The Zeitgeist – 5.22.2019

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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.


May 22, 2019 Narrative Map – US Equities

Source: Quid, Epsilon Theory

Go Wide, Not Deep [Morningstar]

We think core menus should be wide, not deep—that is, menus should offer exposure to a wider array of investments but not multiple options for the same asset class (with the potential exception of an active and passive option). The idea is to offer a range of investments that will better help participants achieve their retirement goals. We think it’s important to give participants access to funds with unique risk characteristics so they can supplement allocations in their other accounts (such as an IRA) as well as give a financial advisor (who is not associated with the plan) the ability to design a portfolio inside the plan. These funds can also be used by in-plan advice providers, such as managed accounts, to build better portfolios.

Retirement plan menus are ground zero for what is delightfully referred to as “choice architecture” … steering and nudging you into making the “right” choice.

If you don’t like what’s being said, change the conversation.
― Don Draper

Ad men understand “choice architecture”. It’s not called the Wheel. It’s called the Carousel.

I’ll make him an offer he can’t refuse.
― Vito Corleone

Mob bosses understand “choice architecture”. An offer you can’t refuse is what game theorists call a Hobson’s Choice, part of a more general class of games that includes ultimatums and dilemmas.

Like all ad men and mob bosses, Morningstar is in the choice architecture business.

And yes, there’s an Epsilon Theory note for that:


Analysts Make Research Cooler, Wonkier and Bespoke to Lure Cash [Bloomberg]

As the industry wrestles with the problem of making money on its own, the stage is set for podcasts and novella-length thematic analyses.

Yes, please.

“Luring cash” … FFS, people.


Quality corn stover in high demand [Hay and Storage]

I went back down through the line and took a closer look at the corn stover quality in the back row that had not sold yet. One load in particular caught my eye. After confirming there was no mustiness, mold, or mildew on the crinkled corn husks, I asked Eric Motter of Myerstown to share how he produced his 7,500-pound load of 3×3 bales weighing a little over 500 pounds each.

He planted the third week of May and the Roundup Ready hybrid only received manure. I could clearly see the corn held its color until harvest and it yielded well. No foliar fungicide was applied.

I have no idea why an article from Hay and Storage was linked so centrally to financial media, but I am so happy that it is!

Of course, I actually DO have an idea why farm esoterica is a central narrative in financial media today, as farmers are the casualties of this trade war.

It’s not just the corn crop that has only received manure this season.


US stocks have crushed their European peers by 76% over the past decade. Here’s what Goldman Sachs says needs to happen for Europe to flip the script. [Business Insider]

Saved you a click.


Global markets are rallying after Trump tempers his Huawei ban after ‘big reality check’ [Business Insider]

US, European, and Asian stocks rose on Tuesday after Trump tempered his Huawei ban.

The Chinese telecoms giant can buy US products to maintain its networks and release software updates, but it can’t buy American components for new devices.

“This latest move by Trump shows just how haphazard his policies are and also how pervasive Huawei goods and technology are,” said Jasper Lawler, head of research at London Capital Group.

This was the actual graphic associated with this Business Insider “article”. It’s a stock photo from Getty, and I suppose it’s what you get when you search for “Yay, Huawei!”.

And then there’s the obligatory anti-Trump commentary from some London dude, criticizing the “haphazardness” of US policy. As always, there’s no parody like self-parody.


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Peter
Member
Peter

Ben…the connection is glyphosate (er…Round-up weed killer) as a pre-harvest desiccant… https://en.wikipedia.org/wiki/Crop_desiccation the same crap that Bayer just lost its butt over. AND we’ve been ingesting this carcinogen thru eating wheat and other grains. Whole wheat (er whole glyphosate) anyone? Bayer is a financial story…Round-up the connection to the story above. Haul-ass,Bypass, and Re-gas!

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Mark Clark
Member
Mark Clark

Roundup is not used as a desiccant on corn, The whole idea behind Roundup Ready corn is that it is resistant to Roundup so the herbicide would be useless as a desiccant. You spray Roundup early in the growing season when the corn is less than 18 inches tall and the weeds have emerged and are actively growing. Roundup kills all emerged weeds and does no harm to the corn. This is long before the corn has pollinated and produced an ear.
I grew corn for over thirty years and have been associated with farmers who have produced corn for another 20 years and never heard of anyone using a desiccant for corn. Probably because doing so makes as much sense as burning twenty dollar bills to dry the crop after harvest.

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Peter
Member
Peter

Sorry for my lack of precision re corn…here it is re wheat. Despite being the incorrect grain, my assertion stands.

https://www.thehealthyhomeeconomist.com/pre-harvest-roundup-crops-not-just-wheat/

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Mark Clark
Member
Mark Clark

The only region of the US where any type of desiccant is used for wheat is in the spring wheat areas like North Dakota. The vast majority of wheat grown in the US are winter wheat crops and no desiccant is used on winter wheat. Winter wheat is harvested during the hottest days of summer so speeding up maturity or drydown is not an issue. Also there is no Roundup Ready wheat in existence so Roundup can not be used at any time while the wheat is growing. The only time you could use Roundup in wheat production would be to kill weeds before the wheat is planted or has emerged. It is safe to say that wheat grown in the US has less exposure to Roundup than just about any crop you can name.

The article cited conflates Roundup use as a desiccant with Roundup use as a weed killer.

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Kevin
Member
Kevin

In addition to trade war connections for the farm/corn article, I’ve been seeing quite a few articles over the past week regarding how little of the corn crop has been planted so far this year. Things like this: https://www.bloomberg.com/news/articles/2019-05-20/usda-crop-progress-corn-crop-49-planted-lowest-on-record

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The Daily Zeitgeist

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Forget about impeachment and its partisan Kabuki theater. It’s a joke.

If there’s some rich dude who bought his way onto that Wuhan evacuation flight, and you know there is … if this Administration is forsaking its ONE JOB to protect American citizens, and you know they are …

THAT’S what brings down this government.

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Pleased to Meet You, Hope You Guess My Name

By Ben Hunt | January 22, 2020 | 9 Comments

It’s the one thing that Donald Trump and Rachel Maddow can agree on … “who the hell cares about the budget?”

If you don’t see that every government in the developed world is about to embark on a massive deficit spending spree, with modern-day ziggurats constructed in every burg and hamlet … you’re just not paying attention.

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The Church of the Long Now

By Ben Hunt | January 17, 2020 | 2 Comments

I know, I know … it’s me being mean to Neel Kashkari again.

Sorry, not sorry. Belittlement and scorn is the only weapon we have against the creeping ensorcellment of the Long Now.

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Shot, Chaser

By Ben Hunt | January 13, 2020 | 9 Comments

So I downloaded and compiled every SEC Form 4 filing that former Boeing CEO Dennis Muilenburg has ever made, to answer one simple question:

How much money did Dennis Muilenburg suck out of Boeing over the last ten years?

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Alpha/Beta Amnesiacs

By Rusty Guinn | January 10, 2020 | 0 Comments

We are emerging from the year end, so the language shared across financial media articles is performance language. How did stocks, markets, benchmarks, funds and strategies perform in 2019?

Frequent readers will recognize Gell-Mann Amnesia as a favorite topic here at Epsilon Theory.

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Normalize This

By Ben Hunt | January 3, 2020 | 13 Comments

I feel like the Billy Crystal character in Analyze This all the time. There’s always some mob boss politician or central banker or CEO or asset manager pinching my cheek and telling me that it’s all gonna be okay, that I’ve just gotta understand how things are.

My god, I am so tired of having my cheek pinched. I am so tired of being nudged in such an artless, heavy-handed way. I am so tired of being told that 2 + 2 = 5.

Read more

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