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.
Jamie Dimon is the rake.
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I’m old enough to remember when Donald Trump, the President-elect of the United States, and Masayoshi Son, CEO of Softbank, had an impromptu press conference in the Trump Tower lobby to trumpet the FIFTY THOUSAND JOBS and FIFTY BILLION DOLLAR INVESTMENT that Softbank would be bringing to the US.
All based on a powerpoint deck.
I believe it is impossible to separate the modern management practice of self-enrichment through massive levels of stock-based comp from the modern management practice of investor placation through massive levels of stock buybacks … without regulating one or the other practice.
But I’m all ears for any ideas.
The missionaries are out, and guess what? They want you to do a lot of trading and portfolio repositioning. How thoughtful!
Today’s Zeitgeist brought back a blast from the past, an early encounter with the distinction between narrative and other, more common, measures of what the crowd thinks.
You know, everyone is all in a tizzy about Softbank paying Adam Neumann $1.7 billion just to go away.
My unpopular opinion: the Adam Neumann story is repeated in a non-infuriating and non-obvious way every day in every S&P 500 company. And it’s been going on for a DECADE.
One day we will recognize the defining Zeitgeist of the Obama/Trump years as an unparalleled transfer of wealth to the managerial class.
Every now and then we come across an article or blog post that’s directly relevant to what we’re trying to say on Epsilon Theory, but is too big and thoughtful to be carved up for a Mailbag note or Zeitgeist post.
Make / Protect / Teach is a Big Tent.
In which Ben and Rusty discuss the three Ps of the narrative of a functioning government – and why their cartoons are being stretched to the limit.
The NBA, Blizzard and others are in hot water after kowtowing to the Chinese government. America will have forgotten about both within weeks. But the awareness of just how long the CCP’s reach has become? That can’t be unseen.
If Carl Icahn calls up the CEO of GM and asks her how the UAW talks are going, it is illegal for Mary Barra to tell him anything that she does not also tell everyone else.
If Carl Icahn calls up the President of the United States and asks him how the China talks are going, it is perfectly legal for Donald Trump to tell him whatever he likes without obligation to tell anyone else.
I believe that we are on the cusp of the Long Now becoming irreversible. Or at least irreversible without a cataclysmic Fall.
Why? Because they have mastered the art of stealing our tells. At scale.
Here’s how we start to confound the stolen tells. At scale.
It won’t be noticeable at first. And then it will. And then it becomes a self-sustaining narrative. And then the world starts to change.
Marc Benioff, the billionaire CEO of Salesforce.com, says we need a New Capitalism … a kinder and gentler capitalism to rectify our modern culture of greed and massive wealth inequality.
Ray Dalio, the billionaire CIO of Bridgewater, says the same thing.
I think they’re both right.
I also think they should STFU.
“Until an hour before the Devil fell, God thought him beautiful in Heaven.”
That’s my fave Arthur Miller quote, from The Crucible.
Our Devil is inflation, and today we think him beautiful in Heaven. You’re not ready for the Fall.
Every US company with Chinese consumer-facing products is going to be forced to make a choice. Do you want to preserve your authenticity and your brand, or do you want to preserve your earnings guidance and share price?
Choose one. You can’t have both.
No one will believe me when I say this, but it’s the truth: this is bigger than tariffs.
They keep us sick, you know.
They keep us hooked on this framing of something-something Republicans vs. Democrats.
The cure? Take back your distance.
You’ll find your local library to be the perfect place to start.
Yeah, yeah … I know that the Deep State is a powerful adversary. Or at least that’s what my MAGA buddies on twitter keep shouting at me.
But I’ll take the Deep State as an enemy any day compared to Steve Schwarzman and the rest of the Private Equity Tong looking to keep their carried interest tax treatment.
I bet Elizabeth Warren feels the same way.
This isn’t a note about Facebook. It’s a note about online brokerage fees. And it’s a note about Facebook.
As a consumer … don’t cry for Argentina, and don’t cry for the online brokerages who are taking their commission fees down to zero. As an investor in or an employee of ANY financial services company, on the other hand … maybe it’s time for a good cry and a hard look at your future prospects.
Yes, Deadwood is the greatest HBO series ever. Don’t @ me. I’m not having it. David Milch is MY President.
And while Al Swearengen is the greatest character of that greatest show, the fact is that it’s another character – George Hearst – who drives the narrative arc for the entire series (and movie).
You see, Deadwood is a show about property rights.
So is the Argentina – IMF show.
Overnight repo is where the interest rates that central banks SET meet the interest rates that real economic actors USE.
So what happens when the setting of interest rates becomes a disembodied symbol of governmental will rather than a clearing price of money in the real world? This.
It’s a new common knowledge about central banks, and it changes EVERYTHING.