The Zeitgeist – 5.3.2019

Every morning, we run The Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it.

But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world.

May 3, 2019 Narrative Map – US Equities

Fed Reverberations: Market Starts Coming To Terms With Lower Rate Cut Hopes [Forbes]

If actual volatility is the only thing that can save us from these melodramatic analogies from people who clearly have never had children who expect a snack, I’m ready.

Ask These 10 Questions Before Investing In A Company [Forbes]

I know we give the Forbes Contributors a hard time, but it’s also important to point out those times when an article ISN’T a weird advertisement to an unknown audience wrapped in a milquetoast listicle. I mean, to be clear, this isn’t one of those times, but I want to make sure you know we agree that it would be important to point out if it were.

The most universal observation about these pieces – and frankly a lot of other white-paper-lite style content and one-off corporate blogs – is that they never seem to have the foggiest idea who their audience is. Who out there is looking for ten pieces of advice on investing in a non-public company who need to get this as the culminating pearl:

Powell’s Gut Punch to Equities May Be a Belly Rub: Taking Stock [Bloomberg]

You could go with this, or you could go with that.

Asset Managers Are More Pessimistic Than Ever on the Swiss Franc [Bloomberg]

Ordinarily I think that survey levels of “asset manager” positioning are cartoons, representations of survey methodology and underlying universe biases more than anything. That may be (and probably is) the case here to some extent, but at least anecdotally, I’m aware of at least a few macro funds with this positioning.

Leaving aside whether the article is true or whether it matters, why did it rise to the top of the Zeitgeist like this?

Here’s why:

• It connects European currency and fixed income discussions to a growing number of articles about EM Local yield-hogging, like this one.
• It is also connected to articles referencing “extremes” in flows and investor behavior w/r/t fixed income and currencies across other markets, including articles like this one about US corporates.
• It uses similar language to other “safety” asset stories referencing polls and surveys (i.e. similarities in both topical language and affected usage), like this one.

SocGen’s stronger showing on capital offsets profit fall [Reuters]

Paul McElroy: A lot of people don’t realize that change is a two-way street. You can come in with sixteen quarters, eight dimes, and four nickels – we can give you a five-dollar bill. Or we can give you five singles. Or two singles, eight quarters, and ten dimes. You’d be amazed at the variety of the options you have…

All the time, our customers ask us, “How do you make money doing this?” The answer is simple: Volume. That’s what we do.

– First Citiwide Change Bank, Saturday Night Live (10.8.1988)

150 years ago, 12 men in Cincinnati took a chance on baseball and changed the world [USA Today]

At the very least, they changed the US, Latin America and East Asia. Although, as always, there are efforts to export and import American-born sports to new markets. The NFL has tried aggressively with the UK, for example, and the NBA has been quite successful in exporting basketball to China. But MLB has been less aggressive, and (oddly, in my judgment) less visibly interested in developing a more global audience for our one-time national pastime.

Leave it to a fan in the UK to take that burden on himself. If you haven’t been following Joey Mellows’s tour of major and minor league stadiums across the United States, I highly recommend you do so – @BaseballBrit on Twitter.

Beyond Meat opens at $46 in market debut, after pricing at $25 per share [CNBC]

So much of narrative abstraction – especially of growth narratives – is the simple act of declaration – I declare that this thing is actually THIS.

I declare that Salesforce.com is not just a UI slapped on a basic database, but a disruption in the very way America does business! How? Oh, I could give you an answer, but the only ones who’d understand it would be you and me. And that includes your teacher.

I declare that WeWork is not in the business of renting office space, but the pure and disruptive distillation of the essence of the spirit of community, now available in a convenient securitized format for your convenience.

I declare that Tesla is NOT REALLY a car company, but a…I don’t know, are we still doing the Tesla thing, guys? Guys?

It’s the same thing with Beyond Meat, which I declare is absolutely NOT in the business of selling processed, pre-packaged food products.

In a Three-Body Market, knowing what something really is is still important. Knowing that what it really is isn’t the only thing that matters is even more important.