This post from Team Macro Man has been getting a lot of links; and rightfully so:
Beware Bears Bearing Maps
Some of the points & bolding I highlighted in my notes:
the response to our calling for a turn in risk in the markets was most informative. TMM’s “comments rule” played out again where bullish posts are either met with no response or a stream of disagreement to the point that we think we proved one of yesterday’s observations – “On balance the blogosphere wants a recession so they can say ‘told you so'”. TMM received similar ribald jibing in their work environments too. Now such biased response certainly does not mean that TMM will be right, and with a 2 horse race of bottom or no bottom. A 50/50 outcome is all we should expect. But if price reflects information and expectations, and expectations as detected by our mockery meters are pretty extreme, then where do we go from here? Who is the seller who is more stupid than you who hasn’t been exposed to stories that are so tabloid they are on the back of cornflakes packets? …
TMM, just like any good navigator, suggest that the 2008 GPS is an assistance to traditional navigation methods, never to be trusted fully and to be used together with a wily local knowledge and a healthy respect for the uncertainty of what lies ahead. Things are only ever obvious with hindsight. Especially new things.
Our point is that the observation itself has feedback into the price and so the outcome will never be exactly the same again. …
traders minds are usually framed, as far as crises go, on the last crisis they experienced. So “This time is NOT different” is more the norm than not, from an expectations standpoint.