The Zeitgeist | 2.19.2019

This is our feature of the 10 (or so) most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

New voices in hospitals: Apple, Google

Greece Seeks European Commission’s Assent for Bank Plan

Are ETFs About To Rule The World?

Blame The Fed For The Plight Of The Average American

Stock Market Nerves Remain High, Volatility Futures Curve Shows

The Obstacle Between Credit Funds and a Giant Pool of Money

Why I Didn’t Invest In Nvidia

Global Stocks Edge Up as U.S.-China Trade Talks Progress

Everything you need to know about the Federal Reserve’s balance sheet – and how it could impact you

‘America First’ or America alone? In debut on world stage, acting Pentagon chief must answer for Trump.


As regular readers will know, my wife and I bought a farmhouse in Connecticut when we moved up here last year. It was originally built in the late 18th Century, then rebuilt about 10 years ago. Still, the floorplan is of an older vintage, which is to say formal – separated into smaller, traditional spaces. For the most part, that’s what we wanted. We also have two boys (2 and 4), and they are…well, they’re 2 and 4. We wanted another more informal space where a little bit of healthy destructiveness could be permitted during the 7 or so months of winter we apparently have up here.

Starting today, we’re working on a project to build out a currently unfinished space where the boys can be rowdy, where we can play games together and watch movies. Among other things, that has meant doing a bit of research on a television and speakers, neither of which I’ve had cause to purchase in the last 5-6 years. I’ve forgotten a lot since the days I spent in my early 20s as a 2-channel stereo audiophile. But I hadn’t forgotten the acronym that often pops up in online forums dedicated to audio equipment.


A decade or so ago, I’m confident this term meant ‘Wife Aggro Factor’, although Googling it now seems to indicate that the internet’s better judgment, if such a thing exists, has downgraded it to ‘Wife Acceptance Factor’. Either way, the idea is that there is some sound equipment that is so big, bulky and weird-looking that a partner who doesn’t care as much about audio fidelity is going to throw up all over having it in their living room. And y’all, there is some really weird-looking audio equipment out there. Drop this in your living room and see what happens:

Ultimately the buying decision requires some combination of accounting for what will sound the best, what’s in your budget and what isn’t going to earn you vicious side eye for the next 10 years. It’s…a complicated optimization. It’s also no different from the optimization every FA or IAR goes through in designing every client portfolio or financial plan. CAF – Client Aggro Factor – is a real thing, and it’s tricky as hell to juggle with the way we are usually trained to understand the role of a fiduciary.  

In my prior life, I ran the investment side of the house in a company with a $4.5 billion private wealth business. Mostly UHNW, a few family offices. We believed – as I still do today – that the best possible starting point for every investor was the one which expressed the least confidence in our ability to predict returns among asset classes, and the most confidence in diversification over any views we did have. The final destination of these two logical statements is risk parity. For a variety of reasons, we never ended there, but it was always where we started. It’s exactly what we did with institutional portfolios, too.

We were pretty forceful in making risk parity / risk balance the base recipe for our wealth business. Why? Because we believed it was the right thing to do. Because we believed that long-term, patient investing families deserved the same advice we gave to institutions. Because we believed that we could educate our clients to get on board with it. Because the speakers sounded better.

It was a mistake. It was my mistake.

The clients hated it. They hated it when it worked. They hated it even more when it didn’t work. They didn’t get it. It felt like a black box to most, even if we were fully transparent about the holdings, the trading and every calculation we made to build the portfolio from beginning to end. Our education program – which used a very light touch – came off as condescending and smarmy. Want to know why AQR changed the name of its risk parity mutual fund to “AQR Multi-Asset Fund” at the end of 2018, just like we did with our fund in 2016? Because even their massive distribution apparatus couldn’t sell a fund that FAs knew they couldn’t sell to their clients, even if they wanted to, and even if they thought it was the best portfolio for them.

If you work directly with clients, this conflict between doing what is in a client’s comfort zone and doing what you think would produce the best possible expected investment outcome for that client is the single hardest part of your job. If you are doing your job right, it’s the thing you will think about the most, that you will struggle with the most. There’s a sort of nobility you feel when you’ve convinced a client to trust you to implement a portfolio of things they don’t like or understand, but which you believe with all your heart are the best possible option. As much as we’ve written about these topics, we struggle with this, too. The intervening truth is that our evaluation of what is best for a client must always take into account the willingness of a client to stick with what we’ve designed for them. But unless we’re going to evaluate it on a case-by-case basis (please don’t), we need a framework for how we will answer the CAF problem.

I offer my humble submission, in three fairly easy rules:  

  • In matters of costs and independence, always do what you believe to be the best possible thing.
  • In matters of quantity of risk, always do what you believe to be the best possible thing.
  • In all other matters, seek the best possible thing wherever you can, but recognize that a client leaving the plan is likely to do him or her more harm than the good your best possible thing will achieve.

You may not come to the same conclusion. That’s fine. But if you’re managing money for clients and haven’t tried to explicitly define the places to take a stand and the places to show flexibility to prevent worse decisions, it’s time. Get it down on paper and make it part of your process.

The Zeitgeist | 2.15.2019

This is our feature of the 10 (or so) most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

Facebook in talks with FTC as possible record fine looms

Tech Giants Are Increasingly Designing Their Own Custom Chips – How to Play It

Deere’s CEO Calls Out Tariffs and Trade as Profit Disappoints

How to Play the Fed’s Coming Rate Cut

Six Flags Sinks as Revenue Misses Estimates Because of ‘Challenging’ China

DealBook Briefing: The Bigger Picture Behind Amazon Ditching N.Y.

How Bill Daley became rich at the crossroads of government and business (Ed Note: My stars! Do tell!)

Nvidia Shares Pop as Earnings Top Estimates

Duck and Cover

There is no piece of fiction (other than those published by the Chinese National Bureau of Statistics, perhaps) presented more earnestly as fact than the Periodic Physical Exam of the President of the United States. The latest report was released to Americans waiting with bated breath earlier today. Not exactly the stuff of best-sellers, but it’s a nice bit of fantasy all the same:

I’m not a doctor, but I am a gambling man. I would give you very favorable odds if you think there is any chance that the president weighs 243 pounds, has a resting heart rate of 70 bpm, or blood pressure of 118/80. It is a fantasy. Everyone knows it is a fantasy. The point of the Periodic Physical Exam is not to inform you.  It’s to make you feel like the executive is in the hands of a healthy, vital individual.

This is obviously not just a feature of this weird report on a routine physical. For example, I’m writing this little brief from an airplane. As with every such trip, before takeoff we heard the safety demonstration telling us all about the features of this Embraer Regional Jet. Here’s where you’ll exit in the case of a water landing, and make sure you grab that flotation device from underneath your seat. Here’s what you need to know in case we fly into a mountain. Here are all the restrictions you need to follow – where to put your bags, when you can have your tray up or down, who can sit in an exit row – to make you safer in each of those situations.

So, er, I’m not an aeronautics engineer either. But if you really believe that you’re going to be grabbing a flotation device in the case of a water landing, or that the positioning of your bag is going to matter in the case of another kind of crash, you are delusional. You’re gonna die. I hope that this does not come as a surprise to you. But airplane safety demonstrations are not about informing you about what you should do in the case of emergency. They’re about making you feel safer flying.

If you are Ben’s age – and my demographic data tells me a goodly portion of you fine people are, in fact, middle-aged males – you probably remember the nuclear bomb drills from the 70s and early 80s. Duck and cover. OK, sure, if you are on the periphery of the blast zone, maybe you’ll have enough time to respond AND maybe you’ll also be outside of the range where massive overpressurization would collapse your internal organs AND maybe you’ll be outside of the range where the fireball would turn you to a fine dust AND maybe you maybe the act of hiding under your desk would protect you from falling debris or retinal damage or some of the most damaging forms of radiation emanating from the blast.

But c’mon. Duck and cover was never really about protecting you from the effects of a nuclear attack. It was about making you feel like you might have some control. You know, like control over whether being heated to a temperature hotter than the surface of the sun would be fatal. It was about excising your sense of despair.

We’ve written a lot about the Bad Things that have come to our industry from an approach to facts which cultivates a limited selection of words and images to convey a particular feeling. That’s not really what we’re dealing with here. These are garden variety lies. What’s more, they are justified by all three of the reasons why we lie: because we must, because we may, and because we believe doing so serves a Greater Truth. Still, it would be kind of weird to argue that these examples aren’t pretty harmless. The problem isn’t that we play these games of pretend together from time to time. The problem arises when we’re the only one playing who doesn’t realize that we’re playing a game of pretend.

In our investing lives, this isn’t an occasional threat. It is our everyday reality. So how do we know when we’re treating a game of pretend like the real thing?

Well, are you receiving your fund managers’ holdings? Do you believe this will give you material insight into their processes and strategies? If so, you are the one who doesn’t realize you’re playing a game of pretend.  

Are you feeding somebody’s capital markets expectations into a mean-variance optimizer to generate a set of efficient portfolios to tweak to come up with your new model? If so, you are the one who doesn’t realize you’re playing a game of pretend.

We’ve got a word for this sort of thing on Epsilon Theory. These are both kinds of cartoons, and they are everywhere, whether we’re talking about economic data, diligence lists, disaster recovery plans, risk reports – you name it. Think for a moment. How much of the info you take in on a daily basis wasn’t provided to you because it contains actionable information but because someone else wants you to feel a certain way about it? The Clear Eyes, Full Hearts counsel for dealing with cartoons and games of pretend pretty simple. You don’t have to treat it like a cardinal sin any time an author, politician, consultant, adviser or expert tries to make you feel a certain way. Just don’t be the only one at the table who doesn’t realize what’s happening.

The Zeitgeist | 2.14.2019

This is our feature of the 10 (or so) most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

Venezuela’s crisis of socialist faith; Not just leaders, but very economic model questioned

Howard Schultz: Americans need more opportunities

Noxious Trade Talk Fumes Dull S&P Bears’ Senses: Taking Stock (Ed Note: Aww, I thought they were hopeful – now they’re noxious!)

Stock Buybacks Are Not the Enemy

Robot Wars: $60B Intuitive Surgical Dominated Its Market For 20 Years. Now Rivals Like Alphabet Are Moving In

Tempur Sealy Reports Fourth Quarter and Full Year 2018 Results

A US-China trade deal may not be the catalyst the market is expecting

Teva Pharma Tumbles as Earnings and Outlook Miss Estimates

MARKET SNAPSHOT: S&P 500, Nasdaq Poised To Extend Rally To A Fifth Day On U.S.-China Trade-talk Progress (Ed Note: Whew! False alarm!)

EMERGING MARKETS-Emerging stocks, FX fall, await cues from trade talks (Ed Note: Wait, I was poised to extend my rally! I’m awaiting cues now?)

The Zeitgeist | 2.13.2019

This is our feature of the 10 (or so) most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

San Francisco City & County Employees allocates $380 million to alternatives

How Much Money Is In The Global Marketing Industry – More Than We Believed

The Biggest Bank M&A Deal Since the Financial Crisis

EU Approves Accord for Market Regulators to Swap Data

Shopify Stock Takes a Beating After Solid Earnings as Guidance Disappoints

Forge First Asset Management January 2019 Commentary: We Are Either In The 8th Inning Or We’re Already In Extra Innings

BlackRock’s president just highlighted one fast-growing ETF product that will ‘catapult’ the $6 trillion firm

Trump’s approval of offensive military hacking makes sense, most experts say

Asian stocks reach four-month peak on U.S.-China trade deal hopes

The Federal Debt: Is Anyone Concerned?

The Zeitgeist | 2.12.2019

This is our feature of the 10 most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

Fitch May Cut GE’s Credit Rating Again — Should Investors Worry?

Cashing In on a Warming Arctic

Spain’s strawberry fields lie under a Brexit shadow

Delayed USDA reports and Snake River jump: Hyped, but duds

Tuesday briefing: ‘Pantomime’ of Brexit baffles Europeans

Global markets bounce as US agrees deal to stop a fresh government shutdown

Investors Pull $30 Billion, Just From One Company: Taking Stock

Europe Shares Gain For Second Day on Trade and U.S. Shutdown Hopes

U.S.-China Trade Hopes Give Stocks a Lift

The Zeitgeist | 2.11.2019

This is our feature of the 10 most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

For Boeing, juggling cash flow often means “another ‘Houdini moment'”

Proper Portfolio Diversification – Have We Become A ‘Fly In A Bottle’?

Why venture capitalists love fintechs

More to our success than low corporate tax

Banking Royal Commission – managed investment funds under the spotlight

Elizabeth Warren kicks off presidential bid with challenge to super wealthy – and other Democrats

Warren refocuses populist message in official kickoff

Waiting For The Bears To Say ‘Uncle’

EMERGING MARKETS-Shares rise on optimism over trade talks

Blast from the Past

Oh, no! I fired you! Just like the hair salon guy and the Chevy dealer!  You know why you can’t keep a [damn] job?  Because you can’t keep your [damn] mouth shut!  That’s why!

Blast from the Past (1999)

I visited my folks down in Texas recently. In a familiar ritual for anyone in their late 30s, I went out to the garage with my dad, who had found a couple boxes of stuff from when I was a kid. What do you want to do with this, Rusty?

Some of you will recognize the contents of this plastic tub immediately. For the benefit of those that do not recognize them, these are Becketts. For many kids in the late 1980s and early 1990s, they were the Bible. You, see they told us how much our baseball cards were worth. They told us which cards we absolutely didn’t have but needed. They told us which cards we could clip to the wheel spokes on our bikes to make them buzz when we rode.

Now, you probably know or at least vaguely remember that the baseball card (all sport-related card collectibles, really) industry rose to great heights in the late 1980s and utterly collapsed by the late 1990s. Just long enough to give us a good MacGuffin for Blast from the Past. When a market goes through a bubble and bust cycle, we can usually identify a dozen contributing causes. In this case, we don’t have to. It’s very simple: The sports card market rose and collapsed because of Beckett Baseball Card Monthly.

Prior to the early 1980s, the low-to-medium end of sports memorabilia was an extremely inefficient market. As with many collectible items, baseball cards were scarce enough that transactions did not take place that frequently. Their markets were regional, which meant that values for collectibles related to anyone other than the most famous players or Nolan Ryan (who played on the east coast, west coast and in Texas) could differ significantly in price. They were idiosyncratic. Price variations could be driven as much by one buyer’s personal preferences as what the price should have been. They were subject to massive information differences. It was not widely known by the holders of the assets that their collections had worth, much less that one card or another had a particular value.

Beckett changed all that.

In the mid-1980s, Beckett began soliciting prices of cards from dealers. These prices came from shops, shows and major traveling collectibles events. They represented available-for and transacted-at prices. This was pre-internet and pre-eBay, of course, so there was little that Beckett could do to confirm what was being reported. Sure, they had enough data to see if a contributor was systematically under- or over-reporting relative to the rest of the universe, or if there were irregularities in their reports. But in general, the belief was that there were enough reports of price that the owners trying to talk up the price and the prospective buyers trying to talk it down would cancel each other out and result in a robust representation of the true market. And as long as the market mostly consisted of true enthusiasts willing and able to participate on both sides of a transaction, this was true. OK, trueish.  

But Beckett quickly became a source of common knowledge – what everyone knew that everyone knew – about the value of baseball cards. They became the industry’s One True Missionary.

It wasn’t simply the availability of information about the value of baseball cards that facilitated the rise of the industry, however. It was the ability that dealers, manufacturers and Beckett itself now had to create information that everyone knew that everyone knew – common knowledge – about the value of newly published cards. Were there really people paying $30-40 for a 1989 Fleer Craig Biggio rookie card within days of it being uncovered in a wax pack? Or was it a representation of what dealers wanted to charge –  or at best a price at which an early transaction or two had taken place while everyone else waited for an accepted market price to emerge?

It was both.

Beckett imbued collectibles professionals with the ability to create common knowledge about prices. Once these individuals discovered this, it became clear to any who possessed any measure of savvy that their best business was no longer to be buyers or investors or traders or agents who would play both sides of transactions to take advantage of inefficiencies. The only model that truly made sense was to become nearly exclusive sellers, and to target a growing market of buyers increasingly informed by the dealer-provided data going to Beckett.

Once this began, it was only too obvious to card manufacturers what they needed to do: Give the collectibles industry trappings of scarcity and segmentation to permit them to differentiate price and create even more confidence in the common knowledge that Beckett promoted. In the end, once Beckett published that a card was worth a certain amount, transactions really did start to happen around those prices. And so manufacturers printed hundreds of millions – billions – of cards. Cards with foil surfaces. Super-premium packages on thick card stock. Variant cards with a gold-embossed logo in the corner to let you know that this was a very rare version of this card. Cards with pieces of bats or gloves or jerseys attached to the card itself. Signed cards. Billions of them. Within a moment of a series of cards being printed and sold in wax packs across the country, a surprisingly sticky price for it emerged in Beckett. Not much later, real collectors – and a lot of kids like me – paid real money at those prices. The world of abstraction became the real world in a big damn hurry.

In writing about the crash in baseball cards, many will tell you that it was collectors’ awareness of just how many cards were printed that did it. Others will say that it was a growing fatigue at all the new brands, all the new series, all the special cards. Nonsense. What really killed baseball cards was the existence of a compelling contrary source of common knowledge, which in turn killed what control selling-minded dealers and Beckett had over anchored initial valuation ranges. What really killed baseball cards was eBay – a place where collectors could see in the open how many sellers there were at these prices, and how few buyers.

Baseball cards as an industry lasted for years beyond the point at which the sellers were in on the joke, because the manufacturers and card-sellers relied on its survival. It lasted months once the average buyer was in on the joke, because he did not rely on its survival. This is the way of most bubbles. They rise. They fall. They regress to the mean. They come back to fundamentals. However you want to describe it in your own language.

When we write about the making of markets into utilities, we are talking about something different. We are not talking about vanilla cycles of narrative-influenced bubbles and bursts. We are writing about attempts to transform financial markets into a social institution that is robust to the emergence of contrary information. Metastability. How does that happen? By making it common knowledge that all of us – not just a particular side of most transactions – have a vested interest in a particular outcome. By making it common knowledge that certain things will not be allowed to happen to imperil those interests.

Narratives can break. Narratives can change. But as investors we often take comfort in the belief that things that are stretched will always revert back to some mean. When we all need to believe something, however, that reversion may take far, far longer than our empirical models tell us.

In some cases, it may take longer than the time we have to invest.

The Zeitgeist | 2.8.2019

This is our feature of the 10 most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

A Storm Is Coming to the Global Music Industry – and More than $100 Billion Is at Stake

Tesla cuts the price of its Model 3 AGAIN: Electric car maker slashes $1,100 off its most affordable vehicle in second cost reduction this year as production finally ramps up

A positive picture: How banks are presenting their art treasures in a better light

ESG investing: how the rise of data can undermine human rights

Looking At Standalone Maersk Drilling Through Potential M&A Lens

Citi just revealed unflattering pay data. Will other banks follow suit?

Thomas Cook Stock Falls as Brexit Seen Hampering Airlines Sale

LAZY SUNDAY Average Brit spends Sundays eating roasts, taking strolls and watching films  (Ed Note: If you’re able to take a stroll, you’re not doing Sunday lunch correctly)

The Zeitgeist | 2.7.2019

This is our feature of the 10 most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

Wall Street Sees Red

Apple’s Top Retail Exec Angela Ahrendts to Leave Amid iPhone Sales Slowdown

Don’t Like How Vague Alphabet Can Be? Better Get Used to it — Here’s Why

This could be the year of the megadevelopment. These 6 sites could alter Chicagos skyline forever.

New Research From Bain & Company, Google Predicts Online Grocery Shopping Will Triple In The Next Decade Raises $40 Million to Transform Sales With AI

Texas Employees commits $235 million to 4 alternative funds

Liht Cannabis Corp. Announces Signing of $10,000,000 Non-Dilutive Development Agreement For Its Project In Celista, British Columbia

2020 Dems walk fine line with support for ‘Medicare for all’

SocGen Will Shrink Trading Unit, Cuts Targets After Market Rout

The Zeitgeist | 2.6.2019

This is our feature of the 10 most on-narrative (i.e. interconnected, highly similar) stories in financial media. It’s not a list of best articles, or articles we think are most interesting, or articles we agree with. But if you’re going to read 5-10 stories when you start your day, these are the ones that are most connected to the financial news that got published today.

Sorry for the delay today, folks! Couldn’t be helped. I mean, it could have, but I didn’t.

FemBeat: P&G Acquires Organic Period Care Startup This Is L.

Why the US will avoid a recession this year and next (just)

ECB: Draghi’s Succession Matters

GM’s Resilient Profit Shows Why CEO Mary Barra Decided to Cut Jobs

Don’t Count on Active Funds to Provide Downturn Protection

US Production Shows no Signs of Slowing Down as OPEC moves to Support Prices

UK funds to snap up as Brexit beckons

Four of the last five times markets rallied like this, it was a dead-cat bounce

All Along the Watchtower

‘There must be some way out of here’
Said the joker to the thief
‘There’s too much confusion, I can’t get no relief
Businessmen, they drink my wine
Plowmen dig my earth
None of them along the line know what any of it is worth’

‘No reason to get excited’, the thief he kindly spoke
‘ There are many here among us who feel that life is but a joke
But you and I, we’ve been through that, and this is not our fate
So let us not talk falsely now, the hour is getting late’

All along the watchtower, princes kept the view
While all the women came and went, barefoot servants, too
Outside in the distance a wildcat did growl
Two riders were approaching, the wind began to howl

All Along the Watchtower, by Bob Dylan (1967)

Quis custodiet Ipsos custodes?

But who will watch the watchmen?

Satires, by Juvenal (2nd Century)

We haven’t published an update on our Fiat News Index for a little while, but it is for a good reason. We are working on an improved version that does more to handle gradations, nuance and context in affective language. If the concept of fiat news is new to you, Ben’s original piece here offers the best explanation. In short, it is news which broadly cheapens the credibility of media by presenting opinion as fact. It debases information in the same way that a capricious sovereign might debase a currency. It tells you how to think.

But there is a certain type of fiat news which is the most pernicious, most in need of calling out where it rears its head. It seeks, like all fiat news, to present subjective judgments and opinions as fact. This type of news also elects itself as arbiter, responsible for determining the accuracy of the statements made by others. It’s not an unworthy goal. But in the hands of actors who wish to tell you how to think about a topic and not just inform you, it can do more to debase confidence in information and news than any other kind of media activity.

Yep. I’m talking about Fact Check Journalism.

Sure, there are examples of Fact Check Journalism doing good. And then there’s the NPR Fact Check of the 2019 State of the Union Address.

It’s a long read. I recommend it. If you’re like me, you’ll find yourself agreeing with most of the commentary. If you’re not, then maybe you won’t. But whether you agree with the commentary or not isn’t the point. Ignore whether you agreed or disagreed with its sentiments. Read it again and ask yourself: Is this really a fact check? Or is this person trying to shape how I think by presenting his or her opinions as a fact check? As it happens, I think you’ll find that there are actual fact checks in the article, mostly in the well-researched responses to the immigration and border wall questions, other responses to foreign policy and national security questions, and in many of Jim Zarroli’s checks on economic statements.

But with those exceptions, NPR’s Fact Check is an analysis, commentary and opinion piece. There’s nothing wrong with that on its own. That’s an important role of the press. But publishing a piece like this as a ‘fact check’ is not just fiat news. It is fraud, a fraud of the kind that will kill confidence in the media stone dead unless others of influence recognize it and disavow it.

What am I talking about? Let’s take a look.

Source: NPR

This ‘Fact Check’ is of a kind you might call the Benchmark Switch. It isn’t a fact check so much of a statement against reality, but against what the author believes should have been said. The intention of this kind of fact check is to establish common knowledge about what is conventional and acceptable, to frame your interpretation of the remainder of the speech. We are to begin by understanding that the speaker being evaluated is beginning his speech well outside the norm. Definitional, textbook fiat news.

Source: NPR

This ‘Fact Check’ has a two-fer – Anecdotal Rebuttals and Emotionally Curated language. The author has elected to fact check an expressed desire, which is not entirely inappropriate. Although it is difficult to know in any absolute way if someone really wants to ‘binds wounds of division’, it is reasonable enough to assess whether their actions line up with that expressed desire. Yet the author simply lists a couple of examples and plays to the crowd with a ‘reading lines from a teleprompter’ bit. It’s a shame, because with as much as we write about the Widening Gyre, you won’t be surprised to learn that I completely agree with Tamara. But this isn’t fact-checking. This is an opinion the author wished to express, and found a ‘fact check’ to use as scaffolding for that opinion.

Source: NPR

This starts with a fact check, but then transitions into Necessary Context, the selective provision of additional facts to tell you the context in which the original fact should be interpreted. The author doesn’t trust you to know what to do with certain bits of information that imply that the economy has been doing well. You need to know his opinion about whether it has been influenced by certain policies, and he also wants you to know that he and ‘forecasters’ believe that it won’t be sustained, which is a fact check on…oh, nothing really. We just thought you should know, because reasons.

Source: NPR

This one starts out looking like a fact check, but ends up offering the reader a lovely combination of Benchmark Switching and Necessary Context. The author wishes the speaker had compared unemployment levels between two demographics, and fact checks against what she wishes had been said. She then wants to make sure that you know how to think about this data in context of the president’s achievements, even though no such claim about responsibility had been made.

Source: NPR

Again, I largely agree with Jim on the point, and most of what Jim had to say in the piece was squarely in the true fact check camp. But consider a rule of thumb: If a fact check includes the terms, “what matters”, it is not a fact check. It is an opinion, and when it is presented as a fact or fact check, it is someone telling you how to think.

Source: NPR

The legal challenges facing the eliminated regulations are a feature of a legitimate fact check, since they could bring the accuracy of the original statement into question. You’ve got a little bit of Necessary Context here, of course. The author wants to make sure you know that you should think about this policy as a bad thing. What’s the surest tell for this? Look for the word ‘including’, and see what follows. If the list is a bunch of things selectively curated to trigger a particular emotional response, be aware that our thinking is being curated, too. And not by us.

Source: NPR

More Necessary Context. Lots of ‘buts,’ which in any kind of fact check is a sign that the author wants to guide how we think about and interpret the fact presented in the first clause.

Source: NPR

More Necessary Context. No fact checks here, just an author who wants to give you some additional context so that you can think about the issue in the way he wishes to frame it.

Source: NPR

Necessary Context. Note the structure of each paragraph as well. ‘Bad things’ up front, and ‘grudging admissions’ at the back. This is not a fact check. It is another interpretation check, making sure that you interpret the facts ‘correctly.’ Vanilla fiat news.

Source: NPR

In response to a simple (and completely accurate) statement celebrating the record number of women in Congress, the author wants you to know all sorts of Necessary Context. The author has all sorts of opinions about this topic, and wants to present them to you in the context of a fact check. No fact has actually been checked in the drafting of this statement.

Source: NPR

Larry has all sorts of Necessary Context for you. No fact checks, really, but zealous attempts at purporting the existence of common knowledge – what everyone knows that everyone knows – about the issue. And if you didn’t know how to think about all these facts and context, Larry gives you an Emotionally Curated fact as a kicker at the end, just to be sure.

You will find more of these if you read the piece, and you’ll find more of them in any such piece, because many news organizations have allowed their so-called fact checking apparatuses to become melded with their editorial, commentary and analysis practices. And that, friends, is the problem. Our trust in media is under attack. Our confidence in its value being debased from without and within. From without, we are being told that the media are the enemy of the people. From within, we are presented with opinions and commentary that purport to be facts. Both serve to debase this critical social institution.

The widening gyre will guide you to concern yourself with one of these, to be offended at the two being conflated. It will make you recoil, since one of them is clearly a ‘bigger problem’ or ‘more outrageous.’ Resist that impulse. We must resist and defeat both of these threats. Someone must watch for riders. And someone must watch the watchmen.