As everyone is engrossed by assorted groundless Christmas (and other ongoing bear market) rallies, and oblivious to the debt monsters hiding in both the closet and under the bed, Zero Hedge has decided it is about time to present the ugliest truth faced by our 'intellectual superiors' and their Wall Street henchman who succeeded in pulling off Goal #1 for 2009 - the biggest ever bonus season (forget record bonuses in 2010... in fact, scratch any bonuses next year if what is likely to transpire in the upcoming 12 months does in fact occur).
If someone asks you what happened in 2009, the answer is simple - two things. There was a huge credit and liquidity crunch, and then there was Quantitative Easing. The last is the Fed's equivalent of band-aiding a zombied and ponzied corpse, better known as the US economy. It worked for a while, but now the zombie is about to go back into critical, followed by comatose, and lastly, undead (and 401(k)-depleting) condition.
In 2009, total supply of all USD denominated fixed income, net of maturities, declined by $300 billion from $2.05 trillion to $1.75 trillion. This makes sense: the abovementioned crunches stopped the flow of credit from January until well into April, and generally firms were unwilling to demonstrate to the market how clothless they are by hitting the capital markets until well into Q2 if not Q3. What happened was a move so drastic by the Fed, that into November, the worst of the worst High Yield names were freely upsizing dividend recap deals (see CCU) - the very same greed and stupidity that brought us here. Luckily, so far securitization and CDOs have not made a dramatic entrance. They likely will, at which point it will be time to buy a one-way ticket for either our southern or northern neighbor, both of which, in the supremest of ironies, transact in a currency that will survive long after the dollar is dead and buried.
Back to the math... And here is the kicker. Accounting for securities purchased by the Fed, which effectively made the market in the Treasury, the agency and MBS arenas, but also served to "drain duration" from the broader US$ fixed income market, the stunning result is that net issuance in 2009 was only $200 billion. Take a second to digest that.
And while you are lamenting the death of private debt markets, here is precisely what the Fed, the Treasury, and all bank CEOs are doing all their best to keep hidden until they are safely on their private jets heading toward warmer climes: in 2010, the total estimated net issuance across all US$ denominated fixed income classes is expected to increase by 27%, from $1.75 trillion to $2.22 trillion. The culprit: Treasury issuance to keep funding an impossible budget. And, yes, we use the term impossible in its most technical sense. As everyone who has taken First Grade math knows, there is no way that the ludicrous deficit spending the US has embarked on makes any sense at all... none. But the administration can sure pretend it does, until everything falls apart and blaming everyone else for its fiscal imprudence is no longer an option.
Out of the $2.22 trillion in expected 2010 issuance, $200 billion will be absorbed by the Fed while QE continues through March. Then the US is on its own: $2.06 trillion will have to find non-Fed originating demand. To sum up: $200 billion in 2009; $2.1 trillion in 2010. Good luck.
As we pointed, the number one reason why 2010 is set to be a truly "interesting" year is a result of the upcoming explosion in US Treasury issuance. Fiscal 2010 gross coupon issuance is expected to hit $2.55 trillion, a $700 billion increase from 2009, which in turn was $1.1 trillion increase from 2008. For those of you needing a primer on the exponential function, click here. But wait, there is a light in the tunnel: in 2011, gross issuance is expected to decline... to $1.9 trillion.
And while things are hair-raising in "gross" country (not Bill...at least not yet), they are not much better in netville either. Net of maturities, 2010 coupon issuance will be about $1.8 trillion, a 45% increase from the $1.3 trillion in FY 2009 (and the paltry $255 billion in 2008).
Now everyone knows that the average maturity of the UST curve has become a big problem for Tim Geithner: nearly 40% of all marketable debt matures within a year (a percentage that has kept on growing). In fact, the Treasury provided guidance in its November 2009 refunding, in which it stated that it intends "to focus on increasing the average maturity" of its debt after relying heavily on Bill issuance in H2. Once again, we wish Tim the best of luck.
Why our generous best intentions to the US Treasury? Because unless the US consumer decides to forgo the purchase of the 4th sequential Kindle and buy some Treasuries (and not just any: 30 Year Bonds or bust), the presumption that the Bond printer will have the option of finding vast foreign appetite for its spewage is a very myopic one. We already know that China is a major question mark, and will aggressively be looking at pumping capital into its own economy instead of that of Uncle Sam's - at some point the return on investment in its own middle class will surpass that of funding the rapidly disappearing US middle class. That tipping point could be as soon as 2010.
As for Japan - the country has plunged into its nth consecutive deflationary period. Whether or not the finance minister announces yet another affair with the Quantitative Easing whore on any given day, depends merely on what side of the bed he wakes up on. The country will have its hands full monetizing its own sovereign issuance, let alone ours.
Lastly, the UK - well, with the country set to have zero bankers left in a few months, we don't think the traditionally third largest purchaser of US debt will be doing much purchasing any time soon.
None of this is merely speculation: October TIC data confirmed these preliminary observations. It will only become more pronounced in upcoming months.
How about that great globalization dynamo: emerging markets? Alas, they have their hands full with issuing their own record amounts of both sovereign and corporate debt as well: in 2009 gross EM debt issuance reached an astounding $217 billion, $29 billion higher than the previous record in 2007. Gross EM issuance was particularly high in the last quarter at $73 billion, with October breaking the record for the largest ever monthly gross issuance of emerging market global bonds at $38 billion (January is traditionally the busiest month of the year.) With $81 billion, 2009 was notably a record year for sovereign bonds, while gross issuance of corporate bonds amounted to $136 billion, the second highest level after that of 2007 with $155 billion.
Bottom line: everyone has major problems at home, and is more focused on the supply than the demand side of the equation.
What options does this leave for the administration? Very few, and all of them are ugly. As we stated earlier on, the options for the Fed are threefold:
Announce a new iteration of Quantitative Easing. This will be met with major disapproval across all voting classes (at least those whose residential zip codes do not start with 10xxx or 068xx), creating major headaches for Obama and the democrats which are already struggling with collapsing polls.
Prepare for a major increase in interest rates. While on the surface this would be very welcome for a Fed that keeps hinting that deflation is the biggest concern for the economy, Bernanke's complete lack of preparation from a monetary standpoint (we are surprised the Fed's $200 million reverse repos have not made the late night comedy circuit yet) to a forced interest rate increase, would likely result in runaway inflation almost overnight. The result would be a huge blow to a still deteriorating economy.
Engineer a stock market collapse. Recently investors have, rightfully, realized there is no more risk in equities, not because the assets backing the stockholder equity are actually creating greater cash flow (as we demonstrated recently, that is not the case), but simply because taxpayers have involuntarily become safekeepers for the entire stock market, due to Bernanke's forced intervention in bond and equity markets. Yet the President's Working Group is fully aware that when the time comes to hitting the "reverse" button, it will do so. Will the resultant rush into safe assets be sufficient to generate the needed endogenous demand for Treasuries is unknown. It will likely be correlated to the size of the equity market drop.
If the Fed decides on option three, we fully believe a 30% drop (or greater) in equities is very probable as the new supply/demand regime in fixed income becomes apparent. We hope mainstream media takes the ideas presented here and processes them for broader consumption as indeed the Fed is caught in a very fragile dilemma, and the sooner its hand is pushed, the less disastrous the final outcome for investors. Then again, as Eric Sprott has been pointing out for quite some time, it could very well be that the US economy has become merely one huge Ponzi, and as such, its expansion or reduction on the margin is uncontrollable. We very well may have passed into the stage where blind growth is the only alternative to a complete collapse. We hope that is not the case.
Merry Christmas and Happy Holidays to all readers.
http://www.zerohedge.com/article/brace-impact-2010-private-demand-us-fixed-income-has-increase-elevenfold-or-else
Showing posts with label zero hedge. Show all posts
Showing posts with label zero hedge. Show all posts
17 August 2009
, Social networking, IT and its implications for stock markets
The integrity of the market is as safe as copyright materials in this day and age..
Zero Hedge Has the Proof...
GLG Cuomo
Zero Hedge Has the Proof...
GLG Cuomo
9 August 2009
Timing withdrawals is always tricky....
Zero Hedge looks at the "monitisation debate", the key question who is actually buying the treasuries? You can be sure that the US government is..thats what QE is all about. The question is this; can Ben keep pumping the stimulus until it works and yet still "pull out" before hyperinflation and a reserve currency credibility crisis is well and truly conceived.
As a strategy it has all the same failings of the contraception technique: skewed incentives and an "agency problem" of deep discontinuities in the costs and benefits.
Hmmm.....
A bigger question is the degree to which the US stimulus is working, it looks like it probably; its enabling massive credit creation in China.....
The startling conclusion: $32 billion of Treasury Bonds spread across 7 CUSIPs, were purchased by the FED within 10 days of their initial auction and allocation to primary dealers. The amount purchased by OMOs represents an average of 32.4% of the total allocated to primary dealers in the respective auctions. Furthermore, almost two third of total OMO Operations for bonds issued in 2009, or $62 billion, affects Bonds issued within 30 days of the OMO purchase. These purchases account for a total average of 29% of the total amount allocated to primary dealers. While one may make the argument that on the run bonds are preferred on average by the Fed for purchasing and by the primary dealer community for selling, the data presents a marked skew in the Fed's desire to monetize very recently issued Treasuries.
The key questions remain: allocations to primary dealers in 2009 Bond auctions is an undisputed majority (55%) of all auctions - this is troubling due to the the recent change in the definition of indirect purchasers as well as the markedly reduced interest of foreign buyers such as China and other indirects, for US Treasuries. Could a reason for the Chinese lack of appetite be due to the fact that while primary dealers represent not just a majority of all Treasury purchases, that these dealers may also have an implicit understanding that come hell or high water for auctions that lack indirect interest, the Fed could potentially make any dealers whole on purchases and subsequent sales at a loss such as the highlighted CUSIP 91282LD0 example (explicitly, at a loss for taxpayers who have to fund the primary dealers shortfall, in this case the difference between 99-26 and 99-07)? Would the Chinese be interested in playing in a rigged playing field when indirects are potentially impaired vis-a-vis direct purchasers? Furthermore, is Bernanke pulling a Clinton and while claiming under oath the he is not monetizing debt, he is effectively doing just that on well over $30 billion in Treasuries, which the Fed acquires within 10 days of issuance? And lastly, is the rapid uptake by the Fed a means to goose up auctions which have a potential likelihood of failure: the 7 Year in question came hot on the heels of a 5 Year that for all intents and purposes was quite close to a failed auction? Absent an implicit backstop, which everyone knows the Fed is very keen on making these days: as the SigTarp demonstrated, to the tune of tens of trillions of dollars, what is the likelihood the 7 Year would have fared as well as it did, had not the primary dealers really stepped up, for reasons known and unknown.
Zero Hedge is not making any claims, but merely asking questions. And while we appreciate the opinions of self-professed experts such as John Jansen, these answers should really come from the proper authorities - the US Treasury and the Federal Reserve of the US.
As time allows, Zero Hedge will next conduct a comparable study on Agency and MBS debt repurchases by the Federeal Reserve.
http://www.zerohedge.com/article/open-market-operations-and-statistics
As a strategy it has all the same failings of the contraception technique: skewed incentives and an "agency problem" of deep discontinuities in the costs and benefits.
Hmmm.....
A bigger question is the degree to which the US stimulus is working, it looks like it probably; its enabling massive credit creation in China.....
The startling conclusion: $32 billion of Treasury Bonds spread across 7 CUSIPs, were purchased by the FED within 10 days of their initial auction and allocation to primary dealers. The amount purchased by OMOs represents an average of 32.4% of the total allocated to primary dealers in the respective auctions. Furthermore, almost two third of total OMO Operations for bonds issued in 2009, or $62 billion, affects Bonds issued within 30 days of the OMO purchase. These purchases account for a total average of 29% of the total amount allocated to primary dealers. While one may make the argument that on the run bonds are preferred on average by the Fed for purchasing and by the primary dealer community for selling, the data presents a marked skew in the Fed's desire to monetize very recently issued Treasuries.
The key questions remain: allocations to primary dealers in 2009 Bond auctions is an undisputed majority (55%) of all auctions - this is troubling due to the the recent change in the definition of indirect purchasers as well as the markedly reduced interest of foreign buyers such as China and other indirects, for US Treasuries. Could a reason for the Chinese lack of appetite be due to the fact that while primary dealers represent not just a majority of all Treasury purchases, that these dealers may also have an implicit understanding that come hell or high water for auctions that lack indirect interest, the Fed could potentially make any dealers whole on purchases and subsequent sales at a loss such as the highlighted CUSIP 91282LD0 example (explicitly, at a loss for taxpayers who have to fund the primary dealers shortfall, in this case the difference between 99-26 and 99-07)? Would the Chinese be interested in playing in a rigged playing field when indirects are potentially impaired vis-a-vis direct purchasers? Furthermore, is Bernanke pulling a Clinton and while claiming under oath the he is not monetizing debt, he is effectively doing just that on well over $30 billion in Treasuries, which the Fed acquires within 10 days of issuance? And lastly, is the rapid uptake by the Fed a means to goose up auctions which have a potential likelihood of failure: the 7 Year in question came hot on the heels of a 5 Year that for all intents and purposes was quite close to a failed auction? Absent an implicit backstop, which everyone knows the Fed is very keen on making these days: as the SigTarp demonstrated, to the tune of tens of trillions of dollars, what is the likelihood the 7 Year would have fared as well as it did, had not the primary dealers really stepped up, for reasons known and unknown.
Zero Hedge is not making any claims, but merely asking questions. And while we appreciate the opinions of self-professed experts such as John Jansen, these answers should really come from the proper authorities - the US Treasury and the Federal Reserve of the US.
As time allows, Zero Hedge will next conduct a comparable study on Agency and MBS debt repurchases by the Federeal Reserve.
http://www.zerohedge.com/article/open-market-operations-and-statistics
5 August 2009
Congrats to Zero Hedge....
Kinda like what we try to do here in our iconoclastic aussie way, I'd like to think; wadda they got anyway, only more panache, a team and lots more energy..
Given the blurry line between journalism and entertainment, Wall St. Cheat Sheet has decided to launch a First Amendment Award Series for Outstanding Journalism. The inaugural winner for Best Blog is Zero Hedge. We like to think of Zero Hedge as the gritty, indie Bloomberg.
Most recently, Zero Hedge’s relentless coverage of Goldman Sachs has brought countless critical issues from the smokey back-rooms of Wall Street to the public corridors of Congress. Many in the mainstream media will refuse to give credit where credit is due because such an acknowledgment is an admission they did not do the reporting encouraged by the Constitution.
We believe media is continuing a major paradigm shift wherein old-school media outlets will continue to lose market and mind share to those who simply do the best reporting and offer the most valuable information. We believe that cynical investors will gravitate away from cheerleading and entertainment because no matter how financially illiterate they are, Pavlov’s Dog tells us investors will ultimately learn to not respond to the bell if the bowl is empty or filled with poison.
We are proud to bring you the first ever interview with Zero Hedge co-founder Tyler Durden. Tyler and his team are perfectly branded as the protagonists from Chuck Palahniuk’s classic Fight Club. The team of brilliant ex-Wall Streeters is on a mission to liberate us from the Old World Order where journalism is nothing more than a means to selling ads.
Damien Hoffman: Tyler, can you share the general story of your career?
Tyler: Alas, I can not go into details for obvious reasons. However, I can tell you that between the four authors of Zero Hedge, we have over two decades of corporate finance advisory, investing and operational experience. For example, between my colleagues and myself we have experience with Credit Default Swaps, financial restructuring, equity capital markets, M&A advisory, private equity, macroeconomic and FOREX analysis. Marla [Singer] is the legal expert in the Zero Hedge family. We also have a variety of experience with all facets of business including front, middle, and back office operational expertise.
Damien: Why did you start Zero Hedge?
Tyler: Last year I realized there was a gaping hole in analytical financial reporting. The vast majority of financial journalists become finance experts by necessity. Alas, there is only so much they can learn without being actively engaged in what they discuss and report. It is still very rare to have an individual with a practical financial background do research, reporting, and analysis in a public medium — and do so coherently — due to the substantial opportunity cost.
Zero Hedge hopes to satisfy the need for objective, unbiased analysis and news. Thanks to the backgrounds of our founders, we are able to connect the dots between seemingly unrelated data sets faster and better than most mainstream media outlets.
Damien: How did you decide to brand the news agency with the Fight Club theme?
Tyler: Since its inception, Zero Hedge had activist overtones to it. Activism not only in the sense of pointing out errors and fraud in the financial system, but also as a grassroots campaign in which people can feel part of a force for change. And real change — not its hollow replica being shoveled down people’s throats in the form of empty campaign promises.
In this sense, Fight Club represents nothing less than the growing disenchantment with a highly leveraged consumer culture, a financial system that merely redistributes wealth from the middle class to Wall Street, and a crony political system which never changes its substance. However, in order to succeed in real change, the truth about the reality behind the scenes has to be exposed. People need to see just how deep the rabbit hole goes. This is the main priority of Zero Hedge for the time being.
Damien: Some of your critics try to discredit you as a result of your anonymity. Can you please explain why you are anonymous and respond to this criticism?
Tyler: Our method is pseudonymous speech because anonymity is a shield from the tyranny of the majority. Thus, anonymity exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation, and their ideas from suppression, at the hand of an intolerant society.
Our pseudonymous speech is responsibly used. In 1995, Supreme Court Justice Stevens, writing for the majority in the case of McIntyre v. Ohio Elections Commission [514 U.S. 334], stated, “The right to remain anonymous may be abused when it shields fraudulent conduct. But political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.”
Though often maligned — typically by those frustrated by an inability to engage in ad hominem attacks — anonymous speech has a long and storied history in the United States. We think ourselves in good company in using one or another nom de plume. Anonymity was used by the likes of Mark Twain, also known as Samuel Langhorne Clemens, to criticize common ignorance. Perhaps, most famously, it was used by Alexander Hamilton, James Madison and John Jay — also known as Publius — to write the Federalist Papers.
Particularly in light of an emerging trend against vocalizing public dissent in the United States, we believe in the critical importance of anonymity and its role in dissident speech. Like The Economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker — as it should be. We believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn’t.
Damien: You were recently embroiled in a WWE-style argument with CNBC anchor Dennis Kneale. During Kneale’s rant, he alleged your audience must be morons for reading a blog rather than watching a major media outlet. Can you share a rough breakdown of your real audience and why Dennis is wrong?
Tyler: Discussing Dennis Kneale is counterproductive as I really have no desire to be grouped in even remotely close circles to him. He is an entertainer. I provide information. However, I will tell you that two-thirds of Zero Hedge’s readers originate on Wall Street and its equivalents around the globe at major investment banks and hedge funds. We also have a large segment of readers at the most critical establishments in Washington D.C. Ironically, these are the very people who will never be caught watching the 8pm segment of CNBC.
Damien: What do you want Zero Hedge to be in five years?
Tyler: Let’s follow up on this question in five years. The growth of Zero Hedge has been a shock to me. From its humble beginnings a little over six months ago, Zero Hedge has become the fastest growing, most frequented finance-focused blog in America. While I am very happy with the growth rate, it is both a little puzzling and somewhat concerning. People’s demands of Zero Hedge continue growing, and absent a significant expansion, the blog may soon reach its threshold. Which is also exciting, as I have many new ideas which I am preparing to launch in the very near future.
My ultimate goal is to make Zero Hedge a self-sustaining source of unbiased information, which is not at the mercy of corporate sponsorships or blessings from Wall Street or Washington D.C. Luckily, the currently deplorable condition of mainstream media, which has only so many years to exist in its current format, will undoubtedly make the growth of blogs such as Zero Hedge a pull rather than a push process.
Damien: Tyler, thanks for taking the time to do your first interview with me. You and your team set the bar very high for those who wish to win this award in years to come.
Tyler: We are delighted and honored to win this award. My team and I thank you very much.
For more information about Zero Hedge, please visit: zerohedge.com
Given the blurry line between journalism and entertainment, Wall St. Cheat Sheet has decided to launch a First Amendment Award Series for Outstanding Journalism. The inaugural winner for Best Blog is Zero Hedge. We like to think of Zero Hedge as the gritty, indie Bloomberg.
Most recently, Zero Hedge’s relentless coverage of Goldman Sachs has brought countless critical issues from the smokey back-rooms of Wall Street to the public corridors of Congress. Many in the mainstream media will refuse to give credit where credit is due because such an acknowledgment is an admission they did not do the reporting encouraged by the Constitution.
We believe media is continuing a major paradigm shift wherein old-school media outlets will continue to lose market and mind share to those who simply do the best reporting and offer the most valuable information. We believe that cynical investors will gravitate away from cheerleading and entertainment because no matter how financially illiterate they are, Pavlov’s Dog tells us investors will ultimately learn to not respond to the bell if the bowl is empty or filled with poison.
We are proud to bring you the first ever interview with Zero Hedge co-founder Tyler Durden. Tyler and his team are perfectly branded as the protagonists from Chuck Palahniuk’s classic Fight Club. The team of brilliant ex-Wall Streeters is on a mission to liberate us from the Old World Order where journalism is nothing more than a means to selling ads.
Damien Hoffman: Tyler, can you share the general story of your career?
Tyler: Alas, I can not go into details for obvious reasons. However, I can tell you that between the four authors of Zero Hedge, we have over two decades of corporate finance advisory, investing and operational experience. For example, between my colleagues and myself we have experience with Credit Default Swaps, financial restructuring, equity capital markets, M&A advisory, private equity, macroeconomic and FOREX analysis. Marla [Singer] is the legal expert in the Zero Hedge family. We also have a variety of experience with all facets of business including front, middle, and back office operational expertise.
Damien: Why did you start Zero Hedge?
Tyler: Last year I realized there was a gaping hole in analytical financial reporting. The vast majority of financial journalists become finance experts by necessity. Alas, there is only so much they can learn without being actively engaged in what they discuss and report. It is still very rare to have an individual with a practical financial background do research, reporting, and analysis in a public medium — and do so coherently — due to the substantial opportunity cost.
Zero Hedge hopes to satisfy the need for objective, unbiased analysis and news. Thanks to the backgrounds of our founders, we are able to connect the dots between seemingly unrelated data sets faster and better than most mainstream media outlets.
Damien: How did you decide to brand the news agency with the Fight Club theme?
Tyler: Since its inception, Zero Hedge had activist overtones to it. Activism not only in the sense of pointing out errors and fraud in the financial system, but also as a grassroots campaign in which people can feel part of a force for change. And real change — not its hollow replica being shoveled down people’s throats in the form of empty campaign promises.
In this sense, Fight Club represents nothing less than the growing disenchantment with a highly leveraged consumer culture, a financial system that merely redistributes wealth from the middle class to Wall Street, and a crony political system which never changes its substance. However, in order to succeed in real change, the truth about the reality behind the scenes has to be exposed. People need to see just how deep the rabbit hole goes. This is the main priority of Zero Hedge for the time being.
Damien: Some of your critics try to discredit you as a result of your anonymity. Can you please explain why you are anonymous and respond to this criticism?
Tyler: Our method is pseudonymous speech because anonymity is a shield from the tyranny of the majority. Thus, anonymity exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation, and their ideas from suppression, at the hand of an intolerant society.
Our pseudonymous speech is responsibly used. In 1995, Supreme Court Justice Stevens, writing for the majority in the case of McIntyre v. Ohio Elections Commission [514 U.S. 334], stated, “The right to remain anonymous may be abused when it shields fraudulent conduct. But political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.”
Though often maligned — typically by those frustrated by an inability to engage in ad hominem attacks — anonymous speech has a long and storied history in the United States. We think ourselves in good company in using one or another nom de plume. Anonymity was used by the likes of Mark Twain, also known as Samuel Langhorne Clemens, to criticize common ignorance. Perhaps, most famously, it was used by Alexander Hamilton, James Madison and John Jay — also known as Publius — to write the Federalist Papers.
Particularly in light of an emerging trend against vocalizing public dissent in the United States, we believe in the critical importance of anonymity and its role in dissident speech. Like The Economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker — as it should be. We believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn’t.
Damien: You were recently embroiled in a WWE-style argument with CNBC anchor Dennis Kneale. During Kneale’s rant, he alleged your audience must be morons for reading a blog rather than watching a major media outlet. Can you share a rough breakdown of your real audience and why Dennis is wrong?
Tyler: Discussing Dennis Kneale is counterproductive as I really have no desire to be grouped in even remotely close circles to him. He is an entertainer. I provide information. However, I will tell you that two-thirds of Zero Hedge’s readers originate on Wall Street and its equivalents around the globe at major investment banks and hedge funds. We also have a large segment of readers at the most critical establishments in Washington D.C. Ironically, these are the very people who will never be caught watching the 8pm segment of CNBC.
Damien: What do you want Zero Hedge to be in five years?
Tyler: Let’s follow up on this question in five years. The growth of Zero Hedge has been a shock to me. From its humble beginnings a little over six months ago, Zero Hedge has become the fastest growing, most frequented finance-focused blog in America. While I am very happy with the growth rate, it is both a little puzzling and somewhat concerning. People’s demands of Zero Hedge continue growing, and absent a significant expansion, the blog may soon reach its threshold. Which is also exciting, as I have many new ideas which I am preparing to launch in the very near future.
My ultimate goal is to make Zero Hedge a self-sustaining source of unbiased information, which is not at the mercy of corporate sponsorships or blessings from Wall Street or Washington D.C. Luckily, the currently deplorable condition of mainstream media, which has only so many years to exist in its current format, will undoubtedly make the growth of blogs such as Zero Hedge a pull rather than a push process.
Damien: Tyler, thanks for taking the time to do your first interview with me. You and your team set the bar very high for those who wish to win this award in years to come.
Tyler: We are delighted and honored to win this award. My team and I thank you very much.
For more information about Zero Hedge, please visit: zerohedge.com
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