Superstorm Powell

4+

Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it.

But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world.


Powell Suggests Fed Could Cut Rates If Trade Spat Escalates  [Wall Street Journal]

Federal Reserve Chairman Jerome Powell said the central bank is closely monitoring the recent escalation in trade tensions and indicated it could respond by cutting rates if the economic outlook deteriorates.

The crazy thing about Superstorm Sandy was how big it was. It wasn’t the most powerful hurricane to hit the US, although it certainly packed a punch. But it was one of the largest storms on record in this country, with what’s called a “wind diameter” of more than 1,000 miles, and it set a record in much of the northeastern US for the lowest barometric pressure ever recorded.

How did Sandy get so big? After passing over Cuba and looking like it might dissipate into a few days worth of rainy weather, it merged with another low-pressure system and was re-energized.

We’re seeing the same thing in narrative-world.

The narratives of Central Bank Omnipotence and Trade & Tariffs have merged into a superstorm.

Source: Quid, Epsilon Theory

This is a narrative map of all unique financial media articles about the Fed in May, clustered by the sub-narrative of all the things that people talk about in regards to the Fed. That big blue circle is the effective center of gravity of this narrative map, and it’s comprised of three topics: Fed interest rate cuts (aqua), broad trade war coverage (red), and farmer-specific trade war coverage (dark blue).

There is no conversation about Fed rate cuts today without an enmeshed conversation about the China trade war. They have become a single memetic structure with an enormous gravitational pull.

What do we do in our ET Professional service? This.

We take five core macro narratives – Inflation, Central Bank Omnipotence, Trade & Tariffs, US Fiscal Policy, and Credit Cycle – and we evaluate their shifting structures. Not just their sentiment, but their STRUCTURE. Because when you see a structure like this, and you can track its movement across the map of narrative-world, you know it’s going to pack a punch.

To learn more about all of our subscription services, check here.

To learn more about ET Professional in particular, check here.

There’s nothing like this on the market today. And we’re just getting started.


4+

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You'll get two or three of these emails every week, and your email will not be shared with anyone. Ever. It's our effort to spread the word about what we're doing, and allow you to read more Epsilon Theory!

2
Leave a Reply

Please Login to comment
  Subscribe  
newest oldest
Notify of
CMG
Member
CMG

Fury isn’t a useful reaction. At the same time, this process is indeed infuriating. Trump badgers Powell to lower rates “like one point” > Trump manufactures a trade war with tariffs that affect the economy > Powell lowers rates because we can’t have a market decline > Trump reduces tariffs > Trump claims to have fixed the economy just in time for the 2020 election. I allow myself plenty of room to be wrong, but it all feels to obvious. And yet…

1+
Lloyd
Member
Lloyd

This! It’s one thing to hear them always in the same breath, but seeing it form over the Atlantic of the Narrative Machine is so helpful. Thank you.

1+

The Daily Zeitgeist

One Narrative Keeps on Trucking

By Rusty Guinn | December 9, 2019 | 4 Comments

Trucking is dying and truckers are suffering along with it. The fact that the latter is the framing being chosen for the issue should pique your interest.

Read more

Presented Without Comment

By Ben Hunt | December 4, 2019 | 1 Comment

Regardless of your personal views pro or con, if you don’t see that a powerful narrative backlash is forming against corporate management enrichment, you’re just not paying attention.

Read more

Our Dumb World

By Rusty Guinn | December 2, 2019 | 0 Comments

Sometimes you really have to wonder how on earth an article makes its way into the Zeitgeist. Sometimes it’s best not to know.

Read more

The Rent Is Too Damn Low

By Ben Hunt | November 25, 2019 | 8 Comments

It’s so weird that everyone who would throw an unholy temper tantrum at – gasp! – rent-controlled apartments is just fine with rent-controlled money.

“Yay, crumbs!”

Read more

OK, Boomer

By Ben Hunt | November 18, 2019 | 4 Comments

I’m a fan of FedEx the company and Fred Smith the founder. I think they are both crown jewels of Western capitalism.

But if I hear another lecture from Fred Smith and his fellow billionaires on trickle-down tax cuts and the “benefits to the United States economy, especially lower and middle class wage earners”, I’m going to lose it.

Read more

The Rake

By Ben Hunt | November 12, 2019 | 10 Comments

Jamie Dimon is the rake.

Read more

DISCLOSURES

This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.

Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.