Wednesday, September 30, 2009

Who is Tyler Durden? or The Rise of Zero Hedge

My friend kyle sent me to zerohedge.com a while ago, and since then it has exploded in popularity.

New York magazine did a piece on "The Rising Power of Financial Blog ZeroHedge" run by the shadowy figure with the Tag of Tyler Durden. 

It is a good read so you should check the article on NYMAG here.

Here is a link to TrueSlang on the NYMag article of Zero Hedge.

Here is Zero Hedges response to the NYMag Hagan Article

Excerpts from the NYMAG article:

Such is their power today that the Treasury and Federal Reserve both circulate “blog watch” e-mails, which are sent to the White House every day. (Speaking of the current popular financial blogs like zerohedge and seekingalpha.)
Last spring, in a far corner of the Internet, an unknown blogger began to piece together a conspiracy theory: The investment bank Goldman Sachs was using sophisticated, high-speed computers to siphon hundreds of millions of dollars in illegitimate trading profits from the New York Stock Exchange, invisibly undercutting the market and sidestepping the regulatory reach of the Securities and Exchange Commission.

Only a few loyal readers paid attention to the blog called Zero Hedge, a no-frills site full of arcane analysis decipherable only by finance professionals. But when a former Goldman Sachs computer programmer was arrested for allegedly stealing software codes used for the firm’s electronic trading arm, and a federal prosecutor was quoted saying the codes could be used to “manipulate markets in unfair ways,” the once-obscure blog ignited a chain reaction. While on a golf outing, an editor at the New York Times learned from a friend who worked on Wall Street that the Zero Hedge allegation was the talk of the industry, and an assignment ensued. On July 24, the Times published a front-page article on so-called high-frequency trading and its potential abuses, which in turn prompted Chuck Schumer, a member of the Senate Finance Committee, to draft a letter to the SEC that same day. Twelve days later, the SEC signaled that it was considering a ban on the very computerized trading that Zero Hedge had attacked.

Excerpts from True/Slant:

One of the things that inevitably happens when someone like Zero Hedge causes as much damage as he has to very wealthy and connected people is that the media will start looking at who he is. In ZH’s case that’s among other things because he’s a great story, a kind of cyber-Zorro: beyond even his amazing ability to rock the mighty Goldman Sachs from a hitherto unknown blog site, his (formerly) mysterious identity made him an even better feature subject.

But when you shine a light on Zero Hedge, you’re taking the light off the people he’s focusing on. That’s the primary problem with this kind of activity, and one of the reasons you often see this tactic employed against an uncomfortable news-breaker. I’m not saying that was Hagan’s intention — in fact I don’t think it was — but this kind of story can immediately have the effect of shifting the geography of the conversation, from Goldman’s backyard to Zero Hedge’s. I’d expect that from other quarters, but coming from Hagan I’m a little confused by it.

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