-serving, deceptive rant last year, i.e. the government is ruining the market. Am I the only one who can see that Cramer is creating a hedge for himself? “Market is up? Great, I called it! Market is down? Stupid Fed. They know nothing!!! They know nothing!!!!” In a way, Cramer never left the hedge industry. Only now he hedges predictions and not stocks.

  15. Jeff M. commented on Aug 19

    @Eric: You hit the nail on the head. When Cramer sees his forecasts go south, he quickly blames, the Fed, the SEC, the weather, anything “beyond his control” (e.g. “if only the SEC had enforced the uptick rule, the financials would have been fine and we wouldn’t be re-testing the July 15th lows”) that he can throw out there to take the heat off of him. It’s pathetic.

  16. Stuart commented on Aug 19

    He’s a conscript of the confidence game. Nothing wrong with these companies, it’s just that we don’t understand them I guess. Right!
    Next time Raines should at least use his own e-mail and not anonymous…..

  17. bobbyside commented on Aug 19

    Whatever happened to Michael Schumacher??

  18. Venndata commented on Aug 19

    It always give me a chuckle when “real Americans” like this clown who wrote Barry don’t like it when people actually act on their First Amendment Rights.

    Like, for two hundred and thirty years all that Bill of Rights stuff was OK, but not since I bought a thousand shares of GE at my new Etrade account.

  19. Bob A commented on Aug 19

    you mean “Ciao MS”?

    …think he’s in Italy brushing up on his Italian

  20. Frank commented on Aug 19

    I wish financial news programs like CNBC would preface their contributors’ comments on the stock market with a YTD, 3-Yr and 5-Yr performance of the contributors’ personal portfolios. I know they sometimes display performance of the funds contributors’ manage for clients, but I’m more interested in the performance of a contributor’s personal portfolio. Why would I want to listen to the investment advice of someone who has a lousy (or no) track record of investing their own money?

  21. Mark E Hoffer commented on Aug 19

    Posted by: RJ | Aug 19, 2008 8:25:19 PM



    most words, see: Ripley’s, have more than one definition.

    It’s like Nick choosing to assume, Question asking isn’t that hard.

    Though, with this: “I would suggest saying “from the gambler to the investor.” ”

    Would you consider 403(b) accounts holders, for instance, ‘gamblers’? To an earlier point of mine, there are droves of similiar account holders that believe/are repeatedly told that they are doing the wisest/safest thing possible and that “Options” & “Futures”, that could, legitimately, hedge their exposures, even beyond those accounts, are for Gamblers.

  22. GuinnessFan commented on Aug 19

    That e-mail sounds like a Ben Stein editorial.

  23. km4 commented on Aug 19

    Jack Cafferty of CNN on Bush and McCain

    He will leave office with the country $10 trillion in debt, fighting two wars, our international reputation in shambles, our government cloaked in secrecy and suspicion that his entire presidency has been a litany of broken laws and promises, our citizens’ faith in our own country ripped to shreds. Yet Bush goes bumbling along, grinning and spewing moronic one-liners, as though nobody understands what a colossal failure he has been.

    I fear to the depth of my being that John McCain is just like him.

  24. Mich(^IXIC1881) commented on Aug 19

    Marcus: what gorilla? oh that one? they are telling me it is a baby monkey

    Eric/Jeff: aren’t successes always internal and failures always external?

    Emailer: Quell buying stocks

  25. teraflop commented on Aug 19

    Someone complained to me today about the “gloom and doom” I was sharing with them (you know, “bunk” about default spreads, extended swaps programs, etc.). I told them if they’re fed up of that, turn on the cheerleading media for some balance.

    Don’t quell the truth, Barry!

  26. Kid Dynamite commented on Aug 19


    Barry, we all know you are the same guy who SPECULATED in oil and caused so much pain for the average American gas hog, while at the same time you were mericelessly shorting financials and attempting to destroy our banking system.

    Please stop spreading falsehoods and trying to take advantage of the hard working middle class American in order to advance your personal wealth.


  27. cfe commented on Aug 19

    You tell ’em, Barry.

  28. alex commented on Aug 19

    Phil Gramm sent that e-mail.

  29. rickrude commented on Aug 19

    bernanke moves markets… not barry.
    Let the US financials/banks go bust, that
    would clearly revitalize the rest of the
    market and mark a meaningful bottom.

  30. KnotRP commented on Aug 20

    It’s not a dead parrot. It’s resting. Beautiful plumage.

    it’s a flat out refusal to acknowledge reality, in the face of obvious facts. It’s just missing the funny delivery…

  31. dan k commented on Aug 20

    The Titanic sinking was due solely to negative thoughts.

  32. freejack commented on Aug 20

    Wow, that was like a Redux of the wingnuts when Iraq started heading south in ’03.
    “stop talking about the people getting blown up….we’re building schools!”

    Some strange folks out there….

  33. Hugh commented on Aug 20

    Barry – keep fighting the good fight my friend. This is the kind of economic insight that the rest of the nation needs to hear.

    Being stationed in Germany, my news coverage on the economy back stateside is limited. However, I can honestly say that you and Roubini have helped me take what funds I do have and make smart decisions based on what is going on.

    Keep up the good fight!

  34. Will Divide commented on Aug 20

    As an individual investor with assets under half-a-mill I went very very long on cash almost a year ago. Small boats should keep out of big seas.

  35. Len commented on Aug 20

    One of the problems the “individual investor” has is just as you describe, they don’t do their homework.
    It seems to me that many watch the talking heads and some take what’s said as gospel.
    I’m a retail broker and I actually have clients that watch TV,hear someone comment and then call me and buy or sell. I try to talk them out of hasty transactions but I simply don’t have the ability to save the “fool and his money”.
    It’s one of the reasons that I think what’s needed is to make the talking heads abide by the same rules the retail brokerage industry has to live with. It would certainly slow down some to the hype.

  36. john Doe commented on Aug 20

    PLEASE BR… Never Shut up. These same people that want you to shut up listen to the fools @ CNBC. WE are a country of free speech…Speak..speak the truth.

    It always amazes me how Republicans/free market investors are such hypocrites.
    1. Free speech, only if you agree with us
    2. Free markets, only if the price goes up
    3. Fiscal conservatives that run record deficits…. etc…
    You and Mish have made me lots of money… Love it in Dubai

  37. Eric Blood Axe commented on Aug 20

    Be careful, you may find yourself on the No-fly list.

  38. someone commented on Aug 20

    The OP was an idiot!! Maybe if he wasn’t so busy watching American Idols like the rest of America, then folks can educate themselves, do some homework and really tell the difference between fact and fiction.

  39. Harleydog commented on Aug 20


    I would humbly counter that an investor is a speculator who made a mistake and will not admit it.

    Prudens Speculari

  40. GB commented on Aug 20

    Why is he interested in Fusion then? I’m confused…

    BTW I love #7 BR. You should copyright it… I just emailed to some family members to keep in mind as they are investing and moving around 401k’s and such.

    Excelent Job and don’t stop doing interviews or get flustered from these types.

    Thanks again

  41. Toro commented on Aug 20

    “I move markets? I don’t think so;”

    Yes you do! You da man!

  42. ben commented on Aug 20


    I’d forward the e-mailer to link to the latest gloomboomdoom report. There are lots of nice charts in the monthly letter for August so that Faber’s mention that his friends think the S&P will go to 500, which indicates a 5-6k DOW won’t seem like “pure speculation” “that he’s trying to profit from”

  43. Greg0658 commented on Aug 20

    riding home with the wind in my face last night … I realized (again) that we can’t live without business and biggie corporations in todays world
    (we might see the pass away of small business)
    but business can’t live without our purchasing power (I think)(you wonder some times)

  44. Elizabeth commented on Aug 20

    Love #4… it’s quite a compliment when people suggest you have the power to move the market. People have accused me of “working for the shorts” to keep stocks depressed — if this is true, the shorts owe me a paycheck by now.

  45. Spartacuss commented on Aug 20

    I think flim-flam is a cultural neccesity, a by product of free speech where there is so much noise and hype, that even if someone was the ultimate oracle of the markets (there seems to be some) no one would listen anyway, or if they did, they would still let thier emotions get the best of good judgement. Quoting myself I say “there are no safe investments” unless you are on the inside of something big, which for us peons is not likely. Trouble is everyone wants to “shoot the moon” and get rich quick; it’s doable, but not realistic.

    So, let ’em rant, let ’em rave ‘cuz we all crave.

  46. phatmary commented on Aug 20

    what is the obsession with ben stein? what’s the dynamic going on there?

  47. napster commented on Feb 12

    It is the markets’ job to reallocate money from the ignorant to the intelligent, from the lazy to the hard working and studious; from the naive to the educated, and from the speculator to the investor.

    ~ ~ ~ ~
    This is one of biggest myths surrounding the fallacy of the market. The market does indeed reallocate money, but it may not be from the ignorant to the intelligent, or the lazy to the hard working, or even from the naive to the educated.

    The market is just a place where people make money. Some people have an amazing ability to make money, but this ability does not make them less lazy, less ignorant , or even less studious. Persons with an inherited source of funds might be so lazy and ignorant that they hire people to make them money. A lot of intelligent people make foolish decisions because of delusion and even ignorance.

    A lot of people can make a lot of money, but the market itself does not innately reallocate money in the best interest of society as a whole.

    That’s why government has been the parent of the market place since before the Roman Empire.

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