Noah, Zerohedge are a bunch of simpletons, but y...

Noah,

Zerohedge are a bunch of simpletons, but your basic case here is predicated on assumptions that don't describe the real world (insert economist joke here). Institutions and individuals are resource constrained. They could quite easily maximize their commitment to whatever signal they are using, and for that signal not to be tapped out.

PIMCO, who have compiled a long record of mostly successful macro-calls (last year's short of treasuries notwithstanding) is a pretty clear example of how this could work. Those guys take positions, typically very significant relative positions, let alone absolute positions, given their AUMs, and then talk their book all day.

And even with their size and ability to leverage, investing with PIMCO on that basis would still have produced alpha relative to benchmarks like the Barclay's Aggregate, and that's before one considers the possibility that the reader was not adding value by information filtering and/or aggregating other value-added signals, e.g. GMO's. As to GMO, it's 10 year return forecasts have proven to be remarkably accurate.

Of course you could argue that this counts as post hoc selection of news sources and is proof of nothing, but PIMCO and GMO have been right for a long time (both famously got the dot com bubble correct), so the fly in the ointment remains. Furthermore, the argument in question is phrased as being applicable to every Tom Dick & Harry putting financial information into the public domain.

Of course, notwithstanding the trouble this makes for your larger argument, it doesn't distract from the likelihood of high frequency trading driving poor investment outcomes, but that insight applies to institutional investors who don't read toilet roll like Zerohedge as much as retail investors that do. So it's a little besides the point.

PS My investment thesis was formed on an around the world trip, wherein I was struck by third world countries use of ratty dollars and the seigniorage implied. Triffin's paradox acts a bit like erosion. Slow and misleadingly receptive to intervention, but ultimately and utterly inexorable.

I was long gold and commodities during the Bush years when our savings rate plummeted and no one seemed to care. More recently I have been long treasuries. As to doom mongers like zerohedge and Kyle Bass, I'd suggest one of Camus's insights. There's no money in plague.