There is currently a diary on the recommended list titled Reading Dkos and Bonddad saved us! (updated) which pays me an incredible compliment -- that I helped someone to avoid some of the financial pain of the last year and a half. To that I can only say you are welcome. Most importantly, I'm glad that I helped because that is a big part of why I write about economics.
But I am not the only one who got it right. If you look over at the right hand side you will see a host of other bloggers who got it right -- that is, people who looked at the economy and said, "this can't work the way it's structured." In other words, I am in extremely good company. While I may disagree with some of the individual policy proscriptions offered (or not), I still think the list at the right -- The Mess that Greesspan Made, Mish, Barry at the Big Picture, Calculated Risk, Economist's View, Angry Bear, and Naked Capitalism -- is a fine group of economic writers who all offer great insight into what has happened. And that is by no means an exhaustive list. I am sure there are plenty of people who I am missing.
All of this leads to an important question: why did the economic blogs get it right? That is -- why is it the financial genius' on Wall Street missed what was happening? And miss it they did. Barron's recently ran an article on stock picking and it turns out that "experts", well, suck.
I think there are several reasons why blogs beat the financial press on this story.
1.) We don't have a product to sell. Wall Street firms have to sell stock. It's that simple. And no one wants to buy stock when the market might tank. As a result, there is an incredibly bullish bias regarding research.
2.) We love what we do. Why do I do this? Because I love it, plain and simple. Day in and day out, I get a hoot out of writing about the economy and figuring it out. The word amateur is from a French word that means, "one who does it for love". I think that is a really important aspect to remember.
3.) The economic blogs have some great talent. Barry is a former lawyer who got into trading; Mish and Tim at the Mess that Greenspan Made are both investment advisers, Corey at Afraid to Trade just got is certified market technition certification (I may have the designation wrong but you get the idea), I'm a former bond broker who practices tax law. The bottom line is there are some really smart people out there who figured this whole thing out -- and got the word out.
4.) The economic blogs are like one long economic conversation. Someone will write something and then others will develop it, stretching the concept so it makes more sense. New Deal Democrat and I had a discussion about it and he likened it to the Borg of Star Trek fame -- one consciousness that sees different parts of the same situation, thereby allowing the whole to figure figure it out.
There are plenty of other reasons I am probably missing. but the bottom line is this: if you read the blogs you got out when the getting was good. If you watched CNBC, you got hosed. It's that simple.
Again -- thanks very much for the compliment. I am pleased that I could help prevent some of the pain. However -- please always have a critical eye to what I write because the economy will make an ass out of me whenever possible.