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The Last Hurrah

By Ben Hunt | April 9, 2024

I think everyone in Washington and on Wall Street is in the bag for nominal growth (ie, number-go-up) by any means necessary through November.

Washington is in the bag because their world ends if they don’t win in November. Wall Street is in the bag because it’s their last chance for a big score before a stagflationary vol event of enormous proportion hits the economy regardless of who wins in November.

That which we call QE by any other name would smell as sweet

By Ben Hunt | March 14, 2024

That which we call QE by any other name would smell as sweet.

I think if Shakespeare were reincarnated as a Fintwit luminary, that’s how he’d rewrite the Juliet bit about roses, at least if he were thinking about what’s happening in bank regulation today.

This is the privatization of QE and debt monetization.

Two Quick Narrative Observations

By Ben Hunt | March 7, 2024

I got some more color from Rusty on the shift in our Narrative Monitors this month from hawkish to dovish central bank narratives, and I thought it was well worth forwarding to everyone.

Private Credit Working Group Call 3/1/24

By Ben Hunt | March 6, 2024

Recording of last Friday’s private credit working group call, along with a transcript for those who prefer reading over video.

The main takeaway is that we are increasingly thinking that the expansion in private credit is less of a ‘bubble’ than it is a structural transformation within capital markets.

Why Don’t Real Assets Work Better as an Inflation Hedge?

By Ben Hunt | February 29, 2024

I think the reason real assets like commodities are typically so disappointing in their inflation-hedging reality relative to their inflation-hedging theory is that they have no inherent pricing power. They only have a market story – and a mechanistic one at that – that they are an inflation hedge. It works for a while because enough people tell the story and believe in the story, until it gets trounced by another story, like growth/recession or supply-and-demand.

Is private credit any different?

Real-Time Narrative Shifts

By Ben Hunt | February 22, 2024

Once a truthy-sounding explanation for a market crash is widely publicized, the crash stops. It becomes safe to get back in the water.

That’s true for China today just like it was true for Bitcoin a few weeks ago.

Epsilon Theory University: ETFs with Dave Nadig

By Ben Hunt | February 16, 2024

Exclusively for Professional subscribers, I recently hosted ETF expert Dave Nadig for a wide-ranging discussion on everything you always wanted to know about ETFs (but were afraid to ask).

It’s one of the best things we’ve ever done, and regardless of how extensive your investing experience with ETFs might be, I promise you will learn something new here!

The ‘No Landing’ Narrative

By Ben Hunt | February 8, 2024

We’re starting to pick up the “no landing” macro scenario in The Narrative Machine.

Private Credit Working Group Call 01/26/24

By Ben Hunt | January 30, 2024

Recording of the private credit working group conference call on Jan 26.

Round Two of the Unmooring Rates Trade

By Ben Hunt | January 18, 2024

I think that we’re gearing up for Round Two of the Unmooring Trade.

January Professional Monitors

By Ben Hunt | January 9, 2024

The language FROM central bankers remains hawkish (“slow down on your projected 2024 rate cut schedule”), but the language TO central bankers is not only decidedly dovish but is starting to veer into “we need a Fed put” territory.

From a Promise to a Threat

By Ben Hunt | January 5, 2024

We’ve moved from the promise of cutting rates (mission accomplished on inflation and a soft landing, so now the Fed should cut rates by choice rather than by necessity … well done and take a bow, you geniuses!) to the threat of not cutting rates (if the Fed doesn’t cut rates soon, then it will cause a recession … hurry up and cut, you fools!).

Private Credit Working Group Call 12/15/23

By Ben Hunt | December 20, 2023

Recording of our kick-off call for an ET Professional working group on private credit.

Believe Them the First Time

By Ben Hunt | December 15, 2023

The Fed just raised their inflation target from 2% to 4% without saying that they raised their inflation target from 2% to 4%.

Deja Vu All Over Again

By Ben Hunt | December 1, 2023

If the Fed cuts four times in 2024, it’s because we are having a nasty recession. If we don’t have a nasty recession, I don’t think the Fed cuts at all. Why not? Because Common Knowledge. Because everyone knows that everyone knows that inflation is still a thing, allowing companies to pass along higher prices to maintain/expand margins even as labor pushes for higher wages.

We are SOOOO not done with inflation.

Days of Theater

By Ben Hunt | November 17, 2023

Every macroeconomic data release will be parsed and presented by Wall Street and the White House to pressure the Fed to lower the price of money. That storytelling effort will be particularly strong when everyone is paying attention on a Day of Theater.

Like a CPI release.

The Yen Narrative Domino

By Ben Hunt | November 2, 2023

Earlier this week, the BOJ ‘tweaked’ their YCC policies again, this time eliminating their hard commitment to buying unlimited amounts of 10-year JGBs to maintain a 1% cap on rates. Instead, 1% is now just “a reference”, not a hard and fast target. And with that, the yen blew past 150, weakening to 151 and change.

And now the story-telling begins.

The Great Unmooring

By Ben Hunt | October 23, 2023

I am increasingly convinced that it’s not only interest rates that have become unmoored in narrative-world, but also our banking system and our housing finance system … and our domestic political system and our international security system.

We’ve moved from an unmooring of long-dated interest rates to an unmooring of everything.

This Is What Unmooring Looks Like

By Ben Hunt | October 13, 2023

On Wednesday, October 11, the 30-year yield declined 13.8 bps (NY to NY last trade), its third biggest one-day decline in yields since November 2020.

Yesterday, October 12, the 30-year yield rose 16 bps. This was the biggest one-day increase since March 2020.

This is what unmooring looks like!

The End of the Beginning

By Ben Hunt | October 6, 2023

The narrative archetype “Supply and Demand” tm is typically trotted out to describe a market move that no one has a better answer for. It’s not particularly useful for a directional trade, though, as it is inherently cyclical and mean-reverting.

Discovery Phase to Mainstream Phase

By Ben Hunt | September 29, 2023

It’s important to recognize that a Big Trade is a long campaign made up of dozens of narrative battles and skirmishes. We won the first battle – and that’s great! – but now it’s on to preparing for the next.

The Dot Plot IS Forward Guidance

By Ben Hunt | September 21, 2023

Why did the Fed slap down Mr. Market’s expectations of massive rate cuts in 2024?

Because the most important thing for the Fed is not to be right, but to be believed.

The Ghost of Arthur Burns

By Ben Hunt | September 14, 2023

In narrative-world, we have now redefined core CPI to not only exclude food and energy prices directly, but also indirectly. If airfares went up in-line with or ‘because of’ rising fuel prices, then obviously we need to ‘adjust’ those airfare readings for a ‘true’ core CPI, right?

The ghost of Arthur Burns haunts us still.


By Ben Hunt | September 7, 2023

The latest narrative development I’m seeing is that the US economy has “decoupled” from the other Big Three economies: China, Germany and Japan, and that has a couple of important implications for market-world, I think.

Narrative Monitors

April 2024

March 2024

February 2024

January 2024

December 2023

November 2023

October 2023

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December 2022

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