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When Narrative Takes Flight

By Rusty Guinn | October 14, 2021 | 18 Comments

We find ourselves together now at the stage of the Widening Gyre in which your political identity now determines the reality you wish to accept about three days of moderate operational difficulties at the ninth largest global airline, as measured by passenger-miles.

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The Political Autotuning of Inflation

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

Non-Verbal Narrative

We make it no secret that our research program here is all about using natural language processing to identify and measure narratives in the world. But is narrative truly only shaped by verbal and written communication? Do missionary statements have to be made with the mouth?

Of course not.

Here’s narrative missionary Max Scherzer, pitcher for the Washington Nationals, providing an exaggerated form of protest against the revised MLB enforcement policy regarding the use of foreign substances. The umps have generally been inspecting hats gloves and belts for these substances. Max decided to give them a little, shall we say, extra on the belt removal.

Max Scherzer begins stripping on the field as baseball's weirdest new rule  takes effect

Here’s Oakland Athletics pitcher Sergio Romo, picking up every nuance of Scherzer’s crystal clear communication to the commissioner’s office.

Sergio Romo ready to strip for foreign substance checks

Scherzer and Sergio’s sticky substance strip show is memetic perfection in the form of malicious compliance. There is no press conference speech either pitcher – or the others who will no doubt mimic their displays in the coming days – could have made that would have more clearly shifted common knowledge to the belief that the foreign substances rule was being applied, interpreted and policed in an absurd, preposterous way.

Bold prediction: this narrative doesn’t peak until Joe West enrages Zach Greinke into an NC-17 display on national television.

— Rusty Guinn | June 23, 2021 | 9:21 pm

Headline Risk

The average American news consumer is exposed to far more headline text on news websites, social media apps and content aggregation sites than they are to the prose of the articles themselves. It should be no surprise, then, that more fiat news and missionary behavior exists in headlines than almost anywhere else. It typically gets a pass because, well, the whole job of a headline writer is to summarize what an article is about. But that’s precisely the task that lends itself so perfectly to telling us how we should think about the article. What’s important? What should our conclusions be? How should we feel about it?

I’ll give a free subscription to our free newsletter if you can find the fiat news language in this gem of a headline to a CNN news article.

Here are the companies rushing workers back to the office — and the ones that aren’t [CNN]

Aside from the general observation to take care in our content consumption habits, remember that it is the constant barrage of articles – and headlines – like this that reinforces our belief that the missionaries of the “Work From Home Forever!” narratives are dominating the field, at least in the narrative war.

— Rusty Guinn | June 22, 2021 | 9:58 am

“Yay, Stock Buybacks!”

h/t @SouthernValue95 for the brilliant memework!

I saw this work of art on Twitter today, referring to Dropbox management using stock buybacks to sterilize their outrageous stock-based comp, and it made my day.

The Epsilon Theory notes I wrote about stock buybacks in 2019 are the most controversial thing we have ever published. They generated more anger, more arguments and more cold shoulders from the mainstream finance community than anything else we’ve done. Here’s my position:

When stock buybacks are used to sterilize stock-based comp (i.e., a company gives managers stock with one hand and buys it back from them with the other hand), no money is “returned to shareholders”. This is true whether or not management actually sells its shares into the buyback program.

Stock buybacks only “return cash to shareholders” to the degree that the buyback program reduces the sharecount. To the degree the buyback program does not reduce the sharecount, but simply sterilizes new issuance to management, it is purely a transfer of wealth from shareholders to management.

As the kids would say, it’s just math.

I think you would be AMAZED at the proportion of stock buyback programs that go towards sterilizing stock-based comp. I certainly was. I think it’s the greatest transfer of wealth in human history.

Not to founders. Not to entrepreneurs. Not to risk-takers.

Nope … to managers. To asset-gatherers. To fee-takers. To rent-seekers. To rakes.

Yep, Jamie Dimon is the rake. But then so is every S&P 500 management team. So is every Wall Street management team. That I’m aware of, at least. It’s the water in which we swim.

“Yay, Stock Buybacks!”

It’s amazing how many people get very angry at me when I say this.

Anyhoo … in addition to The Rake, here are the notes that started all the fuss.

— Ben Hunt | June 15, 2021 | 4:04 pm

“Yay, Environment!”

In Epsilon Theory-speak, we use “Yay, Good-Thing!” as shorthand for a narrative that takes a linguistic construction that we all agree is a Good Thing (something like “capitalism” or “freedom” or “democracy”) and turns it into a behaviorally powerfully argument for something that is decidedly not that Good Thing, but can be painted with other behaviorally powerful words into something that sorta kinda looks like that Good Thing if you squint really hard and you say the behaviorally powerful words loudly enough.

In rhetorical construction, “Yay, Good Thing!” is a variation on begging the question (in the correct way of understanding that phrase, where the conclusion is assumed in the proposition), or if you’re in marketing or sales you would recognize this as a variation of the assumptive close. The typically-but-not-always unspoken corollary to the “Yay, Good Thing!” narrative construction is “You’re not against Good Thing, are you?”, which is the linguistic stick to the “Yay, Good Thing!” carrot.

Socrates would call “Yay, Good Thing!” sophistry, and he hated the Sophists with a deep and abiding passion. Same. In the modern world, the Sophists are powerful government and corporate interests (aka the Nudging State or the Nudging Oligarchy if we’re going to continue in Epsilon Theory-speak), and the “Yay, Good Thing!” construction is their go-to narrative weapon in the Forever War of stripping away our autonomy of mind.

If you want to read more about our take on “Yay, Good Thing!” narratives, here’s the Epsilon Theory note that started all that.

Anyhoo … I was thinking about “Yay, Good Thing!” today because of how the “Yay, Environment!” implementation of this narrative device is being used to shape the politics of two issues that we’ve been writing a lot about recently: work and crypto.

“Yay, Environment!” is now one of the primary threads in the narrative-world battle over the future of work.

It’s a very powerful narrative thread. It’s a big reason why “Remote work is here to stay!” is winning this narrative war, and you are going to see a lot more “Yay, Environment!” rationalizations for remote work policies in the future.

Similarly, “Yay, Environment!” is now one of the primary narrative threads in the narrative-world battle over the future of Bitcoin.

Here’s the latest, from Elizabeth Warren, but you’re no doubt familiar with Elon Musk’s oeuvre here, as well.

And yes, this construction of “Yay, Environment!” does indeed speak the usually silent part – “You’re not against the Environment, are you?” – out loud. And yes, you’re going to be seeing A LOT more of this narrative. Not because it’s right. Not because it’s wrong. But because it WORKS.

It’s all just another weapon in the ongoing narrative war for Wall Street control and US Treasury visibility over Bitcoin.

— Ben Hunt | June 10, 2021 | 9:24 am

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

By Ben Hunt | June 23, 2021 | 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 | April 28, 2021 | 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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Sometimes a Cigar is Just a Cigar

By Ben Hunt | May 22, 2015 | 0 Comments

More on Information Theory.

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Recent Notes

When Narrative Takes Flight

By Rusty Guinn | October 14, 2021

We find ourselves together now at the stage of the Widening Gyre in which your political identity now determines the reality you wish to accept about three days of moderate operational difficulties at the ninth largest global airline, as measured by passenger-miles.

Read more

No Time to Die: China Banks Edition

By Marc Rubinstein | October 7, 2021

With $300+ billion of assets, Evergrande is big, but if you want REALLY big, take a look at the balance sheets of Chinese banks.

ET contributor Marc Rubinstein was there at the beginning when Chinese banks went public, and he’s here now to review the sector.

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How Lucky You Are To Be Alive Right Now

By David Salem | October 7, 2021

ET friend and contributor David Salem is back!

Here with his Constitution Day address at Middlebury College, David makes the rich tradition of academic speeches richer still, with nods to the Founders and Vitalik Buterin alike.

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The Uncontained Spark

By Ben Hunt | October 1, 2021

There is an uncontained spark in the financial world today, a spark that emerged from the unlikeliest of places, a federal courthouse in Florida.

It’s a spark with the potential to light a searing bonfire under Robinhood and Citadel.

#BITFD

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Zeroism and the Allocator Status Quo

By Matthew Edwards | September 21, 2021

ET contributor Matthew Edwards pushes back on seven rules that allocators often apply to new managers.

1) We don’t do crypto.
2) We only invest in what we know.
3) We never pay full fees.
4) We prefer fundamental investment strategies.
5) We seek strong alignment of interests.
6) We cannot be greater than x% of a fund’s total assets under management.
7) We require a minimum track record of X years.

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Unanchored

By Brent Donnelly | September 15, 2021

ET contributor Brent Donnelly starts up where he left off, with a new launch of AM/FX and a new riff on the classic ET note, “Snip!”.

In the immortal words of Hunter S. Thompson, when the going gets weird, the weird turn pro!

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Whitestone Bridge

By Ben Hunt | September 11, 2021

Our true enemies on 9/11 – the Deep State of Saudi Arabia and the Deep State of Pakistan – are our true enemies still.

And we won’t defeat them until we bridge our petty divides.

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The Green Protocol: A New Vision for Crypto, Pt 2

By Ben Hunt | September 8, 2021

The Green Protocol is a set of rules for the tokenization of symbolic betting markets in positive social good.

I think this is how crypto saves the world.

Our first step on this new path? Let’s plant one billion new trees in North America over the next ten years.

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Cursed Knowledge #5: Hot Coffee

By Harper Hunt | September 2, 2021

The Epsilon Theory podcast is free for everyone to access. You can grab the mp3 file below, or you can subscribe at: Cursed Knowledge is…

Notes from Camp Kotok 2021

By Brent Donnelly | August 27, 2021

ET contributor Brent Donnelly with an end-of-summer compilation of the top–of-mind topics at Camp Kotok!

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Prophet of the Pandemic

By Luke Burgis | August 26, 2021

Sophocles knew it. Dostoevsky knew it.

Disruption to the biological order and disruption to the social order are one and the same.

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Afghanistan and the Common Knowledge Game

By Ben Hunt | August 23, 2021

When the State Department announced on August 12th that it was removing all remaining non-essential personnel from Kabul within 3 days and was considering a relocation of the US embassy to the more defensible airport, the fall of the Afghani government became common knowledge.

And that’s when everything fell apart.

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The Afghanistan Narratives

By Rusty Guinn | August 17, 2021

We are in the very early innings of the narrative formation around responsibility for the outcome in Afghanistan. Steel yourselves for weeks of gaslighting from every angle. Hooray.

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ET Podcast #13 – Wanting

By Ben Hunt | August 17, 2021

It’s the only question that really matters here in the Age of Nudge: why do we want what we want?

A conversation with Luke Burgis, author of “Wanting: The Power of Mimetic Desire in Everyday Life”.

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Cursed Knowledge #4: The Olympics

By Harper Hunt | August 16, 2021

The Epsilon Theory podcast is free for everyone to access. You can grab the mp3 file below, or you can subscribe at: Cursed Knowledge is…

How a Narrative Goes Viral

By Rusty Guinn | August 10, 2021

It is a fact that migrants here illegally have spread, are spreading, and will spread Covid-19.

It is also a narrative. A dangerous, seductive, rapidly spreading narrative that will cause many of us to shut off our minds to other facts, which is what narratives DO.

How do we parse the two?

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Sauron Remains Undefeated

By Ben Hunt | August 9, 2021

Here’s my take on this weekend’s Senate wrangling over the infrastructure bill, and the implications for crypto.

The US Treasury is the Eye of Sauron — a gigantic panopticon tower that sweeps the world with its unblinking gaze, seeking out the owners of power, i.e. money.

And Sauron remains undefeated.

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Nudging State, Noble Lies

By Ben Hunt | August 4, 2021

In the world of Nudge, everyone is an ad man, and the government is just the biggest, baddest ad man of them all.

I’m not so naive as to think this isn’t a good description of what modern government is.

But it’s a terrible prescription for what modern government should be.

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Cursed Knowledge #3: The Molassacre

By Harper Hunt | July 26, 2021

The Boston Molassacre was one of the great tragedies of the early 20th century. So why isn’t it treated like one?

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Ever Grande

By Marc Rubinstein | July 26, 2021

The Chinese real estate developer Evergrande is the epitome of Too Big To Fail. It is truly Ever Grande.

So what happens if it does, in fact, fail?

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3 Strikes They’re Out

From the ET Forum ...

If you hadn’t heard about the potential IATSE strike allow me to catch you up to speed. IATSE is the much needed abbreviation for the International Alliance of Theatrical Stage Employees. They’re the thousands of people who make movies and television. All those names in the credits, that’s them.

And they’ve had enough. The crew works horrible hours with no breaks. Imagine your call time to work was 6am. But you have to wake up at 4am to get there in time and set up. Then work continues non stop until 9pm. Go home, get some sleep, and do it all again the next day. That’s not counting overtime. And the pay is not worth it.

Now the IATSE is ready to strike. They’re looking for a few things. One is better pay that accurately reflects the work done for streaming services. Technically shows produced for streaming services like Hulu and Netflix don’t count as a series and workers don’t get the higher pay that entails. So Stranger Things and The Handmaiden’s Tale are TV enough to win Emmys, but not to pay their crew.

IATSE is in the sixth day of talks with the Alliance of Motion Picture and Television Producers right now. They hope to come to a resolution, but they also have picket signs ready. And if the strike does happen, Hollywood is in trouble.

Remember how all the movies and shows from 2008 were super delayed, short, and just really bad? That’s because of the writers strike. Now imagine if it’s not just the writers. It’s the lighting tech. The cinematographer. The grip. The boom mic guy. If they go on strike Hollywood is shut down.

The IATSE expects to reach an agreement within days. But just in case, don’t hold your breath for Season 2 of Emily in Paris.

— Harper Hunt | October 12, 2021|

Coming Soon to CBS

From the ET Forum ...

The Activist is an upcoming reality show that really shouldn’t have made it past the “there are no bad ideas” stage of development. It’s the most tone deaf, disconnected concept I’ve ever seen.

The basic idea is that the show will feature six activists from around the world and follow them as they “compete in missions, media stunts, digital campaigns and community events”. Think Shark Tank meets The Apprentice. Contestants will be judged on how much social media engagement they receive, and the grand prize is an opportunity to attend the G20 Summit in Rome.

Yeah.

Contestants will be judged not by quality of their work but by the quality of their Instagram captions.

The show and its marketing campaign present this very shallow idea of supporting activism and getting them mainstream attention. But the show isn’t prepared to follow through on helping create change. The prize isn’t money or manpower. It’s a chance to beg powerful people to pretend to care.

At its core, this show is not about activism and social change. It’s about social media attention. Just look at the judges! Usher, Priyanka Chopra Jonas, and Julianne Hough have no experience in activism aside from Instagram posts and speaking at charity events. They’re not leaders of change. They’re mid-level celebrities who wouldn’t be out of place judging The Masked Singer.

The show has been justly lambasted on social media as literally everyone has a problem with the premise. It’s been called “performance activism personified” and it is. It’s encouraging participants and viewers to see activism not as something meant to enact change, but a way to get attention. It sets a standard that successful activism isn’t making change, it’s getting likes and views. It ignores the small, boring, and thankless work that is done on a grassroots level. The work we need to see more of.

We don’t need more beautiful people talking about how they use metal straws to save the sea turtles. We need more people who are willing to do the work. This show isn’t doing anything to help anyone and I, for one, will not be watching.

— Harper Hunt | September 16, 2021|