Bing Blog

Let's stop whipping ourselves into a frenzy, shall we?

Bank Run

Hi there. I'm sitting in the Admiral's Club at London Heathrow, which may, as they say, be the busiest airport in the world but is most certainly the most hectic, confusing, and exhausting to negotiate. They have two x-ray lines: one for the normal stuff, another reserved just for shoes. Weird. I'm sure there's a good reason for it. Like, there's a guy looking at the machine who is specifically trained to evaluate footwear and nothing else. I wonder what he does for kicks.

Anyhow, I read a really stupid thing the other day and it made me think how close we all are to crushing ourselves in a real honest-to-God panic the way those soccer maniacs do to each other every couple of years. One person gets spooked, then another, and pretty soon people are trampling over each other like lemmings eager to hurl themselves over the nearest cliff. I hope I'm wrong. But it's starting to look that way, and as usual a lot of the biggest and most determined lemmings either work or feed on Wall Street.

I was reading about the bank failure in Second Life over the summer, which coinciding with the subprime meltdown in real life. People trading in Lindens suddenly got a feeling that they were going to have trouble converting them back into dollars or something and there was a run on the make-believe financial institution that held their virtual lucre and pretty soon they had to close the so-called bank. What a mess.

Imaginary people trading in fictional currency whip themselves up into a state in which they create a situation in which they lose actual money. One is temped to sneeze at such fatuosity, except I think it's really possible that the same thing is now going on in what we laughingly call the "real" world.

First there was debt that undermined the momentary health of some financial institutions, entities so large that they take multi-billion dollar write downs the way we would endure the loss of a $20 bill from our pockets. Then the industry that created the problem started talking about whether we were actually in a recession, when in fact the figures show that really, we're not.

Once analysts, the media, gossipy brokers, boozy bankers and nervous investors start that story rolling, they need to follow it up with more reports, speculation, gossip and wind. So they did, in short order. Pretty soon the word "stagflation" started bouncing around.

This morning I looked at the front page of the Financial Times and yeah, now we're not talking about recession, as we were last week, or depression, the concern of a few days ago, but inflation, the greatest bugaboo of all. "Stocks tumble as inflation fears grow" the headline screams. It's only noon here and I already need a drink.

You know what? I have a reasonable, sane suggestion for the FT, the analysts, boozy brokers, et. al. Here it is: Shut... up. Please. I'm begging you. Let me put it another way. Go home, all of you. And don't talk to anybody or write anything at all for the next three or four days. You don't know anything anyhow, so it should be easy.

Look at it this way: It's nearly Friday. You've had a busy week, moving the markets down, scaring everybody with all the horrendous words that make people run on banks, sell stocks, start stashing cash under their mattresses. Inflation. Stagflation. Recession. Depression. Recession. All of the above! Aieeee!

Take tomorrow off. Go pet your dog or something. You guys are going to create all the things that you're frothing about if you're not careful. And it won't be Linden dollars this time.

Sometimes silence is golden. And last time I looked, gold was good in any currency.

35 Comments Add Comment

"I wonder what he does for kicks."

(punchline drums)

Bing, you are absolutely right. In the dot-com days it was "irrational exuberance" as Chairman Greenspan said; now we are dealing with "irrational depression". Things are bad but they aren't that bad.

Buy the uncertainty, Bingster, buy the the uncertainty...


The other person who need to shut ___ ____ up is Ben!

Oh, and, don't forget Greenspan!!!!

Totally agree with Mr. Bing. I only hope someone listens, and shuts up.

There's a difference between lemmings running off a cliff because all of the other lemmings are, and all the forest creatures running out of the forest because the forest is on fire. From my perspective, it's pretty damn hot in here, and well past time to start picking up the pace toward the exit.

As for "the figures" showing that we're not in a recession -- figures come from all over the place. Arthur Andersen used to spew forth some figures, some of which turned out to not be all that reliable. How about those figures that were used by rating agencies to make junk look like AAA? And the appraiser who, when asked to provide a valuation for a house, asked "what would you like it to be?" And let's not forget the government figures, brought to you by the same folks who had highly accurate figures for WMD in Iraq. With such a lack of credibility and trust out there (don't worry -- I still trust you, Bing), pardon me if I rely on the figures in my own account to determine whether we're in a recession.

Amen and amen! And while we're at it, could we stop with the germophobia, and treating junior like (s)he's made of glass... (eyeroll.)

I have said this for years...the problem is we have a bunch of overpaid, underqualified analysts, advisors, self-proclaimed gurus and pundits pontificating on stuff when they have no more insight and experiencethan I did when I got my first pimple. If we went back to 90 minutes of news a day - TOTAL - the entire world would go right back to normal I guarantee it. Tom Peters said in Thriving on Chaos back in the late 80's that soon we would become the nano-second ninties, innundated with data and information at light speed. Of course, he was right. Only problem is it created the chaos he spoke of because people are still basically stupid. Now everything is over-thought, over-analyzed and over-engineered just to provide a bunch of do-nothing MBA's with a job. This country (U.S.) was founded on two thing - common sense and faith. We've lost both.

Great article on "Whipping ourselves into a frenzy."
One thing is certain in the market. It is not driven by logic but is driven by two things, greed and fear. One can use this to thier advantage.
As the "lemmings" leap off the cliffs, I will be there to pick up the dollars they leave behind!
There are going to be some incredible bargins out there after the dust clears. Actually, there are some incredible bargins out their now.
Does anyone think Warren Buffet became one of the richest people on earth by following the crowd? No way. He buys a dollar for 60 cents and the dollar goes to 60 cents when the lemmings leap.
So keep the doom and gloom articles rolling!! I'm here to pick up the money being thrown in the air by the panic stricken who think this is the end of the world!!

Exactly....right on. And can someone explain this one...
The market wants the FED to cut the interest rates(the economy would need to be weak for that to happen, hence poor performing companies) then, when the rate cuts happen, stocks soar......but the economy is poor....I DON'T get IT!!
It's like the market is punishing when the economy is strong!

Dorothy said it best, "Lions and tigers and bears, oh my." They weren't there either, and anything that was confronted by that famous quartet could be solved by what they already had inside.

Have that drink Bing, and possibly a second, you're going to need it.

Good points. In any given hour you can read contradictory expert opinions on the economy, oil, stocks, real estate and so on and most of these commentators don't know squat.
I'm making about 10% on my investments. You know how? I ride the ups and downs of the market. Like my hero, Warren Buffet, I am an investor and not a speculator.
So, sell like hell Wall Street greed heads. I'm waiting for more good deals.

All in favor of taking friday off say I!!!!

You are right on one count. Its all imaginary numbers. When people start to realize that, the real stampede begins.

better, yet. go away for two or three weeks. great idea, Stan

Spectacular entry today Bing. I couldn't possibly agree with you more. I have nothing to do at work, so I sit here and read every piece of financial news that comes up when I refresh some financial media websites. Now, I'm no financial genius, so maybe this is all way above my head, but a lot of times it seems that these experts who you called out don't know much of anything at all and start trends based on how they are feeling that day. As a sports writer once cleverly suggested for sports franchises, perhaps financial institutions need to create a senior level position - VP of Common Sense.


what an idiotic commentary. 1st and last time I waste time with 'bada bing'

It would be nice if the analysts, brokers and the media would focus on actual results as it pertains to the overall health of the economy and stop throwing my money away on spoeculation built on sand. I agree, SHUT UP!

What is the point of this post? You know they will not stop talking and they will get us into a recession. So why not stop writing these useless blogs and do something that actually makes sense?

Didn't you just write a "sky is falling" column? You crack me up.

Agreed. A lot of people forget the precursor talk coming from Washington and Wall St. after the Internet bubble burst. Granted, the market took a beating, but it wasn't until 9/11 that the wheels really came off the wagon. Recessions are psychological. If you think you are in a recession, sooner or later you will end up in one.

Bing, you sound sane today. Maybe you should stay in London. Your media employers may not enjoy today's remarks, however. Keep representing the U S of A in a way that I'm sure will make us all proud.

Thanks for attempting to interject a modicum of sanity into what is quickly turning into a muddled, gut-wrenching mess, with everybody screaming at everybody else, and the financial news channels breathlessly plugging the next "humunguous loss" or whatever buzzwords they've chosen to use today.

Now, if they would just listen...

Write on Bing!

Surely you jest, it's much more fun to sit and listen to half truths twisted to keep viewers attention so we are having to endure another online trading commercial. Lets not allow the truth or some positive info to stand in the way of ratings or some halfwit who loves to hear is own voice or read the drivel he prints.

On CNN's "In the Money" last weekend, Ali Velshi and Christine Romans asked Anirvan Banerji of the Economic Cycle Research Institute if we were in a recession, and he said no, and that basically as long as people have jobs, the economy keeps humming no matter what the crisis du jour (i.e. Katrina, energy, etc). The CNN video link is below:

While the FTs, analysts, boozy brokers, etc., take some time off so that us non-lemmings can have a martini and let our blood pressures come down a notch or two, invite the shoe guy to write about his job and/or what he does for kicks. THAT will be worth reading! The other stuff, as you said very well, is worthless, self-serving BS, and we don't need any more of it - we'll get plenty in the next 12 months as we watch the politicians ignore their constituents and feed on each other!

What is this nonsense of 2% core inflation? I would like to get these geniuses to go shopping and buy simple things and realize that milk, gasoline, bread, vegetables etc have gone up by at least 30%. So wall street stop telling us inflation is under control cause it is not

Call me a cynic but how many of these guys make money based on the panic they create? They are often so inbred(is that word to strong? ok substitute "in bed together") in that small island of Manhattan that when our unbiased reporter/analyst at the FT puts out an article his roommate/tennis partner/drinking buddy makes a killing at his hedge fund. Then they all go out drinking again to decide what story will be next. For such a big city it is a small town.

You live there Bing, tell me I am wrong and that I can exorcise my cynicism and relax a bit.

It isn't the commentators that cause the recession... They may cause slight overreactions on both sides of the market but everyone is way too freaked out on their own after a 10% pullback in prices. That is what happens at the end of a 5 year bull run with hardly any pullbacks. Everyone expects the gravy train to keep on moving long after it is exhausted. There are serious economic problems that have been swept under the rug for too long and that is the real issue at hand... everyone feels like they are being blindsided by all of this information because it should have been trickling out for the past year rather than coming in a rush and hitting the news as the market falls apart.

I couldn’t believe my eyes. You didn’t just claim that the looming recession is all in our heads did you? Soon you'll join the countless realtors, builders and mortgage brokers in proclaiming that the real estate market is tanking "because the media scare people away from buying a home". As if the excesses of the last 5 years had never existed and didn't need to be purged.

Let’s take a cold hard look at this economy. 7 years of deficit spending, including a 5 year spending spree on a foreign war. Half of our total 9 trillion national debt was incurred in the past 7 years. Last time the country was in that situation we were coming out of the Vietnam war and went on to experience full blown stagflation. And dare I point out that the fundamentals were actually better then than they are today?

The respective weights of manufacturing vs. financial services in the GDP are the exact opposite of what they were in the mid 70’s. Financial services do not produce any form of tangible wealth. Manufacturing does, but that’s something we decided the Chinese could do better than us. A weaker dollar isn’t going to help us in any way since we do not have anything to export anymore. Even Boeing doesn’t define itself as a plane manufacturer anymore but as a “systems integrator”. They get a bunch of components (a good deal of them foreign-made) and slap them together. The weaker dollar means higher prices for those components before they can even turn around and sell the finished product to take advantage of the exchange rate.

Inflation is already running rampant. Everybody knows the CPI numbers are more cooked than a Thanksgiving turkey. Several tricks such as substitutions and exclusion of certain product categories are used to ensure that we arrive at a “core” number that is within the pre-determined range.

The Fed tried to pretend it was in control by cutting rates (twice!). That little game is coming to an end for several reasons. First rates are already very low by historical standards. There’s not much room left. Second lower rates only fuel inflation. Finally, with our gigantic twin deficits (budget and account balance) we need foreigners to inject massive amounts of money into the US. They will only do so if they get a decent return on their capital and that means rising rates.

It’s déjà vu all over again. Massive war spending, inflation, rising energy costs. Welcome to the 70’s!
Optimism or pessimism have nothing to do with it. 25 years of decreased wealth production and over consumption fueled by debt are coming to an end. You didn’t really believe the party was going to last forever did you?

Bernake finally figured it out. Now he is calculating the real inflation and not this nonsense core inflation. When you listen to the wall street geniuses they will always tell you core inflation is 2 percent. Those wall street !@#$%^ are making millions speculating and the working class has to pay for their big mouths

If you are broke today, chances are that you will be broke tomorrow. If you are rich today, chances are that you will be rich tomorrow. Stop listening to others and focus on getting as much money as you can. Information without action leads to insanity.

My name is Jamie Johnson and Im 25 years old. I have been living with depression for what seems to be a very long time. I am sick and tired of feeling this way, I dont even know what else to try. I am currently taking zoloft, an anti-depressant. It seems to be helping me a little but am still feeling down sometimes. I have been looking into alternative treatments, something to add on to what I am already doing. So now, with my therapy and medication..I also found out about certin stones that can help with mood and negative energy, I decided to try those as well. I now have been wearing my "healing bracelet", as I like to call it for 2 weeks. I can honestly say I feel a little better, I actually think this thing is helping. I now have been recommending them to other girls in my weekly depression group, because if it can help me, maybe it could help you. Im not saying that there magic or should take the place of medication or therapy, but every little bit helps, if you know what I mean. I am just gratefull that I have started to feel a little better, because I get so sick of feeling down all the time. Also, it really sucks because it feels like now one understands. But if you want to look at the bracelets I will leave the link below, and I hope that they help you too.