Epsilon Theory In Full
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.
The CDC’s Don’t Test, Don’t Tell policy came crashing down last night. So did Trump’s “buh, buh the flu” and “Yay, Containment!” narratives.
Now let’s get to work preparing for the fight to come.
Not in panic. Not in fear. But with resolve, sacrifice and righteous anger for those who would use us instrumentally for their own political ends.
Clear eyes. Full hearts. Can’t lose.
Containment has failed.
And so now we must fight.
That means doing everything possible to bolster our healthcare systems BEFORE the need overwhelms the capacity.
That means calling out our leaders for their corrupt political responses to date, and forcing them through our outcry to adopt an effective virus-fighting policy for OUR benefit, not theirs.
To date, WHO leadership has simply been part of the Chinese narrative machine.
It’s more than a disgrace. It’s more than a humiliation of the people who do good and important work through WHO.
It’s a betrayal of the entire world.
China is fighting nCov2019 exactly like the US fought North Vietnam … with policy driven more by narrative control than by what’s best to win the war.
That was a disastrous strategic mistake for the US then, and it’s a disastrous strategic mistake for China today.
Because the danger of powerful memes, cartoons and narratives is not that they demand our acquiesence. It is that they demand our participation.
There is a median narrative theorem that can serve as a central pillar of a NEW approach to social choice theory, an approach less pedantic in its assumptions about human nature and less naive in its assumptions about modes of social power.
The median narrative theorem generates powerful predictive hypotheses about elections, hypotheses that predicted Trump’s Republican primary victory in 2016 and – if current data holds – predicts Sanders’ Democratic primary victory in 2020.
There are many roads to serfdom, and they have all become faster and more perilous. We are walking down one of them now.
The Long Now has severed the tether between taxation and spending – the most important macroeconomic policy relationship in our social lives as both investors and citizens.
Here’s what that means.
And here’s what we’re going to do about it.
It is our second time now to turn the lens we apply to other news sources to our own creative output. Here is a Very Epsilon Theory retrospective on 2019.
Fiduciary standards, prudent man rules and client sensibilities compel us toward fervent pursuit of “alignment.” There’s just one little problem: we can never be aligned with our agents.
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.
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.
In an orchard, it isn’t always easy to tell the difference between rust and blight. The same goes for our cultural institutions.
Some should be pruned.
Some should be ripped up root and stem.
It’s not always easy to know which. But if we want our sons and daughters to sit in the shade of our trees, we must learn.
It’s time to start a fire. To burn, yes, but also to illuminate.
My advice? Abandon the political party as your vehicle for political participation.
My alternative? Find your Pack.
My platform? Make – Protect – Teach.
In both baseball and in investing, we need an all-purpose test of excellence, not just for identifying MVPs like Mike Trout, but for seeing how all of us mere mortals stack up.
ET contributor David Salem makes the case for an investing corollary to baseball’s Wins Above Replacement (WAR). It’s a defense of value investing, but with a twist.
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.
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.
“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.
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.
Mark Zuckerberg is not The Spanish Prisoner. He’s the guy running the con.
Libra, the cryptocoin promoted by Facebook, is a classic Spanish Prisoner con. This is how the State and the Oligarchy co-opt crypto. Not with the heel of a jackboot. But with the glamour of convenience and narrative.
Bitcoin will be permanently diminished in its social importance by the adoption of Libra and other Oligarchy-sponsored and State-embracing crypto currencies. Bitcoin will never again MEAN what it used to mean.