Conspiracy of Optimism

Interesting discussion by NYT media columnist David Carr on a recent CNBC Power Lunch segment with Nouriel Roubini and Nassim Taleb: Predicting Crisis: Dr. Doom & the Black Swan.

As Roubini and Taleb were discussing a major restructuring of the economy, some of the questions were reflective of what we have previously described as the Conspiracy of Optimism (mad props to SocGen’s James Montier for that turn of a phrase).

Carr notes that numerous websites were somewhat aghast at the hunt for stock tips in the midst of such otherwise serious debate:

“Last Monday on “Power Lunch” on CNBC, there was a segment that many people noticed and passed around the Web. Under the rubric “Turning the Corner,” Bill Griffeth and some of his colleagues were interviewing Nouriel Roubini, a professor of economics at the Stern School of Business at New York University, and Nassim Taleb, a derivatives trader, author and theorist about randomness.

The two guests — known as Dr. Doom and the Black Swan, nicknames that usually land on people who do their best work with chain saws and thumb screws — were fresh off their appearance in Davos, Switzerland, where they were hailed as visionaries for having foreseen the financial crisis. Mr. Griffeth started things out briskly by saying, “What would it take to make you bearish on this economy right now?”

You mean bullish, his co-host, Michelle Caruso-Cabrera, interjected. They cracked wise about Freudian slips, but the entire segment, it turned out, was about trying to somehow find the horns of a bull on two ferocious bears.”

Carr then got to the meat of the issue: Cheerleading:

“The news media in this country are often accused of being contrary and pessimistic, but rarely is that the case. Amid carnage, economic or otherwise, reporters are trained to look for “glimmers of hope,” “signs that the worst is behind us” and “miraculous tales of survival,” especially those that involve a baby — or in this case, a 401(k) — somehow making it through a hurricane, tornado or mudslide.

And for people who cover personal finance, the narrative of big stock swings and instant profits has been replaced by cautious advice about hunkering down with T-bills and cash. Being a financial news anchor must seem like owning an ice cream parlor where spinach is the only flavor on the menu.”

I don’t know why I find it surprising that there is some pushback against happy talk on TV.  But it is an unexpected refreshing change of pace.


Predicting Crisis: Dr. Doom & the Black Swan (February 9, 2009)

Apprenticed Investor: Lose the News
Barry Ritholtz
The, June 16 2005

This Just in: The Market Is Still Dead
NYT, February 15, 2009

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