Economist Article Weekly – Bearish Predictions Trend

It can be difficult to create a name for yourself these days. One of the surest way to do that is to stir the pot & go for controversy. It ensures that a few people will listen to you & the ones who feel attacks will respond. And there is only one thing worse than bad publicity – no publicity !

Some financial analysts used this strategy in the past. Funnily enough, they are ripping some of the benefits with the latest crisis. But there are other explanations why the doom profiters have had greater saying over the past few years. This week’s Buttonwood column shed some light on why doom-prediction is on the rise…

Bearish analysts are not all heroes. Sometimes they merely shout “Fire!” in a crowded theatre and feel vindicated when panic ensues. But their prominence is a healthy long-term sign for the markets, which proved as gullible about the health of mortgage lenders in 2005 and 2006 as they were about dotcom stocks in 1999. The best will survive, especially if they have the flexibility to turn bullish when the fundamentals improve.