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.
I haven’t been very nice to Neel Kashkari.
But he was nice enough to engage in a twitter exchange with me the other day. Well, sort of.
Here’s a record of that exchange. I’ll leave it to you to decide who’s the prisoner and who’s the guard.
Nuke the site from orbit. It’s the only way to be sure.
It’s the best line from a movie full of them.
I couldn’t help but think about nuking inhuman monsters from orbit, when I read the PR releases from Prince Andrew and Les Wexner about their “relationship” with Jeffrey Epstein.
The desire of central banks to forestall recession at all costs reminds us of the war that groundskeeper Carl Spackler had with the gopher in Caddyshack.
Sure, you can defeat the gopher. But you’ve gotta blow up the golf course with dynamite to do it.
Markets are boring. Hey, what if we securitized wokeness?
Honest investing means finding a balance between approaches which imply we know everything and those which imply we can’t know anything. It means humility.
We think there are three – and only three – paths to finding this balance. One is the heart of what we are trying to achieve with Epsilon Theory.
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.
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.
Wherever self-determination and resistance to the encroaching power of the state and oligarchical institutions find expression, there should our full hearts be also.
And our full voices.
“I’m a superstitious man, and if some unlucky accident should befall him — if he should get shot in the head by a police officer, or if he should hang himself in his jail cell, or if he’s struck by a bolt of lightning — then I’m going to blame some of the people in this room.” – Vito Corleone
The Nudging State and the Nudging Oligarchy cannot be defeated on a single point of failure like Jeffrey Epstein’s testimony at trial. Or like the bankruptcy of AIG.
But a million effin’ points of failure? A refusal to vote for ridiculous candidates and buy ridiculous securities? A refusal AT SCALE?
Yeah, that can work.
There are some stories that we will want to believe no matter how much contrary evidence we find, and no matter how much we know that the story is bogus. And when these stories convey a sense of control? All bets are off.
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?
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.
“What you call love was invented by guys like me. To sell Nylons.”
Every missionary has his own version of the Don Draper quote.
Politician: What you call values were invented by guys like me. To win power.
Fancy Asset Manager: What you call ESG was invented by guys like me. To gather assets.
The Sell-Side: What you call a rotation trade was invented by guys like me. To earn commissions.
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.
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.
No matter what kind of game you’re playing, never mistake a threat display for a fundamental transformation or escalation of the game. The China Trade War is STILL a game of chicken.
Everybody does Fiat News. But some people get it deep in their soul. A lot of those people work at a particular paper in New York.
The Long Now is everything we pull into the present from our future selves and our children.
The Long Now is the constant stimulus that Management applies to our economy and the constant fear that Management applies to our politics.
We are told that the economic stimulus and the political fear of the Long Now are costless, when in fact they cost us … everything.
There is another way.
It’s the July 30th, 2019 ET Live! Today, we’re all MMT’ers, or at least that’s the narrative in political space. But what about markets?
Perhaps there is an emerging and cohesive narrative around the zombiefication effects of structurally low interest rates. As much as we’d like this to be the case, we think it has yet to really register.