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The Mandarin Class

The Mandarin is the latest super-villain in the MCU (“Marvel cinematic universe” for tho
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  1. One of my clients is married to a (now retired) Federal judge. Whenever we would meet for our quarterly conversations I would give him my thoughts about this company or that one, we’d figure out if we could make improvements to the portfolio, and then he’d tell me he’d get back to me next week. See, he had to talk to his wife first and make sure that she wasn’t hearing any cases–at the moment or on the docket for the future–that involved any of the companies I was recommending. I worked with them for six years and they were always vigilant and adhered to the rules. Turns out that was the sucker move.

  2. Who, besides the mandarins themselves, is against this? In the past 20 years, I can’t recall even one regular person arguing that senators and congresspeople should be allowed to flagrantly trade on inside information.

    I used to work for a mutual fund company, in a freaking sales role, and I had to pre-clear every trade. My trade requests to trade a security would get rejected automatically if any fund had any open order (buy or sell) on that security. Our complex had a couple of 1-2 star large cap core funds that were in net-redemption virtually everyday, so that meant that I couldn’t trade most S&P 500 names on most days. I had to get a hardship exemption just to come up with the downpayment for my house. “Well, this is just one of the sacrifices you need to make in order to work in financial services.” was the standard refrain of management.

    There should absolutely be some personal sacrifices attached to the being elected or appointed to a position in which one is entrusted with the power to ensure the common good.

  3. Avatar for Zenzei Zenzei says:

    I would consider a different question…

    “Who is going to take on the formidable task of taking on the Mandarins to make real change?”

    the system has too much momentum and lacking a mechanism for fundamental change, momentum rules the day.

    This problem falls in the zone of important enough to get animated about, but not important enough to go out and expend real energy and effect change.

    At least, until all the walls come tumbling down and the inertia is gone.

  4. I never thought I’d want to pick up a history book and read all about Mandarins, until I read your post. Well done!

  5. Kleinbloo, loved your insights and thoughts ( and I’m definitely buying “Superpower “ ) , right up until the very end when you stated “crypto” is going to solve this (or anything).

    I’m with N Taleb on crypto, at least the coin version, it’s a bubble, akin to the Tulip bubble of 400 years ago in Holland ( without the aesthetics)

    The most speculative instrument in the most speculative market in our nation’s history.
    Thanks Federal Reserve…………

  6. Kleinbloo,
    First thought – Oof ! That was harsh. One reason I like “the pack” so much is because people don’t rip into other pack members like it’s no big deal. I like what Ben and Rusty have created, Don’t try to turn this good thing into something ugly.

    Honestly, I meant it when I complimented you on the great points and research you did on the mandarin history, it really was interesting.
    It was when you closed with “crypto fixes this” that I had my doubts. I never said

    Further , Taleb is certainly not the only serious thinker out in the universe who have doubts about the legitimacy of crypto-coins. Implying I depend on him for my reasoning isn’t fair or enlightening. BTW, dismissing him based on one comment vs the thousands he has made is odd.
    Who do you admire that is a regular commentator that has NEVER said something off to you?
    I and the other readers would love to find that perfect human being. Please tell us.

    What best encapsulated your comment has to be

    I’ll close with that and hope you will be more civil, understanding and empathetic in the future

  7. Avatar for jrs jrs says:

    I’m with Taleb as well, but weakly, and don’t own crypto because (1) I don’t have enough time to learn enough not to get scammed and (2) Taleb’s black paper on BTC.

    But following Soros’ Human Uncertainty Principle, I’m not convinced that fundamentals actually matter at this point. What concerns me is the faith of a huge group of people in the idea of crypto. Everyday people who work with me, who make normal amounts of money and have significant amounts of it invested in crypto, amounts that can rival their annual salaries. Because, eg, they all know this one guy we work with who made a quick $30k on Doge.

    I hope I am wrong and these people are right and they all FIRE before SHTF or whatever, because frankly their jobs are harder than mine. But I fear what will happen when/if crypto falls and they are proven wrong and lose their money. I hope they will be adults about it and take it lying down, but they are so passionate and so incendiary about this that I’m not 100% sure.

  8. When I read this exchange my first thought was to create a new topic on this Forum called Forum Decorum. Taken in the context of “treat others as you would like to be treated yourself” this exchange merits some consideration. @kleinbl00 would not like being told that neither nobody needs his/her answer on a topic that where he/she has specifically replied to. @kleinbl00 is imo clearly in violation of Forum Decorum.

    Some quick thoughts:

    1. If we are a pack interested in the proper functioning and well being of the pack then @psherman should not be alone in standing up to a violation of Forum Decorum. I am involved in the fisheries and seafood industry. It is a very special industry because to a great extent it’s grounded in real people and community, like a pack, and that has a lot to do with treating others the way you would like to be treated yourself. If I were in @psherman place I would appreciate if a fellow pack member would speak up and stand with me on this for reinforcement of Forum Decorum. I have experienced this treatment in the industry and have appreciated it greatly. It helps me to formulate thinking around a pack mentality.

    2. Many of these discussions are emotionally charged, mixed in with other stimulus which we can’t escape, and many of us work or have worked in a full-contact environment . If a comment made by another pack member rubs you the wrong way, try to generously apply a liberal interpretation of their comment with a view to treating others as you would like to be treated yourself.

    1. There is a diverse and deep pool of expertise on this forum. We should be able to express differing points of view without it being taken as disregarding the expertise of others. A lot of views and expertise are shared on here each day and that is valuable to us all.
    2. When expressing a differing point of view, let us all take care to treat others as we’d like to be treated ourselves.
    3. "forum decorum’ may not even officially a thing, it just rhymes and is something to think about as we interact on here.
  9. Avatar for 010101 010101 says:

    For the sake of not arguing about trivia, I have been trying for days to ignore your use of the phrase ‘common good’.
    I can bear it no longer. I must say it:

    There is no such thing as the common good. It is a phantom of wishful thinking. It has been used by racoons to gain a
    socialist mandate too many times, for me to stay silent. The common denominator that it alludes to is not determined.
    Politics is mostly about resource allocation, a heterodoxy of distributing capital .There are many people on this planet who deserve all the help that I can spare. There are also many who do not. What is the commonality that can be supplied
    with goodness? We are an incredibly diverse species, there is less and less homogenous about us everyday. Please do not lump what is ‘good’ for a 100 year old Chinese national into the same frame as what benefits a western teenager, because in any practical sense, you can’t. The problem is obvious. Politics must pick winners and losers.

  10. Thank you for this important articulation. Manipulation of public sentiment by framing things as “common good” is one of those things that, once you’re aware of it, you’ll see it everywhere. Most initiatives focused on climate change are framed using some variation of the “common good” argument but clearly some will benefit more from that “common good” than others.

    A quick search of the topic turned up this article from The Atlantic which in a nutshell argues that if you don’t believe in the “common good” then you’re not a “good” person.

    You believe in the common good, don’t you? Don’t you??

  11. It has been a long time since I read the Black Swan. But, the underlying theme was calling out the arrogance of Wall Street and its very imperfect models. Reminding the reader that narratives form as substitutes for complete understanding of complex systems that are opaque to disentangle and are actually much more fragile. Only minor shifts in common knowledge can result in supposedly impossible to predict outcomes. BTW, these are surely things Ben and Rusty keep front and center in the ET content. My takeaway, bolstered by the firm he built with Mark Spitznagel (Universa), was to construct a portfolio without this dangerous set of blind spots so that it would be robust to the real world and not crumble when the “black swans” inevitably arrived.

  12. I think you nailed it on the head with this question.
    I remember in a political science or economics class we discussed concentration of political will. When a policy or status quo results in benefits being concentrated for a small group but the risk and cost is spread out over a large group the equilibrium stays the same, despite the large group disagreeing with the status quo.

    It’s all well and good to fight the establishment until you are the one that has to lead the charge.
    Add in that one can’t pay the bills by addressing systemic corruption and we’ve got a whole lot of incentives for status quo.

    In my personal effort to write posts with solutions, rather than simply highlighting problems, this seems like the kind of problem that 501c4’s are designed to address.

  13. I am going to pick up on this idea of The Mandarin Class and expand on it a bit.

    Who do you think is ruling us?

    For example who decided that ALL the Social Media companies simultaneously decided that of all the news that flowed that day --the New York Post article concerning Hunter Biden’s laptop needed to be taken down and not shared?

    That all the TV stations would cut away from Presidents Trumps news conference if he mentioned election fraud? Think a meeting was called beforehand or just every major news outlet decided that we cant handle the lie in unison?

    Some people go to jail when they lie to Congress , Some do not - who decides?

    Some military brass are praised as whistleblowers saving the the Republic , others are thrown into the Brigg when they speak out against their superiors --who decides?

    Who are the people President Biden openly refers to , telling him what questions he can answer and if he can take questions at all?

    How about a reporter that vented at one news organization- when her story on Jeffery Epstein was squashed , and then was fired months later at a different news organization when it was revealed ?

    Who decides that the most liberal Chief Justice in a generation has to be protected from her own words when her words don’t fit the narrative that the fiat news is pushing at the moment?

    It feels like we have Mandarin Class aright , and it runs ALOT deeper than some frontrunning.

  14. 100%. This falls in the exact same bucket as Term Limits, and the Constitutional Apportionment Amendment. Necessary structural reforms that will not be implemented because it relies on the Mandarins themselves to implement them. Turkeys would never willingly vote to implement Thanksgiving dinner.

  15. Cause if you don’t believe , that would be unfortunate.

  16. Avatar for jrs jrs says:

    As I said, I don’t have the time either way right now, because ISTM the topic is pretty complex. And while I do think Taleb is a bit of a rhino and is very obviously inconsistent on many things, at the same time his philosophy has improved my quality of life drastically, and so this is my default position.

    I hope to learn more about crypto in the future, but I already own significant index funds in my 401(k) that I can’t reasonably liquidate for many years, so I figure my first priority should be to protect them. Hence, my first investing priority when I free up some time in a few months will be to learn about tail risk hedging and other things to do with options in order to protect the stash I have. Spitznagel seems to lay out a good approach in his new book Safe Harbor, but it’s unclear to me whether small fry investors like me with less than a 7 figure portfolio can actually implement it.

    Otherwise, following the boomerlicious rantings of John T Reed, I’ve become more interested in investing in things I can eat, and live in, and that otherwise have value in use. As rich as crypto might make me, the fact that I can’t do those things with it (or stocks or bonds for that matter) also makes me less interested at present.

  17. Agree. As long as the Mandarins can vote on their own pay raises, their own benefits and on any legislation that affects their position, there will be no checks or balances. Have long thought that each new senator and representative should be given a civil service GS # upon taking the position, given a Civil Service benefits and rules handbook and governed accordingly. It may be naïve to believe that they would receive pay raises, retirement benefits or be disciplined under the same guidelines as every other civil service employee, but it would at least be something tangible beyond the threat of a recall election.

  18. Thank you for capturing my rage.

  19. A modest proposal:
    Any person who occupies an appointed or elected position of trust and authority in the Federal government must be required to liquidate their assets and place the proceeds in a trust paying only the going rate for a savings account. They must pay their entire salary, and any other remuneration they receive (say, for book deals or speaking engagements) into a separate account, likewise paying only the bank rate of interest. During their term of office, they will live in barrack conditions on a modest stipend tied to the median salary of their district, state, or country. On the expiration of their term of office, they get their original assets back (along with bank interest). But the populace gets to vote on whether the office holder gets all, some, or none of their remuneration account back.

  20. Avatar for jrs jrs says:

    It’s a good start. But how would this prevent the revolving door issue where former elected officials are offered plum positions in private industry after they step down, in exchange for helping the raccoons while in office?

    I like Barry’s idea of a good stipend while they’re in office, and possibly after they leave office, in exchange for very strict rules about what they do with their lives afterward. Of course this is probably all very naive and theoretical and the people who are most motivated to seek office would find a clever way around it…

  21. There is a class of people who we can categorize as Mandarin-adjacent, but that’s not a catchy enough name.

    I’m thinking specifically of the scientists who ran cover for Fauci & Co when the lab leak hypothesis was still a crazy conspiracy* and not, you know, a viable alternative that should be studied. A whole lot of Experts :tm: went pretty far out on various limbs to assure us that it was impossible. When you dug into the careers of many of those people you found that they relied heavily on the funding of NIH, NIAID, and their money laundering operation Eco Health Alliance. So they’re not really Mandarins per se, but they cannot live without staying in the good graces of them. And I suppose it’s warm enough under the dragon’s wing that they felt no need to keep their reputations intact when the tradeoff was their livelihoods. We should have a term for this particular class since they’re the ones who are carrying out the missions of the Mandarins and are functionally servants to them.

    *FTR it was never a crazy conspiracy to the people who had nothing to lose if it turned out to be true. It was only a conspiracy to the people who were invested in it being untrue.

  22. So while Congress day trades individual stocks on inside info, and Fed governors go long and short index futures, you are hamstrung by a limited set of long-only index funds with no ability to hedge the downside, or de-risk, or express your interest in a very specific industry or company.
    –Sounds like you aren’t part of the Mandarin class.

    To protect seems like having the Fed continue supporting the index by keeping rates low for companies to finance share buy backs.

  23. In our analysis we refer to these people as “old boys”. Old boys exist within a constructed network of old boys, and they have an essential role in the system - to tow the line of whichever dominant mandarin or oligarch under which their network is intended to operate. In exchange for being “good old boys” they receive all sorts of preferential treatment and enjoy all sorts of privileges. Thirty years ago there were practically no scientists or women among the old boys, but society has changed a lot and now scientists and women bring real strategic value to old boy networks and there is no shortage of them willing to embrace the attendant opportunities for power and advancement.

  24. Avatar for jrs jrs says:

    No, I’m not a Mandarin, although I might’ve swung that way if I was more skilled at swallowing my own vomit. I’m just glorified shift-work Labor that is rather highly-paid… for now. Not gonna repeat the mistake of putting too much of this pay into my 401(k)/CBP.

    I don’t fool myself that I have any edge in any specific industry or company, so I mostly just stick with VTSAX/VTI. That is the first part of the Boglehead religion. The second part, with which I take issue, is that therefore we should all just relax and have faith that everything will go up forever on average, because American exceptionalism or something. I need a bit more personal control than that.

    Not strictly long-only as I can buy calls and puts and also write a subset of them (ie, Vanguard Level 2). I can also swap out the specific funds/ETFs/stocks I own. But I know next to nothing about options at this point, except that the simplest possible strategy to buy protective puts on VTI does not seem cost-effective at present.

  25. Sorry. I was a little too cryptic. Not actually targeting you. I was pointing out very specifically the hypocrisy in financial markets and how the Mandarins set up constraints to force others (you) into the opposite side of their trades, and limit your alternatives. Because apparently inside information of the highest order isn’t enough of an advantage already.
    Average Joe, working hard to contribute to the economy, saves most of his wealth in home equity and his company 401k with a broad range of typical long only index funds.
    Joe can invest in a much broader spectrum of investments in an IRA (still limited), his 401k is extremely limited. Long only, passive index, no option protection. That makes it easy for Fed governor day traders to scalp a few bps a day to their personal accounts.
    It makes me sick to think of the thousands of people who have sued large companies for real harm probably never considering at that moment they own that company in an index fund in their 401k and still do after losing. @bhunt writes about judges owning the stock. What about the plaintiff being forced to either own a company that killed their spouse, or select a far less ideal portfolio. I’ve thought about looking for someone to suggest they sue their retirement plan for coercion by not giving them any options other than to harm themselves.
    With current technology and costs, there’s simply no justification for such gross limits on the general population.
    Peter Thiel owned Paypal as a private start up in his Roth. And people are mad about his tax savings. If the average person with a large 401k balance has a friend with a good business idea, they can’t invest in it - at least not as far as they know. They don’t even know it’s legally possible (Mandarins do it). But your company might restrict in service rollovers to an outside IRA or self-employed 401k. The Mandarin owner of a company can change that rule for himself (move his assets to a more accommodating custodian) and then add the restriction back to keep assets in the plan if he wants.
    Democracy and freedom for my capital, but you aren’t smart enough to make your own choices. It might not be as bad in the US, but it’s certainly on the same spectrum with the limitations to the general public in China from bank wealth management products.

  26. Avatar for jrs jrs says:

    It makes me sick to think of the thousands of people who have sued large companies for real harm probably never considering at that moment they own that company in an index fund in their 401k and still do after losing.

    Exactly. The enemy is us.

    I’m actually 1099 and funnel it through my own S-corp so I should look into how to invest in my own ideas via a 401(k) as you discuss. (I imagine it involves dumping Vanguard?)

    Or I could just keep all my income in taxable, take the 34% fed+CA bracket hit, and try to wash this machine right out of my hair. To use an awful mixed metaphor.

  27. That last paragraph, bang on the money. My 12 Yr old Godson, smart as (High Functioning Autist) and all of his peers are for the lack of a better term “balls to the wall” on #BTC excetra.
    If it is the new padadigm, great good on him. Will be able to purchase his first house when the great Aussie property bubble pops in BTC. If it isnt what they hope it is, i would rather they learn that lesson sooner than later.
    As it stands, when we talk of generations and market cycles, anyone in the millenials or after is going to get crushed if this experiment in "markets"fails.
    The younger of that cohort might take #BITFD Literally

  28. Avatar for jrs jrs says:

    Yes, my US coworkers in their 20s-30s are the same. Going crazy for BTC, SHIB, SQUID, OMFGBBQ. And platforms that derivativize the same.

    I was in grad school during the GFC. I made $25k, just enough to pay the mortgage on a condo, whose value ultimately was flat when I sold and moved away 7 years later for the next part of my career. In retrospect I consider myself lucky that I didn’t have anything else to lose in 2008 and was too focused on academics to mess with speculation.

    Following reflexivity, I do have a tiny amount invested in GBTC, so I am part of the problem from one perspective. And I hope this time is different, just like the cover of Wired said it was in 1999, just like lots of people said it was in 2005.

    I also hope your godson is not a true believer and sees that he doesn’t need to go all Mad Max, but just needs to make enough off this thing to be more financially independent. Assuming the whole paradigm is not BTFD’d by the true believers shortly after they themselves are burned, again.

  29. Not sure if you have employees. Either way, you can do a self-directed 401k. But if you have employees, you have to allow it as an option to them. I’m sure plenty of plan consultants would spout off thousands of reasons it’s a bad idea to let employees have free reign of day trading their 401k accounts. If you don’t have employees, I believe you can do a solo-401k with most brokerages (would need to confirm w/ S-Corp taxed as self-employed). The restrictions I’ve seen are no shorting (short ETFs are fine), no naked derivatives without plenty of equity to back it up. (Level 3 options authority). There’s very little restriction with that.
    You can also custody retirement accounts at a self-directed custodian that can allow investments like directly owned rental real estate, or private equity. It’s expensive and there are very specific rules to avoid prohibited transactions (which you must absolutely understand). Pacific Premier Trust (former Pensco) is a popular custodian. That’s who Theil used for custody of his Roth IRA that had Paypal in it. Service can be horrible. The business model is not as profitable since they don’t make money off trading, money market expense ratios, or rebates from funds and ETFs. But you take what you can get.

  30. In Florida many if not dozens of trial and appellate court judges had material holdings in “banks” that they owned stock in while presiding over froeclosure trials, throwing people out of their homes during the GFR. www.peoplevmoney.com.

  31. Two questions I have about this topic are:

    Can some (or most or much) of the Mandarin class activities be automated or turned over to AI?

    Would that be a preferable alternative to the current scenario?

  32. @jtpocean brings up a great point. I’ll encourage people to look up Decentralized Autonomous Organizations (DAOs). This is another web3 invention that is in its infancy, but gaining steam rapidly. At it’s core it’s a group of people that come together around a shared resource or asset. Like all organizations, DAOs have a governance structure. DAOs are different in that their bylaws are coded and enshrined in the blockchain typically on “smart contracts”. Imagine real world bylaws or contracts where simple tasks are automated with “if/then/else” clauses. The funds are escrowed and automatically released to a predetermined party/parties only when the pre-programmed conditions are met. Governance and control for most DAOs are currently set up on a pari passu basis where each governance token has the exact same rights as every other governance token in that particular DAO. Right now most are set up as simple democracies, but with a secondary market for those governance tokens where they can be traded.
    The good news is that it takes most of the human out of the interpretation of the rules. The bad news is that it takes most of the human out of the interpretation of the rules. Rules are set in stone in programming language and the code is locked before tokens are minted. As you can imagine, there have been some spectacular blowups because of this. Imagine escrowing funds and minting tokens only to realize an error in your code. Something trivial might ensure that all of the escrow value is eternally enshrined inside some digital lockbox because the conditions for release are now literally impossible to achieve due to a typo!!! On the other hand ensuring the lack of any arbitrary or capriciousness brings value knowing that rules are followed with ruthless machine code precision.

  33. Many believe there’s a much bigger chasm between the current systems such as traditional legal, and ones like DAOs. Or at least that current systems are deeply entrenched requiring decades to unseat.
    They have failed to notice some developments that are quickly closing the distance.

    1. The extraordinary efficiency and standardization of corporate and capital structure in tech hubs. What was a lucrative legal practice 20 years ago, scheming to insert gotcha contract language leading to legal challenges, is now a few pages, widely accepted, and generic. Legal inefficiencies have been mostly cut out. Hundreds of millions of dollars of capital investments now happen by standardized legal agreements a few pages long. Nothing more than a cursory review by an attorney happens, if any at all.

    2. AI developments in litigation. Litigation research services developing AI have stopped publicly marketing, while still accelerating development. Most services calculate probable outcomes of a case type by jurisdiction, venue, or judge. Or even beyond that, probability on appeal. It will guide the attorney which case citations and arguments a given judge tends to rule in favor of and how frequently. The best run draft filings through a language algorithm to match against those a given judge has awarded vs denied. The result will suggest changes to citations, sentence structure and verbs used based on how the judge has previously ruled. They are not far from just writing the filing for the attorney using excerpts from, and structures of, rulings the judge favored. So, in other words, how to take advantage of judicial bias, conscious or not. While being prohibited from impugning the integrity of the court, attorneys are paying for services that categorically assume, actually prove bias to be true and systemic.

    We are not far from any tech minded justice warrior being able to replicate the same AI, and demonstrate statistically significant evidence of material judicial bias- for or against a specific litigant, sex race, lawyer, law firm, industry, etc. - since lawyers have that ability now. They just need the input data.

    Forget personal stock trading. This is what older federal judges are just now realizing is a serious risk. And it might just coincide with the current bill for all federal court filings being available online for free. If AI data suggests statistically significant probability of bias, follow up investigations of that judge’s email would almost certainly prove overt corruption. If this happens to just one, there would be public outcry for broad inspection of all judicial communications, showing embedded, corrupt ties of Mandarins to the legal system- certainly civil, but also criminal (yeah I’m looking at you GEO).

    Understandably, some judges appear very willing to admit insignificant personal stock trades without much profit (not as illegal as corruption), and allow prior litigants another chance. As long as they keep their pension, public reputation, and freedom. It’s a reasonable gamble on their part.

    We aren’t far from civil reform similar to capital reform in tech hubs. The limitations @chudson previously for DAOs will very soon be viewed as a far better system than the current alternative.

  34. I missed this earlier, but here’s the Fed’s new policy for personal trading (link):

    tl;dr not a policy at all, just theater with no actual mandate. Second verse same as the first.

    Key text with all the escape hatches in bold (my emphasis and commentary):

    To help guard against even the appearance of any conflict of interest (so not actual conflict, just appearance) in the timing of investment decisions (trading on inside info is still fine, timing is the issue), policymakers and senior staff generally will be required (so at their discretion) to provide 45 days’ advance notice for purchases and sales of securities, obtain prior approval for purchases and sales of securities (from who? what independent and objective entity reviews to ensure no backdating?), and hold investments for at least one year. Further, no purchases or sales (hedging is fine) will be allowed during periods of heightened financial market stress (ReferenceError: value is not defined).

    Reserve Bank presidents now will be required to publicly disclose financial transactions within 30 days, as Board Members and senior staff currently do (board members are apparently not yet Mandarins).

    The Board and the Reserve Banks will incorporate these new restrictions into the appropriate Federal Reserve rules and policies over the coming months (after they get rising rate / inflation hedges on and some leave? What need is there to delay this policy with more holes than my kids’ jeans?).

  35. So now that it is common knowledge to trade off of politicians’ trades, it is time to stop them from trading. No advantages for you retail trader.

    But in all seriousness, what would be the best move forward to get this to pass?

  36. As a potential starting point, it may be helpful to know which members of Congress actually put their stocks into blind trusts: according to Insider, its only 10 members.

    Getting the other two Senators besides the ones sponsoring the above mentioned bill to sign on as co-sponsors might be a decent step forward.

  37. I like you’re idea, but I don’t think it’s quite common knowledge yet. It’s well known but I think it’s still private. We don’t all know that we all know.

  38. Then potentially one of the steps is making it common knowledge. What missionary would be required?
    This could be one of the last non-gyre influenced topics left in the country so could using traditional gyre associated pulpits be enough or would the missionary poison the message?

  39. ZH did a good job of pushing awareness on this the other day when they posted Pelosi’s latest trades. They were mostly call options on the large tech companies and they surmised that based on her trading record that it would be a really profitable trade. I’m sure that if the trade hits big they’ll do a follow up victory lap. Are they big enough? Probably not. But people are taking notice. Five years ago nobody cared so that’s progress at least.

  40. Honestly, the more noise and attention to Pelosi’s trading, I think the more people learn about it.
    This is the money quote that needs to get more attention:
    “We’re a free market economy,” she said. “They should be able to participate in that.”

    You want to make money and participate in a free market economy, great! But writing the rules for the economy and then trading off of the impact of the rules you’ve written or will write is not free market by any stretch.

  41. Interesting article about the stock ban proposals. Most interesting are the congress members who are opposed to a ban and their “arguments.”
    My favorite argument against the ban comes from Elaine Luria (D-VA), “So my thoughts on it, you know, I think this whole concept is bulls**t because I think that, why would you assume that members of Congress are going to be inherently bad or corrupt?”
    Pelosi even gives a shout out to applying it to the judiciary (now that she has been backed into a corner).
    But it seems like the surge of support to ban trading is going to morph into “Reform” via the STOCK Act 2.0, because if transparency and fines didn’t work, more transparency and larger fines should do the trick.

  42. They shouldn’t ban them from trading. Just leave in place the existing disclosure requirements but pass a law removing the current penalties and inserting instead the same penalties that the rest of us would face if we traded on MNPI. There, now Congress can trade until their heart is content, just like us plebs. Added bonus of this plan is you know that a few dimwits will still do insider trading and we’ll get a handful of Congressmen arrested at their homes at 5:00am on a Tuesday morning. It’s a win for Congress, the people, and cable news!

  43. Chalk up another bill to ban Congressional trading. Only this one adds, Supreme Court, Federal reserve judges, president, vice president.

    The amount of bills being put forward (I believe this one makes it 4) makes me hopeful something will come of this, but the fact that it is taking so long to agree on something makes me think nothing will actually happen.

  44. https://www.marketwatch.com/story/nancy-pelosis-husband-buys-millions-worth-of-nvidia-stock-ahead-of-chip-manufacturing-bill-vote-11658179117?siteid=yhoof2

    While we wait for updated congressional rules on trading, we will continue to get stories like the above. The optics never look good for her in this situation and the more coverage it gets, the more it becomes a bipartisan issues (Reds will want to stick it to Pelosi and Blues will want to do damage control and stick it to Reds).

  45. Maybe we are looking at how to take down the mandarin class wrong? Maybe the goal should be to expose the game so everyone is in on it:


    This website helps you track trades of the political class.

    Maybe we need Pelosi ETFs? Or federal judge ETFs?

    Obviously when you openly expose them like this, they’ll probably vote to hide their trades. But in any case, the pressure would be on.

  46. I’ve regularly argued that it would be simple to require Congress to make intended trades public by noon that would be entered as market or limit orders at 3:30.

    I’d be willing to let them negotiate that delay down to 3 seconds.

  47. The Mandarins of the ECB are trying to conjure the latest version of “Whatever it Takes”. It is called the Transmission Protection Instrument (TPI). In keeping with prior art like 8 years of negative interest rates, it is another pure paradox. Invent a “tool” that sits in the background ready to act in unlimited amounts to push bond spreads of individual countries back tighter if investors incorrectly push them to levels the ECB doesn’t like. So called, anti-fragmentation. The existence of the tool and the threat to use it makes actually using it unnecessary! Good thing, because using it would violate cross-subsidization and lose a legal challenge in the German constitutional court. So, the markets are supposed to clear at favorable levels with the promise, but not commission, of illegal actions by the institution coercing the price of sovereign debts in the Eurozone.

  48. I LOVE THIS!!! I would love to se an SEC submission for a Congressional ETF! If anyone is looking for a partner in launching an index let me know!

    Here, I’ll take first crack at drafting a statement for the prospectus:

    “The investment seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of an index derived from the trades of the Members of Congress. The fund employs a sampling strategy. It generally invests substantially all, but at least 80% of its total assets in the securities comprising the index. The index represents all of the publicly disclosed equity holdings of Members of Congress. Allocations of individual equity holdings within the index are weighted in accordance with those individual equities pro rata percentage of the overall holdings of all Members of Congress combined.”

  49. Noob question. What does it take to launch an index fund like this?

  50. The Bundesbank would have to bear witness for which side?

  51. Historically, Buba stood for austerity and discipline and would work behind the scenes to keep the most outlandish schemes from their more MMT leaning peers being hatched. Now? They must all hang together or they will surely hang separately!

  52. I raised this issue, and vigilantly watch for cracks in the Central Banker omnipotence narrative. I think the combination of a very bad economic hand, the abject impotence of the prior set of policies, and the release of the inflation genie make it a good bet that the TPI will be nearly instantly challenged by investors. Cue the Italian sovereign bond spread widening trades to test the ECB’s resolve.

  53. haha good try, I think the racoons already got you all on this one. Unless this is a joke. But the final subheading is “Serious Product” lmaoooooo.

  54. Damn. There is always someone stealing my ideas. :frowning:

    But the funny thing is that it makes it easier for raccoons to make money on the FOMO and then short on the way down again.

    Narrative theory in investing is about the only way I see a path to not being a step behind as a retail investor. :upside_down_face:

  55. The best performing asset this year? The Inverse Cramer Index that’s tracked by I believe Whale Wisdom. Dude is the greatest contra indicator of all time.

  56. I managed a hedge fund with John Lohman, one of the sharpest, self-deprecating guys in the early 2000’s. He went under the handle Not Jim Cramer on Twitter and unfortunately died in November of 2o21. He was anti-Mandarin, developed his own database of market data and economic indicators (a maker), and was generous with his knowledge (a teacher). He would have been a great pack mate…and I still see his charts at various places on line.

    He bought a painting of Cramer at auction that he turned into his twitter identifier: He figured out Cramer was the ultimate reverse indicator as soon as Mad Money aired!


  57. Two Mandarin observations as we await a 75 basis point hike and the hope in markets that a dovish narrative emerges in the Q&A. The Italian bond spread vs Germany is not tightening as the ECB dictated with its new tool.


    The central bankers in Australia, who did nearly everything their peers did, are being investigated by an outside commission for their perceived failures.

    I continue to sense that the epic miss in seeing the inflationary impacts of rapid money growth and zero/negative interest rates may actually blow up on our global central bankers in the period ahead. Cracks in the foundation are emerging.

  58. To keep this on the radar…

    Spanberger has authored a bipartisan plan with Rep. Chip Roy (R-TX) to require all members of Congress to put assets into a qualified blind trust while they’re in office.The emerging deal has similar provisions and is set to require lawmakers and their immediate families to either sell their stocks or place them into blind trust or a mutual fund. The new restrictions would also come alongside increased penalties for any violations of the law.

    The bill they refer to is the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act

    But the money narrative quote from the article is:

    Early on, Pelosi was one such skeptical lawmaker. She now says she supports the effort but also tempered expectations during her comments Wednesday by questioning whether a deal would have the votes to pass.
    "Just because somebody introduces a bill doesn’t mean it becomes the law of land,” she cautioned.

    Pelosi first brought up the idea of policing the Supreme Court’s stock market activity back in February.

    So she was against it until she read the tea leaves and realized it was a bad look and then later on decided to scuttle it by tying in provisions that make it become a political attack/retaliation bill.
    Either way she gets to declare victory if it passes by saying they’re sticking it to the Supreme Court or get her ultimate aim of having the bill die in a vote and blame R’s for its failure while trying to maintain the high ground.
    That’s a pretty effective narrative play and par for the course for a powerful Mandarin.
    I still hope something gets passed and I wouldn’t be too sad if the Supremes had some more transparency and regulations on their potential conflicts of interest as well (although a blind trust for them would also be ideal).

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