It’s all been leading up to this.
We’re sharing the summary results of our core investment research project with the Narrative Machine.
If you’ve ever wondered, “Gosh, how DO you apply these cool narrative maps to an actual investment strategy?” … well, here’s your answer.
ET In Full
The recent rally in U.S. equities is largely a result of market participants believing they can have their rate-cut-cake and eat it too.
ET contributor Pete Cecchini doesn’t think the Fed will cut rates proactively. Will they cut? Sure. But only if the real-world economic data deteriorates further. Which it probably will.
But don’t eat that cake just yet.
We are the human animal.
We are non-linear.
We ARE a song of ice and fire.
It’s a song that has built cathedrals and fed billions and taken us to the moon. It’s a song that can do all of that and more … far, far more … if only we remember the tune.
The Pack remembers.
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.
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?
ET contributor David Salem is back with five core tenets for achieving 5+% real returns over the next few decades.
It’s all a must-read, but I’m gonna highlight #4: “Favor equity investments in companies employing or serving primarily people with abundance as distinct from scarcity mindsets.”
This is the foundation for behavioral economics on a macro scale.
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!”.
ET In Brief
In which readers ask how to apportion the market effects of Fed jawboning and Fed asset purchases and sales (to the extent that the latter is not just part of the former’s cartoon).
In tangible terms, I’m not sure that Michael Cohen’s flip on DJT has done much to change anything, as much as the left would like it do. From a Narrative perspective, however, it is a big deal.
In which we reference an interesting article from Colin Woodward arguing against Common Knowledge of the rural/urban divide in the United States.
We write about the Common Knowledge Game a lot in Epsilon Theory, because it’s the central game of crowds and narratives.
Common knowledge is something that we all believe everyone else believes.