The Zeitgeist – 3.26.2019

2+

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.


“Flashing amber”: Stocks tumble, bonds rally on U.S. recession risk [Reuters]

It’s hard to create a wall of worry when the Fed is in full CREEP mode (yes, that’s a Nixon reference … you could look it up) and all the US PMIs are way over 50, but haters gonna hate and the Street gonna fake. Or at least that’s what Taylor Swift would say.

We have a BLARING SIREN that is FLASHING … … ummm, amber. I mean, AMBER!

I feel like JPM is increasingly becoming a parody account.


It’s Not Too Late to Buy LivePerson Stock [Fox Business]

Whew! And here I thought that it might be too late.

Small-cap and mid-cap TMT stocks like LivePerson ($1.8B mkt cap) are the mothers milk of sell-side coverage and Fiat financial media, with far more analyst coverage and media puff pieces than you’d think. Why? Because they’re pure story.

Two “‘feels” and one “sees” in this paragraph, plus two “earlys” and a “massive”. It’s all a steak-and-egg breakfast for narrative connoisseurs, with a “seek to evolve” as Hollandaise on top.


Bond market says not only is a recession coming, but the Fed will cut interest rates to stop it [CNBC]

Scary signals. It’s a technical term.

I love this idea that the market “fears” that the Fed will need to get even more dovish. Kinda like Br’er Rabbit was afraid of that briar patch.

And yes, I know that Joel Chandler Harris has been unpersoned. But anyone who tells a good Trickster God story will always have a place at Epsilon Theory.


Tradeweb Aims for $5.8 Billion Valuation in Upcoming Nasdaq IPO [Bloomberg]

Speaking of Trickster Gods …


How Medicare for All Could Eliminate the $600 Billion Private Insurance Industry [Fortune]

They’re coming to get you, Barbara!

Did I mention CREEP earlier? You really should look it up.


2+

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.

Read more

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.

Read more

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.

Read more

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

3
Leave a Reply

Please Login to comment
  Subscribe  
newest oldest
Notify of
Victor K
Member
Victor K

I looked up CREEP. I found both references (Nixon and Radiohead). How you (ET) can pull these cultural/political references out of the hat is a wonder to behold!
Meanwhile: …eliminate…insurance…industry [Fortune]. Haha LOL
(I wished you had used the Hubble Deep Field for the Unicorn background!)

0
Victor K
Member
Victor K

(Because Big Bang Cosmology, Climate ‘Science’, and even Darwinism are the knowledge Unicorns – on a much longer disruption time scale – today IMO!)

0
Sandy McIntyre
Member
Sandy McIntyre

I’m confused. A 30 year treasury at a 2.9 coupon is an effective 35 PE. What you get is a flat 30 year stream of coupons and a capital value that depreciates with inflation. Based on 2% target inflation purchasing power will be almost cut in half over the term of the bond.

Buying a quality basket of companies (I refuse to index invest but that is a different rant) I can acquire multi cycle earnings growth of 4 to 7 % with dividend growth that is directly correlated to earnings growth. A generic PE is tough to generate but assume it is at a premium to the forward market PE of 17xs.

Why is the growth asset considered expensive and the “safe” asset’s price desirable?

For the record, the most destructive bear market in history is the 1950 to 1981 bear market in bonds: 2.5% on the long treasury to 15.8%. The decline in purchasing power was around 90%. In bond land that was permanent destruction in purchasing power.

In PE terms, 1950 was 40xs. 1981 was 6.3xs. The average 10 year 1954 to now is 5.85%. In PE terms that is 17xs. Both are absolutely meaningless numbers given the range of data points over the the time frame.

0
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.