All Epsilon Theory Content
Everything we have published at Epsilon Theory since 2013, an archive of more than 1,000 evergreen notes.
In this episode we discuss how the upcoming November election is shaping the current political and economic landscape. We discuss why inflation, the stock market and the war in the Middle East are all being viewed through a political lens as the election approaches and those with a vested interest seek to influence its outcome . We also discuss the prevalence of conspiracy theories, the erosion of trust in institutions, and the importance of curiosity in a left brain focused world.
Our kids are being rewired.
The data implicating the smartphone-based childhood are compelling but not conclusive – and may never be.
So how should governments, communities, schools and families decide what to do?
As anyone who has ever left their trash lid loose would know, raccoons have a tendency to come in and clean up the leftovers. And they make a huge mess while they do it. That isn’t the only place they exist, though. Raccoons also exist in the financial world, the self help world and a lot of other places. They come in and take what is leftover from what would otherwise be positive innovations and make a mess of them for their own benefit. In this episode, we take a detailed look at raccoons. We look at the tactics they use and how all of us can better spot them before they do their damage. We also discuss the danger of carved out inflation metrics, whether fundamental investing is dead, what steam boat operators have to do with finding your true self and a lot more.
If the HODLers are right, they’re also the new Elites.
Not in a “my thumbdrive will make me the Duke of West Hartford in this post-apocalyptic hellscape” sort of way, but in ugly-but-mainstream scenarios with ugly-but-mainstream power/wealth transfers.
Younger generations today feel like they don’t have a chance. Whether it be rising home prices or income and wealth inequality, they feel that they are starting with a significant disadvantage relative to older generations. One of the responses to this has been to resort to more aggressive gambling when it comes to their investments and their lives. Whether it be sports gambling or investing in riskier investments, some have sought to overcome their starting position by making risky bets. In this episode, we take a deep dive into this idea of financial nihilism and look at its real world implications. We also discuss Elon Musk’s treason allegations against Joe Biden and also look at the amazing behind the scenes story of the creation of the song “We Are the World.”
The Fed’s inflation-fighting credibility is shot and everyone in Washington and on Wall Street is in the bag for nominal growth, ie Number Go Up on EVERYTHING, through the November election.
After that … well, as Louis XV so aptly put it: après moi, le déluge.
Wheeee!
The Boomers have all the money. The American Dream of upward mobility is dead for you. That is Financial Nihilism.
So if you’re on the wrong end of this, what do you do about it?
You gamble. You f**king gamble.
I think the reason real assets like commodities are typically so disappointing in their inflation-hedging reality relative to their inflation-hedging theory is that they have no inherent pricing power. They only have a market story – and a mechanistic one at that – that they are an inflation hedge. It works for a while because enough people tell the story and believe in the story, until it gets trounced by another story, like growth/recession or supply-and-demand.
Is private credit any different?
Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
We all know that technology can be bad for children. But a new paper from 13D Research, which was republished on Epsilon Theory, really drove home the point of just how bad it can be be and the impact it has on the wirings of children’s minds. In this episode, we discuss this research and what we can do as parents to help mitigate the damage technology is doing to our children. We also cover the election and the impact of Trump’s legal problems, Elon’s Musk’s pay package Joe Biden’s scripted press conferences and the importance of embracing difficulty.
We are saying everything, but also we are saying nothing, just sort of talking at each other about things like “rizz” and “Price-to-Earnings Ratio”.
How do we fix that?
The great danger of generative AI lies in its use by governments and corporations to cement the most anti-human misalignment of all – the misalignment of rulers from the ruled, of the State from the People.
Last month, Fannie Mae launched a new financial product they call a Social Mortgage Backed Security, designed to “improve access to affordable housing” by lowering credit standards for borrowers. As ET contributor Chuck Marohn points out, this makes home prices in affected areas go up, and doesn’t touch truly cheap housing.
Exclusively for Professional subscribers, I recently hosted ETF expert Dave Nadig for a wide-ranging discussion on everything you always wanted to know about ETFs (but were afraid to ask).
It’s one of the best things we’ve ever done, and regardless of how extensive your investing experience with ETFs might be, I promise you will learn something new here!
The central course of our children’s lives is being mind-warped by social media and smartphones, not in some ethereal ghost-in-the-machine sort of way but in an actual neural-wiring sort of way, and this research note by Kiril Sokoloff and the 13D team shows how.
Over ten countries are currently engaged in hot wars in the Middle East. But you wouldn’t know if from the media coverage where what has been going on has received limited attention. In this episode we dig into why that is. We also cover Tucker Carlson’s recent interview with Vladimir Putin, Joe Biden’s attempts to tackle shrinkflation and airline seating, why politicians from both sides have no interest in addressing the border and the importance of embracing your yellow pants moment.
Today both Wall Street and the White House are determined to tell you a story that inflation is over and mission accomplished. Wall Street because they want a cheaper price of money and the White House because they want to win an election.
It’s not a lie, per se, but it’s not a truth, either. It’s all just story, all the way down.
And like all sclerotic institutions, Wall Street and the White House rely on their media organs to tell the story.
Panera’s in hot water over their charged lemonade. After building their brand on clean and healthy food, they’re now facing several lawsuits claiming their lemonade caused permanent heart damage and even death. So what’s really going on with the lemonade? And why is the story surrounding it so misleading?
Yes, Virginia, western news media are often useful idiots.
But let’s be real: so is Tucker Carlson.
ET contributor Dave Nadig was there at the beginning of ETFs, and he’s forgotten more about their structure and operations than I will ever know.
In this excellent note, Dave digs into the Bitcoin ETF “tipping problem”. It’s a fascinating read on where Narrative runs headlong into the real world of market mechanics.