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Thread summary:

FOX News Business Block, CNBC out of touch with Main street obsessed with Wall Street, looking for other sources for financial information

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Old 10-28-2007, 12:22 AM
3,567 posts, read 7,532,041 times
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The problem is that the overwhelming majority of the Financial Media have absolutely no understanding whatsoever of the economics of finance.

What they understand is how people will behave with respect to the basics, like "Stock goes up, Mr. Broker will sell." Or sometimes, "Stock goes up, Famous Mr. Broker says subprimes in crisis!"

The sad fact of the matter is that most of Wallstreet also does not understand anything about... anything. What they know is the financial equivalent of pop culture junkets: "Like, Britney could lose her kids! Omg!" relates directly to, "Like, I have a portfolio that isn't diversified beyond real estate, and the WSJ totally dissed these options! Omg!"

I've worked with these people, I've worked among them, and I've audited several. Wall Street is not about knowledge, it's only about turning a profit. The decisions you see there are not based on rational planning for longterm benefit; it's "how can we make money right now". The most glaring evidence I have is the recent subprime crisis. Does Wall Street care? Hell no. They bundled those options off to sell to European banks, they collected their fees. That's what they do. Theirs is not the business of buying and selling to build a foundation, as everyone in the world thinks financial investors do, but buying and selling just to buy and sell.

I think what irritates me most is this constant insistence that things are peachy keen. I literally argued until I was blue in the face with some idiot from Wall Street concerning gas prices. "Oh," he told me, "I've read the reports and the average American does not spend more than $1,000 on gas every year. This gas problem is really nothing." I have several friends who drive and they can attest to spending far more than $1,000 on gas per year, and I mean on fuel efficient vehicles. But because he had read the special report, written by the special economist in his special position on special Wall Street, it could not possibly be wrong.

And really, New Yorkers are famously in touch with the rest of the nation
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Old 10-28-2007, 01:02 PM
Location: Los Angeles, Ca
2,884 posts, read 5,052,033 times
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Something else that drives me up the wall about Wall Streeters and high holy "experts" that seem to have all the answers is the belief in the efficient market hypothesis and that it's impossible to beat the market except for luck.

A. I always wonder, have you ever polled every trader/investor in America to see if it was true. Sure most people will fail and only match the market or earn less.

B. I had finance professors that would argue until they were out of breath that the Buffett's, Peter Lynchs of the worlds are just lucky, like flipping a coin 10,000 times, landing heads.

Sure they are rare. But that'd be like following baseball and believing that 500 home run hitters are lucky. Just because most people don't accomplish it, it doesn't invalidate the ones that do.

In sports or in any other profession, everyone seems to love the high achievers. No one thinks Jordan or Tiger Woods are just "lucky". In the Wall Street world, it seems like there's a real disdain for any high achiever, they aren't treated the same way at all vs other professions.

C. Alot of talk about beating the market doesn't translate to peoples own situations. Most people dont have to beat the market every year for 20 years to feel good. Dollar amounts matter more than arbitrary cut offs.

The "special reports" from "special economists" and from "special firms" are almost treated like words from God. "I was wrong" is something you wont hear much on t.v..
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Old 10-29-2007, 08:47 PM
3,567 posts, read 7,532,041 times
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Originally Posted by John23 View Post

The "special reports" from "special economists" and from "special firms" are almost treated like words from God. "I was wrong" is something you wont hear much on t.v..
No, it's not, but have you ever noticed how reports with titles like "Housing in crisis!" are almost always followed immediately in any financial journal with another article like, "Housing market healthiest in twenty years!"? It's worthy of an eyeroll.
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