Why are Financial Blogs so Bearish?

I have no problem with bearishness, and a good deal of it is warranted right now, with an economy in recession, markets tanking, the Fed’s riding in for the rescue, and so on. But most financial blogs — and their commenters, in particular — are bearish way past that point, with they and their commenters in an echo chamber muttering darkly about canned food, plunge protection teams, a bullet-less Fed, and on and on. It’s bleak and apocalyptic at the best of times, and now it’s a relentless and somewhat bizarre mixture of Calvinist moralizing and noisy negative-triumphalism.


And to be clear, I am equally critical of the always-be-buying up-with-the-economy crowd. Their indefatigable and illogical boosterism in the face of contrary economic evidence is merely wealth-deflating. But that said, I don’t get the same conspiracy-minded moralizing from them, more just fuzzy-headed cheerleading.


  1. I think the bearish blogs are a nice counterpoint to the crap that is on CNBC and Fox most of the day.
    Now, are they TOO bearish? Who can tell at this point in time. Things do look pretty grim and even the fed agrees with this thesis.

  2. The interesting thing is how bullish traders are in practice, as opposed to what folks might be writing about. I was looking at the Commitment of Traders data (up to 1/15) and the small traders in the mini S&P (which means most of us) are actually 65% long!

  3. Barry Ritholtz + Roubini have made their livings as the token bearish guys. Someone wants the bear case they go to those sites. Journalists want a bear quote they go to them. It’s all a marketing game. It’s like why the New York Times slants for a left-leaning audience to capture that market niche. Barry Ritholtz slants his commentary for a bearish-leaning audience

  4. Look at A. Gary Shilling, who is always on CNBC. He predicts a recession every year for 3 straight decades and then when the recession hits he acts like he’s prescient. There’s really not enough accountability in this industry. An investigation of Shilling’s track record would probably show that he sat out 400% S&P gains for the purposes of avoiding a 15% downward retracement in the last few months. I view Barry Ritholtz has a mini-Shilling.

  5. Because it’s easier and you aren’t penalized as much if you’re wrong. Predict a bull market and be wrong and everyone comes down on you. Predict a bear market and be wrong and everyone breathes a sigh of relief.
    The challenge is to find the bear who isn’t trying to cop out.

  6. Because what is wanted is not to be right, but to be watched, and you don’t get audiences by saying more of the same is ahead.

  7. All the optimistic above ignore the obvious: except for a couple of bubbles, most finance bloggers have been looking at several years of earnings attrition, deferred tax liability, and spooky-making economists (e.g., Samwick’s we “need” to cut SocSec payments to balance the budget, as we have always intended).
    It’s easy to be bearish when your savings for the past several years was based entirely on a mythical increase in housing values, and that’s going away.
    It may be a confusion of corporate profits and personal finance, but it’s an understandable one.

  8. Well, as a bearish blogger I need to write what my 30 non blood relation readers want to hear.
    But seriously:
    1) I don’t write about the stocks I like because, well, those are the stocks I buy and I don’t want to tout my own portfolio (seems self-serving) nor do I want to give away that kind of info for free
    2) I do take an arguably Calvinist tone about certain things, but I think the fiscal behavior of some is out of control and a more conservative approach is warranted. This goes for both consumers and corporations.
    3) There is some much unjustified optimism and bad behavior out there, that there is just a ton of stuff to tear apart.
    4) I’m naturally cynical and fix corporate messes for a living, which is going to lead me to be bearish, no?
    I think it’s a complex collection of reasons for why certain people go overboard in the cheerleading camp vs. the bearish one. Still, what a person blogs about doesn’t necessary convey their holistic view on the markets….just their view on the topics they write about.

  9. If you base your findings on the Ticker Sense Poll then some would argue Financial Bloggers are too bullish!
    Bloggers have been net bullish since August of 2006 (the most bullish they have been since the poll began). Yes, there are bearish bloggers – but popularity of given opinionated blogs as measured by foot traffic does not equate to opinion for financial bloggers as a whole.
    I have done two pieces on the accuracy of the Ticker Sense Poll here:
    An updated version is due soon.
    For the record; this has been my opinion

  10. Paul,
    Financial bloggers are bearish for three reasons that I can discern:
    1) Most started blogging in a hyper bull market, it was MUCH easier to build a name for themselves by pointing out the contrarian viewpoints. The world didn’t need a bunch of bloggers telling them to buy the Four Horsemen, to buy BRICS, to play the LBO/IPO resurgence; because we had 25-30 sell-side shills doing that already.
    2) It’s human nature to crow when you’re right. Since most of these guys were singing sad songs from the outset of their blogs, they feel the need to reinforce their prior view points and remind everyone that they “called it.”
    3) The blogosphere is nothing if not an echo chamber, and financial analysis blogging was late to the party but we’re now fully embroiled in the same stagnation.
    I, like you, am looking forward to seeing which of these guys starts talking about how great things look, or what tremendous opportunities are arising as the market sell off approaches panic levels.

  11. Ah, if you want tons of traffic at your financial blog, this you need to do!
    * lots of posts. Multiple posts during the day, even if the posts are nothing but links to others’ work with extending quotes of it, ending in “what say ye?” Look at Beary Ritholz and that Panzner Financial Biblical Disaster guy for examples.
    * some of the posts should be completely off topic, but in no way related to politics. Pictures of good-looking women, wine reviews, music reviews, all play well.
    * many of the posts should be linkfests. If you do regular linkfests, you’ll get a lot of hits.
    * web customers like a bearish, scare the heck out of you attitude. Scare ’em, then offer them a solution that only YOU know about.
    * bearishness sells better if it’s based on esoteric cycles or on macroeconomic gibberish
    * hyperactive, thrill-seeking trading. Lots of announced trade ideas during the day and during the week, preferably with some day trades thrown in.
    * never, or at least, exceeding rarely, should you specifically criticize anyone – unless they are a permabull.
    Check the listings at 26econ or InstantBull, go down the rankings from most popular to least, and you’ll see a congregation of the above factors at the top of the list, with most of them having 2 or more of those characteristics.
    Bears are bears because it sells. Do you think they really believe what they write?

  12. test; made a post but wasn’t accepted??? Hmmm

  13. Paul is a venture capitalist. His job is to purposefully put money at risk.
    He is looking at early venture companies, start ups, new ideas. That requires not only technological and finance skills, but a specific kind of optimism. He knows despite the long odds (most start ups fail) that the next Apple or Google is out there.
    I manage money for a living. I have very different obligations — its to preserve capital and manage risk.
    Since inflation is always eroding our clients assets, we must find ways to offset that by generating returns in excess of inflation. Part of our calculus is when to go into risk-free treasuries.
    And because of our long experience on Wall Street, we have become rather skeptical of what we read in the papers and hear on TV. We have not forgotten all of the analyst cheerleading, the investment banking scams, the corporate fraud, the lax regulatory oversight.
    As Jeff Saut likes to say where you stand is determined by where you sit. And where I sit requires a healthy dose of DONT LET THE BULLSHITTERS LOSE THE CLIENT’S MONEY.

  14. So, what if many supposedly bearish bloggers are neither really neither bearish nor bullish. If risks are at a very high level, does writing of it make one bearish or does it make one simply better prepared for the risks of life? Simply because others may not be aware of quantitative metrics leading to a position, what does that mean? There is a time to be bullish. And, it will happen again.
    Here’s a likely more realistic view of reality. Bias is built into our society by many factors. Including the mass media assault of Wall Street. As John Galbreath, Ben Graham, Warren Buffett and Jesse Livermore told us, Wall Street is neither smart money nor learns from the past. So, the entire premise of believing the mass media assault when the data doesn’t support it simply means many are brainwashed. That’s okay, many of us have bias or brainwashing as it pertains to many ideals. The American dream of a White Picket Fence is a marketing scheme that is indeed brainwashing. Does that make it bad? No. Is that a fundamental truth of all who want to be free? haha.
    Barry Ritholtz is criticized for being bearish. And, he’s wrong about inflation, haha, but would you rather have someone managing your money who has no ability to think for themselves and is forever bullish when the data doesn’t support it, or would you rather have someone who can withstand the pressure to go against the massive bias of the world’s biggest mind bending machine that is full of untruths?
    When it is time to buy, we’l find out who really is just plain bearish all of the time and who believes in the fundamentals espoused by Ben Graham and other genius.
    The data supports being very risk averse here. And, there is nothing anyone can say to change the facts.

  15. The Bears love to write about how they are intellectually smarter and more honest than the Bulls , how they are the defenders of the “small investor” , and how “Right” they are …. (which they finally are now )…of course , they conveniently dismiss their Bad calls , blaming those on timing , or the Fed , or Speculators , or Gnomes from Zurich ,the list is endless ….
    They’ve been wrong for years , “blame” each rally on Repos , the PPT , or the Bankers and Brokers and Traders ( all Dolts of course , without ever having worked in an IB, HF , PE or VC ) on Wall Street ….
    They strap on the Tin-Foil Hats and like pied pipers , lead their merry band of Area 51 believers in insane rants of commentary

  16. As an old broker once told me, in a Bear market,
    the Bears are right!!

  17. I hate to point out the obvious, but perhaps bearish bloggers are so loud right now because what has been obvious for sometime is becoming clearly true: things are bad and getting worse for the global credit markets, and unfortunately it looks like the global economy may follow suit.
    By nature, I am an optimistic person and as an investor I am naturally bullish (and invest according).
    However, when the greatest housing/lbo/consumer-finance/credit-derivative bubbles all start bursting at the same time, I would be shocked if in a country that cherishes individual liberty as much as ours people didn’t stand up and shout.
    Here’s hoping for greener pastures on the horizon once the smoke clears…

  18. The market always overreacts… this is no different from any other drop/recession. Plus people think it sounds more “contrarian” to be bearish. I ignore it as it’s all just noise in my view and has no effect in the long-term.

  19. Response to #9 Jason Wood:
    Financial bloggers are bearish for three reasons that I can discern:
    1) A war with no end in sight. I imagine the final bill to be trillions.
    2) A dollar sinking to where there are parties seeking to replace the dollar with a more stable standard for internation settlements. And the prospect of foreign ownership of our assets.
    3) Our 2 party system unable or unwilling to follow the will of the citizenry.

  20. The economy has been bootstrapping itself up on a monetary bubble for the last generation and we are awash in surplus cash. Wall St. ran out of safe places to invest it. With subprime bonds, they put a padlock on a dumpster and called it a safe.
    At least Roosevelt had a solid currency to work with. This time, it will be quicksand.