All Epsilon Theory Content
The soul of Epsilon Theory is our long-form content, a library of hundreds of pieces written by Ben, Rusty and others over the course of the last 5+ years. These are the print-and-take-home-for the weekend notes that made Epsilon Theory what it is today.
Our leaders have botched the Covid-19 war, and we are defenseless against a now endemic disease.
15,000 to 20,000 Americans officially sick. 500 to 1,000 Americans officially dead.
The free world does not easily survive a globally endemic Covid-19.
The Hertz bankruptcy is not a story of financialization by an entrenched, self-dealing management team.
It’s a story of financialization by an entrenched, self-dealing minority ownership.
A Gilded Age isn’t an age of prosperity. It is an age of the narrative of prosperity, and narratives of prosperity are always top-down political narratives.
There is but one way to tear down top-down political narratives: action.
ET contributor Demonetized is back, grappling with some investment themes here at the end of the beginning.
The skinny: deep value is at best a tactical trade. At best.
ET Contributor Pete Cecchini looks at the monetary and fiscal policy stimulus coming out of Washington and sees a staggering price to pay in lost real growth and massive institutional corruption.
A truth that’s told with bad intent
Beats all the lies you can invent.
– William Blake
Our narratives of COVID-19 are all lies.
They are lies of a particular sort, political narratives that have a nugget of truth within them, but are told with bad intent. They are told this way because it works. Because the nugget of truth hides a deeper, unpleasant truth. And a Big Lie.
There’s light at the end of the pandemic tunnel, and there’s light at the end of the pandemic narrative tunnel. No, on second thought I think that’s an oncoming train called “election season.”
Take away a great performer’s live audience, and you take away their source of narrative power.
That’s true for American Idol. That’s true for Warren Buffett.
It’s also true for Donald Trump.
We have written that one of the major social changes occurring at present is the transformation of capital markets into public utilities.
The COVID-19 pandemic and policy response have accelerated that transformation. It is now the water in which we swim.
Join us this afternoon for the Pandemic Edition of Epsilon Theory Live! As usual, we start promptly, so if you don’t have video within a short period after 2PM ET, please refresh your browser. We recommend Chrome for the best experience.
We are now in the Flooz.com phase of the “how is COVID-19 going to change the world forever” process. Be careful out there.
The systemic risk question you need to ask yourself today is the same question you needed to ask in 2008.
What is the micro-level truth of the potential real-world shock, and does that micro-level truth threaten the common knowledge surrounding a levered business model and securitized asset class of enormous size?
I, for one, am delighted to learn of the “Through No Fault of Their Own” exemption to stock market risk.
One day, and soon, there will be a reckoning. Time to choose a side.
There was no greater sin between 2009 and 2020 than enduring a ‘constant drag on returns’. This is the meme of Yay, Efficiency!, and it permeates every layer of our economy and markets.
ET contributor Peter Cecchini makes a strong case that the Fed is playing a dangerous game with its constant use of the “exigent circumstances” exception to Section 14 of the Federal Reserve Act.
Does the alphabet soup of new facilities and SPVs established by the Fed in recent weeks amount to an illegal taking of assets? It’s a reasonable question.
Even more reasonable: if not here, where do you draw the line?
We’re going to change the world, you know … you and me.
It won’t happen the way you think, because you think that someone is going to lead you. You think that someone is going to organize you. You think that someone is going to give you a top-down, political Answer in the form of something to march for or somebody to vote for.
Nope. We’re going to create a million points of failure for the system of sociopathic oligarchy. We’re going to create points of failure AT SCALE.
How? With the Narrative Machine.
This is not a chronicle of errors and mistakes made during COVID-19.
This is the story about the inevitable, simultaneous failure of each of the institutions designed to operate in our interest.
It is the story of how we respond to fragility with resilience.
The oil narrative is not as it seems.
The White House and others assume the Saudis and Russians are at odds. Don’t be so sure. Their interests are aligned around disabling U.S. production. Period.
There is no country in the world that mobilizes for war more effectively than the United States. And I know you won’t believe me, but I tell you it is true:
This will be #OurFinestHour.
We have been asked to discuss our views about the CARES Act. In order to facilitate future such requests, we have provided what we hope to be a helpful rubric.