The Zero Hedgies

By Felix Salmon
September 30, 2009
story on Zero hedge. The vitriol aimed at him from the Zero Hedgies is something to behold, both in the comments on and on ZH itself. For instance, these three consecutive comments:

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I met up with Joe Hagan this morning, in the wake of the appearance of his big New York story on Zero hedge. The vitriol aimed at him from the Zero Hedgies is something to behold, both in the comments on and on ZH itself. For instance, these three consecutive comments:

Let’s get some of his work particulars, as well as information about his father. And does he have kids?
Hagan: you’re just another meal in the food chain, and you might find ZH readers are a hungry lot.

welcome to fight club joe.

Joe forgot we are the ones that educate his kids, care for his parents, fix his car and deliever his pizza. hehe

There’s genuinely nothing in the article which could remotely justify that level of hatred, except maybe for the fact that Hagan outed ZH as Dan Ivandjiiski. (Something the NY Post had done back on September 2.)

That said, however, it’s undeniable that ZH has a huge following: Quantcast puts pageviews at over 5 million a month, and uniques at over 330,000. (The ratio between the two is very high indeed by website standards, showing how sticky and addictive the site is for its loyal readers.)

Who are these people who flock to and lap up everything they’re served? They clearly love the chart-filled posts about intraday movements in the stock market, which is one clue. I think what we’re dealing with here is, essentially, retail day-traders, as profiled by Hagan back in February. (Hagan told me that even back then, before ZH really took off, the day-traders he was writing about were constantly reading the site.)

You need to be a little bit delusional to be an individual day-trader, paying substantial sums for information, technology, and trading spreads every day and yet somehow reckoning that by zooming in and out of highly-levered ETFs you can not so much beat as utterly obliterate broader market returns. All day-traders think they’re above-average; they have to, otherwise they wouldn’t have the hubris necessary to do it in the first place.

The idea really took hold in the popular imagination sometime during the first dot-com boom: stay at home, hook in to the markets, and make more by trading your own account than you ever would working for the Man. Call it the ultimate triumph of Capital over Labor.

It’s not hard to guess why these people might be angry: they’re losing substantial amounts of their own money in the market, and they’re casting about for someone to blame. The insanely profitable Goldman Sachs, for one, is always a good target. And indeed it might well be the case that Goldman’s traders probably are picking off a lot of these individual day-traders, and making quite a lot of money off them in aggregate.

Remember too that day-traders tend to be quite rich (or they wouldn’t have money to play with) and convinced that they know something most people don’t (or they wouldn’t have their self-perceived edge in the market). At that point it becomes quite easy to see how they would be attracted to a conspiracy theorist like ZH, who writes dense and often hard-to-decipher posts about the arcana of how the market works. The masses read Dan Brown for fun; the day-traders read Zero Hedge for profit.

None of this really explains the unbridled anger aimed at Hagan, but for the fact that when you’re casting around for someone to blame, and a major media outlet paints your idol as some kind of sleazy kook, you’re liable to take extreme umbrage — especially when you can hide safely in complete anonymity. The Zero Hedgies, in other words, are the 4chan of the financial blogsphere, which is maybe one of the more depressing aspects of the degree to which the financial blogosphere has matured.


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Well said Cornelius and so much more polite than my own comment. The best take on why ZH and other blogs are taking off is presented by Samantha Bee on yesterday\’s Daily Show explanation of HFT. Check it out on another of these blogs:

Posted by Andrey | Report as abusive

Felix,Add me to the list of annoyed Zero Hedge fans who was an avid reader of your column. Until yesterday. I really, really don’t like being stereotyped – I read the Nation too. I suppose that makes me a communist? Or does that simply confirm my paranoia?And I have to say, other comments on this page made me happy. Bravo, Zero Heads.Finally, I noticed a guy on television last night bemoaning the state of the financial system – basically saying that it’s tilted in favor of a few. He was on Charlie Rose and his name was….what was it again? Oh yeah, Paul Volket, or Vulkan, or no, it was Volcker, Paul Volcker. But I’m sure he’s just some day trader who has it out for Goldman Sachs.Bye, Felix, and good lu- nah, just bye.

Posted by Jon | Report as abusive

Felix,I think you’re painting the readership of Zero Hedge with far too broad a brush. I’m an avid reader and occasional commenter on the site, and far from a day-trading loser shut-in or malcontent, I am: an MIT educated electrical engineer, a Harvard Business School educated MBA grad, a veteran of two successful technology startups from early stage through IPO, a former venture capitalist of 3+ years, …I say all this to say that maybe I’m an exception that proves the rule, there are more than “stick it to the man” day-traders in pajamas reading Zero Hedge. Alternative points of view are always good grist for the mill when formulating one’s investment strategies, and ZH’s views are nothing if not alternative.

Posted by just.a.guy | Report as abusive

You are a Zero Hedgie if you recoiled in horror at Hank Paulson’s first version of the TARP bill; if you were outraged at Paulson’s and Bernanke’s manhandling of the Bank of America-Merrill Lynch shotgun wedding and their obvious complicity in securities fraud; if you were dismayed at the outright theft of taxpayer dollars via payments of 100 cents on the dollar for worthless phony derivatives from AIG to Goldman Sachs and other politically powerful banks, who should have been left for dead; if you are alarmed at the lack of journalistic integrity in the main stream media evidenced on CNBC and blogs such as these, where facts and statistics are twisted and cynically spun on a daily basis to support the agenda of the wealthy and politically powerful; or if you are angered by clumsy ad hominem attacks designed to marginalize and silence those who dare speak the truth of what is going on in this country. You, Felix, are not a Zero Hedgie.

Posted by Ned Zeppelin | Report as abusive

Regardless of the actual veracity of the content on ZH, at least its not puffery. Does journalism school even teach how to write a story and actually, you know, explain whats going on to the reader? Apparently not. If I wanted a profile of the guy I could go to Facebook. Other than wasted time, what does the piece give me? Absolutely nothing. And before you dismiss all the items as being a conspiracy nutcase stuff, you might do yourself a favor by actually checking it out. Because the govt would never never never lie to the public, right? Check out GATA and the data they have on gold, which is extensive and comes from govt agencies own reports. Or is that too hard to actually do some investigative reporting?

Posted by jimh | Report as abusive

Put more simply – the people know something is rotten in Denmark. And they don’t trust the current power brokers to tell the truth. At all.

Posted by jimh | Report as abusive

And I am not a day trader. Not even in the equity markets. Neither are any of my friends who also read ZH. Nice job of smearing and labeling the entire readership so that its easily dismissable as just a bunch of day traders.

Posted by jimh | Report as abusive

i love it when a ‘journalist’ comments about any group of over a million viewers, chery-picks a few extremists, and then generalizes them ALL as ‘these people’ (multiple times) as if a million people could actually be that consistent and/or coherent.i don’t suppose he like those Glenn Beck viewers either.or the Ron Paul followers either.and probably thinks the “Sound of Music” is provincial and schmaltzy (sp?).but you’ll never see these guys commit to anything they like. they just throw stones. don’t distract them with facts.once you see their MO, they’re rather predictable and fun to read. show your kids how it works! more fun than scrabble.oh, and i forgot… buy gold.

Posted by i.knoknot | Report as abusive

you’ve dignified this piece of rubbish-writing enough folks… your time is precious.go read something real somewhere else. vote with your clicks.

Posted by i.knoknot | Report as abusive

ZeroHedge has some great posts and some crap posts.Felix Salmon has some great posts and some crap posts (like this one).Felix Salmon, why don’t you focus on something useful, like the corruption in our capital markets instead whining about Zerohedge’s readers? Why does it matter who Zerohedge’s readers are?

Posted by Fu | Report as abusive

The quality of writing on ZH is uneven compared to some financial blogs (Mish or Automatic Earth come to mind).However, criticism by an MSM flunkie is high praise. Salmon only forgot to claim that ZH is “racist” and he would have touched all the bases for the standard “kill the messenger because the message offends my masters” approach that passes for journalism from the old media.At least ZH tries to provided the truth, even if their articles are occasionally crude or poorly written. The MSM simply lies to protect their bosses and the corrupt system they run.If you want to compare the quality of readers. I bet the average ZH’er is a lot less likely to excuse Polanski for child rape than the average NYTimes reader. Oh but wait, saying rude things about Goldman Sachs is much worse than sodemizing children. Where are my morals?I approved this message and I am not a Day Trader

Posted by Gary Poteat | Report as abusive

Zero Hedge surely got some free publicity. Lot of comments here too. If the subject realy is sophisticated you don’t see as much but if folks can do some ranting they are their. It’s pathetic!Gore Vidal is right: “Does anyone care what Americans think? They’re the worst-educated people in the First World. They don’t have any thoughts, they have emotional responses, which good advertisers know how to provoke”From: Gore Vidal: ‘We’ll have a dictatorship soon in the US’

Posted by Youri Carma | Report as abusive

I came across ZH on the third day (it was still a blogspot). I’ve never owned (directly or indirectly) a share of stock in 62-years but things worked out quite well without them. Most people confuse Wall Street with investing but the reality is that it’s just speculating or a plain “roll-of-the-dice”. People I know in the market have no idea of what they own – no concept of the crap on the balance sheet. I find ZH to be one of the three or four best sites and am amazed how the MSM is now pushing all this traffic his way – Great Job Tyler..

Posted by Gerd Berg | Report as abusive

The few responses I could stomach here were all from sheep.The sheep are asleep in the field, while the Shepard fleeces the flock.

Posted by K Ackermann | Report as abusive

Felix, looks like you just got your ass handed to you in the comments.

Posted by ha ha ha | Report as abusive

Felix, You have got this all wrong. ZH is unmasking criminal market manipulation.”If you’re not part of the solution, you’re part of the problem.” Get a clue, Felix.

Posted by leftback | Report as abusive

Felix Salmon — I quote you alongside your fellow MSM shills here: 2009/10/02/defending-goldman-sachs-joe-h agan-msm-shill-vs-zero-hedge-blog/Defend ing Goldman Sachs: Joe Hagan (MSM shill) vs. Zero Hedge (blog)In this month’s NY Mag story, Joe Hagan continues to defend Goldman Sachs by attacking Zero Hedge blog and its 330k/month readership. Simultaneously, Justin Fox is supporting the hit-piece at his blog – arguing that readers of Zero Hedge are “paranoid nutters” who engage in “conspiracy theories” which — most damningly — are only right “once in a while”.[...]According to Hagan’s narrative, Ivandjiiski (AKA Tyler Durden) became “emboldened” by increased site traffic and began to write more-detailed postings, outlining his “radical notions” of un-manipulated markets and governments. Thus “Zero Hedge’s popularity metastasized with its increasingly paranoid focus.” Soon, we are told, Ivandjiiski was seduced by the site’s ad revenue and “a newly minted sense of his own importance”, and Zero Hedge became, as Reuters contractor Felix Salmon would write three days later, a “Dan Brown novel” for “delusional retail day-traders”.[Continues...]

Posted by TC | Report as abusive

Jeez, you reuter’s salary men are so damned envious of zero hedge’s success.But must you be so obvious about it?

Posted by phil_hubb | Report as abusive

Go back to 4chan Felix, you are way over your head here. If you can’t handle unbridled ideas and discussion then get out of the kitchen. Your political correctness and broad judgment serves no purpose and has no value.

Posted by RS | Report as abusive

Avid intellectuals who follow multiple streams of media would find this article a bit ignorant. For “pop” culture to catch on to a intellectual’s website; than attempt to judge that website on the basis of one perception is a lack of understanding of macro/micro trends in global economics/politics. Maybe there attempting to hack at the “hits” of the loyal avid “day-trade losers” who must follow everything written on the web.

Posted by T | Report as abusive

There seems to be a consensus among the media types that Felix Salmon finds respectable that Paulson, Bernanke et. al. saved the world a year ago by giving money to failing, too-big-too-fail banks and their bondholders, that the current administration, advised by many of these same wise people, is continuing this heroic work, that these disinterested public servants are still saving us all from an economic apocalypse, that their success is proven by higher stock prices, and that their failure to tie any kind of reform of how these banks do business to the massive outlays of taxpayer money used to rescue them had nothing to do with their personal agendas and loyalties but was simply an oversight that may still be corrected down the road once the world is saved. All of these assumptions are rarely challenged or even examined outside of the blogs that Felix Salmon denigrates, but they seem suspect to many people who care about these issues and spend a lot of time thinking about them. For the most part, these are people who do not benefit very much, directly or indirectly, when these banks make large profits. To them, the reluctance of the mainstream media to question these assumptions is a serious failing that feels like a passive form of the cheerleading that occurs all day long on the cable stock market shows. Portraying the difference between mainstream media and bloggers as a clear matter of right vs. wrong thinking, with bloggers as disreputable conspiracy nuts and plugged-in jounalists as serious intellectuals who give powerful bankers and politicians the respect their positions entitle them to, also seems like bad faith to these people. There is a divide, however, and Felix Salmon needs to decide which side of it he is on. This is a problem for him, no doubt, because being on the wrong side will certainly affect his career prospects.

Posted by bob | Report as abusive

Have you no shame? The mainstream media herded the population like sheep for decades. Rarely questioning the soundness of our economy or the undue influence and recklessness of the major banks.The financial blogosphere saved my ass. When I felt that something was amiss in early 2007 – it was the blogosphere that painted me the REAL PICTURE. And losers like you after the fact say things like “no one saw this coming!” LOL…You, Felix, et al, did nothing. I read you guys for entertainment; the blogs for info. Yeah, I have to sift thru the blogs, but it’s a hell of a lot easier than believing a captured MSM.You let us down MSM… it’s no surprise your viewership is dropping fast. Off to the trash heap of history for many of you. Good riddance. And by the way, whatever your salary is Felix, it’s too much.You guys in the MSM failed us – so please stop your whining.

Posted by GK | Report as abusive

These blogging sites took-off the same day your ad revenue fell off a cliff.Reuters, Bloomberg, WSJ, and-the-like, and all-in-unison, chimed in on the “green shoots” thesis in order to save their bottom lines.You sacrificed your integrity, started cheerleading and only reported the positive.Your audience saw right through it and left in droves. The same has happened with newspapers and MSM.The audience is NOT stupid; but you seem to think so – at your peril…

Posted by Peter | Report as abusive

Felix, I think I can provide some perspective here. I am a regular reader of ZH, but am also an “industry insider”, on the regulatory side, where I have the ability to verify much of the information on ZH. Tyler does in fact post relevant and useful information, and is often the first to major stories. ZH has been an important source in our regulatory efforts (ref. high frequency trading), and while Tyler and Marla and co. aren’t always right, they are well-informed and insightful enough that they are worth paying attention to.As opposed to the ZH commenters. A more emotionally unstable and ill-informed crowd you will have a difficult time finding on the internet. Next to them, the BusinessInsider/Clusterstock crowd looks positively intelligent; even the Dealbreaker crowd looks good by comparison (and it’s telling that the Dealbreaker minions, who constitute real industry insiders, have nothing but contempt for the ZHers.)I have made efforts to have an intelligent dialog with the ZH crowd (excluding Tyler and the other principals), and it’s a losing battle. It is nothing but hysterics, and it’s painfully evident that only a handful have relevant experience and useful insights. As such, I stick to just the posts from the ZH principals, and skip the comments entirely. At least the DB comments can be entertaining; the ZH comments don’t even have that going for them. I don’t think I’m alone, and my suspicion is that ZH is read by a large number of industry people, but most of them, like myself, waste no time in the comments section.

Posted by PV | Report as abusive

…as opposed to the calm, rational sociopathology of institutional traders and the market-makers.

Posted by TC | Report as abusive

one of the commenters here said: “Sigh. For gosh sakes, get your facts straight. Dan is NOT Tyler. At best, he is a contributor. Nice try, but a big strike out. There were a few clues way back as to who the original TD really was, but fortunately, those even those random clues have been removed.”I’ve read zh since just about day one (stumbled upon it somehow) and I clearly remember the clues (actually the identity issue was likely an oversight/error) referenced in the quote above. The person Daniel Ivandjiiski who is referred to as “the TD” by Hagan and the NY Post is most likely not from the information that I recall. Then again, it doesn’t really matter as I don’t know any of these people and am much more interested in content and the points of views expressed. It’s the message vs. messenger, “Publius” thing for me.I read approx. 10 hrs per day (unemployed/semi retired from financial sector)from very diverse sources about finance, economics, politics and zh is daily stop, wherein I read most zh articles. I am not a daytrader. I don’t find the site geared at all to daytraders but rather to people interested in finance/politics who know that the underbelly of the street and politicians has always been pretty dirty and are curious to hear more about it. I cannot ever recall seeing ZH make any particular investing decisions.Frankly, I view them most favorably as very smart rabble rousing patriots exposing the financial charades and chicanery between the financial and political communities in the USA to the detriment of most US citizens. ZH (as well as other blogs) has brought to the surface many matters that the established financial media have either missed or failed to report or perhaps, just maybe, felt pressured not to report because of financial pressure or interests from ownership groups or related parties. I think the odds of ZH exposing additional interesting matters to the general public will be much higher than what I expect from the established financial media.I’m convinced they are doing the honorable duty because they are making a hell of a lot of people very, very uncomfortable and ultimately that is a great thing for the USA.

Posted by DH | Report as abusive

ZH frequent reader.ZH is the best financial blog ever.You should be ashamed for assuming people are stupid.

Posted by capitan_mex | Report as abusive

“Who are these people who flock to and lap up everything they’re served?”–Felix SalmonThe distortion, through which anyone sees and mistakenly attributes to ‘others’ may merely be an aspect of our own reflection, unrecognized. Contemplate and possibly recognize this, if you will, “Ignorance created gods and cunning took advantage of the opportunity.”

Posted by joe blow | Report as abusive

Felix – your vitriol directed at ZH comes across as envy.

Because of course when you work for the MSM you check your journalistic credentials at the door and you become a sycophant to the corporations.

Sure you probably think what you write is real critique – but is it really – how far are you allowed to go without being slapped in the head by your editor – and eventually shown the door?

The reason I read ZH is because the MSM has let me down – most of what I see that passes for financial news these days resembles verbatim press releases (propaganda) from govt officials/central bankers.

There is for the most part no analysis and no questioning.

Case in point – recent 14% increase in China exports. Trumpeted across the home pages of MSM sites.

I immediately said whooooaaaa there… the EU is a wreck and the US stagnant. HOW is China growing exports?

But nope – none of the MSM sources asked that question – they just printed the BS without a second thought.

Another case in point – Fracking – the MSM reports this as if it were the 2nd coming of Christ.

Next to nothing is said about 1. toxic side effects 2. that is is hugely expensive and most importantly 3. I am not seeing any MSM suggesting that we are without a question at Peak CHEAP Oil because otherwise why in the hell are fracking, drilling miles beneath the sea and tearing apart the entire province of Alberta – to get at oil that is VERY expensive to extract?

When I go to ZH I get THE ANSWERS. That site will increase its traffic in direct proportion to the failures of the MSM to report accurately.

Posted by Roadhouse | Report as abusive

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