Stalking Horse

Livre de Chasse (1387)
Neel Kashkari

That illustration above is from one of the most influential books in the world, Livre de Chasse (Book of the Hunt), constructed by Gaston III, Count of Foix between 1387 and 1389. Gaston, more popularly known as Phoebus, was the preeminent hunter of his day, and this illustrated manuscript, presented with great acclaim to Philip the Bold, is an amazing compendium of every hunting technique that man has developed over the thousands of years we have hunted beasts.

This illustration shows the hunting technique of the stalking horse.

That photograph of the rather intense young man is a 2006 picture of Neel Kashkari, who was then the Assistant Secretary of the Treasury under Hank Paulson, and who is today the President of the Federal Reserve Bank of Minneapolis. Kashkari recently wrote a well-publicized opinion piece in the Wall Street Journal, calling for the Fed to stand down from its program of interest rate hikes.

Neel Kashkari IS a stalking horse.

What is this hunting technique? I’ll let Jeremiah Johnson and Bear Claw explain.

[Jeremiah and Bear Claw hunt a big elk buck]

Jeremiah:  Wind’s right, but he’ll just run soon as we step out of these trees.

Bear Claw:  Trick to it. Walk out on this side of your horse.

Jeremiah: What if he sees our feet?

Bear Claw:  Elk don’t know how many feet a horse has!

– “Jeremiah Johnson” (1972)

Elk don’t know how many feet a horse has. 

Neither do we.

Or for a different sort of example, I’ll Let Vito Corleone explain.

“Tattaglia is a pimp. He never could have outfought Santino. But I didn’t know until this day that it was Barzini all along.”

Tattaglia was a stalking horse. Barzini was the hunter standing behind him.

A stalking horse is a familiar presence that a hunter hides behind in order to get close to his prey. And when WE are the prey, the stalking horse is almost always a familiar Narrative or Abstraction, to use the Clear Eyes, Full Hearts lingo, presented by a familiar Missionary

Just as the elk is hard-wired to trust a horse standing in a field no matter how many legs it has, so are we hard-wired to trust, say, Kevin O’Leary appearing on CNBC no matter how many conflicts of interest he has.

I mean … we all know that it’s weird that CNBC has Kevin O’Leary on to talk about everything under the sun. It doesn’t feel quite right to us elk. And yet there he is again. Hmm. I guess I’ll listen to what he’s saying. Hmm. Well, I guess that certainly sounds convincing. He certainly says it with confidence and conviction.

You know what my number one tell is when I’m trying to figure out if a financial advisor is actually just an elk dressed up in human clothes?

CNBC is playing non-stop from the TV hanging in the corner of his office.

And yes, it’s always a him.

Every Missionary – meaning every famous politician or central banker or investor who appears on CNBC or CNN or Fox – understands perfectly well how we are hard-wired like elk.

And every status quo institution – meaning every large corporation or political party or government bureaucracy – they know it, too. They stand behind their Missionaries and their familiar-sounding words and messages in order to hunt down their true quarry without spooking anyone. And by anyone I mean us. This is how the Nudging State and the Nudging Oligarchy work.

How is Neel Kashkari a stalking horse?

He’s a familiar Missionary presenting a familiar narrative. The Fed’s monetary policy is all about helping Main Street. The Fed should pause on any more interest rate hikes “to allow as many Americans as possible to participate in the recovery.” If the Fed continues “tapping the brakes”, then the primary impact will be “restraining wage growth.” 

This is not a lie.

But it is not the truth. It’s not even a half-truth. It is a cartoon of populism broadcast as a promoted opinion piece in the freakin’ Wall Street Journal. It is a constructed one-tenth truth in service to the interests of two of the most powerful hunters on earth – Wall Street and the White House.

Why are Wall Street and the White House freaked out over the Fed’s interest rate hikes? Because they’re worried about getting “as many Americans as possible to participate in the recovery”? Bwahahahahahahaha!

NO. They’re worried about the stock market going down. Period. Full stop.

The most direct threat to rising financial asset prices is the Fed and their interest rate hikes. It’s the most obvious Horseman of the Investment Semi-Apocalypse, and it’s what Wall Street and the White House desperately want to stop. But they can’t just come out and say, “hey, c’mon guys, we need to juice the stock market here before we have an election and year-end bonuses!” because that would be … you know, an unpopular thing to say. So let’s get good old old Neel Kashkari, who for all I know actually believes that this one-tenth truth he’s writing is the whole truth, and let’s put him out front as our stalking horse. I mean, it wouldn’t be the first time that Neel Kashkari has been a stalking horse (cough, cough … Hank Paulson and TARP). Or the second time (cough, cough … PIMCO and equity mutual funds). Or the third time (cough, cough … California Republican Party and the 2014 governor’s race).

Look, I’m not saying that we can be anything other than elk. We’re not going to change the power dynamics of the hunter and the hunted. But we can be wary elk. We can be survivor elk.

We can see our world differently, looking through the familiar narratives and abstractions to see the powerful interests hiding behind those narratives and abstractions.

Clear eyes, friends. Clear eyes.

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  1. Ben, I don’t want to mix metaphors, but I also saw him as a trial balloon. I think the fed wants to stop; I think they want to reverse. But they need political cover to do it, so every so often they put someone out there to test the waters. I’m not disagreeing. I was just seeing another angle.

  2. Ok, but the big question is will they get their prey? I understand the narrative analogy well, and I’ll assume you’re right. The problem is we’re all being forced to take bets on the outcome of their hunt.


    Few things in this article which i can decipher based on reading episilon theory:

    1. Accounting rules (side pocketing) don’t change the reality.I doubt they can be marketed as saviour for small investors. Small investors are used as stalking horse in this case.
    2. Owning up mistakes is not in vogue.Just after first signs of trouble you are ready to surrender your self to the whims of the regulator - loosing freedom.
    3. In the end its all about profits, you just want to keep less aware investors invested in your fund by creating a parallel and illusionary NAV.

    Any correction and additional insight would be really helpful.

  4. Bump to this gem of an article. This is the exact same narrative game being played today…. But in the inverse direction.
    Check out the messaging too in 2018 here about the Fed needing to raise rates to tame wage inflation. Lmao!

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