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ZeroHedge has a lot of shady things, and if you didn't know better you'd think the world was falling apart.

That being said, their bearish view is pretty important when it gets confirmed by huge people. For instance, ZH has been beating the drums on high yield debt since summer of last year, then Icahn steps in and make similar comments and takes to task BlackRock CEO about their HY ETF being shady and the underlying market being illiquid. There hasn't been a high yield implosion, but a lot of people are betting there will be sometime in the near future. But maybe there won't be? Everything is a gamble, I've lost plenty of money being too early or too late.

You can get decent trade ideas from ZH, but like you said, 95% of their items have to be taken with a grain of salt. The odd part is that most traders, professional traders, and some hedge fund managers frequent ZH and mostly agree on some of their doom scenarios; but the central banks pump the markets with so much money it's impossible to bet against the S&P. "Don't fight the Fed" is a slogan for a reason.

> ZH has been beating the drums on high yield debt since summer of last year

So have John Mauldin, the New York Times's Dealbook, the Financial Times... There are better places to get your bear-market digest.

John Mauldin and Worth Wray are two really strong voices for the high yield debt problem. I have learned an incredible amount from them and trust them far more than Zero Hedge on such topics. ZH is the frontline pulse but if you don't want to have to filter out 85% of the crap, Mauldin and Wray are excellent sources.

Reading ZH like Reddit will always turn out to be toxic. It isn't just the low signal-to-noise ratio. The site's core Austrian philosophy is at odds with the forefront of economic evidence.

I skim it from time to time. Very quickly. If I see something interesting, I look look at the source. If it's credible, e.g. Reuters, I cautiously read. If it isn't, I research it. Once in a while I'll come across novel, credible sources this way. This is the No. 1 way to get value from ZH.

The other time I read ZH is when I have a specific crisis on mind, e.g. Greece/Brazil/Venezuela shitting the pot. ZH throws up a good sense of how the bear market feels. Still terrible analysis. But good sentiment stock.

'The site's core Austrian philosophy is at odds with the forefront of economic evidence.'

Which evidence are you referring to? Would you mind sharing some of it?

A slightly technical read, but here you go: http://econfaculty.gmu.edu/bcaplan/whyaust.htm.

So, a link to conjecture from an associate professor at the PREEMINENT SCHOOL for studying Austrian School economics in the US... is evidence against Austrian school economics?

Let me put it this way: there is a lot of financial incentive for Austrian School economics to appear "wrong", because Keynesian "economics" is really all about printing money and earmarking it for buddies within a given office's constituency.

Austrian School economics can't really actually be wrong. It's primarily the study of basically common sense things that can be proven a priori, such as subjective value (if you like purple more than I do, a purple bike might be worth more to you than to me... can something like that really be proven wrong?) and ideas like allowing people to spend money as a means of expressing the value of a given good or service.

The fact that there is an active movement within our government and its "education" system to apparently disprove such things is preposterous. But given the financial incentives, it's not surprising.

I'd have thought the opinion of an academic based at the pre-eminent school for studying Austrian economics in the US would be considered an unusually informed one. Especially when he explains why even though he's largely politically aligned with them he thinks much of their theory is lacking.

Let me put it this way: the reason the academic mainstream has relatively little regard for Austrian economics and even less for permabear investment advice based around passing familiarity with Austrian economics has nothing to do with printing money for their buddies (which the more influential half of the economic establishment has been passionately arguing against for decades) and everything to do with adherents of the discipline's tendency to rely on rants about government conspiracy once the economic problem gets a bit more complicated than determining who buys the purple bicycle from whom.

The education system isn't in the slightest bit interested in disproving the sort of trivial economic stuff about preferences that most microeconomists simply absorb as foundational axioms on the first day of their undergrad course rather than writing papers about how they can be deduced from the statement "humans act", but they're rather more sceptical about extending that to "therefore, it's true a priori the gold standard is the only way to run an economy and that QE will inevitably lead to uncontrollable hyperinflation and large scale malinvestment. (Which is the sort of prediction made on a regular basis by Austrian-inspired economic commentators on finance sites like the one being discussed here). Especially if the proponent of the idea starts ranting about "financial incentives" and wrapping inverted commas around the word education at the mere suggestion that such hypotheses might be falsified.

Milton Friedman was the father of Neo-Keynesian economics, and Milton Friedman literally INVENTED monetarism. If you actually think Austrian School, which has been considered heterodoxy, if not blasphemy, to any standing US government in the past 80 years, is the influence behind quantitative easing, then I don't really know what to say at this point...

> Austrian School economics can't really actually be wrong.

If you can't be wrong, you're not making claims about the real world.

I appreciate the link, this was a good read even though I ultimately disagree with his overall assertion. This issue isn't going to be settled here, or anytime soon, it's been going on since before many of us were born, and will probably continue after we're gone.

I lost about $100k in 2009 buying into the ZH-gloom and doom mentality, unfortunately. Everything they said made sense, but it just wasn't how the world works.

In a 2009 bear's defense it was unprecedented Government intervention that lit the fuse under the markets and led us here. I remember reaching a point myself where I realized that policy was driving the markets more than any other factor and quit actively trading completely. You can be right but if the Feds take the other side of your trade you will be bragging about it to your fellow corpses in the graveyard.

Yep. At the time, I was reminded of a quote from The Iliad, which I can't find anymore. It was something to the effect of, when the gods come down to earth to meddle in the affairs of mortals, the only ones who win are the ones whose side they take.

  We everlasting gods . . . Ah what chilling blows
  we suffer—thanks to our own conflicting wills—
  whenever we show these mortal men some kindness.

> In a 2009 bear's defense it was unprecedented Government intervention

The novel part was the purchase of government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities. The Fed's balance-sheet expansion, interest-rate regime and their effects on the market have precedent [1].

[1] http://www.hoover.org/sites/default/files/14110_-_bordo_-_ex...

Agreed. I only wish I figured this out $75k or even $50k sooner :)

I feel a little bit better now.

I learned a very valuable lesson from reading Housing Bubble blogs and what not during the 2008 Financial Crisis.

I prided myself on being one of those people who saw it before it was happening, and had purchased double shorted bank ETF's. I thought I was a genius by "getting news first" and acting on it, and seeing the money I was "making". But then the Government stepped in and said they would not let the banks fail. My position evaporated into thin air.

You learned half the lesson. The other half is the over-class will force the government to do whatever is needed to keep them from going bust.

My dad claimed that the biggest mistake he made financially was when Chrysler was going bankrupt in in the early eighties. He knew that it was politically impossible for the government to let Chrysler fail. However my dad didn't follow through and sock the 100k he had into Chrysler stock.

I did the same thing. I knew in January 2009 that the slide in financial stocks was over. Should have put half into Goldman Sacks half into JP Morgan. The Fed wasn't going to let Goldman Sacks and JP Morgan fail.

"Not letting them fail" does not necessarily mean that investors in those institutions won't be taking a bath.

Exactly. After learning from his mistake with Chrysler, Gibbon1's dad might have bought GM's bonds, and gotten hosed yet again. Oops.

Chrysler was 1979, GM was 2008 totally different political economic climate. In 1979 ordinary businesses and unions had a huge amount of political clout. And Chrysler wasn't an ordinary business.

By 2008 only Wall Street investment banks had that clout. That's because under neo-liberalism the profits from the real economy are funneled through the investment house. Letting them go under means the spigot gets turned off.

Putting all your eggs into a single risky basket is not a good thing. Sounds like your dad was wise despite wishing he had done otherwise with the benefit of hindsight.

Yeah, and had you acted on the type of information ZH pushes in 2007 you'd probably saved as much or more.

In fact, I made $225K in 2006 on real estate arbitrage buying into ZH type gloom.

A lot of what ZH publishes still does make sense; it's just that the financial/ponzi schemes the Fed has employed since 2009 haven't busted yet.

I still don't get the pass that's given to the mainstream financial "experts" who all missed 2008.

Since 2006 Gold has out performed the DOW by ~30%, even with the the financial schemes and pushing the national debt to 19 trillion.

Frankly, you should be keeping that salt boulder at the ready for all media you read today. Not just ZH.

What do you think about the rally now? I too have been following the site since it started. Around 2011 or so I realized I was missing the greatest rally, possibly ever, but I was an unemployed millennial with no money to invest.

In the past 2 years or so I'm finally on a good financial footing but I really think this monetary experiment is coming to an end and I dont think I'm thinking that only from reading doom media.

Hope I'm wrong, because another downturn would be bad for this country.

There are two principles at work here. First is Lord Acton's rule: "things that can't go on forever, don't." The second is Keynes: "the market can stay irrational a lot longer than you can stay solvent."

Everyone knows that this has to end -- not just in doom media but everywhere -- but all smart traders know that being early is the exact same thing as being wrong.

You cannot time whats coming, and unless you're running money for somebody else, you don't have to. The only thing you can do is diversify. I know that this is standard advice and it's not nearly as sexy as betting on The Big One, but having a healthily diversified portfolio is literally the only way to stay sane.

If you just have to buy catastrophe insurance, then treat it like what it is: a small hedge against a long tail eventuality. That means don't bet your lifestyle on it.

For me, the most powerful lesson from the GFC is that /everyone/, without exception, is net long The System, and when you bet against The System you bet against the combined best efforts of the most advanced civilization that this planet has ever produced. That is stupid, so don't do it.

The problem is that you can't properly diversify anymore, I went looking for things that weren't correlated. Heck during all the fed/government meddling things that should have been negatively correlated were moving together. That is when I concluded the whole thing was rigged, and it was better to go with the herd than get run over by it. In my own way I bet against the housing boom of the early/mid 2000's too. I didn't really lose any money, but what I learned is that I should have just went out and purchased the largest house I couldn't afford, because the government made it clear that they would do anything to prop up housing/banks/etc. We will never see a _REAL_ price crash in housing because as soon as the markets start to dip a few percent the 2% loans, tax breaks, and bailouts for banks holding empty real-estate they cant sell because doing so will cause the prices to drop further.

I've realized in my life trying to predict macro is pretty damn hard. Because even if something is irrational, it might be in a whole bunch of very powerful group's interests to keep on propping up the irrational for a very long time.

For example, I come from Vancouver. In Vancouver, the 2007 real estate bubble never stopped, wages stayed at their Reno, NV levels. Having Vancouver RE has had about a %30 annualized return for about 15 years. Now an average house is about 1.5-2 million dollars. The housing market is completely irrational, but knowing how it works it might be another 'boom' decade or it might all collapse on itself in the next few years.

As other posters have said: diversification is the only free lunch because market timing is nearly impossible. The other thing you can do is invest in yourself and increase your income earning potential (which, to me, means both the absolute amount of income you make and how much your enjoy your job and therefore how long you can last in it). As returns on financial capital decrease, returns on human capital (your own labor) become relatively more important and attractive. If we are truly headed for decades of ZIRP and sub-4% (or even flat) real returns then YOU are the best place to invest your money.

Its click bait plus some useful info.

Running a story with whatever the latest gossip on twitter happens to be is not news. Sure you'll get lucky occasionally, but let's be realistic here.

If you don't care at all about journalistic integrity, then why not just follow the trending twitter hashtags yourself from their search page?

You'll get your news even faster that way.

I get what you're saying, but it's not quite like that with ZH. Those guys may not do a bunch of legwork, but they have good instincts for which stories are likely to be worth following up on and which are just lizard man nonsense. Their instincts act as a kind of initial filter.

There are other sites you can go to if you just want to see anything and everything (and there's always Twitter), but the value of ZH (which I probably should've spelled out in the parent) is that they do an initial pass with their noise filter, and while there's still a ton of noise there's also enough signal there after they've done their thing that it's still worthwhile.