Bear Psychology

[HAMISH_MCTAVISH]

I've noticed today the bears are acting like, well, bears with a sore head.

Obviously theres a lot of fear in bearland, what with all these green shoots popping up everywhere, but it did make me wonder why they are so bl00dy miserable about it all.

So I did a little research into the most common psychological derangements of bears, and found the following.

Cognitive Dissonance:

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously, such as believing that a massive, 50% plus house price crash is inevitable absolutely everywhere, whilst observing that only a minor correction of less than half or a quarter of that amount is occurring in your local market.

The "ideas" or "cognitions" in question may include attitudes and beliefs, and also the awareness of one's behavior. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by justifying or rationalizing their attitudes, beliefs, and behaviors.

Dissonance normally occurs when a person perceives a logical inconsistency among his or her cognitions. This happens when one idea implies the opposite of another. For example, a belief in house prices being far too expensive could be interpreted as inconsistent with the reality that house prices have risen by several hundred percent since this observation was first made.

Noticing the contradiction would lead to dissonance, which could be experienced as anxiety, guilt, shame, anger, embarrassment, stress, and other negative emotional states, combined with a desire to discredit all credible evidence to the contrary.

A powerful cause of dissonance is when an idea conflicts with a fundamental element of the self-concept, such as

"I made the right decision" to not buy property in 2002 when clear evidence exists to the contrary.

The anxiety that comes with the possibility of having made a bad decision can lead to rationalization, the tendency to create additional reasons or justifications to support one's choices. A person who just wasted a massive amount of money on 10 years of rent during phenomenal house price inflation might decide that it is erroneously justified by some abstract belief in not being a wage or debt slave, whilst ignoring the catastrophic effects on their long term financial health.

This belief will not be true, but it would likely reduce dissonance and make the person feel better.

Dissonance, along with an excessive amount of time posting on HPC, can also lead to confirmation bias, the denial of disconfirming evidence, and other ego defense mechanisms.

And then theres this one......

Confirmation bias

Confirmation bias is a tendency to search for or interpret new information in a way that confirms one's preconceptions and to avoid information and interpretations which contradict prior beliefs.

For example, holding a belief that house prices must crash by 50% would lead a bear to avoid rational and neutral interpretation of articles claiming to see the green shoots of recovery when prices had only fallen by 25%.

Attempts to focus the bear on these articles would most likely be met with hostility and defensiveness, and finally by desperate attempts to use fallacy ad hominum, as the threat to the core beliefs of the bear would trigger such ego defence mechanisms.

It is a type of cognitive bias and represents an error of inductive inference, or as a form of selection bias toward confirmation of the hypothesis under study or disconfirmation of an alternative hypothesis.

Confirmation bias is of interest in the teaching of critical thinking, as the skill is misused if rigorous critical scrutiny is applied only to evidence challenging a preconceived idea but not to evidence supporting it, as is frequently the case from bears posting on HPC.

Positively bonkers, the lot of you, but at least you keep us sane people entertained.....

Edit: Oh, and house prices, (must keep on forum topic....) The level of house price decline is slowing, and will stabilise within the next 12 months. Discuss.

Edited April 19, 2009 by HAMISH_MCTAVISH

[mfp123]

I've noticed today the bears are acting like, well, bears with a sore head.

Obviously theres a lot of fear in bearland, what with all these green shoots popping up everywhere, but it did make me wonder why they are so bl00dy miserable about it all.

So I did a little research into the most common psychological derangements of bears, and found the following.

Cognitive Dissonance:

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously, such as believing that a massive, 50% plus house price crash is inevitable absolutely everywhere, whilst observing that only a minor correction of less than half or a quarter of that amount is occurring in your local market.

The "ideas" or "cognitions" in question may include attitudes and beliefs, and also the awareness of one's behavior. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by justifying or rationalizing their attitudes, beliefs, and behaviors.

Dissonance normally occurs when a person perceives a logical inconsistency among his or her cognitions. This happens when one idea implies the opposite of another. For example, a belief in house prices being far too expensive could be interpreted as inconsistent with the reality that house prices have risen by several hundred percent since this observation was first made.

Noticing the contradiction would lead to dissonance, which could be experienced as anxiety, guilt, shame, anger, embarrassment, stress, and other negative emotional states, combined with a desire to discredit all credible evidence to the contrary.

A powerful cause of dissonance is when an idea conflicts with a fundamental element of the self-concept, such as

"I made the right decision" to not buy property in 2002 when clear evidence exists to the contrary.

The anxiety that comes with the possibility of having made a bad decision can lead to rationalization, the tendency to create additional reasons or justifications to support one's choices. A person who just wasted a massive amount of money on 10 years of rent during phenomenal house price inflation might decide that it is erroneously justified by some abstract belief in not being a wage or debt slave, whilst ignoring the catastrophic effects on their long term financial health.

This belief will not be true, but it would likely reduce dissonance and make the person feel better.

Dissonance, along with an excessive amount of time posting on HPC, can also lead to confirmation bias, the denial of disconfirming evidence, and other ego defense mechanisms.

And then theres this one......

Confirmation bias

Confirmation bias is a tendency to search for or interpret new information in a way that confirms one's preconceptions and to avoid information and interpretations which contradict prior beliefs.

For example, holding a belief that house prices must crash by 50% would lead a bear to avoid rational and neutral interpretation of articles claiming to see the green shoots of recovery when prices had only fallen by 25%.

Attempts to focus the bear on these articles would most likely be met with hostility and defensiveness, and finally by desperate attempts to use fallacy ad hominum, as the threat to the core beliefs of the bear would trigger such ego defence mechanisms.

It is a type of cognitive bias and represents an error of inductive inference, or as a form of selection bias toward confirmation of the hypothesis under study or disconfirmation of an alternative hypothesis.

Confirmation bias is of interest in the teaching of critical thinking, as the skill is misused if rigorous critical scrutiny is applied only to evidence challenging a preconceived idea but not to evidence supporting it, as is frequently the case from bears posting on HPC.

Positively bonkers, the lot of you, but at least you keep us sane people entertained.....

everything that was spoken about on these boards with regards to the economy, banking, house prices, 12 months ago, has happened or is happening today.

in truth, the boards have always been 2 steps ahead of the game every time.

['Bart']

Speaking of bear psychology, what is your view on this post?

Bart, he may be rude arrogant and confrontational.. possibly even a troll, but he is still a Bear. He says he expects prices to hit 35% off peak when we are only still only at 20% down.

In my book that makes him a bear even though he hates everything that bears stand for.

[Britney's Piers]

I think you should send this to the Daily Express, they might be interested.

[swissy_fit]

A good effort, Hamish.

However I will permit myself a biblical quotation :

http://bible.cc/matthew/7-5.htm

[Not Long Now]

I didn't know that wanting one of lifes basic requirements at an affordable price, that is sustainable in the long run, was wrapped up in so much psychological twaddle.

[AC2]

Two well-established aspects of human nature, which can be applied equally to bulls. And probably 'neithers' too.

They are extremely difficult to overcome (even though you may think you have), which is why it's rarely a good idea to place anyone - bar the most repetitive monothematics - on 'ignore'.

The things that irritate you most are often the things about which you're deceiving yourself. The self-defence of vested interests is a strong force in most of us.

[blankster]

The bulls have been in denial, now it's our turn, or so it seems.

[Britney's Piers]

[DeepLurker]

Edit: Oh, and house prices, (must keep on forum topic....) The level of house price decline is slowing, and will stabilise within the next 12 months. Discuss.

I'd love to. Please provide a link to a reputable source* stating that houses prices will stabilise within the next 12 months, and I will be happy to discuss.

* i.e., not a source that was bullish on the economy and house prices just before the crash.

EDIT: replaced 'positive' with 'bullish'.

Edited April 19, 2009 by DeepLurker

[Injin]

I've noticed today the bears are acting like, well, bears with a sore head.

Obviously theres a lot of fear in bearland, what with all these green shoots popping up everywhere, but it did make me wonder why they are so bl00dy miserable about it all.

So I did a little research into the most common psychological derangements of bears, and found the following.

Cognitive Dissonance:

Cognitive dissonance is an uncomfortable feeling caused by holding two contradictory ideas simultaneously, such as believing that a a pile of bricks that was assembled for thirty quid two hundred and fifty years ago is somehow worth 25 years of your working life, instead of about 6 or 7 months worth of income.

The "ideas" or "cognitions" in question may include attitudes and beliefs, and also the awareness of one's behavior. The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance by justifying or rationalizing their attitudes, beliefs, and behaviors.

Dissonance normally occurs when a person perceives a logical inconsistency among his or her cognitions. This happens when one idea implies the opposite of another. For example, a belief in house prices being far too cheap could be interpreted as inconsistent with the reality that house prices have risen by several hundred percent since this observation was first made.

Noticing the contradiction would lead to dissonance, which could be experienced as anxiety, guilt, shame, anger, embarrassment, stress, and other negative emotional states, combined with a desire to discredit all credible evidence to the contrary.

A powerful cause of dissonance is when an idea conflicts with a fundamental element of the self-concept, such as

"I made the right decision" to buy property in 2007 when clear evidence exists to the contrary.

The anxiety that comes with the possibility of having made a bad decision can lead to rationalization, the tendency to create additional reasons or justifications to support one's choices. A person who just wasted a massive amount of his or her life during phenomenal house price inflation waiting for the rest of humanity to drop out of it's cheap credit coma might decide that it is erroneously justified by some real worl drealisation of not being a wage or debt slave, whilst ignoring the beneficial effects on their long term physical, spiritual and mental health.

This truth lets;' you sleep soundly at night.

Dissonance, along with an excessive amount of time watching the MSM, can also lead to mass hysteria, the denial of the evidence of your own fricking eyes, and other false self defense mechanisms.

Started to fix it but got bored.

Thanks anyway, weird person.

[Valerius]

Aside from the "bears psychology", what most of them seem to be forgetting is that the UK economy is centered around financial services, banking, and one of this component is house prices which support a great deal of the economy's backbone.

What they have to realized is that the HPC of 50% will simply not happen, or rather the government won't let this happen what come may.

The correction under way is cyclical, and will not last, even though many posters wish for an armageddon style economy disaster.

['Bart']

or rather the government won't let this happen

Haven't heard that one in a while.

[libspero]

I've noticed today the bears are acting like, well, bears with a sore head.

Hamish the original bear-hating bear

Do you have a word to describe that condition?

[enrieb]

I've noticed today the bears are acting like, well, bears with a sore head.

Obviously theres a lot of fear in bearland, what with all these green shoots popping up everywhere, but it did make me wonder why they are so bl00dy miserable about it all.

So I did a little research into the most common psychological derangements of bears, and found the following.

Positively bonkers, the lot of you, but at least you keep us sane people entertained.....

Edit: Oh, and house prices, (must keep on forum topic....) The level of house price decline is slowing, and will stabilise within the next 12 months. Discuss.

The ability to self reflect and question ones own sanity is a sign of a balanced and healthy mind, and over the last few years many here have, at some point, asked the question as to our own sanity. Believing that you alone are sane and thinking all others are insane is probably a good indicator of psychological derangement. Guess which one applies to you McTavish.

The question of how we know what we know and whether or not we are correct in our beliefs is a fundamental one and it helps if we make the effort to read some basic philosophy, critical thinking and cognitive brain psychology so that we can best understand and test our opinions.

Of course the most important thing to do after reading all that is to apply the philosophy, critical thinking and cognitive psychology to our own thoughts first of all and then to use the 'cancel post' button before we post every little brain fart that surfaces in our heads.

Doublethink

The power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them....To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies — all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.

Edited April 19, 2009 by enrieb

[HAMISH_MCTAVISH]

Hamish the original bear-hating bear

Do you have a word to describe that condition?

To be fair, I have always said I'm bearish on property short term, and bullish long term. Thats why I chose neither.

[Kazuya]

The correction under way is cyclical, and will not last, even though many posters wish for an armageddon style economy disaster.

In the last recession which was not as bad as the current recession, house prices dropped for 5+ years before bottoming out in 1995 and grinding along the bottom for 2 years.

What makes you think it'll be different this time? The government can't just throw money at the economy and expect the problem to go away, hence why BoE Governor Mervyn King told Gordon Brown "enough is enough with the spending". Interest rates will not stay low for long and have already started to creep up slowly.

You say the correction is cyclical yet assume prices will hit a bottom this year hence stating we will have a V-shaped recovereh. Unemployment is set to rocket past 3 million by the end of the year.

I say "get your head out of the sand!"

[swissy_fit]

Edit: Oh, and house prices, (must keep on forum topic....) The level of house price decline is slowing, and will stabilise within the next 12 months. Discuss.

OK, I'll discuss.

There are about 4 possibilities :

1. The level of house price decline is slowing, and will stabilise within the next 12 months.

2. The level of house price decline is slowing and there may even be some rises soon, but the decline will accelerate again when interest rates rise and unemployment bites hard.

3. High inflation will be unleashed and prices will rise in nominal terms but will continue to fall in real terms for some years, meanwhile most people will get poorer. All investments will prove difficult/unsafe including property, but at least a house is also for living in.

4. The banking system will collapse, social unrest, famine and war will ensue.

As an optimum hedge to cope with these possibilities I intend to buy something with at least a quarter acre and partial autonomy(no mortgage) in late 2009. I'm undecided about trying to obtain weapons as I fear reading HPC too much could cause me to shoot the postman.

[drrayjo]

Wibble!

[uptherebels]

To be fair, I have always said I'm bearish on property short term, and bullish long term. Thats why I chose neither.

I am a neither too, but for different reasons. Mind you, I am as mad as a box of frogs, so you have me there.

[Potwalloper]

To be fair, I have always said I'm bearish on property short term, and bullish long term. Thats why I chose neither.

Shame there is not a Bore option.

[R K]

Aside from the "bears psychology", what most of them seem to be forgetting is that the UK economy is centered around financial services, banking, and one of this component is house prices which support a great deal of the economy's backbone.

What they have to realized is that the HPC of 50% will simply not happen, or rather the government won't let this happen what come may.

The correction under way is cyclical, and will not last, even though many posters wish for an armageddon style economy disaster.

"2.5% is something that is containable".

Gordon Brown April '08.

The government couldn't prevent it happening, even though he promises to do "whatever it takes" every time he opens his mouth so you're demonstrably wrong on that one.

[DeepLurker]

Aside from the "bears psychology", what most of them seem to be forgetting is that the UK economy is centered around financial services, banking, and one of this component is house prices which support a great deal of the economy's backbone.

A prosperous economy has to be based on wealth creation.

HPI is not wealth creation (Selling and re-selling a house over and over does not increase its worth).

According to you - "a great deal of the economy is based on house prices". Which are not wealth creating.

Congratulations, one of the forum's bulls has just admitted that the UK economy is not based on true wealth creation. Ergo, it's f***ed.

[the end is a bit nigher]

The bulls have been in denial, now it's our turn, or so it seems.

Denial of what? If you think prices are going to rise would you please change your status to Bull.

Aside from the "bears psychology", what most of them seem to be forgetting is that the UK economy is centered around financial services, banking, and one of this component is house prices which support a great deal of the economy's backbone.

What they have to realized is that the HPC of 50% will simply not happen, or rather the government won't let this happen what come may.

The correction under way is cyclical, and will not last, even though many posters wish for an armageddon style economy disaster.

As someone who has worked in financial services for the last few years, including for a company that managed lots of portfolios for the likes of Kensington, GMAC, Amber etc, I believe I am best placed to tell you ythat you haven't got a clue what you are talking about.

[cashinmattress]

What they have to realized is that the HPC of 50% will simply not happen, or rather the government won't let this happen what come may.

The correction under way is cyclical, and will not last, even though many posters wish for an armageddon style economy disaster.

Wanna bet? This crash is unprecedented. Nobody knows what the outcome will be, silly boy, but all the pundits agree it won't be a happy ending, especially if you are heavily positioned in property.

This is not one of the 18 year cycles touted by you rampant rampers. I don't mind bulls, but you guys are too much. Bulls at least have some facts and figures to back up their arguments. You, on the other hand, just keep throwing up the same old rhetoric, based on your emotional attachment to property...that and maybe some astrology.

If you are so confident in your statements, why do you feel the need to come on this particular website anyhow?