All Epsilon Theory Content
Everything we have published at Epsilon Theory since 2013, an archive of more than 1,000 evergreen notes.
The systemic risk question you need to ask yourself today is the same question you needed to ask in 2008.
What is the micro-level truth of the potential real-world shock, and does that micro-level truth threaten the Common Knowledge surrounding a levered business model and securitized asset class of enormous size?
I, for one, am delighted to learn of the “Through No Fault of Their Own” exemption to stock market risk.
One day, and soon, there will be a reckoning. Time to choose a side.
There was no greater sin between 2009 and 2020 than enduring a ‘constant drag on returns’. This is the Meme of Yay, Efficiency!, and it permeates every layer of our economy and markets.
ET contributor Peter Cecchini makes a strong case that the Fed is playing a dangerous game with its constant use of the “exigent circumstances” exception to Section 14 of the Federal Reserve Act.
Does the alphabet soup of new facilities and SPVs established by the Fed in recent weeks amount to an illegal taking of assets? It’s a reasonable question.
Even more reasonable: if not here, where do you draw the line?
We’re going to change the world, you know … you and me. We’re going to create points of failure for the system of sociopathic oligarchy AT SCALE.
This is not a chronicle of errors and mistakes made during COVID-19.
This is the story about the inevitable, simultaneous failure of each of the institutions designed to operate in our interest.
It is the story of how we respond to fragility with resilience.
The oil Narrative is not as it seems.
The White House and others assume the Saudis and Russians are at odds. Don’t be so sure. Their interests are aligned around disabling U.S. production. Period.
There is no country in the world that mobilizes for war more effectively than the United States. And I know you won’t believe me, but I tell you it is true:
This will be #OurFinestHour.
We have been asked to discuss our views about the CARES Act. In order to facilitate future such requests, we have provided what we hope to be a helpful rubric.
Sometimes investors and corporate executives will beg for a miracle to bring mostly dead assets back to life. That’s OK. But we don’t have to give it to them. And we don’t have to treat their requests as news in themselves.
We are led by high-functioning sociopaths, in our politics and our economy, and nowhere is this more apparent than in our war against COVID-19.
How do we protect ourselves? Not by allying with the sociopaths, but by finding our pack.
Saying that “America needs to reopen for business” isn’t the same thing as doing what we need to reopen America for business. Words matter, but actions matter more.
Let’s do the right things. Now.
This is our personal effort to help identify *need*, *sources*, and *money* for personal protective equipment distributions to healthcare workers and first responders.
Bailout the airlines and their rank-and-file employees? You bet.
Bailout the CEOs? Not a chance.
But that’s what we’re gonna do.
When people stop asking “How much worse is this going to get” and start asking “How much longer is this going to last”, things really start changing.
But we can change that, too.
Levering up a portfolio based on a model that we know cannot act as a representation of the state of the world is perilous.
Doing the same with a country is far, far worse.
The structurally bullish will warn us against failure of nerve. The traders will warn us against hesitation. The structurally bearish will warn us about being unable to shift into a defensive shape. But what we should be worried about now is a lack of imagination.
The NYC healthcare system – one of the finest in the world – is about to be slammed beyond anything they have ever seen. ER visits and patient testing is where it begins. It moves from there through the system, ending in ICU wards. The process is like a python swallowing a pig, except this isn’t a pig. It’s a whale.
For the first time our federal government is treating the fight against this virus like the war that it is.
Is it pathetic and sad and a corrupt betrayal of the public trust that it took this long? Absolutely.
But now here we go. And there is no country in the world that mobilizes for war more effectively than the United States.