The Zeitgeist – 3.26.2019

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.


“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 … <checks notes> … 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.


Comments

  1. 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!)

  2. 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.

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

Continue the discussion at the Epsilon Theory Forum

Participants

Avatar for bhunt Avatar for Sandy_McIntyre Avatar for Victor_K

The Daily Zeitgeist

ET Zeitgeist: Raccoons Never Sleep

By Ben Hunt | May 28, 2021 | 5 Comments

Lemonade (LMND) isn’t just an insurance company. No, no … they’re an AI Company! ™.

Plus Chamath is up to his old tricks.

I hate raccoons.

Inflation as Ad Campaign

By Ben Hunt | May 24, 2021 | 0 Comments

An ET Pack member sent me this. Anyone else come across ads that directly call out inflation expectations? Would love to collect more screenshots like…

Many People Are Saying … Bitcoin is Art

By Ben Hunt | May 24, 2021 | 0 Comments

The Bitcoin Is Art thesis that I put out back in 2015 (The Effete Rebellion of Bitcoin) and recently put forward again (In Praise of…

The Zeitgeist – 3.12.2019

By Rusty Guinn | March 12, 2019 | 0 Comments

Today’s Zeitgeist is about winning when we’re losing, the polarizing power of hyperbole, more on SRI/ESG, a wonderful specimen of the Mad Creditor Letter and a less-wonderful specimen of the Obligatory Press Release.

The Zeitgeist – 3.11.2019

By Rusty Guinn | March 11, 2019 | 0 Comments

Today’s Zeitgeist is about crashes on crashes, Nplpalooza 2019 and hunger-striking ruined property tycoons.

But mostly we celebrate the hedge fund industry’s effort to shake off last year’s challenges. From all of us, thank you for this gift of what we will just assume is uncorrelated alpha.

The Zeitgeist Weekend Edition – 3.9.2019

By Rusty Guinn | March 9, 2019 | 0 Comments

A Weekend Edition of the Zeitgeist, where we turn from financial markets to find the narratives and stories from the last week or so that were most connected to common narratives in culture and politics.

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.