Children of a Lesser Narrative

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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.


Why We Should Fear Easy Money [NY Times]

There’s an ET note for that.


There’s an ET note for that, too.


There’s an ET note for that, too, although we’d probably differ on the focus on bearish sentiment. The author is certainly right that these are possibilities, but we think the transformation of capital markets to utilities is a powerful, largely stable narrative.


You may not know his name if you aren’t in the money management industry, but Ruchir’s is a powerful missionary voice. Pension funds, sovereign wealth funds and others care what he says. They will repeat it to their boards. They’ll put it in their own words and call it their new outlook, or else they’ll put it in the ‘risks’ section of their 2020 strategic planning. That’s how narrative works.

Alas, this still isn’t the dominant narrative. Frankly, against the tide of ‘Financial Asset Appreciation = Economic Strength = National Strength’ memes promoted throughout political and financial media, it barely registers. Still, it’s gratifying to see some emerging coherence around these ideas, even if the piece had to summon the spectre of a crash to fit the Zeitgeist.

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Scott
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Scott

When I heard the CBS top of the hour radio update, in all its Fiat News/Narrative Building throw-up-in-mouth glory, switch to the ominous tone about “Fed Rate Cuts”, after 9 years of speaking of low rates in the up-talk cheery voice, first I thought of ET, then it occurred to me that tides may be changing in Team Elite land. And a few days later, cue NYT featuring a missionary furthering said change in narrative.
So do we wait until the “low rates are racist” stories come out to invest on this narrative change? Or is that the ‘all in’ moment?

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BobK71
Member
BobK71

‘…Easy money is increasing inequality, since the wealthy own the bulk of stocks and bonds.’

It would be more provably clear to say that rising financial asset prices are a *sure sign* of inequality. Since the wealthy save away a larger portion of any income growth, the fact that asset prices grow faster than consumer prices shows that the new wealth is going to the already wealthy.

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cartoox
Member
cartoox

i read this from Peter Drucker in an interview done back in 2001 with someone called Eric Schonfeld :
” The idea that the Federal Reserve chairman has power is a delusion. The only power he has is over the interest rate, and the interest rate has ceased to be important because businesses are no longer dependent upon borrowing from banks. The interest rate is only important to the stock market, to people that short or buy on margin. For the economy — yes, if it goes up to 18 percent or down to 2, but half a point is a symbolic gesture. The Fed has control only as long as people trust that when Greenspan opens his mouth, it is meaningful. But the first time it does not work — well, magicians get no second chance.”

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The Daily Zeitgeist

Frauds and Traitors

By Ben Hunt | August 16, 2019 | 2 Comments

Throwing words like “Fraud!” and “Traitor!” around so casually … it doesn’t reveal the true frauds and the true traitors.

It makes it easier for them to hide.

Read more

When Potato Salad Goes Bad

By Ben Hunt | August 15, 2019 | 4 Comments

On Tuesday, the Macy’s narrative was “I think they can make their comps.”

On Wednesday, the Macy’s narrative was “I think they can cover their dividend.”

This is what it means for a narrative to go bad. This is what it means for a story to break.

And when a story breaks, so does the stock. Not just for a little while, but for a loooong time.

Just ask GE.

Read more

A Cartoon in Three Parts

By Rusty Guinn | August 8, 2019 | 2 Comments

Cartoons are not evil. And yet they are the engine behind the Long Now, and very much at the center of our financial Zeitgeist. What is a clear eyed, full-hearted investor and citizen to do?

Read more

The Last Chance

By Rusty Guinn | August 7, 2019 | 6 Comments

You want scarcity? Access to the upper echelons of high society? Well, say no more. It’s your very last chance to buy this most special, most fantastical, most legendary, most unattainable of whiskies.

Read more

Are You Sweet Talking Me?

By Ben Hunt | August 6, 2019 | 4 Comments

It’s my favorite part of any Batman movie … that scene where the henchman pays a visit to the crazed supervillain – the Joker is the gold standard here – and you just know that the meeting is about to go terribly, terribly awry for the thug.

It’s a funny scene in a movie.

It’s a crappy way to run a country.

Read more

The Donkey of Guizhou

By Ben Hunt | August 5, 2019 | 7 Comments

My point in relating the fable of the Donkey of Guizhou is not that I believe China is the tiger and the United States is the donkey in our current trade-war-going-to-currency-war.

My point in relating the fable of the Donkey of Guizhou is not that I believe the current United States president is a braying donkey in his “easy to win” trade-war-going-to-currency-war.

I mean … I do, but that’s not my point.

My point is that Chinese political leadership believes that they are the tiger and the current United States president is a braying donkey.

Read more

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