The Narrative Matrix
March 2, 2020·4 comments·in the trenches
Markets and politics operate on the same information, yet participants arrive at radically different conclusions and prices. The gap between what is true and what is believed has become a chasm that can persist for years. Something fundamental has shifted in how reality itself gets constructed.
• The same data interpreted through different narrative frameworks produces entirely different market prices. Two participants with identical information can still disagree on value because narrative context determines interpretation.
• Narratives come in two forms: those created by fiat through coordinated messaging and those that grow organically over years. Both can shape perception so completely that their version of reality feels permanent and unquestionable.
• Social media has accelerated the spread of managed narratives by normalizing extremes. What once seemed extraordinary feels inevitable once the narrative settles in and becomes pervasive.
• Even when a narrative bears no resemblance to underlying reality, it can drive markets and behavior for years. The disconnect between price and fact isn't a malfunction; it's how the system actually works.
• Narratives eventually break when reality becomes too dissonant to ignore, but identifying that moment beforehand is nearly impossible. What collapses a narrative one day might still seem credible the next.
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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.
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Comments
If strategic communication consultants and PR consultants read what ET puts out we could be in trouble.
My favorite false narrative being circulated is the one that inflation is low and prices are “stable”.
Seconded. I like referring people to http://www.chapwoodindex.org/
"They dress the wound of my people as though it were not serious. ‘Peace, peace,’ they say, when there is no peace. ~Jeremiah 6:14
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