All Epsilon Theory Content


Everything we have published at Epsilon Theory including our long-form content, a library of hundreds of pieces written by Ben, Rusty and others over the course of the last 5+ years. Plus, short-form pieces for those without the time (or attention span) for classic Epsilon Theory notes.

Essence of Decision

By Ben Hunt | September 16, 2016 | 0 Comments

Here’s the thing. The Fed is now revealing its one True Love — its own reputation and its own political standing — and that’s going to be a bombshell revelation to investors who think that the Fed loves them.

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Magical Thinking

By Ben Hunt | September 1, 2016 | 1 Comment

The problem with magical thinking run amok and its perpetuation of a fantasy world is that sooner or later the dream of the delusional king becomes a real world nightmare for real world people. It’s time to wake up.

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The Narrative Machine

By Ben Hunt | August 17, 2016 | 0 Comments

Alex: There was me, that is Alex, and my three droogs, that is Pete, Georgie, and Dim, and we sat in the Korova Milkbar trying to make up our rassoodocks what to do with the evening. The Korova Milkbar sold milk-plus, milk plus vellocet or synthemesc or drencrom, which is what we were drinking. This …

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Crisis Actors and a Reichstag Fire

By Ben Hunt | July 26, 2016 | 0 Comments

Man in Bar: Tomorrow, I’m gonna be a hero. Gideon: I’m sorry?  Man in Bar: You may just be a patsy, but you’re an important one. In fact, I don’t think I’ve ever met a bigger crisis actor than you before. … This is for our country! [Man in Bar shoots Gideon in neck, killing …

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Financial “Innovation” Returns to ABS Market

By Ben Hunt | July 20, 2016 | 0 Comments

On Monday, Verizon Wireless successfully securitized more than $1 billion in cellphone contracts and sold the notes into the Asset-Backed Securities (ABS) market. Here’s the Reuters article describing the deal. Wireless guys have been selling their contracts for years in private deals, but this is the first public securitization, and the first new “asset class” to …

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When Narratives Go Bad

By Ben Hunt | July 7, 2016 | 0 Comments

How many things served us yesterday as articles of faith, which today are fables for us? – Michel de Montaigne, The Complete Essays (1580) That same night, I wrote my first short story. It took me thirty minutes. It was a dark little tale about a man who found a magic cup and learned that …

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Waiting for Humpty Dumpty

By Ben Hunt | June 24, 2016 | 0 Comments

Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall. All the king’s horses and all the king’s men Couldn’t put Humpty together again. Brexit is a Bear Stearns moment, not a Lehman moment. That’s not to diminish what’s happening (markets felt like death in March, 2008), but this isn’t the event to …

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Cat’s Cradle

By Ben Hunt | June 21, 2016 | 0 Comments

Negative rates are ice-nine. If you don’t know what ice-nine is, read the book. Spoiler alert: the world ends. TIAA will end the voluntary expense waiver on the CREF Money Market Account by April 14, 2017. This decision was reached after ongoing discussions with the TIAA and CREF boards, as well as our state insurance …

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Pressure and Time

By Ben Hunt | June 7, 2016 | 0 Comments

Red: [narrating] In 1966, Andy Dufresne escaped from Shawshank prison. All they found of him was a muddy set of prison clothes, a bar of soap, and an old rock hammer, damn near worn down to the nub. I remember thinking it would take a man six hundred years to tunnel through the wall with …

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Who’s Being Naïve, Kay?

By Ben Hunt | May 24, 2016 | 1 Comment

The Mysterious Stranger is a liar, to be sure, but he’s a proper villain, as the Brits would say, and he’s quite upfront about his goals and his use of clever words to accomplish those goals.

Your goal? Survive the encounter.

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Optical Illusion / Optical Truth

By Ben Hunt | May 4, 2016 | 0 Comments

Portion of original dot map by Dr. John Snow, the founding father of epidemiology, showing the clusters of cholera cases in the London epidemic of 1854. The visual representation of Snow’s data analysis convinced local authorities to shut down the contaminated public well at ground zero of the cholera outbreak, although it would be another …

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The Placebo Effect

By Ben Hunt | April 20, 2016 | 0 Comments

BOTOX® is the only FDA-approved, preventive treatment that is injected by a doctor every 12 weeks for adults with Chronic Migraine (15 or more headache days a month, each lasting 4 hours or more). BOTOX® prevents up to 9 headache days a month (vs up to 7 for placebo). BOTOX® therapy is not approved for …

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My Passion is Puppetry

By Ben Hunt | April 6, 2016 | 0 Comments

Campaign Company Launch Date “Flo” Progressive Insurance 2008 “Rhetorical Question” “Happier Than A … ” “Did You Know?” “It’s What You Do” GEICO 2009 2012 2013 2014 “Mayhem” Allstate 2010 “University of Farmers” Farmers Insurance 2010 “Magic Jingle” State Farm 2011 2011 “That’s Not How It Works” Esurance 2014 “Chicken Parm You Taste So Good” …

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There for the Right Reasons

By Ben Hunt | March 29, 2016 | 0 Comments

A quick follow-up to “Hobson’s Choice”, the most widely-read note in the Epsilon Theory canon to date (thank you!). First, I’ll be hosting a one hour webinar on Thursday March 31, where I’ll present the note and take questions. You can register for the webinar here (for compliance reasons, it’s limited to investment professionals and …

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Hobson’s Choice

By Ben Hunt | March 16, 2016 | 0 Comments

I’d like an omelet, plain, and a chicken salad sandwich on wheat toast, no mayonnaise, no butter, no lettuce, and a cup of coffee. Now all you have to do is hold the chicken, bring me the toast, give me a check for the chicken salad sandwich, and you haven’t broken any rules.

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The Narrative Fix Is In

By Ben Hunt | March 11, 2016 | 0 Comments

A quick email to Epsilon Theory readers on what’s happening in Europe, because we’ve seen this movie before. On August 2, 2012 Mario Draghi gave the most disastrous ECB press conference of all time. The market anticipation was enormous leading up to the event, as this was the moment where the ECB would unveil the …

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Welcome to the Jungle

By Ben Hunt | March 1, 2016 | 0 Comments

Zero-sum, Elliot. You’re playing a game you already lost. You know I’m right. – “Mr. Robot” (2015) You can have anything you want  But you better not take it from me – Guns N’ Roses, “Welcome to the Jungle” (1987) I’m not expecting it. I’m observing it. – George Soros, January 22, 2016 To do …

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The Silver Age of the Central Banker

By Ben Hunt | February 19, 2016 | 0 Comments

We all sing along But the notes are wrong – Matt & Kim, “Get It” (2015) The strong do what they will, and the weak suffer what they must. – Thucydides, “History of the Peloponnesian War” (c. 400 BC) Xerxes: Come Leonidas, let us reason together. It would be a regrettable waste. It would be …

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By Ben Hunt | February 9, 2016 | 0 Comments

As longtime Epsilon Theory readers know, I’m a big comic book fan. One of the joys of a comic done well is the effective representation of a dynamic multi-dimensional narrative within a static two-dimensional art form. As the saying goes, a picture is worth a thousand words, but occasionally so is a sound. Or rather, …

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Rewardless Risk

By Ben Hunt | February 1, 2016 | 0 Comments

Faramir: Then farewell! But if I should return, think better of me. Denethor: That depends on the manner of your return. – J.R.R. Tolkien “The Lord of the Rings” (1954) I’m going full-nerd with the “Lord of the Rings” introduction to today’s Epsilon Theory note, but I think this scene — where Denethor, the mad …

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