The Zeitgeist – 5.8.2019

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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 8, 2019 Narrative Map – US Equities

Source: Quid, Epsilon Theory

Renewed China trade fears send U.S. markets tumbling [UPI]

Futures fall on U.S.-China trade uncertainty [Reuters]

Global stocks slip, bonds rally as U.S.-China trade fears grow [Reuters]

Frequent readers will be familiar with our three recurring trade and tariffs arguments:

  1. The narrative on tariffs has been complacent for the last several months – coherent and positive. Investors who have a contrarian (read: negative) view of outcomes could benefit from the resulting asymmetry.
  2. If it ends up as a major market event, it is likely that traditional diversification techniques continue to work like they have historically (i.e not a ‘new’ zeitgeist).
  3. We don’t think anyone should be in the business of having those contrarian OR consensus views on the topic, because it’s a GAME OF CHICKEN. You don’t know the odds, because there aren’t any.

None of that has stopped financial media from updating their assessments of the odds on a daily basis, of course.

These are the sectors that worry Wall Street analysts the most if there’s a US-China trade war [CNBC]

None of that has stopped the sell side from pushing new ways to play the odds, either.

Goldman Sachs – Hardline Retail Stocks

UBS – Softline Retail Stocks

Cowen – Chemical Stocks

Credit Suisse – Auto Parts Stocks

Bank of America – Automobile Stocks

Needham – Semiconductor Stocks

Baird – Chemical Stocks

Let’s get trading, fellow muppets!


Data Gumbo Secures $6M in Series A Funding from Venture Arms of Leading International Oil & Gas Companies [Press Release]

HOUSTON–(BUSINESS WIRE)–Data Gumbo Corp., a Houston-based technology company that has developed a Blockchain-as-a-Service (BaaS) platform to streamline smart contracts management for industrial customers, announced today completing a $6M Series A equity funding round co-led by Saudi Aramco Energy Ventures, the venture subsidiary of Saudi Aramco, and Equinor Technology Ventures, the venture subsidiary of Equinor, Norway’s leading energy operator.

Wait, what?


Sysco’s Earnings Beat Estimates but Revenue Comes Up Shy [The Street]

I wonder why this perfunctory note scored so high on the Zeitgeist.


Americans mimic Russian disinformation tactics ahead of 2020 [The Hill]

The widening gyre is only beginning.

And this is how it widens – as always, with the best intentions.


AIG Unit Rebounds After an Overhaul [WSJ]

What is dead may never die.


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Mark Kahn
Member
Mark Kahn

I’d love to take the other side of you on the widening gyre as it is sucking the life blood out of me, but you guys are so right on (and were so early to) the call. Everything – Every. Single. Thing. – widens it.

Mueller’s report would have widened it either way: It was favorable to Trump, so the left lost its mind; had it been deleterious to Trump, the right would have. It is absolutely awful and frightening to live through this.

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Landvermesser
Member
Landvermesser

This isn’t perfectly responsive to the present article, but I just had an interesting thought about a mechanism that might have some contribution to the development of widening gyres:

People who disagree with you can be pretty annoying, pointing out real or imagined inconsistencies in your positions, putting words in your mouth, etc. You bump into each other every once in a while, butt heads, and maybe when you part you both feel a little worse off. This is the first order game. It can feel like a lose-lose proposition.
The second order game is where you present a facade that is a caricature of your actual self, so exaggerated, so very annoying that the other guy decides just not to deal with you any more. They stop annoying you, you stop annoying them, win-win! In the short term, anyway. There are externalities…
“Full hearts” is an even higher-order strategy that tries to realize a genuine, durable win-win.

Sorry if I’m rehashing an old ET article, I promise it’s merely negligent.

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The Daily Zeitgeist

Narrative is not a Disease. Narrative is Us.

By Ben Hunt | September 16, 2019 | 3 Comments

Robert Shiller’s new book, “Narrative Economics”, will be out soon, and the publicity effort is kicking into gear. I am SO HAPPY that the rigorous study of narratives is finally being taken seriously, and grateful to Shiller for making that happen.

I am also SO DEPRESSED about how Shiller’s central metaphor, that narrative = infectious disease, will be used against us. Because the “cure” is the Nudge.

Read more

Sparks, Arcs and Trademarks

By Rusty Guinn | September 13, 2019 | 0 Comments

I’m not sure if electric buses are really a national security risk. Even if they are, I’m not sure characterizing them that way is really an escalation of the trade war into existential rhetoric land.

But it’s worth watching.

Read more

When Meta-Analysis Goes Meta

By Rusty Guinn | September 9, 2019 | 4 Comments

What does it mean when it becomes common knowledge that other investors are focused on evaluating common knowledge?

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I’ve Got a Secret

By Ben Hunt | September 6, 2019 | 8 Comments

Is there a bubble in passive investing? Honestly, I’m not even sure what that question is asking.

I DO think there’s a bubble in markets today – a behavioral bubble I’ll call ABB.

Always. Be. Buying.

And the Common Knowledge around passive investing is what blows this bubble. That’s MY secret.

Read more

The Industrially Necessary Egg

By Ben Hunt | September 5, 2019 | 1 Comment

In modern farming and in modern investing, we have become prisoners of the monoculture. It’s efficient. It’s necessary for a mass society of ever-increasing Desire.

But here’s the thing …

In the investment monoculture, you’re not the farmer.

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Gell-Mann Gravity

By Rusty Guinn | September 3, 2019 | 0 Comments

It’s the Monday Zeitgeist, including all known lanthanides and actinides.

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