We have been writing about the Widening Gyre for more than five years now.
In 2016, we wrote abo
When Narrative Takes Flight
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This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results. Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.
Psst - “The Second Coming” is correctly attributed in the paste, but not in the text. It’s Yeats not Keats - though I do wish we had a bit more Keats in our lives these days…
Cheers
JE
PS - feel free to delete this comment once the appropriate edit has been made. No reason to keep it up here…
If you would believe it, I have submitted three notes with this exact dumb mistake. I’ve only been fortunate that my editor caught it both other times. Thank you for spotting it for me (once again).
However, your comment must remain up as a badge of my dishonor and shame!
My God, man. And here I thought I read too many irritating and time-sucking things on any given day.
No issue with your central points about MSM framing around vaccine issues. And you correctly noted the MSM had ignored relevant issues such as bailouts and employee workloads/exhaustion. But I would point out two other SWA narrative issues, based on my career in aviation
Perhaps the problem wasn’t totally driven by media desire to shoehorn SWA’s meltdown into an unjustifiable vaccine framing, although I’m sure that’s what happened with outlets focused on their owners’ political objectives. But in many MSM outlets, it seems the problem was that reporters couldn’t deal with a story that contradicted the official SWA-is-pretty-wonderful narrative and were struggling to come up with anything (including unverified twitter/facebook posts) that might possibly provide an alternate explanation
Focus groups have consistently shown my personal suffering to be a moderately compelling feature of the Epsilon Theory subscription.
Hubert, I think both of your points are 100% correct, and I’m grateful to hear your expertise.
I think that I at least tap-danced or alluded to the first point you made in some ways, but your second point, the more specific existing Southwest narrative, is spot on, too. Everything that everybody knows about SWA probably affected the willingness to challenge certain implications of the inconsistency. In fairness, I think that will probably happen to some degree in the latter part of this news cycle that unfolds over the next week or so, but it has not yet.
Even speaking personally, it’s hard for me to overcome the good brand equity SWA has in my mind/heart.
SWA, as you and most of your readers know, deserved much of its positive reputation. It grew rapidly in the 80s and 90s because (unlike any Legacy carrier) it carefully focused on markets where it had a large competitive advantage, and established an internal culture where everyone knew its financial success would be widely shared. While at Northwest I did a study (correctly) predicting SWA could profitably grow to 10-15X its current size. I wrote the business plan after America West came out of bankruptcy in 1995, the only carrier that was competing with SWA head to head. A major obstacle was when America West’s chairman, focused on killing off the tiny union presence, outsourced all of line maintenance, teaching me what an operational meltdown looked like. The lead WSJ story was about how all the SWA staff at Phoenix bought pizza for all the America West staff who had taken the brunt of customer anger (and handed SWA massively profitable traffic).
But that SWA was dead by 2005. They had exhausted all the market opportunities where they had strong competitive advantage, but still felt that robust profitable expansion was their god-given right. Given their proven industry-leading profitability staff began insisting on industry-leading wages, but management demanded the wages appropriate to a struggling 1980s startup was all they could pay. McKinsey was suddenly everywhere. Their strategy has been to raise fares almost as fast as United, and allow service to deteriorate as long as they were still less worse than United (not a difficult standard).
ET has written a lot of good stuff on conventional wisdom and how it can change. Based on that I would disagree with your point about the SWA narrative changing in the next week (or anytime soon). There are no Harvey Weinstein type events that could suddenly burst the narrative bubble. Your comment about your continued belief in SWA’s good image reflects a very common view. And more importantly the MSM will absolutely refuse to print anything that even vaguely suggests its reporting about SWA has been badly wrong for a very long time.
I don’t disagree with the idea that a private entity should be able to mandate certain things such as a vaccine, but there needs to be discussion around whether these companies are truly private anymore. After being bailed out by the government, it’s easy to see how many of the organizations will do whatever is directed to them so that they can remain eligible for that sweet sweet bailout in the future.
This is so good. Herb stepped down right before 9/11 iirc. But the SWA I knew & flew in the 80’s and 90’s was dead by the middle aughts.
One of the first thoughts I had hearing about Southwest, which airline will NOT require vaccine and advertise it? Highly doubtful, but it is 2021.
A guy I graduated with, is a pilot for Southwest. he generally post very positive messages saying that he loves the company, but did post a negative meme yesterday about not getting the vaccine. If I had to guess, I’d say vaccine mandate fade for Southwest.
Completely off topic, but the other thought I had when watching Blue Origin yesterday, we remotely pilot capsules to space but are still relying on pilots for air travel. I know, I know, a lot more hurdles to get to pilotless flying, but I preprogram every mission on Google maps with my drone and have for a few years now.