When Barry Ritholtz Talks, People Listen

At about 8:30 a.m. yesterday, Yahoo!’s Tech Ticker posted an interview with Barry Ritholtz, noted finance guy and blogger. In recent times, he has also been very bearish on the market.

But he thinks the bottom may be near. Here’s his money quote from the interview: “There’s a big bear market rally coming.”

Seven and a half hours later, the Dow had risen 5.8 percent.

So was this a case of causality, or merely correlation?

Probably about as much causality as the typical explanations of stock-market movements. If there really was a specific reason behind yesterday’s spike, it probably had to do with Citibank, not Ritholtz.

But given his excellent timing in this case, I wouldn’t be surprised if a lot of people got out their wallets the next time they hear him speak.

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  1. Ken B says:

    Here’s some Freakonomics for you: one possible reason for Citigroup’s better results may be a continuation of the usury that got us into this mess. Millions of their credit card customers received notice a few months ago that their APRs would be increasing to 20%, 25% and even 29% unless they opted out by closing their accounts. This was being done to customers who’ve never been delinquent, over limit, etc., and with good credit scores.

    Presumably many of their solvent customers did opt out, leaving only the most desperate ones who are now paying loan shark APRs and are thus even closer to bankruptcy. I phoned their customer service to complain and to my surprise they readily rescinded the increase, leaving my APR at 8.15% instead of 29%.

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  2. Matt says:

    Agree with Ken B. I hold two citi cards, have excellent credit, and just saw my rates jump from 6%/8% to 15%/17%. Called with alarm and wastold that all holders were increased. I did not get the reduction that Ken received, but I didn’t push it as I had already moved my balance off of my Citi cards (and should have it paid off by May, woo!).

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  3. Kent says:

    I’m a regular reader of Barry’s blog and the timing was pretty funny. I wish the government would listen to him about his recommendations on the bailout, TARP, AIG, etc.

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  4. Mike P. says:

    An internal memo is ‘leaked’, in which Pandit says, well, ignoring all the losses and charge-offs, Citi is making money…. and the market goes wild?!?!?!

    BWAHAHAHAHAHA! The best part is, he can’t be held liable for anything. Internal memos aren’t regulated by anyone, and he can say anything he wants.

    You know, I have $1 million dollars in my checking account right now, minus the amount of $1 million I don’t have…

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  5. deriuqer says:

    I told my wife in the beginning of September: “Honey, those investment banks… It doesn’t look good…” Next thing you know — Lehman goes belly up. I am pretty sure I caused this because my wife has a lot of friends and likes to talk, so it must have been self-fulfilling.

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  6. Colin says:

    As a trader, I love Ritholtz’s site. The guy doesn’t predict, he looks at the same thing all us traders do. There’s a certain structure to the market, and he definitely had an edge in predicting a bear bounce.

    Even he’s laughing at the poeticalness though. His idea was solid, and most traders would agree.

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  7. kahlia says:

    I’m in the same boat as Ken B. and Matt, my “fixed 7.99% for as long as you hold the card” suddenly went up to a VARIABLE 14.99 (without notice). They did lower it again as soon as I asked — and credited my account for the days it was billed at the increased rate –, but said that by “rejecting the new terms”, the card cannot be renewed and when the current card expires I’ll have to get a different one.
    Luckily, I have a year and a half to shop around! ;)

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  8. Chris says:

    The skill set required to be a successful blogger and/or market pundit is very different that what is required to be a successful hedge fund manager.

    I have been invested with Barry for about 3 years now, and the performance of the fund that I am in is not very impressive at all considering the following he has.

    At times I wonder if he is devoting more of his attention to his blog and media appearances than his money management business.

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