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I hope everyone here had a great Christmas. I have a lot to cover in the next fortnight as 2017 may be the crunch year for the global financial system – but more on that later.
This current piece is an update to my previous post on the Italian Banking System (/forums/topic/economic-options-for-italy-before-the-2016-referendum/) and the ECB crises ( /forums/topic/why-the-eus-fiat-currency-system-must-fail/)
After the recent Italian Constitutional Referendum saw the resignation of Prime Minster Matteo Renzi in Nov 2016, the new Italian cabinet led by Prime Minister Paolo Gentiloni agreed on 23rd Dec 2016 to plow as much as 20 billion euros into the Italian Banking System – using a loophole in the European Central Bank (ECB) rules to avoid having to “bail in” bond holders and savers. A desperate measure to save a banking system that appears unworkable.
Italy’s banks hold about $383 billion in non-performing loans (NPF) in 2016, about one-third of the entire Eurozone – a 100% increase since 2011. The government support of bad bank loan practices is now reaching the expected outcome of a system freeze or collapse – unless the banks urgently reduce debt levels to the ECB allowed norms to avoid capital flight and bank runs.
Italy is problematic for many of the same reasons that Greece, Spain, and Portugal are. Bank customers in these southern EU states borrowed to buy goods from the wealthier north, mainly from Germany while export markets did not materialise -and then the economic growth they anticipated failed to occur. The purchased goods have mostly been consumed, so there is no collateral to recover. Many loans look like near-total losses. Plus there is systemic bad lending practice, lack of controls and lack of accountability that the past Italian governments have ignored or supported.
Italian banks can either call the loans in, forcing the borrowers to pay or declare bankruptcy and possibly only recoup 40% of the face value of the loans. Or sell the bad loans to a third party to only get 20% of the face value. This would reduce the bad loan portfolio, but it would also require a bank bail-in for the remainder of the debt . The ECB’s new rules introduced in 2015 say that if a country’s government bailed out a bank, then the investors (e.g., holders of the banks stocks and bonds) would have to be “bailed in” and lose a percentage of their investments. This the Italian government cannot afford without triggering a political and economic disaster.
Since the banks are still technically solvent, the government’s cunning plan is to call the cash injection bailout a “precautionary recapitalization” allowed by the ECB rather than a bail-in. Since the ECB limits the injection fund to stop misuse of this scheme – the bailout is nowhere near enough to save one bank, let alone Italy’s banking system.
The EU’s banking union currently provides three levels of rules. None have been actually tested in practice.
Crisis Prevention: Under ECB supervision requiring banks to pass “stress tests” on a regular basis
Early Intervention. If an institution’s situation begins to deteriorate the ECB can force the bank to adopt urgent reforms, because the crisis worsens.
Crisis Management. If the financial situation of a bank deteriorates beyond repair, the ECB can provide a partial bailout from a fund to which all EU banks contribute. A “bail-in” process would be used to determine who is going to lose their money to save the bank. Authorities would first write down all shareholders and other holders of instruments such as convertible and junior bonds. Deposits under 100,000 euros are currently protected, and taxpayer money is not allowed to be used.
Usually, anyone who invested in stocks and bonds would have to be considered a “sophisticated investor.” However thousands of ordinary people, including many elderly savers, who wanted to deposit their money in savings accounts instead were sold bank bonds indiscriminately and fraudulently on the pretext of higher rates of return. A bank “bail-in” in Italy will actually cause tens of thousands of people to lose their life savings.
Italy’s government followed these bail-in rules last year to save four banks, but 130,000 people had their savings wiped out, and the related suicide of a 68 year old pensioner become politically explosive.
The government has been severely tested by the following case – which proves the eventual capitulation of the Italian banking system to bail-ins is not far away:
The rescue of troubled lender Banca Monte dei Paschi di Siena SpA (BMPS) on 23rd Dec 2016 under this indirect bailout scheme is costing the Italian Treasury about 6.6 billion of a total 8.8 billion euros in liquidity demanded of BMPS by Brussels under the bail-in requirement – including 2 billion euros to compensate around 40,000 retail bond holders affected under the bail-in, while the rest will come from the forced conversion of the bank’s subordinated bonds borne by institutional investors.
MPS has €55.2 billion in bad loans and three weeks ago said that it had enough funds to stay afloat for 11 months. Last week, this changed to 4 months. It’s believed that the rapid deterioration is being caused by a run on the bank.
BMPS’s stock price has fallen 80% in the last year, and fell a further 14% this July, following the ECB “ultimatum” to reduce its bad loans portfolio to $32.2 billion by 2018 to meet the 60% NPL-to-GDP ratio.
It’s known that from June to September 2016 customers removed deposits of €6.7 billion, and it’s believed that this run on deposits is continuing, or even accelerating and spiraling out of control.
BMPS had plans to issue 15 billion euros ($15.8 billion) of debt next year to restore liquidity and debt sales would be supported by government guarantees.The European Commission said that it will work with Italy to assess whether the planned capital injection into Monte Paschi is within EU state-aid rules.
However BMPS is still unable to find backers and on 29th Dec 2016 bank trading has been suspended.
It appears that other Italian banks are not far behind. Unicredit, which is even larger than Monte dei Paschi, intends to raise €13 billion early next year. This is not expected to succeed as well and a bail-in is likely.
Finally – Italy is a key player in the EU banking system and the contagion of bad debt default will spread quickly to the primary lenders – who now have similar banking problems.
The total exposure of French banks and private investors alone to the €2.4 trillion Italian government debt exceeds €250 billion or 10%. Germany holds €83.2 billion worth of Italian bonds. Deutsche bank alone has nearly €12 billion worth of Italian bonds on its books. The other banking sectors most at risk of contagion are Spain (€44.6 billion), the U.S. (€42.3 billion) the UK (€29.8 billion) and Japan (€27.6 billion).
All of which helps to explain why banks and their representatives at the IMF and the ECB are frantically demanding a no-expenses-spared Italian taxpayer-funded rescue of Italy’s banking system.
It does not appear that the ECB rules will allow anything other than a ball-in to occur to contain the problem in order to protect against debt spillover. However the collapse of the Italian economy under the stress seems very likely – with a Greek no-solution the expected end result for Italy.
Citations
http://uk.reuters.com/article/us-eurozone-banks-italy-montedeipaschi-idUKKBN14J0J8
https://www.bloomberg.com/news/articles/2016-12-30/paschi-rescue-to-cost-italy-6-6-billion-euros-central-bank-says
http://www.breitbart.com/national-security/2016/12/28/28-dec-16-world-view-bank-run-worsens-italys-banking-crisis/
http://www.generationaldynamics.com/pg/xct.gd.e160705.htm#e160705
http://www.truth-out.org/news/item/38853-the-italian-banking-crisis-no-free-lunch-or-is-thereI hope everyone here had a great Christmas. I have a lot to cover in the next fortnight as 2017 may be the crunch year for the global financial system – but more on that later.
This current piece is an update to my previous post on the Italian Banking System here and the ECB crises here
After the 2016 Italian Constitutional Referendum saw the resignation of Prime Minster Matteo Renzi in Nov 2016, the Italian cabinet led by new Prime Minister Paolo Gentiloni agreed last week to plow as much as 20 billion euros into the Italian Banking System – using a loophole in the European Central Bank (ECB) rules to avoid having to “bail in” bond holders and savers.
Italy’s banks hold about $383 billion in non-performing loans (NPF), about one-third of the entire Eurozone. The government support of bad bank loan practices is now reaching the expected outcome of a system freeze or collapse – unless the banks urgently reduce debt levels.
Italy is problematic for many of the same reasons that Greece, Spain, and Portugal are. Bank customers in these southern EU states borrowed to buy goods from the wealthier north, mainly from Germany; and then the economic growth they anticipated failed to occur. The purchased goods have mostly been consumed, so there is no collateral to recover. Many loans look like near-total losses.
How are Italian banks going to reduce bad loans? Either call the loans in, forcing the borrowers to pay or declare bankruptcy, and possibly only recoup 40% of the face value of the loans.
Or sell the bad loans to a third party, in which case it would only get 20% of the face value. This would reduce the bad loan portfolio, but it would also require a bank bail-in for the remainder of the debt – which the Italian government cannot afford.Since the banks are still technically solvent, the government’s plan is to call the cash injection bailout a “precautionary recapitalization” rather than a bail-in. Since the ECB limits the injection fund to stop misuse of the scheme – the bailout is nowhere near enough to save one bank, let alone Italy’s banking system.
The ECB’s new rules introduced in 2015 say that if a country’s government bailed out a bank, then the investors (e.g., holders of the banks stocks and bonds) would have to be “bailed in” and lose a percentage of their investments.
The EU’s banking union currently provides three levels of rules. None have been actually tested in practice.
Crisis Prevention: Under ECB supervision requiring banks to pass “stress tests” on a regular basis
Early Intervention. If an institution’s situation begins to deteriorate the ECB can force the bank to adopt urgent reforms, because the crisis worsens.
Crisis Management. If the financial situation of a bank deteriorates beyond repair, the ECB can provide a partial bailout from a fund to which all EU banks contribute.
In the last case, a “bail-in” process would be used to determine who is going to lose their money to save the bank. Authorities would first write down all shareholders and other holders of instruments such as convertible and junior bonds.
Deposits under 100,000 euros are currently protected, and taxpayer money is not allowed to be used.
Usually, anyone who invested in stocks and bonds would have to be considered a “sophisticated investor.” However thousands of ordinary people, including many elderly savers, who wanted to deposit their money in savings accounts instead were sold bank bonds. A “bail-in” will actually cause tens of thousands of people to lose their life savings.
Italy’s government followed these bail-in rules last year to save four banks, but 130,000 people had their savings wiped out, and the related suicide of a 68 year old pensioner become politically explosive.
The government has been severely tested by the following case – which proves the eventual capitulation of the Italian banking system to bail-ins is not far away:
The rescue of troubled lender Banca Monte dei Paschi di Siena SpA (BMPS) on 23rd Dec 2016 under this indirect bailout scheme is costing the Italian Treasury about 6.6 billion of a total 8.8 billion euros in liquidity demanded of BMPS by Brussels under the bail-in requirement – including 2 billion euros to compensate around 40,000 retail bond holders affected under the bail-in, while the rest will come from the forced conversion of the bank’s subordinated bonds borne by institutional investors.
MPS has €55.2 billion in bad loans and three weeks ago said that it had enough funds to stay afloat for 11 months. Last week, this changed to 4 months. It’s believed that the rapid deterioration is being caused by a run on the bank.
BMPS’s stock price has fallen 80% in the last year, and fell a further 14% this July, following the ECB “ultimatum” to reduce its bad loans portfolio to $32.2 billion by 2018 to meet the 60% NPL-to-GDP ratio.
It’s known that from June to September 2016 customers removed deposits of €6.7 billion, and it’s believed that this run on deposits is continuing, or even accelerating and spiraling out of control.
BMPS had plans to issue 15 billion euros ($15.8 billion) of debt next year to restore liquidity and debt sales would be supported by government guarantees.The European Commission said that it will work with Italy to assess whether the planned capital injection into Monte Paschi is within EU state-aid rules.
However BMPS is still unable to find backers and on 29th Dec 2016 trading has been suspended.
It appears that other Italian banks are not far behind. Unicredit, which is even larger than Monte dei Paschi, intends to raise €13 billion early next year. This is not expected to succeed as well and a bail-in is likely.
Finally – Italy is a key player in the EU monetary system.
The total exposure of French banks and private investors alone to Italian government debt exceeds €250 billion. Germany holds €83.2 billion worth of Italian bonds. Deutsche bank alone has nearly €12 billion worth of Italian bonds on its books. The other banking sectors most at risk of contagion are Spain (€44.6 billion), the U.S. (€42.3 billion) the UK (€29.8 billion) and Japan (€27.6 billion).
All of which helps to explain why banks and their representatives at the IMF and the ECB are frantically demanding a no-expenses-spared taxpayer-funded rescue of Italy’s banking system
Citations
http://uk.reuters.com/article/us-eurozone-banks-italy-montedeipaschi-idUKKBN14J0J8
https://www.bloomberg.com/news/articles/2016-12-30/paschi-rescue-to-cost-italy-6-6-billion-euros-central-bank-says
http://www.breitbart.com/national-security/2016/12/28/28-dec-16-world-view-bank-run-worsens-italys-banking-crisis/
http://www.generationaldynamics.com/pg/xct.gd.e160705.htm#e160705
http://www.truth-out.org/news/item/38853-the-italian-banking-crisis-no-free-lunch-or-is-thereWhen I abstain from drinking – I have at least 60 IQ points to spare so I thought I’d opine a bit .
My parents are still alive even though I’m nearly 60 and so they have a lot of interesting life experience that I sometimes like to tap into. Politically we are completely 180 degrees apart mostly because of the way they raised me. Both college educated degreed professionals they are also birth defect liberals. When I say birth defect liberals they are the kind of liberals that came out of the depression that kind of liberal and that kind of birth defect. The way they raised me was kind of the way the school system does by Distraction and indoctrination rather than parenting.
Yeah I know this doesn’t have anything to do with politics but it really has everything to do with it. What were your parents like? Were they liberal, conservative …..did you believe what they said?
My parents always appeared to be right about everything. This is the way most human beings spend their lives thinking that they are right about everything and everything that is wrong is everybody else’s fault. You can kind of see where I’m going with this. In my almost six decades on this planet I have noticed characteristics about different political ideas. Conservatives (that is what we used to call traditional liberals in the 18 hundreds) are people who have great empathy in other words men. Liberals on the other hand tend to be very selfish and very self-centered and they think that the entire world sees things the way they do if not they are completely defective and should be ignored. Then they compound damage by yelling at you as if raising their voice will make you cognition level go up. Sure maybe intellectually they have something going on but they are completely disconnected from reality. So this morning I’m thinking about it how my parents have always kind of projected their own s~~~ on me and then resent me if I don’t accept it which is pretty much how I’ve lived my life and I came across this little gem. I hope you find it as interesting as I did. I’ll provide the link as well.
https://en.m.wikipedia.org/wiki/False_consensus_effect
False consensus effect
In psychology, the false-consensus effect or false-consensus bias is an attributional type of cognitive bias whereby people tend to overestimate the extent to which their opinions, beliefs, preferences, values, and habits are normal and typical of those of others (i.e., that others also think the same way that they do).[1] This cognitive bias tends to lead to the perception of a consensus that does not exist, a “false consensus”.
This false consensus is significant because it increases self-esteem (overconfidence effect). It is derived from a desire to conform and be liked by others in a social environment. This bias is especially prevalent in group settings where one thinks the collective opinion of their own group matches that of the larger population. Since the members of a group reach a consensus and rarely encounter those who dispute it, they tend to believe that everybody thinks the same way. The false-consensus effect is not restricted to cases where people believe that their values are shared by the majority, but it still manifests as an overestimate of the extent of their belief. For example, fundamentalists do not necessarily believe that the majority of people share their views, but their estimates of the number of people who share their point of view will tend to exceed the actual number.
Additionally, when confronted with evidence that a consensus does not exist, people often assume that those who do not agree with them are defective in some way.[2] There is no single cause for this cognitive bias; the availability heuristic, self-serving bias, and naïve realism have been suggested as at least partial underlying factors. Maintenance of this cognitive bias may be related to the tendency to make decisions with relatively little information. When faced with uncertainty and a limited sample from which to make decisions, people often “project” themselves onto the situation. When this personal knowledge is used as input to make generalizations, it often results in the false sense of being part of the majority.[3][clarification needed]
The false-consensus effect can be contrasted with pluralistic ignorance, an error in which people privately disapprove but publicly support what seems to be the majority view (see below).
Contents
Contrasted with pluralistic ignoranceEditThe false-consensus effect can be contrasted with pluralistic ignorance, an error in which people privately disapprove but publicly support what seems to be the majority view (regarding a norm or belief), when the majority in fact shares their (private) disapproval. While the false-consensus effect leads people to wrongly believe that the majority agrees with them (when the majority, in fact, openly disagrees with them), the pluralistic ignorance effect leads people to wrongly believe that they disagree with the majority (when the majority, in fact, covertly agrees with them). Pluralistic ignorance might, for example, lead a student to engage in binge drinking because of the mistaken belief that most other students approve of it, while in reality most other students disapprove, but behave in the same way because they share the same mistaken (but collectively self-sustaining) belief. In a parallel example of the false-consensus effect, a student who likes binge drinking would believe that a majority also likes it, while in reality most others dislike it and openly say so.
Major theoretical approachesEdit
The false-consensus effect can be traced back to two parallel theories of social perception, “the study of how we form impressions of and make inferences about other people”.[4] The first is the idea of social comparison. The principal claim of Leon Festinger’s (1954) social comparison theory was that individuals evaluate their thoughts and attitudes based on other people.[5] This may be motivated by a desire for confirmation and the need to feel good about oneself. As an extension of this theory, people may use others as sources of information to define social reality and guide behavior. This is called informational social influence.[6][7] The problem, though, is that people are often unable to accurately perceive the social norm and the actual attitudes of others. In other words, research has shown that people are surprisingly poor “intuitive psychologists” and that our social judgments are often inaccurate.[5] This finding helped to lay the groundwork for an understanding of biased processing and inaccurate social perception. The false-consensus effect is just one example of such an inaccuracy.[7]
The second influential theory is projection, the idea that people project their own attitudes and beliefs onto others. This idea of projection is not a new concept. In fact, it can be found in Sigmund Freud’s work on the defense mechanism of projection, D.S. Holmes’ work on “attributive projection” (1968), and Gustav Ichheisser’s work on social perception (1970).[8] D.S. Holmes, for example, described social projection as the process by which people “attempt to validate their beliefs by projecting their own characteristics onto other individuals”.[5]
Here a connection can be made between the two stated theories of social comparison and projection. First, as social comparison theory explains, individuals constantly look to peers as a reference group and are motivated to do so in order to seek confirmation for their own attitudes and beliefs.[5] In order to guarantee confirmation and a higher self-esteem, though, an individual might unconsciously project their own beliefs onto the others (the targets of their comparisons). This final outcome is the false-consensus effect. To summarize, the false-consensus effect can be seen as stemming from both social comparison theory and the concept of projection.
The false-consensus effect, as defined by Ross, Greene, and House in 1977, came to be the culmination of the many related theories that preceded it. In their well-known series of four studies, Ross and associates hypothesized and then demonstrated that people tend to overestimate the popularity of their own beliefs and preferences.[9] In each of the studies, subjects or “raters” were asked to choose one of a few mutually-exclusive responses. They would then predict the popularity of each of their choices among other participants, referred to as “actors”. To take this a step further, Ross and associates also proposed and tested a related bias in social inferences: they found that raters in an experiment estimated their own response to be not only common, but also not very revealing of the actors’ “distinguishing personal dispositions”.[9] On the other hand, alternative or opposite responses were perceived as much more revealing of the actors as people. In general, the raters made more “extreme predictions” about the personalities of the actors that did not share the raters’ own preference. In fact, the raters may have even thought that there was something wrong with the people expressing the alternative response.[2]
In the ten years after the influential Ross et al. study, close to 50 papers were published with data on the false-consensus effect.[10] Theoretical approaches were also expanded. The theoretical perspectives of this era can be divided into four categories: (a) selective exposure and cognitive availability, (b) salience and focus of attention, (c) logical information processing, and (d) motivational processes.[10] In general, the researchers and designers of these theories believe that there is not a single right answer. Instead, they admit that there is overlap among the theories and that the false-consensus effect is most likely due to a combination of these factors.[11]
Selective exposure and cognitive availabilityEdit
This theory is closely tied to the availability heuristic, which suggests that perceptions of similarity (or difference) are affected by how easily those characteristics can be recalled from memory.[10] And as one might expect, similarities between oneself and others are more easily recalled than differences. This is in part because people usually associate with those who are similar to themselves. This selected exposure to similar people may bias or restrict the “sample of information about the true diversity of opinion in the larger social environment”.[12] As a result of the selective exposure and availability heuristic, it is natural for the similarities to prevail in one’s thoughts.[11]Botvin et al. (1992) did a popular study on the effects of the false-consensus effect among a specific adolescent community in an effort to determine whether students show a higher level of false-consensus effect among their direct peers as opposed to society at large.[13] The participants of this experiment were 203 college students ranging in age from 18 to 25 (with an average age of 18.5). The participants were given a questionnaire and asked to answer questions regarding a variety of social topics. For each social topic, they were asked to answer how they felt about the topic and to estimate the percentage of their peers who would agree with them. The results determined that the false-consensus effect was extremely prevalent when participants were describing the rest of their college community; out of twenty topics considered, sixteen of them prominently demonstrated the false-consensus effect. The high levels of false-consensus effect seen in this study can be attributed to the group studied; because the participants were asked to compare themselves to a group of peers that they are constantly around (and view as very similar to themselves), the levels of false-consensus effect increased.[13]
Salience and focus of attentionEdit
This theory suggests that when an individual focuses solely on their own preferred position, they are more likely to overestimate its popularity, thus falling victim to the false-consensus effect.[12] This is because that position is the only one in their immediate consciousness. Performing an action that promotes the position will make it more salient and may increase the false-consensus effect. If, however, more positions are presented to the individual, the degree of the false-consensus effect might decrease significantly.[12]Logical information processingEdit
This theory assumes that active and seemingly rational thinking underlies an individual’s estimates of similarity among others.[12] This is manifested in one’s causal attributions. For instance, if an individual makes an external attribution for their belief, the individual will likely view his or her experience of the thing in question as merely a matter of objective experience. For example, a few movie-goers may falsely assume that the quality of the film is a purely objective entity. To explain their dissatisfaction with it, the viewers may say that it was simply a bad movie (an external attribution). Based on this (perhaps erroneous) assumption of objectivity, it seems rational or “logical” to assume that everyone else will have the same experience; consensus should be high. On the other hand, someone in the same situation who makes an internal attribution (perhaps a film aficionado who is well-aware of his or her especially high standards) will realize the subjectivity of the experience and will be drawn to the opposite conclusion; their estimation of consensus with their experience will be much lower. Though they result in two opposite outcomes, both paths of attribution rely on an initial assumption which then leads to a “logical” conclusion. By this logic, then, it can be said that the false-consensus effect is really a reflection of the fundamental attribution error (specifically the actor-observer bias), in which people prefer external/situational attributions over internal/dispositional ones to justify their own behaviors.In a study done by Fox, Yinon, and Mayraz, researchers were attempting to determine whether or not the levels of the false-consensus effect changed in different age groups. In order to come to a conclusion, it was necessary for the researchers to split their participants into four different age groups. Two hundred participants were used, and gender was not considered to be a factor. Just as in the previous study mentioned, this study used a questionnaire as its main source of information. The results showed that the false-consensus effect was extremely prevalent in all groups, but was the most prevalent in the oldest age group (the participants who were labeled as “old-age home residents”). They showed the false-consensus effect in all 12 areas that they were questioned about. The increase in false-consensus effect seen in the oldest age group can be accredited to their high level of “logical” reasoning behind their decisions; the oldest age group has obviously lived the longest, and therefore feels that they can project their beliefs onto all age groups due to their (seemingly objective) past experiences and wisdom. The younger age groups cannot logically relate to those older to them because they have not had that experience and do not pretend to know these objective truths. These results demonstrate a tendency for older people to rely more heavily on situational attributions (life experience) as opposed to internal attributions.[14]
Motivational processesEdit
This theory stresses the benefits of the false-consensus effect: namely, the perception of increased social validation, social support, and self-esteem. It may also be useful to exaggerate similarities in social situations in order to increase liking.[15] It is possible that these benefits serve as positive reinforcement for false-consensus thinking.Relation to personality psychologyEdit
Within the realm of personality psychology, the false-consensus effect does not have significant effects. This is because the false-consensus effect relies heavily on the social environment and how a person interprets this environment. Instead of looking at situational attributions, personality psychology evaluates a person with dispositional attributions, making the false-consensus effect relatively irrelevant in that domain. Therefore, a person’s personality potentially could affect the degree to which the person relies on false-consensus effect, but not the existence of such a trait.
ApplicationsEdit
The false-consensus effect is an important attribution bias to take into consideration when conducting business and in everyday social interactions. Essentially, people are inclined to believe that the general population agrees with their opinions and judgments. Whether or not this belief is accurate, it gives them a feeling of more assurance and security in their decisions. This could be an important phenomenon to either exploit or avoid in business dealings.
For example, if a man doubted whether he wanted to buy a new tool, breaking down his notion that others agree with his doubt would be an important step in persuading him to purchase it. By convincing the customer that other people in fact do want to buy the appliance, the seller could perhaps make a sale that he would not have made otherwise. In this way, the false-consensus effect is closely related to conformity, the effect in which an individual is influenced to match the beliefs or behaviors of a group. There are two differences between the false-consensus effect and conformity: most importantly, conformity is matching the behaviors, beliefs, or attitudes of a real group, while the false-consensus effect is perceiving that others share your behaviors, beliefs, or attitudes, whether or not they really do. Making the customer feel like the opinion of others (society) is to buy the appliance will make the customer feel more confident about his purchase and will make him believe that other people would have made the same decision.
Similarly, any elements of society affected by public opinion—e.g., elections, advertising, publicity—are very much influenced by the false-consensus effect. This is partially because the way in which people develop their perceptions involves “differential processes of awareness”.[16] That is to say, while some people are motivated to reach correct conclusions, others may be motivated to reach preferred conclusions. Members of the latter category will more often experience the false-consensus effect, because the subject is likely to search actively for like-minded supporters and may discount or ignore the opposition.
UncertaintiesEdit
There is ambiguity about several facets of the false-consensus effect and of its study. First of all, it is unclear exactly which factors play the largest role in the strength and prevalence of the false-consensus effect in individuals. For example, two individuals in the same group and with very similar social standing could have very different levels of false-consensus effect, but it is unclear what social, personality, or perceptual differences between them play the largest role in causing this disparity).[citation needed]
Additionally, it can be difficult to obtain accurate survey data about the false-consensus effect (as well as other psychological biases) because the search for consistent, reliable groups to be surveyed (often over an extended period of time) often leads to groups that might have dynamics slightly different from those of the “real world”. For example, many of the referenced studies in this article examined college students, who might have an especially high level of false-consensus effect both because they are surrounded by their peers (and perhaps experience the availability heuristic) and because they often assume that they are similar to their peers. This may result in distorted data from some studies of the false-consensus effect.[citation needed]
See alsoEdit
Attributional bias
Confirmation bias
Fundamental attribution error
Groupthink
Illusory superiority
List of cognitive biases
Overconfidence effect
Pluralistic ignorance
Pseudoconsensus
Psychological projection
The Engineering of Consent
Manufacturing Consent
ReferencesEditNotesEdit
^ “False Consensus & False Uniqueness”. Psychology Campus.com. Archived from the original on 2007-11-17. Retrieved 2007-11-13.
^ a b Dean, Jeremy (2007). “Why We All Stink as Intuitive Psychologists: The False Consensus Bias”. PsyBlog. Retrieved 2007-11-13.
^ Myers 2015, p. 38.
^ Aronson et al. 2015, p. 86.
^ a b c d Bauman & Geher 2002, p. 294.
^ Aronson et al. 2015, p. 231.
^ a b Bauman & Geher 2002, p. 293.
^ Gilovich 1990.
^ a b Ross, Greene & House 1977.
^ a b c Marks & Miller 1987, p. 72.
^ a b Marks & Miller 1987.
^ a b c d Marks & Miller 1987, p. 73.
^ a b Bauman & Geher 2002.
^ Yinon, Mayraz & Fox 1994.
^ Marks & Miller 1987, p. 74.
^ Nir 2011.
SourcesEdit
Aronson, Elliot; Wilson, Timothy D.; Akert, Robin M.; Sommers, Samuel R. (2015). Social Psychology (9th ed.). Pearson Education. ISBN 9780133936544.
Bauman, Kathleen P.; Geher, Glenn (2002). “We think you agree: The detrimental impact of the false consensus effect on behavior”. Current Psychology. 21 (4): 293–318. doi:10.1007/s12144-002-1020-0.
Botvin, GJ; Botvin, EM; Baker, E; Dusenbury, L; Goldberg, CJ (1992). “The false consensus effect: predicting adolescents’ tobacco use from normative expectations”. Psychological Reports. 70 (1): 171–8. doi:10.2466/pr0.1992.70.1.171. PMID 1565717.
Gilovich, Thomas (1990). “Differential construal and the false-consensus effect”. Journal of Personality and Social Psychology. 59 (4): 623–634. doi:10.1037/0022-3514.59.4.623.
Marks, Gary; Miller, Norman (1987). “Ten years of research on the false-consensus effect: An empirical and theoretical review”. Psychological Bulletin. 102 (1): 72–90. doi:10.1037/0033-2909.102.1.72.
Myers, David (2015). Exploring Social Psychology (7th ed.). New York, NY: McGraw-Hill Education. ISBN 9780077825454.
Nir, L. (2011). “Motivated reasoning and public opinion perception”. Public Opinion Quarterly. Oxford University Press. doi:10.1093/poq/nfq076.
Ross, Lee; Greene, David; House, Pamela (1977). “The “false consensus effect”: An egocentric bias in social perception and attribution processes” (PDF). Journal of Experimental Social Psychology. 13 (3): 279–301. doi:10.1016/0022-1031(77)90049-X.
Yinon, Yoel; Mayraz, Avigail; Fox, Shaul (1994). “Age and the False-Consensus Effect”. The Journal of Social Psychology. 134 (6): 717–725. doi:10.1080/00224545.1994.9923006.
Further readingEditKunda, Ziva (1999). Social Cognition: Making Sense of People. MIT Press. pp. 396–401. ISBN 978-0-262-61143-5. OCLC 40618974.
Fields, James M.; Schuman, Howard (1976). “Public Beliefs About the Beliefs of the Public”. Public Opinion Quarterly. 40 (4): 427. doi:10.1086/268330.
Pronin, Emily; Puccio, Carolyn; Ross, Lee (2002). “Understanding Misunderstanding: Social Psychological Perspectives”. In Gilovich, Thomas; Griffin, Dale; Kahneman, Daniel. Heuristics and Biases: The Psychology of Intuitive Judgment. Cambridge University Press. pp. 636–665. doi:10.1017/CBO9780511808098.038.
External linksEditChanging minds: the false consensus effect
Overcoming Bias: Mind Projection Fallacy
Last edited 1 day ago by InternetArchiveBot
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Terms of UsePrivacyDesktopI can see their heads have been twisted and fed with worthless foam from the mouth. Bob d
I have been on the mgtow path for about 5 months.
You read all the posts, start threads, get responses, process the info. You stay up day and night trying to figure out what the hell happened, how you were conned by so many for your entire life and what you are going to do next.
You spend days on end mad, angry at everyone and everything wishing there was someone you could make pay for the travesty. You try to think of something you could do to change it and somehow make reality match the fantasy you have been fed for decades.
Then one day you wake up completely spent, with no more strength left to even be angry anymore.
A few more months pass. You lift the weights, lose the flab, change the diet, focus on your job, read the books, take the courses. You start walking tall, chin up, eyes on the horizon instead of the ground. You look at people in the eye and back down from nothing. You are polite to all, but always have a plan to take them down if required.
No f~~~s given, you talk to everyone no longer afraid of rejection no matter how hot the girl is because you can see right through them. Their empty shells, the hollow eyes, the fake smiles, all the bulls~~~ now clear…like you have Night Vision while everyone else stumbles around in the dark.
This week I was presented with the option of a relationship with a good friend I have know for over 20 years. In my blue pill days I would have jumped at it, but no longer.
T spent the last couple days thinking it over. In the late night quiet of my home when I got brutally honest with myself I realized it does not matter who the woman is, I will never be in a relationship again. I will never care for or love a girl again. I will never trust one again. I will never believe one again.
I will never believe in one again.
I explained to my friend tonight that having lived my entire adult life in emotionally and verbally abusive relationships has brought me to the point where I simply have to walk away from them…forever. She said that she understood and was sad for me, and that she hated the women who had done this to me. We chatted for a few more minutes, then said goodbye.
Tonight it is real. This is a temporal marker for me. The knowledge of what is real and what has been a lie has finally moved from my head to my heart. What I have to do, how I must live and what my path will be from here is clear.
I will never be the same again.
Tomorrow I will get up, stand tall, put on my armor and raise the shields that will never come down again until they lay me in the ground. I will be tough, hard, unflinching, no f~~~s given. I will be a man that many might come to think they want, but none will ever have.
I will be MGTOW.
Yet tonight, I have a feeling in my heart that I cannot describe nor explain. The closest description might be a “weary sadness”.
Perhaps my brothers, I have finally arrived at acceptance.
Hello from Heave-Ho MGTOW. I have visited this site for many months now and felt it was time to join and help other MGTOW by sharing my experiences. I also look to others to help keep me on the MGTOW path of independence from modern, entitled females and their unachievable and constantly changing expectations. No hate, it’s merely fate and their nature in action.
I have always struggled resisting the beliefs ingrained in me that a man needs to be in a relationship with a female. It gets easier now, as I am older and wiser and most of the women are chunky and post wall with more baggage then a major airline. It was harder when I was young; I became mesmerized with their asses and the fact that they were cute, smelled good and the never-ending pursuit of forbidden fruit. Forget how she treated you, she looks good on you!
I was also trained by society to believe that spending all of your spare time and money on trying to make women happy was what men were supposed to do. The formula that worked during my parent’s era does not apply today as males of my generation learned the hard way; slaughtered in the battlefields they call the family court system.
Screw that noise, I know that I should not be expected to make anyone happy but myself, but this is a trap I still tend to fall into. I remember the last time my Mom tried to give me guidance on relationships “you have so much going for you – I hope you find the right girl soon” Me “the last thing I need right now is to try and please a damn women”. She never brought the subject up again, and right then I knew I was on my path towards something, I just did not know what it was. I searched “I’m done with women” and found out I was not alone, so here I am.
If I had to write a book, the chapters would look like this;
1.The early years – Young Unicorn hunter
2.The Chad years (not natural, I was in a band and I got the ricochets’ but learned a lot about female nature. Thanks guys!)
3.Early Career years – focused, STEM graduate, then onto my masters.
4.Number 1 – Enjoyed being married 9 years after living together for 4, had a son, then crazy sets in. Minor in family law from the school of hard knocks.
5.Single parent years part 1 (Fathers with custody makes effective female repellent)
6.Number 2 – despite red flags, married single mom after dating for six months. Six years of hell on earth. Much to share here.
7.Single parent years part 2, numerous tales of relationships gone bad to share here with all of you. These finally convinced me to stop all of the craziness, drama, control and expense mentally and monetarily and start going my own way.
8.On the path to MGTOW but still struggle to get beyond the thin sliver of remaining programming that there may be unicorns about.That’s why I come here; for the red pill of wisdom dispensed by men with shared experiences of how things really are. Mid-fifty’s and twice divorced but at peace. Focused on getting my son out of high school and off to college, then downsizing and planning for retirement in the future. In the last three months I have seen two women that I had dated in the past that hit the wall hard. If there is justice in this world, then witnessing this may be it. Later
Heave-Ho MGTOW
skip the cavernous vag and go your own way
Okay before i begin i would like to state 3 things here
1 Is that i only went to the movie because i was bribed to go and i did not have to pay for a ticket (a family event if you will).
2 Is that i am no geek nor am i a nerd in any way. If you enjoyed it (not likely) that is good for you but i speak from the layman’s perspective on this. I do not give 2 s~~~s about either the starwars or startrack universes in any way.
3 If you think i am being a dumbass just call me one then move the f~~~ on as debating you would be a waste of time also on a final note if this does not belong here then move the thread to where it begins (ill p~~~ myself laughing if this goes in the litterbox).
Okay where do i begin here? oh yes the movie was completely unnecessary and it was just a cash grab for all the c~~~s getting into Starwars which answered a bulls~~~ question that no layman has ever f~~~ing asked in the first place. I would rather have the revenge of the Sith film end the franchise instead of Disney running into the ground.
And why Disney running it into the ground is my biggest question of them all? since Disney goes really slow in most cases. the pixar films for example toy story 4 is being planned to release 9 years after the third one and the third one was released 11 years after the second one with the shortest distance of time being 4 years between them. And this is one of Disney’s biggest property’s but when these assholes finally get a bigger one they run it into the ground every year.
Now back on the film in general this was one boring ass film even with the action involved with the best part being Darth Vader going on a killing spree of rebel soldiers. Outside of this i was bored for the length of the film as it is a completely forgettable story about some guy and some chick with the chick being better if she was in porno compared to this (i have wacked it to a similar looking chick before).
For the rest of the film it is just about the creation of the death star and this couples plan to get the blueprints on how to destroy it. And as for the ending at least this time there was not as much girl power in the film compared to the last one since the bitch tries to attack men and knocks them down but gets thrown down by the robot and she does not kill the main vilian which is a Trump ripoff.
So the couple dies then the special ending happens where the rebel soldiers get their ass kicked while one is giving the keycard to the other in which the footage from the 77 original film begins where young Leia (before she hit the wall head on) gets the card and you know where this is going.
So in the end the film sucked and should have just been a f~~~ing comic book or a video game as it would have worked alot better then to the solve the f~~~ing useless question in which we were given an answer no one asked for but c~~~s seem to get mesmerised by the answer even thou ten years ago they did not give 2 s~~~s about f~~~ing starwars.
So if you want a starwars experience i recommend watching Revenge of the sith or if you want to play a video game based off the middle of the movies play shadows of the empire instead of this.
And if you must watch it pirate it instead. Anyway i just had to get this off my chest somehow everyone around me seems to have enjoyed this film and i mean everyone. These f~~~s around me are not gonna listen to reason especially the female family members none the less the males.
Just an east coast asshole who likes to curse, If you get offended by words like fuck, cunt, shit, piss, bitch or any racial slurs then you just scroll down.
Anonymous
AnonymousYup, that’s the video, 1980? Was that the year I turned off my first TV? M TV? Thank God Good Habits Die Hard! I just started watching Kung-Fu and finally I got the entire premiere episode that all the “flashback’s” are linked too.
Pre-feminism rampage TV suites me just fine, so far my favorite episode of the Twilight Zone is “Mr Bevis”, he preferred his old humble life back where he was loved and cherished instead of being a dry empty elite driven around in a Lincoln Continental (1st $10,000. car) he preferred his 1924 Rickenbacker that got wrecked, his job that he lost, and loosing his apartment, but everyone still liked him and he was content. That’s how I see life to be lived at any level of poverty or success. It’s how you treat others that really matters.
For now after 50+ years of endless decline and family restructuring, the paradigm alone that they collectively created (without one push and without one effort) is going to start really treating women just like s~~~!
I’ve crossed over two decades ago. Until mgtow.com I never gave it a second glance, it was a permanent decision that struck me like a bolt of lightning. I watched the last and final woman I was willing to tolerate started the typical flipity flipity flop! (then came back infected with Hep C unknowingly). Thank god my mind was MGTOW made! She was systematically rejected along with every wandering whore woman and often some mans wandering horny wife! Advances from women only angered me ever since that day, that hour, that second, that moment I decided to become MGHOW for life!
I see nothing but a life of endless agony catering to the modern definition of marriage and relationships with the worst batch of women the world has ever seen! EVER!
MGTOW road opened up to my psyche like a search light illuminating a highway to heaven! Within a year I was in flight school flying and airplane! I started skiing heavy and hard! It’s like dancing down clouds when the powder is deep and the terrain is steep! F~~~ me, the best damn decision I ever made!
Oh yea, the desire to self inebriate vanished on its own, I only drank and got drunk on cruises where someone else was responsible and my entire life was put on hold for those vacations. Plus the time I turned this clearing (my home) into a mini 18 hole mini golf course in one day using a shovel and cut sections of PVC pipe. Some of the long drives are about 250 ft! Just don’t be riding a bicycle or driving by at the wrong time!
If someone f~~~ing attacks you there is no high road to take rather you must attack them back for what they did.
I think I understood “sticks and stones can break my bones but names will never hurt me” when I was about 3. Its a shame you haven’t learned this concept yet.
It is a matter of principle known as don’t start s~~~ then there will be no s~~~. If you show you are not afraid of something but won’t do something in the future to state something people will know that if you f~~~ with them you will f~~~ with them back and the way to prevent this is by people not starting s~~~ in the first place.
I’d agree with you if it was as situation where maybe you are a kid in school, and someone is bullying you every day, and short of dropping out of school there is no way to avoid it. Yeah…you have to stick up for yourself…but this was a different situation. It was some irrelevant loudmouth making a public scene, and had she said/done anything back it only would have been negative for her when the media had a 10 second video clip to play over and over to make her look bad.
Basically what she did is what we do as MGTOW…win the game by not playing.
Its called respect making it so that you will not get s~~~ on by people without at least a verbal fight back.
Do you think the hot billionaire daughter of a soon to be president is concerned about earning the respect of some silly homo who can’t even act like a civil human being? I don’t know about you but I’m typically not concerned about whether or not trashy people respect me…this guy was trashy, Trump kept it classy. One of those two people acted respectably today, and it wasn’t the loser who was running his mouth, now was it?
It depends on the situation at hand what i am like if you call me a name all call you one back, if you attack me ill attack ill attack you back and if you try to fight me ill fight you back. So if a coworker slides a joke about me i will not get overcarried and i will just play along but if some dumbass on a flight starts s~~~ then goddamnit there will be s~~~.
So you’d care less about a coworker you see every day talking s~~~ to you than you would some random ass guy you’d probably never see again in your life? Besides..there was s~~~…he got himself tossed off the flight and made himself look stupid. How do you think Trump could have played her hand better here…should she have gotten loud with the guy, probably got herself tossed off the flight as well, and given the media a field day with a video to make her look bad they’d be playing over and over for the next week?
Also on a final side note they will never like Trump nor will they ever like or respect you so it is completely meaningless to have some moral high ground to cling onto.
Alright now I’m really confused…
Its called respect making it so that you will not get s~~~ on by people without at least a verbal fight back.
She should have fought back to earn the respect of people who are never going to respect her anyhow?
Look man, I’m not suggesting by any means that being a spineless coward is the way to progress through life, there are times when you need to stand up for yourself, but you need to know your audience and you need to choose your battles wisely. In this case, Trump most certainly knows her audience, and had she chose to engage this guy by yelling back at him, there really was nothing to gain for her and a lot to lose.
Harassment no disturbing the peace yes.
And another thing…I don’t even see how you could make this claim.
Even his own husband said he was harassing her.
Does the pain from being cheated on ever end?
Of course.
It ends THE VERY MINUTE you stop expecting women to be faithful and understand they are more promiscuous and have more sexual partners than men.
It ends on the day you stop buying into any of that “how do I know I can trust you?” womanly crap s~~~-testing fraud pretense where they pretend “men have a problem with commitment” when everybody knows getting a woman to cheat is easier than getting her to go to the gym. All you gotta do is throw it in front of her face.
Women cheat their age, their looks, hair color, eye lashes, nails, height, weight, and lie about their motivations. One wonders where you ever got the idea that she would NOT cheat? She will even attempt to cheat you OUT of it! If you’re not aware of this, one day , you will come home and she toss you a baby and say “here, this is yours”… while expecting you to pay for her mistake and s~~~ty choices.
And PS. Christmas is coming. No matter how hard you work to put thought into a nice gift for her, you can be prepared that YOUR gift could be a fake positive pregnancy test which she bought from craigslist for $20 while she says “OOPS!” and expects you to stick around until Feb 15th, when she finally admits she was “just kidding – false alarm”.
Accept it. And congratulations. You’re cured.
MERRY CHRISTMAS AND A HAPPY NEW YEAR.
See this video? Just because a woman throws a f~~~ing violent & destructive s~~~ fit and threatens to carve her name into your leather seats — or take a Louisville slugger to your headlights — doesn’t mean she’s not playing sperm vacuum with 10 other guys. You have been sold a mammoth LIE that women are faithful and trustworthy themselves.
They aren’t. Stop expecting women to be faithful.
Jerry Springer and Maury Povich made goddam TV careers out of exposing female infidelity.Who the f~~~ would ever expect her to NOT cheat when all that’s required is the willingness to spread her legs – especially when she doesn’t even understand the consequences of her own actions. Not even guilt will stop women from cheating. That’s because women think that cheating requires some kind of expressed willingness or premeditation on their part to actually count. I s~~~ you not, that is exactly what they say. To a woman “cheating” requires a planning and malice on par with a bank robbery. Blowing some Guido in the nightclub toilet “didn’t count”.
Can you believe that? It means if a woman can somehow convince a co-worker to force himself on her, that “doesn’t count” as cheating. But stand back because it gets worse.
Women also don’t count miring themselves in twisted, Dynasty-styled emotional affairs as “cheating”. For instance, a woman may hang around with as many as five or six of her ex-boyfriends without batting an eye. She may accept niceties from male co-workers or university staff members without ever questioning the motive of a free backrub. That’s a perfectly reasonable thing to be handing out, isn’t it? A free backrub? They’re like porno pamphlets in Vegas.
Like any virus, women are not content with ruining their own lives. Ultimately, they seek out the lives of decent, honest men and tempt and corrupt them until they appear to be the cheaters – when nothing could be further from the truth. Cheating is 100% a woman’s fault and 100% avoidable by her, because sex never even happens unless SHE wants it to.
If you know a woman, you can bet she is cheating at this very moment — OR — she is attempting to get away with cheating her husband/boyfriend OUT of it.
“I have a headache”.
“No you don’t. Your dildo is still moist in the goody drawer. Did you mistake it for aspirin? “.
Learn it, and there will never be “pain” again.
Anonymous
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