If you’re like me, you’ve been put off from digging deeper into DeFi by the terrible signal-to-noise ratio of anything crypto-related on the interwebs. That’s why I found this DeFi primer (using Maker DAO as a specific example) by ET contributor and banking analyst Marc Rubinstein to be so fantastic.
If Barbara Tuchman were alive she would be adding another chapter to her classic The March of Folly.
I am fascinated to see what narratives spring forth from this sad and tragic failure to accomplish anything other than leave behind a string of broken promises.
Z.
‘‘Experience keeps a dear school, but fools will learn in no other, and scarce in that; for it is true that we may give advice, but we cannot give conduct.” said another Ben
T.C.
— Ben Hunt | August 18, 2021|
With the jobs report today showing 4% year-over-year wage inflation and 0.4% month-over-month wage inflation, it seems like a good day to repost this note. Personally, I’m delighted that wages continue to rise at a rapid clip. But if you think that any of this happens in a vacuum, if you think that employers aren’t preserving their margins by raising prices more than they’re raising wages … you’re living in a fantasy world.
This is what a wage/price inflation spiral looks like.
— Ben Hunt | August 6, 2021|
So that’s where we are in our local real estate market – low demand, low supply, high price expectations – and my sense is that this is where we are in lots of markets … not just CT residential real estate. Maybe it’s just the summer doldrums, I dunno. Maybe I’m just taking my local experience as more meaningful than it is. I’d be really interested to hear if anyone is seeing or experiencing the same, either in RE or anywhere else.
Because this is how stagflation happens.
Seasonality is so tough to parse, especially against pandemic-affected seasonality, but it sure seems like inventory got legitimately bought down in Q4/Q1, after which brokers sold that experience and y-o-y % changes to drive a corresponding increase in supply.
Also no idea wtf is going on in multi-family / condo land around here, but definitely seems distinct from the single-family experience.
— Ben Hunt | July 28, 2021|
Epsilon Theory may have gotten its formal start in 2013, but the soft launch took place in 1991. That’s when my partner Ben finished his doctoral work at <lifts nose slightly> a school up in Cambridge. His work there (and his 1997 book, Getting to War) focused on how news could be used to predict the likelihood of war. It also analyzed how news was used by institutions and individuals to foment an appetite for and belief in the necessity of war, which is related to but not the same as the ability to use that news for predictions.
So yes, we were interested to read about Project Cassandra, a collaboration between German academics and military leaders to quantify the risk of conflicts using…literature. The Guardian covers it here in what I think is a very worthwhile read.
The project is really interesting. It confirms, or at least shares, many of the core principles of our Narrative Machine project. Not least among them is the recognition that oft-mined sentiment possesses a fraction of the influence of memes with subjective power that can only be identified objectively through words and phrases of meaning. Or the observation of identifiable, recurring story archetypes.
Leaving aside that we focus on different universes of creative output, our projects DO differ in one respect. The Cassandra Project appears to place great emphasis on the ability to quantify the popular and critical acclaim of a fictional literary work. For example, more popular, more viral, more well-regarded work would have different influence, which is a perfectly sensible hypothesis.
Because we focus on a larger and more frequent dataset of news, blogs, press releases and transcripts, we get to do two different things: first, instead of estimating how much of an audience has heard an idea and how much that idea has changed their minds, we can more easily observe how much a specific memetic idea has reproduced within the dataset over time.
Second, because our dataset includes items which are nominally news / non-fiction content, we can observe the extent to which explicit and implicit opinion language is being deployed, which also provides a window into the narrative-shaping efforts of Common Knowledge missionaries.
Two different approaches to a similar problem. I prefer ours, because I feel more confident saying that an idea has reproductive legs by observing how it changes the language other people use to discuss it, and because knowing some of the intentions of powerful institutions and influential individuals is an indispensable part of any effort to quantify the potential effects of narrative.
But there are absolutely features of the zeitgeist which will only manifest in the arts, in literature, and in the groanings and yearnings of those who make the songs. For that reason alone, we think the Germans have the right of it here in the way that the Scots did before. It’s a very cool project.
Let me make the songs of a nation, and I care not who makes its laws.
Andrew Fletcher, Commissioner of the Old Parliament of Scotland (1703)
— Rusty Guinn | July 8, 2021 | 12:32 pm
The politicization of inflation into a partisan “There Is No Inflation!” TM Narrative by the nudgers and mandarins on the left is really depressing.
The politicization of inflation into a partisan “Biden Inflation!” TM narrative by the clowns and raccoons on the right is really depressing.
It’s really depressing because it makes it impossible for me to say anything on inflation without getting lumped into an insane partisan box. It’s an entirely constructed and false framing of the issue, and I’m just so freakin’ weary of it.
We call this political auto-tuning. We call this a political shock collar.
It’s the go-to move of incumbents in a two-party system with high-peaked bimodal electorate preferences. THIS is why there are no successful centrist politicians. THIS is why there are no stable centrist policies. THIS is why we can’t have nice things.
THIS is why I believe that top-down societal change is impossible, but instead must emerge from the bottom-up through an authentic social movement of Make/Protect/Teach.
Watch from a distance if you like, but when you’re ready … join us.
— Ben Hunt | July 2, 2021 | 11:09 am
Recent major media stories that feel to us like they’re part of a larger narrative campaign.
Modeling common knowledge by analyzing Missionary statements and their reverberations works. Except when it doesn’t.
What do you get when you give a raccoon billions of dollars AND invisibility from regulators? Collusion and insider trading.
Most of us are under the impression that a protracted conflict within China will increase national unity. Not this time.
Recent Notes
Intentional Investor #12: Jim O’Shaughnessy
On this episode of the Intentional Investor, Matt Zeigler welcomes legendary investor and entrepreneur Jim O’Shaughnessy. Jim shares fascinating stories from his childhood, including memories of his influential grandfather, his early interest in magic, and how rejection shaped his mindset.
The discussion covers Jim’s journey into investing, his thoughts on education and critical thinking, and his experiences on Wall Street. Jim offers insights on topics like the power of journaling, the importance of empiricism, and his excitement for AI and new technologies.
The Intentional Investor #11: Eben Burr
Join Matt Zeigler as he sits down with Eben Burr, a financial professional with a fascinating journey from the D.C. punk rock scene to the world of behavioral finance. Eben shares his unique perspective on investing, shaped by his diverse experiences in music, architecture, and finance.
Breaking News #27: When Common Knowledge Trumps Reality
In the latest episode of Breaking News, we are joined by Epsilon Theory Co-Founder Rusty Guinn. We cover the latest developments in the 2024 election and explore how narratives are shaping the political landscape. We delve into the transition from Biden to Harris and examine the strategic implications and how it’s pushing us into what we’re calling our first “vibe election.” We also tackle the Fed’s independence and the potential for rate cuts, regardless of who wins. In our Tweet of the Week, we examine how AI-generated images and rapid narrative formation are changing political discourse, potentially disconnecting us from factual reality. We wrap up with a surprising deep dive into Chumbawamba, using their story to reflect on the importance of folk culture and being “more mid” in our increasingly polarized world.
Metametastasis
We are all concerned about how Gen AI may untether us from reality.
We are not nearly concerned enough about how media will have the ability to do the same through mature social networks.
The Intentional Investor #10: Grant Williams
In this episode of The Intentional Investor, Matt Zeigler talks with Grant Williams, a veteran of the finance industry and creator of the popular newsletter “Things That Make You Go Hmmm…” Grant shares fascinating stories from his career journey, from trading Japanese equities in the 1980s to founding Real Vision. He discusses his approach to writing and interviewing, emphasizing the importance of building trust with an audience and focusing on quality content rather than chasing numbers. Grant also reflects on his experiences living and working around the world, the challenges of moving his family internationally, and his passion for sports. Throughout the conversation, he offers valuable insights on communication, community-building, and maintaining curiosity in both investing and life.
Make, Protect, Teach with Scott Bradlee: Part 1
In our Saturday conclusion, Scott Bradlee of Post Modern Jukebox @postmodernjukebox joins Epsilon Connect 2024 to lead the conversation about what Make, Protect, Teach means to him. And show off his incredible musical talent!
Breaking News #26: The Biden Harris Swap
In this episode of Breaking News, we cover the recent developments in the Democratic party, with Biden stepping aside and Kamala Harris becoming the presumptive nominee. We discuss how reality seems to be proclaimed rather than acknowledged, and how both parties seem more interested in conflict than actual policy solutions. We also touch on the SEC’s case against short-seller Andrew Left and the selective enforcement of rules in finance. We also debate the merits of giving green cards to foreign college graduates and how systems can be exploited by those with money. Finally, we explore the themes in Charlie XCX’s album “Brat,” relating it to the myth of Narcissus and broader questions of self-worth and community in our current cultural moment.
The Weird Thing
The weirdest thing about this “weird” campaign is how convinced some are that it represents a thoroughly directed, planned, systematic propaganda effort.
That’s not how this works. That’s not how any of this works. Not any more, anyway.
We Are Losing Our Minds
Your brain evolved to perceive symbols.
Symbols evolved to be perceived by your brain.
Human society is evolving around a technology which exposes our brains to a barrage of seductive symbols.
And it’s making us lose our minds.
Being Human At An AI Conference: Epsilon Connect 2024 Notes
Matt Zeigler went to Epsilon Connect 2024: Being Human in the Age of AI.
It took him a while, but he figured out what it’s all about.
The Intentional Investor #9: Ryan Krueger
In this episode of the Intentional Investor, Matt Zeigler speaks with Ryan Krueger, founder of Freedom Day Solutions. Ryan shares his journey from working at a baseball card shop as a child to becoming a successful financial professional. He discusses his philosophy on investing, which focuses on transparency, partnership with clients, and a unique approach to retirement planning called “Freedom Day.” Ryan emphasizes the importance of trust, ethical practices, and long-term commitment in his business. He also touches on personal values, such as the influence of his family, his desire to make a positive impact, and his goal of continuing to work and grow rather than retire. Throughout the interview, Ryan’s passion for helping others achieve financial freedom and peace of mind is evident, as is his dedication to building lasting relationships with his clients and team.
Human Being in the Age of AI
The human animal is a social animal, in the truest sense of the words, more similar in our essence to ants, bees and termites than to any other creature. And like any social animal, we are pushed by our very nature towards The Hive, a meaning for our species where consciousness is outsourced, autonomy is abdicated, and discovery is denatured. In his keynote presentation at Epsilon Connect 2024, Ben Hunt shows how the technological push towards The Hive has never been stronger than here at the dawn of the Age of AI, but also how we can use those same tools of language, memory and story to reclaim our human society, our human dominion, and our human being.
Breaking News #25: The Trump Assassination Attempt and Our Plunge Into the Great Ravine
In this episode if Breaking News, we discuss the recent assassination attempt on former President Trump and explore its implications within the context of “The Great Ravine” – our term for the current period of political strife and violence. We analyze how media, technology, and politics intersect to shape public narratives, often transforming sadness into anger directed at opponents. We examine the rationality behind this behavior in closed political systems and discuss the challenges of maintaining critical distance. We also discuss the event’s impact on the 2024 election and explore themes of nourishment and healing through an analysis of the TV show “The Bear.”
This is the Great Ravine
Our mediated cultural transition from sadness to generalized anger to focused anger at specific people and institutions of the Other Party is an entirely intentional effort by Big Politics, Big Tech and Big Media.
This is the Great Ravine, and it’s all going to get much worse before it gets any better.
The Intentional Investor #8: Wes Gray
in this episode, Matt Zeigler speaks with with Wes Gray, founder of Alpha Architect and ETF Architect. Wes shares his fascinating journey from growing up on a ranch to pursuing a PhD in finance at the University of Chicago, serving in the Marine Corps, and eventually building successful businesses in quantitative investing and ETF infrastructure. He discusses key moments that shaped his career, including early experiences with investing, his time in academia and the military, and how he identified opportunities in the ETF space. Wes provides insights into his entrepreneurial approach, the importance of community and collaboration in investing, and how his businesses have evolved over time. The conversation covers a wide range of topics including quantitative investing strategies, ETF structures, and Wes’s philosophy on building innovative financial businesses while maintaining a focus on family and work-life balance.
Breaking News #24: The Debate That Changed Everything | Joe Biden’s Common Knowledge Moment
In this episode of Breaking News we look at the impact of the presidential debate and the role it played in changing the common knowledge about President Biden’s fitness for office. We explore the concept of common knowledge and illustrate how public perception shifts when everyone knows that everyone else knows something. We discuss the implications for the 2024 election, the role of media in shaping these narratives, and the potential fallout within the Democratic Party. Intertwining serious political analysis with lighter anecdotes, including a story about the Beastie Boys’ early days, we emphasize the importance of community and shared understanding in navigating these turbulent times. Join us as we break down what’s making us tick with Clear Eyes and Full Hearts.
Joe Biden and the Common Knowledge Game
Common knowledge is what everyone knows that everyone knows.
Common knowledge is why the 2024 Biden/Harris campaign has collapsed.
All that remains is the cope.
The Intentional Investor #7: Rusty Guinn
In this episode, Matt Zeigler talks with Epsilon Theory co-founder Rusty Guinn. Rusty shares his life journey, from growing up in rural Texas to working on Wall Street and eventually co-founding Second Foundation Partners. He discusses his experiences in finance, including roles in investment banking, private equity, and asset management. Rusty reflects on the lessons learned throughout his career, emphasizing the importance of humility, earnestness, and agency. He also talks about his decision to move to a farm in Connecticut, where he now balances his work in finance with homeschooling his children and running an apple orchard. Throughout the conversation, Rusty provides insights into the investment industry, personal growth, and the search for meaningful work and life balance.
The ETF Innovation Black Hole
Welcome to regulatory stagnation: ETF Industry style.
Innovation is still happening inside the four walls of the established ETF ecosystem. But the structure itself?
Late-Stage.
Breaking News #23: Biden’s Losing Narrative Strategy
In this episode of Breaking News, we examine the current state of the 2024 US presidential election and how it is playing out in the narrative world. We explore the recent Trump trial and its minimal impact on public opinion, as well as growing concerns about President Biden’s age and fitness for office. We then shift to reflections on our recent Epsilon Connect conference about being human in an age of AI, highlighting the importance of maintaining humanity and ethics in our use of technology. We also delve into the troubling state of higher education in America, particularly the exorbitant costs and increasing commercialization of college athletics.