Financial pugilism and offbeat analysis vie for space in blogosphere


Blogs have gone from being eccentric postings to become essential financial reading

SOME OF the savviest and most in-depth analysis of the global banking crisis has come from the financial blogosphere. Luminaries like Nouriel Roubini, Nobel economist Paul Krugman and former IMF chief economist Simon Johnson are all active bloggers while equally valuable material is penned by less well-known financial experts.

Their growing influence and popularity is evidenced by the US Treasury’s recent decision to hold a conference call discussing the latest bank rescue plan with high-profile financial bloggers. Here’s a taste of some of the very best financial blogs.

With more than 75,000 page views every day, Calculated Risk is the most trafficked finance blog. Launched in 2005, it was prescient in its warnings of a US housing market crash.

One poster, a concerned ex-mortgage banker who went by the name of Tanta, became something of a legend, both in the blogosphere and beyond. The Federal Reserve even cited her in a 2008 paper, Understanding the Securitisation of Subprime Mortgage Credit.

Tanta (a pseudonym for Doris Dungey) died of cancer last November and her passing was noted in the New York Times, which carried a detailed obituary. Even without Tanta’s contributions, Calculated Risk remains essential reading.

Few blogs can compete with FT Alphaville, the Financial Times’saward-winning blog.

Managing to combine the real-time delivery of stories with detailed and thoughtful analysis, it does so in a light-hearted and offbeat manner. Typical was the mock-serious “Save our shorts” campaign, which poured scorn on populist bashing of “those evil short-selling monsters in Mayfair”.

“Roubini sees light at the end of the tunnel,” it headlined recently after Nouriel “Dr Doom” Roubini made a few quasi-optimistic comments, only to add that in “typical Roubini fashion”, this light was “more of a pinprick of phosphorescence than a beam of brilliance”.

The blog also features a live chat, Markets Live, every morning.

Not yet five months old, has quickly established itself as a must-read for anyone with an interest in the Irish economy and the international financial crisis.

Founded by Philip Lane, an economics professor at Trinity, this group blog features contributions from a host of renowned Irish economists and won best specialist blog category at the 2009 Irish Blog Awards. Posts tend to attract detailed comments and this interaction leads to lively and illuminating discussion of complex issues.

Paul Krugman may be a Nobel economist but his punchy and forthright style means that readership of his New York Timesblog is by no means restricted to academia. A self-confessed liberal, he is critical of “boneheaded” conservative economists and Republican “Bushies”.

So far, he’s not too impressed by President Obama either.

The president’s stimulus package is “too small” while the recent $1 trillion bank rescue package fills him with “despair” (“The zombies have won”, lamented Krugman, who had advocated temporary nationalisation).

Krugman’s pugilistic style might occasionally grate but he was one of the few economists to predict a serious financial crisis and his influential blog is justifiably popular.;;

Readers looking for tips on money management, stop loss orders, technical trading strategies and the likes will like Trader Mike, a full-time trader who documents his watch-lists and short-term market outlook on his blog.

Psychologist, author and part-time trader Brett Steenbarger is strong on historical market patterns, technical analysis and trader psychology while market-timers will like Traders Narrative, which closely tracks stock market sentiment measures and much more besides.

Former IMF chief economist Simon Johnson is the co-founder of the Baseline Scenario blog. Not only does it explore global economic issues, it is dedicated to “developing concrete policy proposals” and offers an excellent primer on the financial crisis.

Johnson’s blog hit the headlines in February after he controversially called for a “plan of action for Ireland”, adding that “another Iceland-type situation” must be avoided.

Yves Smith has been working in financial services since 1980 and she brings all her experience to bear in her Naked Capitalism blog.

One of the most respected financial bloggers, Smith routinely rips into dodgy economic assumptions and her worldly analysis makes for indispensable reading.

A book deal means that Smith will be blogging less over the following months, with the blog increasingly featuring guest posts from other informed analysts.

Second only to Calculated Risk in terms of monthly web traffic, it’s not hard to understand the popularity of Barry Ritholtz’s blog.

A market strategist and frequent commentator on CNBC and Bloomberg, Ritholtz’s informality and no-holds barred style is made for blogging.

Prescient in his predictions of large-scale financial meltdown, Ritholtz has also made a number of timely calls on the bullish side, correctly predicting a big rally at the beginning of March.

Did you know that the 497-point Dow rally triggered by last month’s financial rescue package was the fifth biggest one-day point gain and the 23rd biggest one-day percentage gain in history?

Did you know that we’ve had 11 400-point up days during the current bear market?

Did you know that just 5 per cent of US stocks were trading above their 50-day moving averages prior to the recent rally and that markets were more extended to the downside than at any time since the Great Depression (excluding last November, when things were even worse)?

Do you care? Maybe not, although market junkies will. The Bespoke Invest blog is renowned for its technical and quantitative analysis and active investors should bookmark it.

In 2003, disgraced equity analyst Henry Blodget was barred from the securities industry for life after e-mails revealed him to be privately rubbishing technology stocks that he was publicly recommending.

Blodget makes the headlines these days as a blogger, and a good one at that.

He’s the brains behind a number of blogs, including Clusterstock, a hyper-active blog reporting on breaking Wall Street stories.

The tone is irreverent – “Bernanke tells Congress that we’re pretty much screwed”, a recent headline read – but the sceptical contributors are knowledgeable and always on the ball.