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.
There are known knowns; there are things we know we know.We also know there are known unknowns; that is to say, we know there are…
Mr. Incredible: You mean you killed off real heroes so that you could *pretend* to be one? Syndrome: Oh, I’m real. Real enough to defeat you! And…
The pursuit of greater predictability and transparency in Fed communications is a mistake, particularly in the context of broad guarantees concerning world-shaking policies. We learned…
“We’re gonna win the game. I guarantee it.” – Joe Namath, 3 days before Super Bowl III “Our torments also may in length of time…
More evidence that QE is no longer an emergency government policy, but is now a permanent government program. epsilon-theory-its-always-something-september-29-2013.pdf (508KB)
High hats and arrowed collars, white spats and lots of dollars Spending every dime, for a wonderful time If you’re blue and you don’t know…
“It is my understanding that the Constitution of the United States allows everybody the free choice between cheesecake and strudel.” – Sky Masterson (“Guys and…
“Tattaglia is a pimp. He never could have outfought Santino. But I didn’t know until this day that it was Barzini all along.” – Don Vito Corleone
Same with Emerging Market growth narratives. It was Developed Market monetary policy all along.
The strong Narrative around Central Bank Omnipotence, which solidified in late September 2012, is now clearly weakening in late August 2013. There are two strands…
The core Narrative around Emerging Markets is shifting away from growth and towards value. This is a profoundly disruptive development. epsilon-theory-the-narrative-shift-around-emerging-markets-august-21-2013.pdf (50KB)
The Common Knowledge informational structure around the US market has weakened in recent weeks, making the risk/reward assessment of ALL exposures — long and short…
“The world is given to me only once, not one existing and one perceived.” – Erwin Schrödinger “Quantum theory provides us with a striking illustration of…
A review of Narrative formation immediately after the July 31st release of Q2 US GDP data. epsilon-theory-the-framing-of-macro-data-july-31-2013.pdf (232Kb)
“Music, this complex and mysterious act, precise as algebra and vague as a dream, this art made out of mathematics and air, is simply the…
“Shape clay into a vessel; It is the space within that makes it useful. Cut doors and windows for a room; It is the holes…
“But Achilles, weeping, quickly slipping away from his companions, sat on the shore of the gray salt sea, and looked out to the wine-dark sea.”…
“You say that we go round the sun. If we went round the moon it would not make a pennyworth of difference to me or…
In some periods of history gold is money. In other periods of history gold is not. But gold is always something, and that something is defined by the Common Knowledge of the day.
Today our Common Knowledge is that gold is an insurance policy against central bank error.
A review of current market informational structure one week post the June 19th FOMC announcement. epsilon-theory-matrix-reloaded-seeing-markets-as-informational-structures-june-27-2013.pdf (295KB)
We are all impaled on the crook of conditioning. – James Dean (1931 – 1955) This note is a sequel to my letter from two weeks…