The Random Comic Strip

The Random Comic Strip

Words to live by...

"How beautiful it is to do nothing, and to rest afterward."

[Spanish Proverb]

Ius luxuriae publice datum est

(The right to looseness has been officially given)

"Everyone carries a part of society on his shoulders," wrote Ludwig von Mises, "no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interest, must thrust himself vigorously into the intellectual battle."

Apparently, the crossword puzzle that disappeared from the blog, came back.


Saturday, March 28, 2009

"Tell me lies, tell me sweet little lies"

"Lie to me" or when we ask for the truth, do we really mean "tell me the 'truth' I want to hear at the moment"?

I just finished reading an opinion piece on Marketwatch.com by Paul Farrell. I normally do not agree with this writer. However, in this instance I am definitely in his camp. People do want to be lied to. Maybe more so in bad times than in good. The opinion piece is fairly long (he's wordier than even me) so budget 5 minutes to read and digest it if my synopsis below isn't enough for you.

Basically, what he is saying (as I see it) is that people know they are being lied to, accept the lies at one level, reward the liars, and then complain that the lies aren't true. Let me quote a specific part of the article:

In early 2009 BusinessWeek and Kiplinger's reported on lies fed to us last year as the meltdown spread: Bernanke, "I don't anticipate any serious [failures] among large internationally active banks." ... Barney Frank, "Freddie Mac and Fannie Mae are fundamentally sound" ... Madoff, "In today's regulatory environment it's virtually impossible to violate the rules" ... Barron's, "Home prices about to bottom" ... Ken Fisher, "This year will end in the plus column ... so keep buying." ... Worth, "Emerging markets are the global investors' safe haven." ... Cramer, "Bye-bye bear market, say hello to the bull." ... and in late 2008 even Kiplinger's said, "Stock investors should 'beat the rush to the banks."

Bad calls? Grow up. Stop the "political correctness" whining. They're "lies." And we're all trapped in this new disease we're calling the "lie-to-me" syndrome, a cultural malaise.


I would take exception here because there is only one provable lie in the above and that would be Bernie Madoff's. The others could easily be hyperbole, wishful thinking, poor judgment, etc. However, those are equally dangerous because we want to believe "experts" who tell us things aren't as bad as they appear and that things are about to (or have started to) turn for the better. It's why I stopped giving credence to brokers and, especially, the business experts on TV.

I have even taken to doing the opposite of what they advise in many cases. When they recommend moving into Bonds, I take a closer look at investing in them. When they say certain companies or sectors are poised for recovery, I steer clear of them. To a great extent, either through luck or cleverness, this has panned out for me. I suspect it's the former but I am willing to take that... so long as it holds out.

By the way, things are getting better... Trust me.

[917/918]

12 comments:

The Logistician said...

This is interesting Douglas and somewhat timely. You indicate that people don't want to be lied to. We recently did a piece on our blog which indicated that quite a significant segment of our population thinks that lying is appropriate, when they need it to be appropriate, and it suits their purposes.

It was difficult to find anyone who felt that the truth should be told all of the time, which we found extremely surprising.

So here's our confusion: if so many can justify lying for their own purposes, how can they be incensed when someone lies to them for their purposes?

Douglas said...

Log - We are nothing if not hypocritical as a species. In this post, I was trying to speak to the phenomenon of people wanting people to lie to them to ease their fears, allay their concerns. The title is from a song by Fleetwood Mac. And I think it expresses that desire to not face reality at times.

GoingLikeSixty.com said...

As with most generalizations (including mine) it's wrong. There are people who just don't pay attention and only listen to what they want to hear.

Nobody called this crash. Nobody.

BUT. your point is a good one. If you only listen to sound bites and read a few analysts you will be burned.

I like the adage: never invest in something you can't explain to somebody else. But even that failed during this crash.

Good thoughtful post.

The Jules said...

I always presume folk are lying, so I'm not dissapointed when they are, and pleasantly surprised when they're not!

Douglas said...

Sixty - In matters of finance, I learned that brokers are there to make money and that they make money even when you do not. So there is no incentive to make you happy unless you have a lot of money already. In other words, they will not make you rich but they will try to use you to get rich.

Jules - Ah, the pessimistic optimist (as opposed to the optimistic pessimist who assumes everyone is telling the truth and is happy to learn they aren't). Though I was thinking that your way would be a bit like assuming your significant other is cheating on you until you learn otherwise.

The Jules said...

Good point. I'm pessimistically pessimistic now.

:-(

GoingLikeSixty.com said...

I never have used a broker for exactly the reason you stated. They have no incentive to give good advice, only the advice that may cause you to trade.

The Logistician said...

Why would anyone not want to face reality? That's incomprehensible to me? You can't get yourself out of a jam or address a problem by playing games with yourself.

I can understand someone crawling into a bunker and saying that the odds are against them, and that there is nothing that they can do. I can also appreciate that someone sufficiently delusional can be deemed "mentally ill." But why would any thinking person want to deny or avoid the truth?

You got me there Douglas. That's a new concept to me.

Douglas said...

Log - What are movies, plays, even symphonies and rock concerts? Escape from the mundane, the dreary reality of life. Is it any wonder people facing a stretch of bad times wouldn't want to be told it won't happen? Look at what was popular during the Great Depression. Look at how FDR kept getting re-elected even when his programs did not turn things around. You, like me, are too logical, too pragmatic to want to be lied to. But we are not in the majority.

The Logistician said...

Movies, plays and such are just momentary distractions, escapes, and we well know that when they are over, we'll have to return to reality.

In dealing with any difficulty, I can not imagine not wanting to confront reality and have my full wits about me.

Douglas said...

Log - What are movies, plays, even symphonies and rock concerts? Escape from the mundane, the dreary reality of life. Is it any wonder people facing a stretch of bad times wouldn't want to be told it won't happen? Look at what was popular during the Great Depression. Look at how FDR kept getting re-elected even when his programs did not turn things around. You, like me, are too logical, too pragmatic to want to be lied to. But we are not in the majority.

The Logistician said...

This is interesting Douglas and somewhat timely. You indicate that people don't want to be lied to. We recently did a piece on our blog which indicated that quite a significant segment of our population thinks that lying is appropriate, when they need it to be appropriate, and it suits their purposes.

It was difficult to find anyone who felt that the truth should be told all of the time, which we found extremely surprising.

So here's our confusion: if so many can justify lying for their own purposes, how can they be incensed when someone lies to them for their purposes?