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Clever Hans

By Ben Hunt | 0 Comments

Part 7 of Ben’s Notes from the Field series reminds us that you don’t break a wild horse by crushing its spirit. You nudge it into willingly surrendering its autonomy. Because once you’re trained to welcome the saddle, you’re going to take the bit. We are Clever Hans, dutifully hanging on every word or signal from the Nudging Fed and the Nudging Street as we stomp out our investment behavior.

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Hobson’s Choice

By Ben Hunt | 7 Comments

“What do you mean you don’t make side orders of toast? You make sandwiches, don’t you?”

Bobby thinks he has lots of choices, but really he only has one.

We’re all Bobby today.

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The NFL Has a Gambling Problem

By Rusty Guinn | 20 Comments

The outcomes of NFL games are inordinately influenced by officials relative to other sports. This is not new. The narrative environment faced by the NFL in 2021, however, IS new.

I’m not sure they’re ready for it.

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False Binary Choices

We seem obsessed with false binary choices. What do I mean – choices that aren’t really choices. Sort of like when your mom says do you want orange juice or apple juice? I don’t want juice. I want Soda. But that is not on the menu.

Do you want Brainard or Powell? Seems right in the zip code here. Like does this choice really matter? I don’t think so and the fact that markets are moving on these small binary choices that are meaningless seems like its becoming part of the weaponized narrative arsenal.

Take a look at what I mean.

https://www.bloomberg.com/opinion/articles/2021-11-23/markets-have-overreacted-wildly-to-the-powell-brainard-fed-drama?srnd=premium&sref=9XsJozxv

And btw, we’ve talked about this before.

— Harper Hunt | November 23, 2021|

Why Am I Reading This Now? 11.22.21

Recent major media stories that feel to us like they’re part of a larger narrative campaign.



Olympic Boycott

From the ET Forum ...

President Biden has announced that he’s thinking about a diplomatic boycott of the 2022 Winter Olympics in Beijing. What does this mean? Not much.

This boycott would be in protest of the Chinese treatment of Uyghurs and the crackdown of freedoms in Hong Kong. It’s been proposed by international advocacy groups and some members of Congress. Biden saying that he’s seriously considering it is the first major attention the movement has received. Though he’s committing about as much as a contestant on the Bachelorette who could “see himself one day having feelings for you”.

A diplomatic boycott would prohibit an official US delegation from attending the games. Usually some diplomatic figures like the first lady and second gentleman are present at the games and symbolically lead the American contingent into the games. But the athletes would still be able to compete.

Let’s be honest, no one cares about the diplomats at the Olympics. It’s all about the athletes. And the US would still send a massive team to the Olympics. There would still be constant coverage of the games and China would still make money off the tourism and streaming rights. Only change is that we won’t have an article talking about Jill Biden’s fashion choice at the opening ceremony.

I’ve talked before about how the Olympics in general are a complete mess. You can check out our Cursed Knowledge podcast on the topic if you want more information. The TL;DR is that the Olympics put an incredible strain on the most vulnerable citizens in the host country. I’m all for boycotting the Olympics. But you can’t half-ass it. Just removing the diplomatic presence is a copout that achieves nothing and helps no one.

— Harper Hunt | November 19, 2021|

Why Am I Reading This Now? 11.15.21

Recent major media stories that feel to us like they’re part of a larger narrative campaign.


It’s Beginning To Look A Lot Like Christmas

From the ET Forum ...

Finished your holiday shopping? I hope so or else you’re out of luck. If you wait any longer you might be in for an unpleasant surprise. Retailers around the world have announced their concern with inventory shortage and supply chain delays as we enter the most wonderful time of the year. Most people don’t start holiday shopping until at least September with most taking advantage of the Black Friday and Cyber Monday sales. This year that might be a problem.

Covid has already wreaked havoc on the supply chain. More people are ordering online instead of going to a store. So the shipping industry has received a massive burden it wasn’t ready to carry. New safety regulations also slow down both production and shipping. And that’s not counting labor shortages that add another spanner in the works. Of course we can’t forget about massive cargo boats getting stuck in canals. That certainly doesn’t help keep things moving.

It’s been like this for awhile, but things are about to get a lot worse.

Most American’s do the bulk of their holiday shopping in November and December. That’s what retailers have been training us to do for years. With special holiday savings events every other weekend, it’s the best time to find that PS5 on sale. These sales have always been … interesting. We all know Black Friday is pretty dang close to the Purge. This year could be less physical pain, more economic turmoil.

If people aren’t out at stores taking doorbusters a bit too literally, then they’ll be doing their shopping online. Imagine everyone who goes out for Black Friday. Double that number. That’s about how many people will be ordering online on that one day. It’ll be chaos.

News outlets have already started to report on our impending doom and you can expect to see more coverage as we get closer to holidays. I highly doubt the articles and segments will encourage people to refrain from buying. More likely the suggestion will be to buy early and expect your shipments to be late.

— Harper Hunt | November 05, 2021|

Proof of Plant: A New Vision for Crypto, Pt 1

By Ben Hunt | 39 Comments

I want to change the language of crypto from mining to growing. I do not mean this in a metaphorical sense. I mean a proof-of-plant method for literally growing cryptocurrency tokens as a representation of the value stored in the human cultivation of plants.

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In Praise of Bitcoin

By Ben Hunt | 57 Comments

What made Bitcoin special is nearly lost, and what remains is a false and constructed narrative that exists in service to Wall Street and Washington rather than in resistance.

The Bitcoin narrative must be renewed. And that will change everything.

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Through the Looking Glass, or … This is the Red Pill

By Ben Hunt | 1 Comment

The first ET note focused on Information Theory.

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Recent Notes

ET Zeitgeist: With Enemies Like This

By Ben Hunt

This has been a bad week for Bitcoin and Bitcoin! TM alike. There’s no getting around that.

But whenever Paul Krugman and the Wall Street Journal agree on something … I want to be on the other side of that trade!

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Mortgage Mayhem

By Marc Rubinstein

Mortgages are pretty standard fare in the world of finance, but the American version is special: it grants its user a free option to refinance if they can get a cheaper rate elsewhere.

Every lender thinks they can thrive in this market. But every lender can’t be right.

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Financing the American Home

By Marc Rubinstein

As a non-American there are many things I don’t understand about America.

Most of all though, I don’t understand the most American of products: the 30-year fixed-rate fully prepayable mortgage.

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ET Zeitgeist: Ransom Paid

By Ben Hunt

The Colonial Pipeline embarrassment will accelerate the US gov’t’s efforts to control and co-opt crypto.

Binance, Kraken, BitMEX … they’re all squarely in the wrathful gaze of the Eye of Sauron now.

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Wage Inflation Isn’t Coming. It’s Already Here.

By Ben Hunt

Over the past four quarters, the United States has generated more wage inflation than at any point over the past 40 years.

This is not an anomaly. This is not a single quarter aberration. A wage-price inflation cycle is here.

I’m not predicting. I’m observing.

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I’m Trying To Understand Hedonic Adjustments

By Brent Donnelly

A Honda Accord cost $12,000 in 1990 and it costs $25,000 now.

A Mustang was $9,000 and now it’s $27,000.

The BLS has new car prices close to unchanged over the past 30 years.

ET contributor Brent Donnelly tries to wrap his brain around hedonic adjustments to CPI.

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ET Zeitgeist: Now Hiring

By Ben Hunt

Our weekly digest on what we’re working on …

Including this article from the WSJ: Millions Are Unemployed. Why Can’t Companies Find Workers?

I dunno, if only there were some mechanism by which companies could entice people to work for them. Weird.

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ET Podcast #10 – In Praise of Bitcoin

By Ben Hunt

Bitcoin has been subverted by the neutering machine of Wall Street and the regulatory panopticon of the US Treasury Dept.

What remains is a constructed narrative that exists in service to Wall Street and Washington rather than in resistance.

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What Sort of Business is Investment Banking?

By Marc Rubinstein

What do investment banks do, and why are European investment banks so bad at doing it?

Great piece by new ET contributor Marc Rubinstein!

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The Zeitgeist – April 30, 2021

By Ben Hunt

Here’s what we’re reading and working on this week at Epsilon Theory.

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In Praise of Bitcoin

By Ben Hunt

What made Bitcoin special is nearly lost, and what remains is a false and constructed narrative that exists in service to Wall Street and Washington rather than in resistance.

The Bitcoin narrative must be renewed. And that will change everything.

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Bitcoin Market Profile

By Brent Donnelly

ET contributor Brent Donnelly gives a crash course in Market Profile analysis and applies it to Bitcoin since the Coinbase IPO.

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Image of Wormwood, the father and slick car salesman from Matilda

Manheim Steamroller

By Rusty Guinn

When we talk about and plan for inflation in our businesses and portfolios, we are usually focused on direction and magnitude. We also usually abstract away from price volatility.

We shouldn’t.

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ET Podcast #9 – Make, Protect, Teach

By Ben Hunt

How do we change the world? Not through corporations and political parties from the top-down, but through free-thinking citizens from the bottom-up. Not as an alienated flock, but as a cooperative pack. Not with abstractions and transactions, but with making, protecting and teaching.

Let’s gooooooo!

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The Zeitgeist – April 19, 2021

By Ben Hunt

Here’s what we’re reading and working on this week at Epsilon Theory.

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Mailbag: ET Forum Edition

By Ben Hunt

We are now more than 900 Pack members strong on the ET Forum, with more than 1,000 posts contributed by smart, clear-eyed, full-hearted people from all over the world and all walks of life. Like you.

Here, I’ll show you. Here is some of the best and most thoughtful content on the internet today.

Here is the Mailbag that we need.

Here is the Mailbag that we deserve.

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What Do We Need To Be True?

By Rusty Guinn

Modeling common knowledge by analyzing missionary statements and their reverberations works. Except when it doesn’t.

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ET Podcast #8 – Leverage and Its Discontents

By Ben Hunt

Three blow-ups in three months: Archegos, Greensill, and Melvin Capital.

What do they have in common? Insane leverage employed to maximize private gain while socializing potential losses.

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A Tiger Can’t Change Its Stripes

By Ben Hunt

What do you get when you give a raccoon billions of dollars AND invisibility from regulators? Collusion and insider trading.

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Hot and Cold

By Rusty Guinn

Most of us are under the impression that a protracted conflict within China will increase national unity. Not this time.

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False Binary Choices

We seem obsessed with false binary choices. What do I mean – choices that aren’t really choices. Sort of like when your mom says do you want orange juice or apple juice? I don’t want juice. I want Soda. But that is not on the menu.

Do you want Brainard or Powell? Seems right in the zip code here. Like does this choice really matter? I don’t think so and the fact that markets are moving on these small binary choices that are meaningless seems like its becoming part of the weaponized narrative arsenal.

Take a look at what I mean.

https://www.bloomberg.com/opinion/articles/2021-11-23/markets-have-overreacted-wildly-to-the-powell-brainard-fed-drama?srnd=premium&sref=9XsJozxv

And btw, we’ve talked about this before.

— Harper Hunt | November 23, 2021|

Why Am I Reading This Now? 11.22.21

Recent major media stories that feel to us like they’re part of a larger narrative campaign.