From Felix Salmon at Reuters:
Ben Stein finally Expelled from NY Times
You’ll forgive me if I take some small measure of credit for this one: after something in the region of 35,000 words of the Ben Stein Watch, the world’s worst financial columnist has finally been fired from the New York Times. And I couldn’t be happier. The reason was his appearance in commercials for (and on the homepage of) freescore.com, a sleazy company which exists only to extract large sums of money from those who can least afford it....MOREFelix soesn't much care for Ben.
August 14, 2007 was the day I realized just how serious the sub-prime mess was going to be. The DJIA closed down 207 at 13,028. The next day we were down another 167. The INDU took a couple months to hit it's all-time high of 14,164.53 on October 9 but the path ahead was plain to anyone watching in August.
Except Ben Stein.
On Aug. 15 I posted "Ben Stein and the Markets (nutshell: Ben's wrong)" in response to an op-ed he had in the NYT earlier that week:
On Sunday Ben Stein wrote an Op-Ed for the New York Times that was conflating, confusing and confounding.I'll have some comments following these exerpts from:On November 5, 2007 we posted "Ben Stein, My Trading Floor Be-atch" which ended with these lines from David Gaffen at MarketBeat:Chicken Little’s Brethren, on the Trading FloorMr. Stein is glossing over, at minimum, three issues that the sub-prime mess raises.
...Much more to the point, the fears and terrors about subprime mortgages have helped knock off 6.7 percent of the stock market’s value in recent weeks. This amounts to about $1.1 trillion, or more than 30 times the losses so far in the subprime market. In other words, these subprime losses are wildly out of all proportion to the likely damage to the economy from the subprime problems....
1) To the extent that sub-prime losses are held by publicly traded companies or their affiliated funds, the amount that should be subtracted from their market capitalization is not the recognized loss but the loss times their P.E. multiple (I shouldn't have to make an argument by definition, Ben knows this stuff). This gives you a much larger number.
2) The banks are reporting that they can't quantify the extent of their losses. What? Who are these guys?
They trade based on models. Here's a must read on modeling,
"Numerical Models, Integrated Circuits and Global Warming Theory",
it was written in regards to climate models but if you read it to the end you will:
a) have a pretty good understanding of some of the problems of modeling in general; and
b) you will think "This guy knows what he's talking about".
Short version on modeling errors? As Alfred Korzybski said "The map is not the territory"
3) With the lifting of the curtain, investors are able to take the measure of the Great and Powerful Oz.I like Ben. He's usually a sharp straight-shooter.
A lot of these Wall Street types are revealed as arrogant windbags. See "hubris" (or see David Gaffen's WSJ.com MarketBeat post yesterday. He skewers 'em like a Canadian guide gutting fish. Very efficient.)
Goldman, Bear, Paribas are the peak of the finance world (and paid like it)
This revelation was not re-assuring to the markets and worthy of a P/E haircut on the market all by itself.
I'd like to see Senator Levin get these guys under oath and ask "What were you thinking?"
I'd have liked to have the chance to win his money.
All of it.
Life's too short to waste time with loudmouths who are wrong on the big moves. Adios Ben.
...The credit-market turmoil of the last several months has taken a large bite out of the market capitalization of most major banks and securities. But substantial losses have occurred in these names since Bear Stearns and Goldman Sachs announced earnings on Sept. 20.Combining eight of the major banks and brokerages, $120 billion in market cap has been wiped out in less than seven weeks...
From The Columbia Journalism Review:
The New York Times Finally Cans Ben Stein
Gawker scoops that The New York Times has finally given its Sunday Business columnist Ben Stein the ol’ heave-ho, after an incredibly dumb ethical lapse last month.
Reuters’ Felix Salmon, a longtime Stein foe, was the first to point out that the actor/columnist/emcee/Nixon speechwriter/”Bueller… Bueller” guy had sold out to a company called freescore.com, appearing in TV ads promoting the morally dubious service.......Good riddance, Ben. Take a victory lap, Felix.