Bronze-level articleZero Hedge

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Zero Hedge is a batshit insane Austrian school finance blog run by two pseudonymous founders who post articles under the name "Tyler Durden," after the character from Fight Club.[wp] It has accurately predicted 200 of the last 2 recessions.[citation NOT needed]

Tyler claims to be a "believer in a sweeping conspiracy that casts the alumni of Goldman Sachs as a powerful cabal at the helm of U.S. policy, with the Treasury and the Federal Reserve colluding to preserve the status quo." While this is not an entirely unreasonable statement of the problem,[1] his solution actually mirrors the antagonist in Fight Club: Tyler wants, per Austrian school ideas, to lead a catastrophic market crash in order to destroy banking institutions and bring back "real" free market capitalism.[2]

The site posts nearly indecipherable analyses of multiple seemingly unrelated subjects to point towards a consistent theme of economic collapse any day now. Tyler seems to repeat The Economic Collapse Blog's idea of posting blog articles many times a day and encouraging people to post it as far and wide as humanly possible. Tyler moves away from the format of long lists to write insanely dense volumes[3] filled with (often contradicting) jargon that makes one wonder if the writers even know what the words actually mean.[4] The site first appeared in early 2009, meaning that (given Tyler's habit of taking a shit on each and every positive data point), anyone listening to him from the beginning missed the entire 2009-2014 rally in the equities market.

The only writer conclusively identified is Dan Ivandjiiski, who conducts public interviews on behalf of Zero Hedge.[5] The blog came online several days after he lost his job at Wexford Capital, a Connecticut-based hedge fund (run by a former Goldman trader). Later Colin Lokey joined Zero Hedge's writing team in 2015 and left in April 2016 publishing an article identifying the writing team as Dan Ivandjiiski, Tim Backshall, and himself. This is quite a bit less than the 40 or so writers Ivandjiiski claimed to be on staff in earlier years. Note that they chose the pen name from a nihilistic psychotic delusion.

Zero Hedge is not quite the NaturalNews of economics, but not for want of trying.

Contents

[edit] Actually doing some good

Zero Hedge came to public notoriety when it brought to light the number of high frequency computer trades (flash trades) conducted by Goldman Sachs in Tyler's more condensed and coherent analyses. Goldman Sachs used this data as a form of arbitrage to make a profit off penny differences in bid/ask prices. This was picked up by Bloomberg for a piece called "Goldman Sachs Loses Grip on Its Doomsday Machine" by Jonathan Weil.[6] This caused the SEC to change weekly financial reporting and propose to ban flash trading altogether.

With Zero Hedge receiving more attention from the mainstream media, Matt Taibbi decided to interview and publish the resulting story about Goldman Sachs in Rolling Stone.[7] There he snarkily states that Goldman is controlling and manipulating everything in order to make money:

From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression -- and they're about to do it again.
—Matt Taibbi

Zero Hedge later earned what started as a severe mocking by CNBC analyst Dennis Kneale,[8][9] and turned into a mocking rant by Kneale "calling top indie finance blogs such as Zero Hedge a bunch of idiots who live in their mothers’ basements" when Zero Hedge refused to show up. Zero Hedge championed it as an absolute victory, including a temporary drop in CNBC's viewership[10] and forcing Kneale out of CNBC Kneale accepting a position at Fox Business.[11]

[edit] Accusations of plagiarism

Tyler has a habit of taking other people's research, sometimes adding a slant to it of economic doom if it isn't there already, and posting it on Zero Hedge.[12] This included a series of reports leaked from Merrill Lynch's chief economist David Rosenberg.[13] Lawyers were sent with takedown notices, and were not moved by his claims of censorship about publishing their copyrighted documents. Morgan Stanley had the same issue later, and is considering legal action in addition to demanding the material be taken down.[14]

[edit] About the authors

Ivandjiiski's history is a little odd, since he moved to the United States from Bulgaria to study at the University of Pennsylvania in order to pursue molecular biology (then go on to med school). Instead he took a job as a junior investment banker at Jefferies & Company in Los Angeles, and continued in finance. It is interesting to note that in 2005, while working for Miller Buckfire, he was barred from working in the broker-dealer business due to insider trading amounting to $780.

Dan denies that he founded the site, but he claims no other profession and to be the primary author of a number of the articles. He claims he writes with a staff of up to 40 other writers that work for Zero Hedge. However, secrecy is paramount in case They find out.

"Creative" journalism is apparently not out of place in the Ivandjiiski family either. His father Krassimir Ivandjiiski runs a cranky tabloid called Bulgaria Confidential; it received brief notoriety in the US after publishing a story about massive drug trafficking and corruption in Montana, picked up by an independent US rag Free Speech Newspaper.[15] There Krassimir and Free Speech claimed that the governor was an alcoholic drug abuser that helped turn his state into one of the pits of drug trafficking in the US.[16] The governor fired off complaints about slander, while many wondered why a state hundreds of miles from any major population center and one small highway[17] could have more drug runners than the West Coast.[18]

A telling article was written in 2016 about the blogs operations after a falling out between Colin Lokey and the forty two other authors at the blog.[19] Including private chat logs between the authors emphasizing punishing 24/7 deadlines and an overwhelming profit motive to support the authors extravagant lifestyles that conflicts with their antiestablishment anti-capitalist icon.[20] Lokey's resignation was rather telling about the sites bias in heavily cheerleading for authoritarian autocratic governments with terrible civil rights records and against freer democratic societies:

“I can’t be a 24-hour cheerleader for Hezbollah, Moscow, Tehran, Beijing, and Trump anymore. It’ s wrong. Period. I know it gets you views now, but it will kill your brand over the long run,” Lokey texted Ivandjiiski. “This isn’t a revolution. It’s a joke.”

[edit] Allegations of "pump and dump" involvement

Ironically, Zero Hedge has itself been accused of some of the manipulation it claims to expose. A company called Noble Investments Limited claims that a financial consultant paid Zero Hedge and a nut from Forbes to write a defamatory blog post about the company, which he then linked to immediately.

Accordingly, just fourteen minutes after the Dalrymple GFC Reptort was published on zerohedge.com, Weinberg published a fully formed blog entry, including pictures, in which he summarized and quoted from the report, and provided readers a link to Ivandjiiski’s blog entry on zerohedge.com where they could download the report. Weinberg did not acknowledge that zerohedge.com had “broken” the story fourteen minutes earlier or state anywhere in the blog that the link from which readers were invited to download the report pointed to Ivandjiiski’s blog entry on zerohedge.com.[21]

The law firm behind the suit describes Zero Hedge as "a portal for people to anonymously distribute derogatory information concerning public companies," giving the impression that Zero Hedge may well have arranged many such pay-to-defame schemes.

[edit] See also

[edit] External links

[edit] Footnotes

  1. Look at all the scandals[wp]!
  2. The Dow Zero Insurgency, New York Magazine
  3. Some essays are more than 3,000 words each, plus graphs, say "So Much For John Burbank Turning Bearish On Gold"
  4. "Head Of Eurogroup Admits To Lying About 'Secret Greek Meeting' Out Of Fears For Market Collapse - 'When It Becomes Serious, You Have To Lie'"
  5. Bio from the NY Post, with one of the least original article names ever
  6. The article
  7. The Great American Bubble Machine and Why Isn't Wall Street in Jail?
  8. Fight Club: ZeroHedge v. CNBC - Round One
  9. Fight Club: ZeroHedge v. CNBC - Round Two
  10. "CNBC Viewership Plunges 50% In October"
  11. Dennis Kneale to Join Fox Business Network
  12. "Things That Make You Go Hmmmm - Where There's Smoke There's Fire"
  13. "Merrill Lynch – Muzzling Zero Hedge and Rosenberg"
  14. Morgan Stanley May Sue Zero Hedge For Publishing Their Research As Its Own, Business Insider
  15. "Drugs Are Trafficked From Canada to the US"
  16. Reply to Governor Marc Racicot by Free Speech
  17. 974,989 as of July 2009
  18. Not really wonder, Krassimir obviously doesn't know shit about Montana. I-5 through Seattle is a very notorious trafficking area that is actually an easy straight shot up and down the coastline through a number of massive cities filled with millions of people.
  19. Bloomburg Markets - Unmasking the Men Behind Zero Hedge, Wall Street's Renegade Blog
  20. Lokey wrote in an e-mail. “Two guys who live a lifestyle you only dream of are pretending to speak for you.”
  21. Noble Investments Limited v. Dalrymple Finance LLC
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