Featured Notes

The ET Election Index – April 2019

By Rusty Guinn | May 20, 2019 | 0 Comments

Today we introduce the Epsilon Theory Election Index, a service intended to help you spot when you are being told how to think about the upcoming election, and to help you make up your own damn mind about it.

In this edition we introduce the key terms of our analysis and show you how the early days of the Democratic primary season are playing out.

In short? Whatever polls are saying, the narrative from the media appears to be that progressive is in, and Biden ain’t it.

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Wage Growth, Groucho Marx Edition

By Ben Hunt | May 7, 2019 | 3

Wage stagnation in 2016 was actually much worse than you were told. Did this make a difference in the Midwestern states that swung the election, in that actual labor conditions were worse than everyone thought they were? I think yes.

Wage growth in 2018 was actually much better than you were told. Did this make a difference in the current Fed/Wall Street/White House narrative that inflation is dead and the easy money punchbowl can be maintained without consequence? I think yes.

For a few days, we’re making this ET Professional note available to everyone to review. We think the ET Pro service is something that every portfolio allocation, wealth management and active investment team can find useful, particularly for risk management.

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Starry Eyes and Starry Skies

By Rusty Guinn | April 29, 2019 | 8

The student loan crisis is a Big Deal. And it is only a part of a Bigger Deal: the Myth of College.

This issue will be front-and-center in the upcoming elections. We will all be handed our very own ‘Yay, College’ signs to raise high. More often than not, we will be asked to raise them in service of market-distorting policies which will make our problems worse.

You don’t hate education, innovation, progress, equality and merit-based reward systems…do you?

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This is Water

By Ben Hunt | April 17, 2019 | 16

Time to add a fourth shift in the Zeitgeist: capitalist productivity, now 200+ years old, is becoming capitalist financialization.

Wall Street gets something to sell, management gets stock-based comp, the Fed gets a (very) grateful Wall Street, and the White House gets re-election.

What do YOU get out of financialization? You get to hold up a card that says “Yay, capitalism!”.

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Most Recent Notes

Epsilon Theory Mailbag: Bitcoin and Big Data

By Ben Hunt | March 9, 2015 | 0 Comments
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One of the best parts of authoring Epsilon Theory is the correspondence I get from readers. For the past few months, however, I’ve been frustrated by my inability to respond to every writer with the same attention and thoughtfulness evidenced by their emails. Between my day job and the effort each Epsilon Theory note requires, …

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Why Take a Chance?

By Ben Hunt | February 24, 2015 | 0 Comments
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Vinny Forlano: He won’t talk. Stone is a good kid. Stand-up guy, just like his old man. That’s the way I see it. Vincent Borelli: I agree. He’s solid. An effin’ Marine. Americo Capelli: He’s okay. He always was. Remo, what do you think? Remo Gaggi: Look… why take a chance? At least, that’s the …

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The Effete Rebellion of Bitcoin

By Ben Hunt | February 17, 2015 | 0 Comments
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Neil McCauley: We want to hurt no one! We’re here for the bank’s money, not your money. Your money is insured by the federal government, you’re not gonna lose a dime. Think of your families, don’t risk your life. Don’t try and be a hero! “Heat” (1995) Butch Cassidy: What happened to the old bank? …

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First Known When Lost

By Ben Hunt | February 3, 2015 | 0 Comments
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I never noticed it until ‘Twas gone – the narrow copse Where now the woodman lops The last of the willows with his bill – Edward Thomas, “First Known When Lost” (1917) Dave Bowman: Open the pod bay doors, HAL. Hal: I’m sorry, Dave. I’m afraid I can’t do that. Dave Bowman: What’s the problem? …

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7 Quick Points on Europe

By Ben Hunt | January 26, 2015 | 0 Comments
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#1) Here are the most relevant recent notes for an Epsilon Theory perspective on the underlying political and market risks in Europe: “The Red King” (July 14, 2014) and “Now There’s Something You Don’t See Every Day, Chauncey” (Dec. 16, 2014). #2) Markets reacted positively to last Thursday’s announcement because Draghi doubled the amount of QE that he …

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Ghost in the Machine, Part 1

By Ben Hunt | January 20, 2015 | 0 Comments
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  The way out is through the door. Why is it that no one will use this method? ― Confucius (551 – 479 BC) Tanzan and Ekido were once traveling together down a muddy road. A heavy rain was still falling. Coming around a bend, they met a lovely girl in a silk kimono and …

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Catch – 22

By Ben Hunt | January 12, 2015 | 0 Comments
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Four times during the first six days they were assembled and briefed and then sent back. Once, they took off and were flying in formation when the control tower summoned them down. The more it rained, the worse they suffered. The worse they suffered, the more they prayed that it would continue raining. All through …

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The Clash of Civilizations

By Ben Hunt | December 29, 2014 | 0 Comments
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Thomas Cole, “The Course of Empire: Destruction” (1836) In the emerging world of ethnic conflict and civilizational clash, Western belief in the universality of Western culture suffers three problems: it is false; it is immoral; and it is dangerous. – Samuel P. Huntington, “The Clash of Civilizations and the Remaking of World Order” (1996) The …

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Now There’s Something You Don’t See Every Day, Chauncey

By Ben Hunt | December 16, 2014 | 0 Comments
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Narrator: Well, today we find our heroes flying along smoothly… Rocket J. Squirrel: Flying along smoothly? Bullwinkle J. Moose: You’re just looking at the picture sideways! Rocket J. Squirrel: Actually it’s like this! Narrator: Oh… OH GOOD HEAVENS! Today we find our heroes plunging straight down toward disaster at supersonic speed! Bullwinkle J. Moose: That’s …

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Narrative Uber Alles

By Ben Hunt | December 11, 2014 | 0 Comments
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Yesterday the Wall Street Journal ran a front page story titled “OPEC Sees Less Demand for Its Oil in 2015”, as well as another article with the following quote: “OPEC’s output exceeded its quota by 50,000 barrels a day in November, the group said.” That’s all true, and all supportive of today’s dominant Narrative that …

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We Now Return to Our Regularly Scheduled Programming

By Ben Hunt | December 5, 2014 | 0 Comments
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Hilsenrath Analysis: Friday’s Jobs Report Assures Global Central Banks Going in Two Directions ― Wall Street Journal, December 5th, 9:59a ET Earlier today I tweeted that “I should write a note on Draghi today, but after 2.5 yrs of reviewing the same song and dance I’d rather put out my eye with a rusty spoon.” I feel the …

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Signs and Portents

By Ben Hunt | December 1, 2014 | 0 Comments
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Young nanny: Look at me, Damien! It’s all for you.   [she jumps off a roof, hanging herself]  – “The Omen” (1976)   When one has little faith, one must survive from day to day signs. – Stephen King, “Bag of Bones” (1998) Criminals are a superstitious cowardly lot, so my disguise must be able to …

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The Unbearable Over-Determination of Oil

By Ben Hunt | November 24, 2014 | 0 Comments
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Jett Rink: Everybody thought I had a duster. Y’all thought ol’ Spindletop Burke and Burnett was all the oil there was, didn’t ya? Well, I’m here to tell you that it ain’t, boy! It’s here, and there ain’t a dang thing you gonna do about it! My well came in big, so big, Bick and …

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Mike Tyson: Master Game Theorist

By Ben Hunt | November 6, 2014 | 0 Comments
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Everyone has a plan until they get hit in the mouth. – Mike Tyson My long-term strategy turned into a 12-hour strategy. – “Survivor” contestant Dale, voted out in last week’s tribal council Reality doesn’t interest me. – Leni Riefenstahl, acclaimed German film director and Nazi stooge Ben, there is no such thing as a …

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Wherefore Art Thou, Marcus Welby?

By Ben Hunt | October 30, 2014 | 0 Comments
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Seek not the favor of the multitude; it is seldom got by honest and lawful means. But seek the testimony of few; and number not voices, but weigh them. ― Immanuel Kant Have you no sense of decency, sir? At long last, have you left no sense of decency? ― Joseph Welch, counsel for the …

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Calvin the Super Genius

By Ben Hunt | October 14, 2014 | 0 Comments
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People think it must be fun to be a super genius, but they don’t realize how hard it is to put up with all the idiots in the world. ― Bill Watterson, “Calvin And Hobbes” Here is the most fundamental idea behind game theory, the one concept you MUST understand to be an effective game …

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Hey Spike

By Ben Hunt | October 9, 2014 | 0 Comments
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The strong do what they can, while the weak suffer what they must. — Thucydides, “The History of the Peloponnesian War” (395 BC) Global growth is really bad! Hooray! That was the verdict of US markets yesterday, as the Fed minutes “revealed” (to use the breathless phrasing of mainstream financial media) a “growing concern” with …

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Going Gray

By Ben Hunt | October 1, 2014 | 0 Comments
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Everything under the sun is in chaos. The situation is excellent. – Mao Zedong (1893 – 1976) Forget it, Jake. It’s Chinatown. – Chinatown (1974) Language is conceived in sin and science is its redemption. – W.V.O. Quine (1908 – 2000) I am, as I am; whether hideous, or handsome, depends upon who is made …

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Best of List

By Ben Hunt | September 26, 2014 | 0 Comments
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I’ll have a new full-length Epsilon Theory note out early next week (“Going Gray”), but wanted to pass along two background points. First, a replay of last week’s webinar – “The Game of Thrones and the Game of Markets” – is available from our friends at RIA Channel, and can be accessed here. Second, for all …

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Finest Worksong

By Ben Hunt | September 15, 2014 | 0 Comments
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The fault, dear Brutus, is not in our stars, but in ourselves. – William Shakespeare, “Julius Caesar” (1599) In theory there is no difference between theory and practice. In practice there is. – Yogi Berra, (b. 1925) There is one great mystery in the high falutin’ circles of the Fed, ECB, and IMF today. Why is …

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