Seriously. I mean it. Stop reporting anything Jeff Rubin (CIBC’s Chief Economist) has to say. If you need to quote someone about aspects of the economy, quote me — I’m right more often than Rubin.
I’m not kidding.
This past summer when oil prices were in the triple digits, Rubin was fear-mongering with talk about $200 barrels of oil being on the horizon. I, on the other hand, called it a bubble that would burst before the year was up. Who was more accurate? (Don’t believe me? Ask any of my customers who came in to buy investment books about that time – we had some heated conversations…that’s Pennywise Books at 1031 Rosser Avenue in Brandon).
Nor was that the only time that Rubin has been significantly wrong. He just “revises” his predictions. For example, in early December of 2008, he cut his prediction for the TSX in 2009 from 12,000 to 11,000. Today?
“Even with a second-half recovery, it is hard to see the TSX beyond 9,000 by the end of the year,” Rubin said.
To be fair, he’s a modern-day oracle, inhaling the fumes of ink and CPU-emitted ozone, spewing out indecipherable babble which is then translated for the “benefit” of those who listen — meaning he’s bound to be wrong a good portion of the time. We just need someone to look into the future for us.
The problem with Rubin is that his attempt to divine the future are not helpful at all. Going back to the example of the $200 oil, his predictions encouraged additional speculation by, well, speculators which led to further inflation of the petro-bubble. (Again, in fairness, there were other culprits too, but this rant is about Rubin, so back off.)
Today, Rubin is again NOT helping. Most commentators are in agreement that in order for the economy to get bak on track, investors need to start investing again. What does Rubin do? Of course. He encourages them NOT to:
Essentially, while many forecasters see a Canadian economic recovery in the cards in the next six months, Rubin said that scenario is not a given.
Gross domestic product in both Canada and the United States should continue to shrink in the second quarter, he said. As well, the U.S. banking crisis will keep leaking into the valuations of Canadian financial institutions, driving down the stock market prices of Canada’s banks and other finance firms, Rubin said.
The TSX should begin to recover by the end of 2009, Rubin said, but only to a level equal to its closing one year earlier.
I’m going to go out on a limb here and say that Rubin doesn’t know jack. I’ll even go a step further and make my own prediction and readers can evaluate for themselves who is the betterr forecaster.
I say that, yes, there are still some troubles to be seen, but Rubin is overly pessimistic. I say that NOW is the time to be buying stocks (and I do indeed put my money where my mouth is). I say that with the international attention that Canadian banks are receiving, we’ll see the stock prices of Canadian banks begin to climb very soon. These rising financials will pull up the TSX, dragging some other stocks with them (sorry Nortel, not you). Oil will continue to languish. By the end of 2009, we won’t be fully recovered, but it won’t be just beginning.
Sure, I may be wrong. If I am and Rubin is right, I’ll tip my hat to him.
That doesn’t change the fact that the media should stop reporting his Debbie Downer claims. The public needs to have some good news — some reason to stop hoarding cash and putting back into circulation. Reporting Rubin’s pessimism is of no help to anyone in any way.
I just needed to get that off my chest.
T. Keith Edmunds
8 Responses to “Attention mainstream media: STOP!”
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Rubin should give thanks every morning and night that Canada doesn’t have someone like America’s Jon Stewart to hold him accountable for the investment information such as has happened to CNBC’s Jim Cramer who’s on camera antics have always been just one notch below that of a hyperactive gorilla on crack:
Maybe Keith can become that guy!
“Hyperactive gorilla on crack” pretty much sums Cramer up. Watching him bounce and yell makes me uncomfortable.
Give me a TV station willing to produce the show, a team of clever writers, a wardrobe, an assistant and a six figure salary and I’m your guy!
Ah, T. Keith. Despite the fact that you’ve married into journalism, and I do my best to show you the way, you still have a bit of the layman’s ignorance about our craft
You see, no one in the MSM cares whether or not Rick Rubin has a track record of accuracy. The fact is, it’s his title that gives him authority.
Sure, if the media was quoting Joe Nobody, then it would look for a history of accurate predictions. But Rubin makes news just due to his position as CIBC Chief Economist.
You may buy stocks — his opinions move the markets.
You may not find him credible, but when the media quotes the chief economist of one of Canada’s Big Banks, that makes the media itself credible. It may also make the media credulous (that’s an argument for another time — does Rubin deliberately put out misleading or deceptive public statements in order to bolster CIBC’s own market positions?)
Finally, though you point out that his advice to not invest is a bit contrarian, IMO that just makes his comments more newsworthy, not less.
But let’s be honest. Really, if Rubin gets more airtime or ink than other prognosticators, it likely comes down to the fact that he’s more generous with the callbacks or the press releases.
Just because the MSM does something, doesn’t make it necessarily right. Hence my call for them to STOP! Besides, why is it that only BAD news is news?
I have a post brewing that deals with journalism, journalists and their “craft.”
The mainstream media, believe it or not, has good reasons for picking out what’s newsworthy. As I pointed out above, the fact that a big bank chief economist is saying something is newsworthy just by virtue of his position — similarly, when the prime minister comments on proposed legislation, it’s news. Why? Because they have the power to influence something that affects many, many people.
It’s not up to the mainstream media to weigh the track record. You don’t see people ignoring what Stephen Harper has to say just because the first proposed Conservative budget got shot down. Why would it be any different with the chief economist of CIBC?
And, it’s not that only bad news is news — it’s just that the status quo doesn’t count as news. Because we live in a stable, relatively peaceful world, what’s interesting and different (what’s “news”) happens to often coincide with what’s bad.
I guarantee that unusual, but positive occurrences also count as news. Um, cure for cancer? Finding ET?
But, “10,000 flights land safely today” will never scream out from a banner headline.
I’m hardly saying that we need to report on the status quo. However, continuing to report what people say SOLELY on the basis of their job title hardly seems responsible if their track record can’t meet some sort of standard of acceptability (political leaders notwithstanding).
I don’t think you’ve convinced me. If the guy is the head economist at CIBC (which he is), then it’s the duty of CIBC and not the media to monitor his job performance and track record. So long as he continues to direct CIBC’s economists, his opinions will carry a fair amount of weight in the markets. The media would be remiss in *not* reporting his opinions.
Do I think there should be a caveat in there somewhere like, “Rubin continues to set economic policy for the bank, though critics contend that he is often overly pessimistic in his outlook”? Yes, I could be convinced that that’s appropriate. But that’s a lot of legwork for a CYA that most people will disregard anyway.