Everyone Talks Their Book . . .

Alternative title: Overlaying Ideology On Every Market Event/Crisis

One of the things I love most about the market is how it acts as a Rorschach test for participants and other various hanger on-ers.

For any market event, there are myriad explanations, rationals, and Monday morning quarterbacking. Experience shows us that most of these commentators are not honest brokers of information, analysis or opinion. Instead, many are people with a previous agenda, ideology or bias. They strain to insert their issue onto whatever is going on. They push their way onto the dialogue regardless of subject matter.

They are the boorish party guest who wants to talk about himself, regardless of the rest of the cocktail party conversation.

I’ve noticed more and more of this. Consider the people who have jumped all over certain issues — regardless of relevancy — to push their agendas and pet projects. Its not necessarily because it helps their investments; often times, its merely a talking point that helps make their argument.

We all engage in this. Selective perception and cognitive dissonance is part of how we are wired. My pet issue is when these folks veer into irrationality and logical inconsistency to make weak arguments. Indeed, we’ve watched tortured explanations rife with logical inconsistencies and internal reasoning flaws. These are typically vain attempts to force their way onto some event, relevancy be damned.

Anyway, here are a few examples of what has become a modern economic sport:

• Credit Crisis:
Hated by: Hank Paulson, Short Term Borrowers, EMH adherents,
Loved by: John Paulson, Book Authors, Hyman Minsky Fans

• Financial Regulatory Reform:
Hated by: Banks, Investment Houses, Free Marketers, Conservatives, Larry Summers
Loved by: Smaller regional banks, Elizabeth Warren, Investors, Barney Frank

• Market Crash (circa January to March 2009):
Hated by: Stock Bulls, Fed, Bank execs, White House
Loved by: Bears, WSJ OpEd, Obama Haters, IBD OpEd, Larry Kudlow

• Market Recovery (circa March 2009 to present):
Hated by: Bears, WSJ OpEd, Obama Haters, IBD OpEd
Loved by:  Stock Bulls, Fed, Bank execs, White House, Larry Kudlow

• Real Estate Collapse:
Hated by: Home Owners, Mortgage Lenders, David Lereah
Loved by: Fannie Mae critics, Short Sellers, Calculated Risk

• Inflation:
Hated by: Stock Bulls, Fed, Savers
Loved by:  Gold bugs, Bond Bears, Dollar Bears

• The Federal Reserve’s Balance Sheet:
Hated by: Gold Bugs, Dollar Bears, Fed Haters, Survivalists, David Kotok
Loved by: Stock Bulls

• Bail Outs:
Hated by: Elected Democrats and Republicans
Loved by: Lobbyists, Bailed Out Wall-Streeters, C, BAC, AIG

• US Deficit:
Hated by: Newly minted deficit hawks (mostly GOP), Bond Bears, US ex-Pats
Loved by:  Government wonks, lobbyists, Tea Party

Its a fascinating study in contrasts. Some of the loved by/hated by are very counter-intuitive, because of the way a target of hatred gives an ideologue something to live for.

The bottom line is that everyone talks their book. The savvy learn to parse through the fog of nonsense, to get to whatever truth lay underneath . . .