Manny Pacquiao Didn’t Let Fans Down, Prodded by Media Fans Deluded Themselves

I empathize with boxing legend Manny Pacquiao for undeservingly feeling “guilty” over public pressures, following his stunning KO loss which he suffered from older Juan Manuel Marquez, a few days.

From MSN News

"The low morale, the sadness, I accept that. This is my job.... But the reaction of the Filipinos, the many who cried, especially my family, it really hurts me," he said in an interview on the GMA network.

The former eight-division world champion wiped tears from his eyes listening to his wife, Jinkee, make a tearful appeal on camera for her husband, who turns 34 next week, to hang up his gloves. 

Pacquio shouldn’t be so hard on himself. He lost because he is just human. 

A random one-punch shot, in a round which he so-dominated, at the last two seconds virtually changed the outcome to his opponents favor.

Nassim Taleb would have called this Pacquiao’s black swan.

Failure to adhere to reality has made Pacquiao’s loss unwarrantedly controversial. This is hardly about the lack of conditioned training, the charge on Marquez’s alleged use of steroids, and other rubbish attributions. Religion has even been absurdly imputed on this. Others have used this as pretext to try to impose political correctness on the contrasting opinion of the others.

He lost because he lost. He was at wrong place at the wrong time. Period. The rest of supposed 'expert' rationalization represents post hoc fallacy.

It has been my impression that the media has made the public believe that sheer nationalism or the force of nationalism by itself would lead to Pacquiao’s sustained invincibility, immortality and everlasting string of victories. 

Pacquiao’s decisive loss exposed such hogwash. In the same way, belief in extreme nationalism has been demolished after 60-78 MILLION lives had needlessly been lost due to World War II.

Pacquiao didn’t let his fans down. The fans have no one else to blame but themselves, for unduly placing extremely high expectations in his supposed ‘superhuman’ capabilities, and importantly, for falling prey into mainstream media’s hype. 

This is a great example of bubble psychology. The same lessons which will permeate and eventually apply to the Philippine capital markets.

As British essayist, critic, poet, and novelist Gilbert Keith Chesterton once sarcastically remarked, 

"Journalism is popular, but it is popular mainly as fiction. Life is one world, and life seen in the newspapers is another."

Reality simply dealt false dogmatism a rude and painful awakening.

Despite Bankruptcy Case, “Rich Dad, Poor Dad” Author Remains a RICH Dad

Popular author Robert Kiyosaki of “Rich Dad Poor Dad” fame seems under assault from mainstream media. While it has been true that Mr.Kiyosaki has indeed filed for bankruptcy, the guy has been insinuated as personally ‘bankrupt’.

[disclosure: I am no fan of Robert Kiyosaki. Mr. Kiyosaki was wrong about the real estate bubble in 2005. But has been right about the currency bubble and being bullish in precious metals. Nevertheless,  this terse commentary has been meant to put Mr. Kiyosaki’s case in perspective]

From ABS-CBN,

In an ironic twist, the author of the bestselling financial help book “Rich Dad Poor Dad,” Robert Kiyosaki, has filed for bankruptcy.

This after one of his companies lost a $24-million court judgment, according to a report from the New York Post.

“Kiyosaki’s Rich Global LLC filed for bankruptcy after being ordered to pay nearly $24 million to the Learning Annex and its founder and chairman, Bill Zanker,” the report said.

“US district judge Shira A. Scheindlin in April ordered Rich Global to pay up $23,687,957.21 after a jury ruled Kiyosaki must give the Learning Annex a percentage of his profits after using their platform for speaking engagements, including a 2002 gig at Madison Square Garden,” it added.

In reality, the reason behind Kiyosaki’s Rich Global LLC filing for bankruptcy has been about legal maneuvering

The same article quotes Mike Sullivan, chief executive officer of Kiyosaki’s Rich Dad Co as saying:

“Robert and [wife] Kim are not paying out of personal assets. We have a few million dollars in his company, but not 16 or 20. I can’t do anything about a $20-million judgment… We got hit for what we think is a completely outlandish figure.”

Mainstream media never explains this or at least gives an effort to make news objective or balanced.

Fundamentally, the case stems from charges of breach of contract by an aggrieved party whom was awarded in the court case.

From Business Insider,

But apparently the fame went to his head because according to court papers obtained by the Post, Kiyosaki, who published his first "Rich Dad" book in 1994, never paid the Annex its rightful share. Said founder and chairman Bill Zanker: "Oprah believed in him, and Will Smith believed in him, but he didn't keep his promise to us."

Yet Mr. Kiyosaki remains solvent in spite of the bankruptcy filing. Again from Business Insider:

Despite the blow to the personal finance guru's reputation, Kiyosaki probably won't feel the pinch in his wallet. Forbes pegs his net worth around a cool $80 million, and Kiyosaki, who's written 11 books, operates as many as ten other companies. Rich Global was said to be worth a few million when it went under.

Again, legal maneuvering from a bankruptcy procedure has been about the potential to discharge debts through the bankruptcy court.

According to bankrate.com, debts that are usually discharged from bankruptcy covers the following:

I think Mr. Kiyosaki’s decision to file for bankruptcy means that his case will fall under

Lawsuits and judgments: These result from creditors or collection agencies suing you for failing to pay. With few exceptions, you may eliminate the lawsuit even after it has begun or the judgment that results from the lawsuit.

So despite the bankruptcy proceedings and the implied media slur, Mr. Kiyosaki remains a RICH Dad!!! This serves as one neat example of why you shouldn't trust the mainstream media.

Quote of the Day: Newspapers as Polluted Vehicles

To your request of my opinion of the manner in which a newspaper should be conducted, so as to be most useful, I should answer, "by restraining it to true facts & sound principles only." Yet I fear such a paper would find few subscribers. It is a melancholy truth, that a suppression of the press could not more compleatly deprive the nation of it's benefits, than is done by it's abandoned prostitution to falsehood. Nothing can now be believed which is seen in a newspaper. Truth itself becomes suspicious by being put into that polluted vehicle. The real extent of this state of misinformation is known only to those who are in situations to confront facts within their knowledge with the lies of the day. I really look with commiseration over the great body of my fellow citizens, who, reading newspapers, live & die in the belief, that they have known something of what has been passing in the world in their time; whereas the accounts they have read in newspapers are just as true a history of any other period of the world as of the present, except that the real names of the day are affixed to their fables. General facts may indeed be collected from them, such as that Europe is now at war, that Bonaparte has been a successful warrior, that he has subjected a great portion of Europe to his will, &c., &c.; but no details can be relied on. I will add, that the man who never looks into a newspaper is better informed than he who reads them; inasmuch as he who knows nothing is nearer to truth than he whose mind is filled with falsehoods & errors. He who reads nothing will still learn the great facts, and the details are all false. 

This excerpt is from America’s founding father, principal author of the Declaration of Independence and 3rd US President Thomas Jefferson in a letter to John Norvell, June 11, 1807 (Source: The Library of Congress)

The Toxicity of Mainstream News

Chris Mayer at the Daily Reckoning explains why we should not rely on mainstream news as source for decision making (bold emphasis mine)

Dobelli’s analogy with food is a good one. We know if you eat too much junk food, it makes us fat and can cause us all kinds of health problems. Dobelli makes a good case that the mind works the same way. News is brightly colored candy for the mind.

News is systematically misleading, reporting on the highly visible and ignoring the subtle and deeper stories. It is made to grab our attention, not report on the world. And thus, it gives us a false sense of how the world works, masking the truer probabilities of events.

News is mostly irrelevant. Dobelli says to think about the roughly 10,000 news stories you’ve read or heard over the past year. How many helped you make a better decision about something affecting your life? This one hit home…

We get swamped with news, but it is harder to filter out what is relevant — which gets me to another point that hit home. Dobelli talks about the feeling of “missing something.” When traveling, I sometimes have this feeling. But as he says, if something really important happened, you’d hear about it from your friends, family, neighbors and/or co-workers. They also serve as your filter. They won’t tell you about the latest antics of Charlie Sheen because they know you won’t care.

Further, news is not important, but the threads that link stories and give understanding are. Dobelli makes the case that “reading news to understand the world is worse than not reading anything.” In markets, I find this is true. The mainstream press has little understanding of how markets work. They constantly report on trivia and make links where none exist for the sake of a story, or just for the sake of having something that “makes sense.”

In markets, reporters try to explain the market every day. “The market falls on Greek news” is an example. Better to not read anything if you’re going to take this kind of play-by-play seriously at all.

The fact is we don’t know why lots of things happen. We can’t know for sure why, exactly, things unfolded just as they did when they did. As Dobelli writes, “We don’t know why the stock market moves as it moves. Too many factors go into such shifts. Any journalist who writes, ‘The market moved because of X’... is an idiot.”

You contaminate your thinking if you accept the neat packages news provides for why things happen. And Dobelli has all kinds of good stuff about how consuming news makes you a shallow thinker and actually alters the structure of your brain — for the worse.

News is also costly. As Dobelli points out, even checking the news for 15 minutes three times a day adds up to more than five hours a week. For what? He uses the example of the Mumbai terror attacks in 2008. If a billion people spent one hour of their attention on the tragedy by either reading about it in the news or watching it, you’re talking about 1 billion hours. That’s more than 100,000 years. Using the global life expectancy of 66 years means the news consumed nearly 2,000 lives!

Pretty wild, right?

So what to do? Dobelli recommends swearing off newspapers, TV news and websites that provide news. Delete the news apps from your iPhone. No news feeds to your inbox. Instead, read long-form journalism and books. Dobelli likes magazines like Science and The New Yorker, for instance.

News and analysis from the mainstream usually represents oversimplified narration of facts that has been typically grounded from cognitive biases (heuristics) and logical fallacies.

Also because news outfits are profit based businesses, their presentations are often designed to generate or to solicit public’s attention through sensationalist reporting or through supposed “analytical” discussions mostly predicated on the emotive dimensions.

Moreover because news outfits have enormous influence on voters, they have embedded ties with the establishment as they reciprocate each other in projecting "noble"political goals. Thus media's bias has been to promote the establishment's interests and frequently serve as discreet channels for political propaganda.

Noticeably most of their arguments have been focused on personality issues rather than the objective evaluation of the system.

Yet their basic recourse to any social problem would be to: 1) change the leader, 2) throw money at the problem, 3) prohibit or intervene on any supposed social ills or 4) tax particular groups. No one ever sees how their proposed interventionism creates more problems which they intend to resolve.

Except for the facts I usually refrain from reading or listening to any of their stupefying analysis.

And I firmly agree with Mr. Dobelli who is quoted above saying “reading news to understand the world is worse than not reading anything”. I’d rather be dumb than be indoctrinated with a quack view of the world.

Quote of the Day: How Media Obfuscates Reality

Another fantastic Facebook quote from my favorite iconoclast author Nassim Nicolas Taleb.

Wall Street Journal Cites Austrian Economics in Dealing with China’s Bubble

Austrian economics has slowly but surely been spreading into the mainstream.

From the Wall Street Journal (hat tip Bob Wenzel)

China is a poster child for the Austrian school of economics' theory of the business cycle. After undertaking the biggest stimulus program the world has ever seen in response to the global financial crisis, the country is drowning in unproductive investments financed with credit.

The government spent 15% of GDP largely on public works projects in inland regions, financed with loans from the state-owned banks. Investment as a share of GDP soared to 48.5% in 2010, and the M2 measure of money supply ballooned to 140% that of the U.S.

Now comes the hangover. The public works projects are winding down, unleashing a wave of unemployment and an uptick in social unrest. The banks' nonperforming loans are rising, and local governments are insolvent. The country is littered with luxurious county government offices, ghost cities of empty apartment blocks, unsafe high-speed rail lines and crumbling highways to nowhere.

One effect of negative real interest rates was a nationwide bubble in private housing, with the average price of an urban apartment reaching eight times the average annual income. Real estate is the most popular investment for the wealthy, according to a central bank survey in September. Millions of luxury apartments are vacant, even as there is a shortage of affordable housing for the poor.

Property construction became "the most important sector in the universe," in the words of UBS economist Jonathan Anderson. It directly accounts for about 13% of the economy, 20% if one includes related industries like concrete and steel. It also provided 40% of local government revenues through land sales.

Worsening inflation forced the government to put on the brakes this year. As with most property busts, transactions dried up, followed by a free fall in prices. Land prices were down 60% year on year in September. Property developers are slashing prices of new homes to stave off bankruptcy.

Beijing recognizes the dangers of a property bubble and deliberately popped this one by telling banks to cut back loans to developers. The government seems to be determined to force some of the smaller developers to the wall, both to force consolidation in the industry and convince the remaining developers to get on board with the state-run program of building low-income housing.

Earlier this year banking regulators conducted stress tests that supposedly showed the financial system can withstand a 40% fall in property prices. Loans to developers and mortgages account for about 20% of the banks' loan books. But since the health of the wider economy is tied to property, China could face a scenario close to that of the U.S. in recent years. Because the private market for housing was tiny 10 years ago when the current boom began, the country has never experienced a broad-based decline in property prices.

The government and the more sanguine analysts say low-income housing construction will pick up the economic slack, as activity at the top end of the market contracts. The problem is that even if the government meets its goals, the program is still too small to save the economy. Barclays estimates that it will contribute one percentage point to growth in 2011, and 0.5 percentage points in 2012.

There is no easy way to avoid the bust that is coming. The silver lining is that China's increasingly state-led growth model will be discredited, and a debate will begin on restarting the reforms that stalled in the mid-2000s. A financial sector that allocates credit based on politics rather than price signals led China into this mess. Popular pressure to dismantle crony capitalism is building, and the Communist Party would be wise to get in front of it while it can.

Anyway I have dealt with how China's bubble seems playing right into the Austrian Business Cycle here

Yet Austrian economics gaining mainstream's attention seems another case of Gandhi’s rule:

First they ignore you, then they laugh at you, then they fight you, then you win

Commonsense economics finally gaining ground.

The Orwellian Approach of Mainstream Media

From Lew Rockwell.com

Today, mainstream media coverage uses programmed distortion, confusion, even outright lying when its Money Power masters order it to support the “official story” on any major political, economic or financial process. When looked at closely, however, the “official story” of things can be seen to be inaccurate, misleading, often hardly believable if not downright stupid.

Examples of this: Iraq’s inexistent WMD’s leading to the invasion and destruction of that country; global mega-banker bail-outs with taxpayer money; irrational US diplomatic, military, financial and ideological alignment to Israeli objectives; “we-killed-Osama-Bin-Laden-and-dumped-his-body-into-the-sea”; and the wide array of “whodunits” surrounding 9/11 in New York and Washington, 7/7 in London, the AMIA/Israeli Embassy attacks in Buenos Aires in 1992/1994, and – of course – that all time favorite: who shot JFK…?…

How they do it…

The Seven Step Mainstream Media Country Destruction Guide

1. First, they start by targeting a country ripe for “Regime Change”, and brand it a “rogue state”; then…

2. They arm, train, finance local terrorist groups through CIA, MI6, Mossad, Al-Qaeda (a CIA operation), drug cartels (often CIA operations) and call them “freedom fighters”; then…

3. As mock UN Security Council Resolutions are staged that rain death and destruction upon millions of civilians, they call it “UN sanctions to protect civilians”; then…

4. They spread flagrant lies through their “newsrooms” and paid journalists, and call it "the international community’s concerns expressed by prestigious spokespeople and analysts…” then…

5. They bomb, invade and begin to control the target country and call it “liberation”; then…

6 As the target country falls fully under their control, they impose “the kind of democracy that we want to see” (as Hillary Clinton before visiting Egypt and Tunisia on March 10, 2011), until finally…

7. They steal appetizing oil, mineral and agricultural reserves handing them over to Global Power Elite corporations, and impose unnecessary private banking debt and call it “foreign investment and reconstruction.”

Their keynotes are: Force and Hypocrisy, which they have used time and again to destroy entire countries, always in the name of “freedom”, “democracy”, “peace” and “human rights”. Utmost force and violence is used to achieve their ends and goals.

Read the rest here

Mainstream media has served as traditional and conventional channels for political interests to broadcast propaganda, even in the Philippines.

Here, the local theme may be different from the above, but the objective has been the same: to justify the use or expansion of political control over the populace--mostly done through abstractions.

As George Orwell wrote,

The inflated style is itself an kind of euphemism. A mass of Latin words falls upon the facts like soft snow, blurring the outlines and covering up all the details. The great enemy of clear language is insincerity. When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish squirting out ink. In our age there is no such thing as "keeping out of politics." All issues are political issues, and politics itself is a mass of lies, evasions, folly, hatred, and schizophrenia.

Video: Jon Stewart on the Media's Blackout of Ron Paul

(hat tip Bob Wenzel)

Notable Quote from Jon Stewart (6.43)

Libertarian Ron Paul becomes the 13th Floor in a hotel!

Just shows how the mainstream has been very afraid of Ron Paul, enough to act in cahoots to censor Ron Paul's 'existence' in media's reporting.

CNN: The Federal Reserve's biggest bloopers

It’s a pleasant surprise to see one of mainstream media join in the bashing of the US Federal Reserve.

The CNN Writes,

Since it was created in 1913, the Federal Reserve hasn't exactly had the best track record of predicting booms and busts.

Not to mention, its leaders have had some embarrassing sound bites along the way, whether they're referencing punch bowls or helicopters.

Here are some of the Fed's biggest bloopers over the years.

Go to the slideshow here

This just goes to show how Fed critics, led by Ron Paul and the Austrian School, have been gradually moving from the fringes and into the mainstream.

Available Bias, US Consumer Industries and Homebuilders

The recent stock market actions in the US should serve as fundamental example of how the "available bias" plagues mainstream reporting.

The other day, as consumer confidence hit a 10-month low , the report apparently coincided with a fall in US stockmarkets. And media hastily promoted a causal effect: market actions had been driven by current news.

Chart from Northern Trust

Bespoke Invest, for the second day, has assiduously rebutted the issue and showed that the broadbased decline had consumer discretionary and consumer staples as the least affected sectors (see here)

In contrast, materials, finance and energy had been smacked the most.


Bespoke Invest extends the rejoinder by illustrating the outperformance of US retail stocks relative to the key benchmark the S&P 500 and called on today's advances as "new bull market high"

In addition Bespoke makes a dissection of the breadth and observes that consumer sectors have, not only outclassed the key index, but also all the other sectors.

They write, (bold highlights mine)

``Consumer Discretionary and Consumer Staples are currently trading the farthest above their 50-day moving averages of the ten sectors. The other two sectors currently above their 50-days are Industrials and Financials...We provide the year-to-date change, % from 50-DMA, dividend yield, P/E ratio, price to sales ratio, and price to book ratio for the various sectors. Across the board, we use red to green as the color code from lowest to highest, but obviously for ratios, the lower the better.

``While it used to have one of the highest yields, the Financial sector currently has the second lowest yield at 1.15%. It also has the highest P/E ratio at 66.44, but it has the lowest price to book at 1.14. Consumer Staples, Consumer Discretionary, and Telecom have the lowest price to sales ratios, while Technology has the highest. Technology also has the highest price to book."

Chart from Businessinsider

If the US consumer industry's outperformance is an indication of the upcoming real activities, even amidst a fall in commercial and industrial loans at commercial banks, this suggest to us that any lagged but positive response to the steep yield curve is likely to even bolster the recent retail activities [see previous discussion Changing Dynamics In Central Bank Management, Quasi Boom Policies]
Finally as we addressed earlier, homebuilder stocks seem to be laying foundations to another bubble cycle. Bloomberg's chart of the day notes that the industry group have also bested the market, according to Bloomberg,

``As the CHART OF THE DAY shows, the Standard & Poor’s 500 Homebuilding Index -- composed of D.R. Horton Inc., Lennar Corp. and Pulte Homes Inc. -- ended last week with a 21 percent gain for the year. The advance compares with a 0.5 percent loss for the S&P 500.

``Homebuilders were the year’s third-best performers among 134 industry groups in the S&P 500, according to data compiled by Bloomberg. The groups that did better each had one member: Eastman Kodak Co. for photo products and Harman International Industries Inc. for consumer electronics."

Well it would appear that market conditions have only been responding to "bubble policies" which is likely regenerate the same cyclical conditions: A boom today for a bust tomorrow.

Wall St. Cheat Sheet: Nouriel Roubini Unmasked; Lessons

The following article, from Wall St. Cheat Sheet, scoffs at the track record of high profile economist Nouriel Roubini in making predictions.

According to Wall St. Cheat Sheet:

``In August I wrote an article “Is Nouriel Roubini a False Prophet?” Apparently, some people are so smitten with Roubini they actually ignored all the cited articles and said, “No.” Consequently, I teamed up with a bunch of people around the world on an open source project to continue our mission exposing false prophets and help unwash those well-meaning brains

``The following video is a large collection of evidence proving Roubini has a horrendous record as a prognosticator. If you too know someone who has been listening to the seductive sounds of Roubini’s mantras, send them this helpful deprogramming message:

Normally, such take downs usually won't make my post. However, there are lessons to be gleaned from this critique which necessitates some discussion.

1. The Role of Media. This reveals of the proclivity of media to glamourize personalities who glibly "represent" the Du jour issues regardless of their past performance.

The appearance of fluency, urgency and connectivity to current events translates to more coverage. Ergo, the celebrity status.

2. Expert problem. Nassim Taleb says that "intelligent or informed persons were at no advantage over cabdrivers" in making predictions.

Why? Because of egotistical problem. Again according to Mr. Taleb, ``The problem with experts is that they do not know what they do not know. Lack of knowledge and the delusion about the quality of your knowledge come together-the same process that makes you know less also makes you satisfied." (emphasis added)

In short, experts tend to confine themselves on what they know.

3. Knowledge problem. There is also the tendency for experts to lean on models and mathematical equations to "scientifically" construct predictions while disregarding the variability of the human response aspect.

According to F. A. Hayek, ``the unavoidable imperfection of man's knowledge and the consequent need for a process by which knowledge is constantly communicated and acquired. Any approach, such as that of much of mathematical economics with its simultaneous equations, which in effect starts from the assumption that people's knowledge corresponds with the objective facts of the situation, systematically leaves out what is our main task to explain."

4. Prediction dilemma.

The public tends to look for specific answers or forecasts from experts rather than examining the reasoning behind them.

For publicity seeking experts, an audacious gambit on forecasting could be a rewarding endeavor.

This, in my view, is where Mr. Roubini has capitalized from basking as a celebrity during last year's crisis.


The google trend chart shows of this phenomenon.

According to NYMAG, ``Since his forecasts proved correct, or semi-correct, Roubini's become an economic celebrity, practically a household name (okay, maybe only in the wonkiest of households, but still). He's been the subject of countless magazine profiles and is lauded by his peers. His independent economic research firm, RGE, has flourished, and he's always speaking at some conference, somewhere, around the globe. (And, with respect to Julia Ioffe, who wrote a great profile of the economist recently for The New Republic, we're not buying the idea that he's taking his message on the road out of some noble sense of duty. His fees must be astronomical at this point.) His stock has gone up with the ladies, too; as he recently told New York, "The recession has been great for me."

In my view, this represents as a personal victory for Mr. Roubini. He attained both the fame and the attendant fortune of booming business and adoring ladies. And maybe some of his critics could have been envious of this.

For us, this goes to show how doing our homework matters more than simply listening or heeding on the opinions of celebrity gurus.

The Problem With Mainstream Media's Mindset

Here is another gem from marketing guru Seth Godin on The problem with cable news thinking

(all bold emphasis mine)

``Cable news thinking has nothing to do with fires or with politics. Instead, it amplifies the worst elements of emotional reaction:

1. Focus on the urgent instead of the important.
2. Vivid emotions and the visuals that go with them as a selector for what's important.
3. Emphasis on noise over thoughtful analysis.
4. Unwillingness to reverse course and change one's mind.
5. Xenophobic and jingoistic reactions (fear of outsiders).
6. Defense of the status quo encouraged by an audience self-selected to be uniform.
7. Things become important merely because others have decided they are important.
8. Top down messaging encourages an echo chamber (agree with this edict or change the channel).
9. Ill-informed about history and this particular issue.
10. Confusing opinion with the truth.
11. Revising facts to fit a point of view.
12. Unwillingness to review past mistakes in light of history and use those to do better next time."

Additional comments:

The above don't just apply only to cable news but also to traditional media: TV, radio or even mainstream broadsheets.

Emotions capture best the attention of the public than the rational. This leads us to our next concern...

The manipulation of public opinion

A chilling reminder from Joseph Paul Goebbels' (1897-1945), Nazi's Propaganda Minister, speech in 1933, ``It is the absolute right of the state to supervise the formation of public opinion."

Manipulating public opinion to advance the interests of the state and of those interest groups who depend on the state can easily be done by brandishing emotions to a gullible public.