Quotes of the day

Just to be clear, the "extension of the unemployment benefits" is an extension of the qualifying dates for the various tiers of benefits, and not additional weeks of benefits.--Calculated Risk

... people read and watch personal finance journalism for a very different reason than is commonly supposed. They aren’t looking to learn new things. They are looking to have their biases and ideas confirmed by an intelligent outsider. Sometimes they are looking for justifications for positions they are already in or are ready to get into. In short, they read what they already think so that they can feel comfortable and smart thinking it. Personal finance journalism is like a magical mirror that reflects back at the reader a slightly smarter and better looking version of himself.--John Carney

Chairman Bernanke’s story serves to establish his stature as an insightful regulator whose prudent intervention prevented a global meltdown. The only problem with his narrative is that it contradicts certain facts and our own experience – like the Fed’s admitted inability to see the crisis coming or to regulate effectively the banks under its purview. Psychologists call the process of rationalizing two incompatible or conflicting beliefs or observations “cognitive dissonance”. ... What was most striking in the interview was Chairman Bernanke’s devotion to the righteousness of his narrative at a time when every actor in the financial system still ought to be asking how things went so terribly wrong. The desire to create a story that emancipates one from blame and promises future forecasting precision must be incredibly powerful for any public servant charged with the awesome responsibilities of the Fed Chairman. Yet it is precisely these sorts of leaders who should be the most attuned to understanding the dangers of believing too much in the stories we tell ourselves, and instead be willing to search out facts and admit wrongdoing.--Daniel Loeb

By far the biggest disappointment has been with the regulators. They’re the ones who are charged with being unbiased and keeping the playing field level and protecting the common interest. The other failings are important – meaning whether it’s rating agencies, sell-side analysts, media and so forth. The idea, though, that the SEC would go after the wrong team and then never really figure it out and deal with it, is terribly distressing. It’s almost like they just sent the same people back to try to do a better job. They basically said, the SEC, do a better job; the Fed, do a better job; rating agencies, do a better job. They didn’t really make any of the structural reforms that would seem obvious. You’d break up everything that’s too big to fail. You’d eliminate the official status of the ratings agencies. You asked for two, I’ll quit there. The people arguing to protect those positions held the day with enough Congress people, and the people who felt otherwise weren’t as motivated. It’s the classic problem of special interests within our government.--David Einhorn