All Epsilon Theory Content
Everything we have published at Epsilon Theory since 2013, an archive of more than 1,000 evergreen notes.
Cheer up, farmers! Sure, you f’d up by trusting our current frat house leadership, but I’m sure that the crack team at USDA has a great plan in the works to buy up all your soybeans and corn and give it away to the poors.
Will that work?
Hey, it’s gotta work better than the truth.
It’s the Weekend Zeitgeist, where we leave the world of finance for a day, in which high costs of credit and criminal justice remain top-of-mind concerns, Bulgaria stems the tide of its brain-drain, Reuters publishes straight opinions as news, Stephen Moore goes on Glassdoor, and we all succumb to the collective solipsism of nostalgic reverie.
It’s the Friday Zeitgeist! In which we explore new ecological niches, dust off our not-so-dusty trade war battle plans, announce the latest winner of “Who’s Going to Blame Risk Parity First”, and talk fairness and Fair Isaac.
Hyper-awareness of Narrative, memes and cartoons can become paralyzing. Once we see them, we see them everywhere. But much of that paralysis comes because the demands of Clear Eyes are less than the demands of Full Hearts. And it’s the latter – identity – that truly matters.
Process stories (what’s happening behind the scenes at the campaign / the White House / the locker room / the negotiations) are the original Fiat News. They are designed to make you angry and further the aims of whoever sourced the “news”.
Who benefits from making you angry at China and their “reneging” on a deal that never existed in the first place?
Oceania has always been at war with Eastasia. Or was it Eurasia? I don’t seem to remember so well these days.
It’s the Wednesday Zeitgeist, in which we get the updated odds on the China Trade War, the updated ways to play the odds on the China Trade War, two quasi-sovereign oil & gas operators’ investments in blockchain-as-a-service, financialization again, and a reminder that what is dead may never die.
Ever wonder why you don’t ever get hit with a year-end taxable gain from ETFs like you do with mutual funds? They use a legal (for now) pseudo-wash trade with in-kind redemptions.
Now Vanguard is doing the same thing with their mutual funds. And get this … they’ve filed a patent on this.
So amazing that I’m not even mad.
Wage stagnation in 2016 was actually much worse than you were told. Did this make a difference in the Midwestern states that swung the election, in that actual labor conditions were worse than everyone thought they were? I think yes.
Wage growth in 2018 was actually much better than you were told. Did this make a difference in the current Fed/Wall Street/White House narrative that inflation is dead and the easy money punchbowl can be maintained without consequence? I think yes.
For a few days, we’re making this ET Professional note available to everyone to review. We think the ET Pro service is something that every portfolio allocation, wealth management and active investment team can find useful, particularly for risk management.
If you’re buying or selling the market because the China deal is on or because the China deal is off, you’re no different from everyone who had a ticket at the Derby. Good luck with that.
Also, what do Warren Buffett and Dune’s Leto Atreides have in common? They both get transformed into near-immortal creatures. I suppose a Cartoon cut-out is more attractive than a sandworm.
Wage stagnation in 2016 was actually much worse than you were told. Did this make a difference in the Midwestern states that swung the election, in that actual labor conditions were worse than everyone thought they were? I think yes.
Wage growth in 2018 was actually much better than you were told. Did this make a difference in the current Fed/Wall Street/White House narrative that inflation is dead and the easy money punchbowl can be maintained without consequence? I think yes.
It’s the Weekend Zeitgeist, in which we consider a going-forward rule for infrastructure editorials, a different kind of Valley Girl, an emerging Get Out of Dodge narrative, and SEO as a service.
It’s the Friday Zeitgeist, in which people who will never buy a company learn how to do it, Powell delivers a belly-rub and takes away a child’s cookie jar simultaneously, Swiss francs climb the Zeitgeist ladder, a local bank makes it up on volume, and we all declare together that an OK faux-hamburger is more than just a faux-hamburger.
Content placement by asset managers is like the elaborate red pouch of the male frigate bird. It is SO wasteful and extravagant that – in an economically perverse way – it demonstrates your evolutionary fitness.
Ditto for why the sell-side still cares about II ratings and “who’s the ax?” and all that stuff that hasn’t mattered for 20 years.
It’s plumage.
At some point, all Fed Chairs learn that their primary function is just to wave their hands. Jay Powell has learned this sooner than most.
ET contributor Pete Cecchini goes way off the Wall Street reservation with this: the bullish narrative for U.S. equity risk makes sense only if one accepts a narrative that the Fed will proactively move to prevent a U.S. slowdown before it happens.
Don’t believe it.
Berkshire Hathaway’s financing for Occidental is in the Zeitgeist today.
What is shadow banking? THIS.
Not that there’s anything wrong with it. Hey, this is Uncle Warren’s true face, and I’m a fan of authenticity in all its forms and ways. But if you think poorly of a guy like, say, Ken Griffin because you think Citadel was “bailed out by the US taxpayer”, and you don’t think EXACTLY the same about Warren Buffett and Berkshire Hathaway … then you’ve been played.
It’s the Tuesday Zeitgeist, in which we explore how you could go with this (or you could go with that), the power of AS, my respect for you, IPOs aplenty and the trade/rotation of choice.
When Donald Trump tells you that there’s no inflation, that up is down and black is white, that monetary policy … It’s toasted! … you’ve gotta believe him, right? Right?
Actually, for investment purposes, you do. When everyone knows that everyone knows that inflation is dead, that IS the Common Knowledge. And the common knowledge must be respected.
The student loan crisis is a Big Deal. And it is only a part of a Bigger Deal: the Myth of College.
This issue will be front-and-center in the upcoming elections. We will all be handed our very own ‘Yay, College’ signs to raise high. More often than not, we will be asked to raise them in service of market-distorting policies which will make our problems worse.
Our lead article today is about Uber (driving-as-a-service) and Amazon (shopping-as-a-service). It’s the triumph of on-demand everything, that makes both production and consumption an experience.
What do you get out experiential consumption and production?
You get to hold up a card that says, “Yay, swineherding!”
It’s the Weekend Zeitgeist, which means we leave the world of finance behind us to delve into bipartisan distrust of government, local opinion writers’ opinions on packaging materials, Yoopers, F-35 sales to completely trustworthy foreign partners, Fiat Features and the worst thing I ever saw.