19 December 2014

ZH fail on Soc Gen fail on Russia selling its gold

Zero Hedge fails when commenting on gold are common, but I was surprised to see in this ZH piece to see that Soc Gen got sucked into due to poor research.
As is common in internet land, people pick up stuff by others without doing basic drilling down to the source. The reason you have to do this is because people often misinterpret the source. Other times the source is wrong.
ZH quote the following from Soc Gen: "It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month."
Now that is a very specific figure, $4.3b. It seems that Soc Gen got it from this Business Insider republication of a Vesti Finance article which said "On Thursday, the Central Bank of Russia announced that gold reserves dropped by $US4.3 billion in just one week, reports Vesti Finance."
However, if we check the source link provided we get the following:
"Russia's international reserves for the week from November 28 to December 5, decreased from $ 420.5 billion to $ 416.2 billion, the central bank said on Thursday. ... For the previous week, from 21 to 28 November, gold reserves increased from $ 420.4 billion to $ 420.5 billion. On November 14th the size of gold reserves stood at $ 420.6 billion, on November 7 - $421,400,000,000 rubles."
Now the decrease they are talking about is $4.3b in total reserves but the headline mistakenly assumes it is all gold. The gold specific figures they mention show completely different numbers. While Business Insider hasn't corrected its article, Frank Knopers noted the following update Yahoo Finance made to its republication of the Vesti Finance article:
"Editor's Note: Earlier it was reported that the Central Bank's gold reserves decreased by $4.3 billion, quoting Vesti Finance. However, in actuality, it is international reserves assets that have decreased — not gold. Appropriate changes have been made."
Now how hard was that fact checking Soc Gen and ZH?


  1. I'm shocked... shocked I tells ya!

    For years now I've been depending upon ZH, SD, and a bunch of other like-minded 'alternative media' sites to help me free myself from "the matrix"...

    only to gradually discover that their only purpose is to provide the other half of the 'control both sides of the debate' leninist-style media blitzkreig by which BOTH the 'sheeples' and the 'anti-sheeples' who laugh at them can be herded in the appropriate direction...

    and their loyalties to whichever team they root for 'monetized' to the benefit of the 'usual suspects!

  2. Admittedly the "Russian gold sale" story was at best a speculation on the part of ZH.

    But in their defence...these days, with every price, value, index and rate faked and manipulated by government - and with "markets" on autopilot and completely nonresponsive to fundamentals - ZH may be having trouble finding meaningful stories of ANY kind.

    Sure, sometimes they go off half-cocked but I've always found the site refreshingly irreverent and a nice counter to the mainstream agenda.

    Who knows? Where there's smoke there's (almost always!) fire...but perhaps they should have mentioned too that a government which has spent months and years building up gold reserves, and which realizes that their real enemy is the US dollar, will not likely turn on a dime and part with that bullion.

  3. Most important is who is checking the facts and rectifies when they are wrong.

    The ones that don't seem to me to have 'an agenda'.

  4. @Bron: shame on you opportunistically rushing to criticise ZH in the manner you have.

    Their story is that SocGen has stated that Russia is selling their Au.

    ZH make it perfectly clear throughout that it is rumour, from a single source who is conflicted, 'if true' etc.

    It is perfectly legitimate groundwork to then come out a day or two later with a story and proof that SocGen's rumour is nonsense. So the important message is 1). Russia is NOT slling it's Au...despite the obvious attack upon it's currency, and 2). there's plenty of misinformation out there...so beware.

  5. Anon,

    Yes ZH said it was rumour but my issue is that any basic fact checking would have revealed it was a bogus rumour, but then that would mean you would just kill the story and have nothing to run but instead ZH just publishes it, couldn't be bothered to check, and may (I don't think I've ever seen them admit they are wrong) write another follow up story.

    So you are saying it is better to publish rubbish fast than facts slowly? Its a fail because it shows they don't care about facts, what they care about is clicks.

  6. Hello Bron, Koos and whoever may find my comment of interest or humour though it is off topic. And I may post this elsewhere if I get off my ass.

    As I watch and listen to all these technical analysts, I feel for these poor fuckers. They undoubtedly (some, most, God knows what percentage of them) have likely identified and are charting some very valid and logical trends and cycles. But the last few years they are having their very logical, rational models in terms of cyclical highs, lows, entry points, exit points and daily, weekly monthly, yearly and longer time cycles increasingly inaccurate and are increasingly making them look like idiots and probably feel like idiots.

    But what I would say to them is the the continuous kicking the can down the road by very powerful interests are skewing their computed perfect waves and curves into Seneca waves. The more powerful the interests are, the more capability they have to skew the the curves into extreme Seneca waves. Furthermore, this kicking the can the road is going to cluster these Seneca waves (which then interact with previously relatively uncorrelated data sets) and cause completely unforeseen circumstances. We're not talking about a black swan, we're talking about a fire breathing BLACK DRAGON.

    Maybe somebody can think out a way to calculate what this type of cycle may look like but how do you calculate human stupidity and denial.

    The only winning move is not to play.


  7. Yes, that was a big time screw up, and at a critical time. That justifies the question about where his loyalty truly is. Errors in favor of the money printers always look bad.

  8. JohnM,

    Classic movie, you're showing you age I think. In that technical analysis is looking at human emotions it is OK but I think when algos are a major force in markets does it work anymore (plus add in conflicting views by those humans)?

  9. Hi Bron,

    I disagree with you, ZH article was to mock with the Bank, SocGen.
    ZH did know that it was a wrong info, but instead Bank used it without checking facts for its own interests. That was the big news, we all know that the question of whether Russia is selling gold or not is a government secret, there is no way to know it.
    You should say how a BANK can do this without fact checking, not ZH.
    I understand you want to critize ZH which is fine but this time you missed the target.