Given the blurry line between journalism and entertainment, Wall St. Cheat Sheet has decided to launch a First Amendment Award Series for Outstanding Journalism. The inaugural winner for Best Blog is Zero Hedge. We like to think of Zero Hedge as the gritty, indie Bloomberg.
Most recently, Zero Hedge’s relentless coverage of Goldman Sachs (GS) has brought countless critical issues from the smokey back-rooms of Wall Street to the public corridors of Congress. Many in the mainstream media will refuse to give credit where credit is due because such an acknowledgment is an admission they did not do the reporting encouraged by the Constitution.
We believe media is continuing a major paradigm shift wherein old-school media outlets will continue to lose market and mind share to those who simply do the best reporting and offer the most valuable information. We believe that cynical investors will gravitate away from cheerleading and entertainment because no matter how financially illiterate they are, Pavlov’s Dog tells us investors will ultimately learn to not respond to the bell if the bowl is empty or filled with poison.
We are proud to bring you the first ever interview with Zero Hedge co-founder Tyler Durden. Tyler and his team are perfectly branded as the protagonists from Chuck Palahniuk’s classic Fight Club. The team of brilliant ex-Wall Streeters is on a mission to liberate us from the Old World Order where journalism is nothing more than a means to selling ads.
Damien Hoffman: Tyler, can you share the general story of your career?
Tyler: Alas, I can not go into details for obvious reasons. However, I can tell you that between the four authors of Zero Hedge, we have over two decades of corporate finance advisory, investing and operational experience. For example, between my colleagues and myself we have experience with Credit Default Swaps, financial restructuring, equity capital markets, M&A advisory, private equity, macroeconomic and FOREX analysis. Marla [Singer] is the legal expert in the Zero Hedge family. We also have a variety of experience with all facets of business including front, middle, and back office operational expertise.
Damien: Why did you start Zero Hedge?
Tyler: Last year I realized there was a gaping hole in analytical financial reporting. The vast majority of financial journalists become finance experts by necessity. Alas, there is only so much they can learn without being actively engaged in what they discuss and report. It is still very rare to have an individual with a practical financial background do research, reporting, and analysis in a public medium — and do so coherently — due to the substantial opportunity cost.
Zero Hedge hopes to satisfy the need for objective, unbiased analysis and news. Thanks to the backgrounds of our founders, we are able to connect the dots between seemingly unrelated data sets faster and better than most mainstream media outlets.
Damien: How did you decide to brand the news agency with the Fight Club theme?
Tyler: Since its inception, Zero Hedge had activist overtones to it. Activism not only in the sense of pointing out errors and fraud in the financial system, but also as a grassroots campaign in which people can feel part of a force for change. And real change — not its hollow replica being shoveled down people’s throats in the form of empty campaign promises.
In this sense, Fight Club represents nothing less than the growing disenchantment with a highly leveraged consumer culture, a financial system that merely redistributes wealth from the middle class to Wall Street, and a crony political system which never changes its substance. However, in order to succeed in real change, the truth about the reality behind the scenes has to be exposed. People need to see just how deep the rabbit hole goes. This is the main priority of Zero Hedge for the time being.
Tyler: Our method is pseudonymous speech because anonymity is a shield from the tyranny of the majority. Thus, anonymity exemplifies the purpose behind the Bill of Rights, and of the First Amendment in particular: to protect unpopular individuals from retaliation, and their ideas from suppression, at the hand of an intolerant society.
Our pseudonymous speech is responsibly used. In 1995, Supreme Court Justice Stevens, writing for the majority in the case of McIntyre v. Ohio Elections Commission [514 U.S. 334], stated, “The right to remain anonymous may be abused when it shields fraudulent conduct. But political speech by its nature will sometimes have unpalatable consequences, and, in general, our society accords greater weight to the value of free speech than to the dangers of its misuse.”
Though often maligned — typically by those frustrated by an inability to engage in ad hominem attacks — anonymous speech has a long and storied history in the United States. We think ourselves in good company in using one or another nom de plume. Anonymity was used by the likes of Mark Twain, also known as Samuel Langhorne Clemens, to criticize common ignorance. Perhaps, most famously, it was used by Alexander Hamilton, James Madison and John Jay — also known as Publius — to write the Federalist Papers.
Particularly in light of an emerging trend against vocalizing public dissent in the United States, we believe in the critical importance of anonymity and its role in dissident speech. Like The Economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker — as it should be. We believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn’t.
Damien: You were recently embroiled in a WWE-style argument with CNBC anchor Dennis Kneale. During Kneale’s rant, he alleged your audience must be morons for reading a blog rather than watching a major media outlet. Can you share a rough breakdown of your real audience and why Dennis is wrong?
Tyler: Discussing Dennis Kneale is counterproductive as I really have no desire to be grouped in even remotely close circles to him. He is an entertainer. I provide information. However, I will tell you that two-thirds of Zero Hedge’s readers originate on Wall Street and its equivalents around the globe at major investment banks and hedge funds. We also have a large segment of readers at the most critical establishments in Washington D.C. Ironically, these are the very people who will never be caught watching the 8pm segment of CNBC.
Damien: What do you want Zero Hedge to be in five years?
Tyler: Let’s follow up on this question in five years. The growth of Zero Hedge has been a shock to me. From its humble beginnings a little over six months ago, Zero Hedge has become the fastest growing, most frequented finance-focused blog in America. While I am very happy with the growth rate, it is both a little puzzling and somewhat concerning. People’s demands of Zero Hedge continue growing, and absent a significant expansion, the blog may soon reach its threshold. Which is also exciting, as I have many new ideas which I am preparing to launch in the very near future.
My ultimate goal is to make Zero Hedge a self-sustaining source of unbiased information, which is not at the mercy of corporate sponsorships or blessings from Wall Street or Washington D.C. Luckily, the currently deplorable condition of mainstream media, which has only so many years to exist in its current format, will undoubtedly make the growth of blogs such as Zero Hedge a pull rather than a push process.
Damien: Tyler, thanks for taking the time to do your first interview with me. You and your team set the bar very high for those who wish to win this award in years to come.
Tyler: We are delighted and honored to win this award. My team and I thank you very much.