The Zeitgeist – 3.21.2019

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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.


How to Advise the Accumulator Investor Type [Morningstar]

Morningstar runs these articles for financial advisors, detailing the different “behavioral types” of typical clients and recommending “action plans” for each type. The action plans are filled with bromides like Listen – Seek to understand. Listen closely … which doesn’t sound too action-y to me, but whatever. Everyone’s got a shtick and everyone’s got to put food on the table.

This article is on the Accumulator Client, aka the Nightmare Client whose over-spending and warped view of markets “typically cannot be corrected with advice and information”. Morningstar’s action plan?

It is therefore your task to make a blended recommendation–one that takes into account his financial goals while at the same time accounts for his emotional (difficult to correct) biases. Therefore, you decide that a reasonable compromise allocation is 65% equity, 10% cash, and 25% bonds. You also plan to recommend that he reduce his spending.

LOL. I mean, it’s actually pretty good advice if you want to keep “Rossington” as a client (who btw in this scenario is 58 years old and had a heart attack last year), but don’t kid yourself that this is a “compromise” with the client.

It’s a compromise with yourself.


Central Banks Kill Volatility. Now Wall Street Fears a Trap [FA Magazine]

It’s a trap!

Sigh. Once more with feeling …

This is NOT a trap. This is NOT a drill. This is NOT a mean-reverting phenomenon.

As I wrote recently to ET Professional subscribers, “This Is Why Your Long-Vol Allocation Isn’t Working“. The skinny: It’s not impossible for market volatility to spike massively through some deflationary shock to the financial system like a global recession or a China-driven credit crisis or an Italy-driven euro crisis. What’s impossible is TO GET PAID for taking out an insurance policy against volatility spikes from these deflationary shocks.

This is a change in the investment Zeitgeist.

This is the transformation of capital markets into a political utility.


Why the Fed Solidified Its Policy U-Turn [Bloomberg Opinion]

The Fed Clears Bond Traders’ Lofty Dovish Hurdle [Bloomberg Opinion]

I guess if you’re a bond trader, yesterday’s charade was a delight. We’ll see how you feel as the inflation engine continues to rev. For equity markets, though, the issue isn’t delight/not delight.

The issue is that we no longer have a normal distribution in portfolio return variation. This isn’t a Fed put. This is what a political utility looks like.

Heads I Win, Tails You Lose


Deutsche Bank merger talks heighten uncertainty for U.S. staff [Reuters]

LOL. I love the sourcing of this hatchet job article — “three employees told Reuters”. You know who sourced this article? Morgan Stanley and Goldman Sachs and JP Morgan and Citi and BofA and UBS and Barclays, that’s who.


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The Daily Zeitgeist

We’re Gonna Need a Bigger Boat

By Ben Hunt | July 15, 2019 | 0 Comments

Financialization is not a mean-reverting phenomenon. It’s too good of a gravy train for Wall Street, corporate management and the White House to stop now. So they won’t. Like any self-respecting Great White shark, the Nudging State and the Nudging Oligarchy never stop swimming. They never stop eating.

Want to survive these financialized waters if you’re potential shark food? You’re gonna need a bigger boat.

Read more

When Did You Stop Beating Your Wife?

By Ben Hunt | July 12, 2019 | 1 Comment

“De Blasio’s ‘pay parity’ hypocrisy” is a feature article in today’s NY Post, and a central article in today’s media Zeitgeist.

Dig a little deeper into the “scandal”, and you learn that the “evidence” is complete horseshit.

It’s an article specifically designed to manipulate someone like me … someone who is VERY predisposed to believe the worst about Bill de Blasio because I dislike his politics SO MUCH.

It’s a rage engagement, one of two primary forms of Fiat News used to win the Game of You.

Read more

The Upside Down

By Ben Hunt | July 9, 2019 | 1 Comment

Everything is topsy-turvy in the Upside Down of Stranger Things. That’s the Big Baddie in the picture above, known as the Mind Flayer.

Financial media is a Mind Flayer, too, especially when it comes to coverage of crypto and tech companies.

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Raking it in

By Rusty Guinn | July 8, 2019 | 0 Comments

A few months ago, we noted how important it had become for public figures and corporations to control their own cartoon, lest someone control it for them. Well, now that advice has itself become the narrative. Don’t say you weren’t warned.

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Here We Go Again

By Ben Hunt | July 2, 2019 | 1 Comment

“You just recently hours ago met with the Chinese president, Xi Jinping,” Carlson said. “Are you closer, do you think after that meeting, to a trade deal?”

“I think so,” Trump replied. “We had a very good meeting. He wants to make a deal. I want to make a deal. Very big deal, probably, I guess you’d say the largest deal ever made of any kind, not only trade.”

He just can’t help himself. And neither can we.

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The Solution To The Fintech IPO Shortage

By Rusty Guinn | July 1, 2019 | 0 Comments

There’s a narrative that exists in Fintech that isn’t really present in most other early stage technology businesses. It defines why they’re different, who succeeds and who fails at getting to a liquidity event and a long-term growth trajectory.

Read more

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