I’ve written much about the pervasive negativity towards the markets and the economy these days, mostly as represented by consumer confidence and reflected in the media.

Today the Economist presents a very interesting case that this negativity is also being reflected in the popularity of financial analysts:

Ten years ago it was easy to make your name as a securities analyst. Take a technology stock, think of a number, double it and then announce that as your price target. Time it right and your call would be a self-fulfilling prophecy, as investors worldwide would regard your views as a buy signal. Mary Meeker of Morgan Stanley and Henry Blodget of Merrill Lynch ruled the markets.

Nowadays you establish your reputation by being as gloomy as possible. Meredith Whitney, a banking analyst at Oppenheimer, scared the markets last year by sounding a warning about the financial health of Citigroup. Kathleen Shanley, an analyst at Gimme Credit, recently caused a brief flurry by opining that creditors were withdrawing funds from Washington Mutual (which the company quickly denied).

I find it very interesting to consider that there are virtually the same rewards today for analysts one-upping each other with dramatically apocalyptic projections as there were during the dot-com bubble for analysts one-upping each other with wildly optimistic visions.

Just as the prevalence of competing pollyannas was a sign of over-exuberance during the internet bubble, I believe the super-star status of today’s competing cassandras it is another clear sign that the pessimism has gone too far.

Sources:
The rise of the bearish analyst
Buttonwood
The Economist
July 31, 2008

I’ve written much about the pervasive negativity towards the markets and the economy these days, mostly as represented by consumer confidence and reflected in the media.

Today the Economist presents a very interesting case that this negativity is also being reflected in the popularity of financial analysts:

Ten years ago it was easy to make your name as a securities analyst. Take a technology stock, think of a number, double it and then announce that as your price target. Time it right and your call would be a self-fulfilling prophecy, as investors worldwide would regard your views as a buy signal. Mary Meeker of Morgan Stanley and Henry Blodget of Merrill Lynch ruled the markets.

Nowadays you establish your reputation by being as gloomy as possible. Meredith Whitney, a banking analyst at Oppenheimer, scared the markets last year by sounding a warning about the financial health of Citigroup. Kathleen Shanley, an analyst at Gimme Credit, recently caused a brief flurry by opining that creditors were withdrawing funds from Washington Mutual (which the company quickly denied).

I find it very interesting to consider that there are virtually the same rewards today for analysts one-upping each other with dramatically apocalyptic projections as there were during the dot-com bubble for analysts one-upping each other with wildly optimistic visions.

Just as the prevalence of competing pollyannas was a sign of over-exuberance during the internet bubble, I believe the super-star status of today’s competing cassandras it is another clear sign that the pessimism has gone too far.

Sources:
The rise of the bearish analyst
Buttonwood
The Economist
July 31, 2008

Editorial Cartoon
Dick Locher
Chicago Tribune
July 30, 2008

Editorial Cartoon
Dick Locher
Chicago Tribune
July 30, 2008

From Investopedia:

Support (Support Level)

What does it Mean? The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock.

Often referred to as the “support level”.

From Investopedia:

Support (Support Level)

What does it Mean? The price level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock.

Often referred to as the “support level”.

The Wall Street Journal reports today:

After filing for Chapter 7 bankruptcy, the parent company of national chains Bennigan’s and Steak and Ale on Tuesday shut hundreds of restaurants, putting thousands of employees out of work.

This is certainly bad news for fans of the chains’ broccoli cheese balls and fried mozzarella sticks and obviously more so for the chains’ many employees.

But the question that really troubles me is, “what about Fergus?”

Is this the end of the “Short Pants Dance?”

(Click for video)

Will he resort to a life of crime and go “Back 2 Tha Hood?”

(Click for video)

Dark days, indeed, when even a Leprechaun gets canned.

Source:
Dining Chains Shut Doors
Jeffrey McCracken & Janet Adamy
The Wall Street Journal
July 30, 2008

Editorial Cartoon
Gordon Campbell
Freelance
July 30, 2008

The Wall Street Journal reports today:

After filing for Chapter 7 bankruptcy, the parent company of national chains Bennigan’s and Steak and Ale on Tuesday shut hundreds of restaurants, putting thousands of employees out of work.

This is certainly bad news for fans of the chains’ broccoli cheese balls and fried mozzarella sticks and obviously more so for the chains’ many employees.

But the question that really troubles me is, “what about Fergus?”

Is this the end of the “Short Pants Dance?”

(Click for video)

Will he resort to a life of crime and go “Back 2 Tha Hood?”

(Click for video)

Dark days, indeed, when even a Leprechaun gets canned.

Source:
Dining Chains Shut Doors
Jeffrey McCracken & Janet Adamy
The Wall Street Journal
July 30, 2008

Editorial Cartoon
Gordon Campbell
Freelance
July 30, 2008