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The Dow Zero Insurgency

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Ivandjiiski was initially enthusiastic about being interviewed for this story and considered confirming his real identity, then backed out, citing the objection of a Chicago-based partner, who used to blog at Dealbreaker under the pseudonym “Equity Private.” She now calls herself “Marla Singer,” another character from Fight Club. She feared Ivandjiiski’s exposure would lead to her unmasking as well. But more important, he made clear, a measure of secrecy is essential to the site’s mission as an incorruptible critic of the market.

Ivandjiiski did arrange for me to speak with Singer. It was a bizarre exchange. “Tyler Durden isn’t one person,” she said, but up to 40 different people allowed to post under that name. “We are all Tyler Durden,” Singer claimed.

It was around this time that Ivandjiiski, in his e-mails to me, began referring to himself in the third person. And one day after declaring our conversation over, he e-mailed again to flag yet another example of Zero Hedge’s influence: a scathing analysis he wrote last March about the National Rural Utilities Cooperative Finance Corporation (NRUC), which prompted an angry press release from the company before the rating agency Fitch downgraded NRUC. In his final post on the subject, Zero Hedge predicted the move would leave the Virginia-based utility “in [a] smoldering heap of electric and telephone poles.”

Whatever its other accomplishments, Zero Hedge has won the fierce loyalty of its readers—so fierce are they that two prominent financial bloggers I spoke with declined to comment on Ivandjiiski or his site for fear of a digital assault. “I have no interest in having his defenders storm over and attack my site,” says one blogger. Says another, “You can offer any logical argument, they just don’t care. They’re going to follow him over the cliff.”

When John Carney of Clusterstock merely posted about a blogger named John Jansen, who had called a Zero Hedge post “egregiously incorrect,” Clusterstock was invaded by Zero Hedge fans who said he had “sold out to CNBC.” “Start a war with ZH at your own peril,” one of them warned.

“A lot of the readers are people who felt like they’ve lost money to machinations on Wall Street in some way,” reasons Carney. “They see Zero Hedge as standing up for them, so any critique of Zero Hedge is taken as something that really needs to be fought back against. All hands on deck.”

Leo Kolivakis, a Montreal-based pension-fund analyst who recently started making occasional guest posts on Zero Hedge, says he enjoys the large and energized readership he gets writing for Zero Hedge. But even he doesn’t buy everything the site promotes, including the assertions about Goldman’s flash trading. “You can claim that, but where’s your proof? How do I know Lehman and Morgan Stanley weren’t doing the exact same thing? If that was really going on, I think the SEC would move and close that operation up.”

But the Zero Hedge faithful, and Ivandjiiski himself, would call that the naïve faith of the stupefied masses. He’s plunging ahead with a new crusade, going after so-called “dark pools,” unregulated markets where big investors can anonymously unload securities. (Just guess which firm dominated this practice.) “Now that flash trading is practically a thing of the past, everyone’s attention is shifting to dark pools,” Ivandjiiski announced last week, readying Chuck Schumer for his next mission: “The investing world is looking to you to continue your pursuit of a ‘level playing field.’ ”

Wall Street is about speculation, and Wall Street blogs are no different. At this point, Zero Hedge has staked everything on a doomsday scenario, a takedown of the old order, “a deleveraging at every level of modern society.” Even as the market has improved, the economy has shown glimmers of stability, and many of his fellow bears have capitulated, Ivandjiiski has clung ever more tightly to his convictions. The manipulation of the market will eventually fail, he believes, and the pyramid scheme will be exposed for all to see. But it better happen soon or Zero Hedge may lose its mojo. The higher the Dow Jones climbs, the more righteous he necessarily becomes: Every hopeful data point a fraud, every bull a conspirator. There’s an old Wall Street term for this, for when you hold firm to your belief in defiance of the market—fighting the tape. It’s considered inadvisable, but that’s what Ivandjiiski is doing, convinced that he is destined to win.


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