Our newest addition to the list of pages on the side panel deals with the myths and "truthiness" commonly propagated on financial TV and in the blogosphere. The page is posted in full below:
In an effort to promote more empirical thinking in the
blogosphere, one of the main themes here at A
Dash is to expose Wall Street myths and “truthiness.” I laid out my major
objectives when I began
a series on this subject in
- Identify a widely-held belief or conclusion where supporting
evidence is sketchy;
- Raise this topic for further discussion and analysis;
- Consider what facts, if any, might prove the conclusion to be
incorrect.
In
A
Search for Catalysts (
- The SEC report on mark-to-market accounting, due on January
2nd. This might recommend reporting transparency, but some relief on
the official asset calculation. Or it might not.
- Housing initiatives. The Treasury is hinting at a new plan
to reduce mortgage rates. The Fed has already acted. We expect
the market to be skeptical of both, so it may take some real evidence to
change opinions.
- Corporate earnings. No one will believe anything from Q4, so
if there is positive news, we are waiting until April -- at least.
I
have been fighting these myths on Wall Street – especially those related to the
BLS
and the Birth-Death Adjustment (
“As always, our motives are to make the best
use of available data. The multi-year criticism of the
Back in April of 2009 I took issue with pundits who felt that the Financial Accounting Standards Board was caving to political pressure on its mark-to-market decision. It was a common case of bureaucracy being drastically oversimplified. As I wrote then:
“Various opponents of change claim that FASB
caved in to political pressure. This is an easy story for journalists to
write and for pundits to criticize. None of them exhibit any understanding
of how the American political system works. They are writing to a
receptive audience, which shares their pre-conceptions about how government
should work.”




