The BAD IDEA “Crackpot Theories About The Financial Crisis” Hall Of Fame
As the anti-Semitic comments left on our own site have reminded us, the internet is the echo chamber where crazy notions go to inflate one another to ghastly proportions. And you can be sure that there are tons of offensive and deluded theories about why the financial world is the way it is, not just from sweaty crackpots but also from Mike Huckabee, with his “economic terrorism” mantra, and Rush Limbaugh’s “Democrats started it so Obama would get elected” schtick. OK, just from sweaty crackpots.
But we don’t want to peer into the dark recesses of the interweb, as we like our belief in the essential goodness of man not to be quashed. So instead let’s have a look at some of the merely silly theories that are being bandied about for this financial pickle we’re in.
First up is Phil Maymin, a professor in finance and risk engineering who this week appeared on the radio to impart his latest research findings. He’s deduced, after slogging away listening to years of chart pop, that the more regular the beat in the biggest hits, the more volatile the American markets become, and when tunes with tempo changes are top, the markets calm down again; ”The turbulence of the music predicts the steadiness of the market”, says Maymin. So what was number one in early October as the markets crashed? “Womanizer”, which is fast, totally relentless and totally regular. Damn you Britney! Why didn’t you look to Albert Ayler as your muse instead of European chart-dance producers? Then we wouldn’t be in this mess!
Then there’s the theory that it was down to testosterone flooding the trading floors, leading to this remarkable statement in Wired: “By favoring ultra-aggressive hotheads, the financial world may be throwing a human-sized wrench in its own gears.” That’s one big wrench! This theory sprouted from the findings that amongst a group of 44 London traders, the most successful had longer ring fingers than index fingers, a sign of high testosterone. Success drives the testosterone up even more, leading to excessive risk-taking. Personally I’d have looked at the shouting, hair-tearing, and inability to forge relationships outside of 20-minute dalliances with strippers as evidence for high testosterone in traders, but to each their own.
We’ve got Daniel Henninger in the Wall Street Journal, prefaced with this sentence: “Did the forces behind the movement to replace ‘Merry Christmas’ with ‘Happy Holidays’ have any correlation to the nation in a financial crisis?” The answer from Dan is a surprising, demented “yes”. “It has been my view that the steady secularizing and insistent effort at dereligioning America has been dangerous…The point for a healthy society of commerce and politics is not that religion saves, but that it keeps most of the players inside the chalk lines”, he says.
“A nation whose people can’t say ‘Merry Christmas’ is a nation capable of ruining its own economy,” he continues, and that to banish the phrase will necessarily lead to an apocalyptic future populated by leather-clad Australians: “Feel free: Banish Merry Christmas. Get ready for Mad Max.” That’s right Dan, only religion can teach us the importance of banks not trading in highly leveraged derivatives. And allowing these folks with their Hannukah and their Kwanzaa to celebrate at the same time as us Christians? Well, it’s a recipe for financial ruin.
And there’s the theory that if you control Wikipedia, then you can rule the world. Patrick Byrne, CEO of Overstock.com, wrote an editorial piece for the Wall Street Journal on the dangers of naked shorts, but it never got published. “Naked shorts” aren’t the pervert’s choice of beachwear but instead a short-sold stock (one that is sold with the hope that it will drop in price, incidentally what destroyed the Merckle fortune) that isn’t actually delivered, leading to an artificially deflated market. Anyway, Byrne says that his piece didn’t get published because a Forbes columnist, Gary Weiss, was editing the Wikipedia entry for “naked shorts” in a misleading way; the WSJ read the Wiki and assumed Byrne hadn’t got his facts straight.
“At some level, you can control the public discourse from Wikipedia,” Byrne says. “No matter what journalists say about the reliability of Wikipedia, they still use it as a resource. I have no doubt that journalists who I discussed [naked shorting] with decided not to do stories after reading Wikipedia – whose treatment [of naked short selling] was completely divorced from reality.” Read about the whole affair here – it reads like a Raymond Chandler novel populated entirely by nerds. I’m now waiting for the Bond film where the villain sparks off a world war by misleadingly editing the pages marked “North Korea” and “United States”.
Oh alright, you can have one scary weird conspiracy theory. The financial crisis was begun so that people would run amok and America could declare martial law, and send everyone to concentration camps where they’d be killed. Why has the Federal Emergency Management Agency started stockpiling plastic containers that look a bit like coffins, eh? Why? Open your eyes man, OPEN YOUR EYES!