The Zeitgeist – 3.11.2019


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.

You want your investments to make money and help the environment. Experts weigh in on whether you can [CNBC]

We have seen a lot of discussion about ESG/SRI in the last year. It feels like a lot, and it feels like it is more than before. And yet, it still seems as though all of the articles end with something like the quote above. All are evocative of this idea that we are riding a massive, unavoidable wave, and any minute now it’s going to transform the way we invest. If you already buy into ESG/SRI, emerging common knowledge that certain of these techniques ARE how everyone knows that everyone knows you invest responsibly and ethically doesn’t change much. If you’re ambivalent about ESG/SRI, on the other hand, that kind of sea change could exert heavy influence on regulators, clients, stakeholders, boards and other constituencies with a vested interest in how you invest.

So is there a change in the narrative and common knowledge about ESG/SRI? Sorry to tease (no, I’m not), but we’ll be publishing our answer to exactly this question in ET Pro in the next couple days.

Hedge funds continue comeback from 2018 [HedgeWeek]

Good job, good effort.

For a minute there I was worried that it might just have been equity beta. Quite a relief, really.

Ruined property tycoon, 63, goes on a hunger strike against bank for £10million ‘mis-sold’ loan after being evicted and made bankrupt [The Daily Mail]

There is…a lot going on here. But most of all, this is the most Britain headline that ever Britained.

Boeing shares down 10 percent after second crash involving 737 MAX 8 [Reuters]

Given the overall business mix at Boeing, does a 10% initial move on this news seem big? It shouldn’t. Here’s an excerpt from our comments on Boeing in an ET Pro note back in January:

The existence of narratives matters. The absence of cohesive narratives matter too. No one without private information about the 737 MAX 8’s design could have reasonably predicted the odds of these accidents. But in our opinion, a Boeing with a ‘strong defense spending’ or ‘trade deal winner’ narrative is a bit more robust to this kind of adverse event risk. In 2019, CEOs must control their cartoon or have it controlled for them – by the media, by politicians, by competitors or by events.

Time is running out for Greek NPLs [Euromoney]

Coming to an institutional pitchbook near you, it’s the 2019 Nplpalooza! Get excited!

I don’t know the answer to this question, but I feel confident it is probably >200-300bps less than the average response I would get if I put it to a poll.


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