Source:  Cnes2021, Distribution Airbus DS

There are these two young fish swimming along and they happen to meet an older fish swimming the other way, who nods at them and says “Morning, boys. How’s the water?” And the two young fish swim on for a bit, and then eventually one of them looks over at the other and goes “What the hell is water?”David Foster Wallace, in 2005 Commencement Address to Kenyon College

There is a funny thing I’ve noticed about telling that David Foster Wallace story: I am convinced at this point that everyone who hears it imagines themselves as the older fish.

Especially investment professionals who hear the story.

Don’t get me wrong. If there is one thing more ironic than believing you are the older fish in the David Foster Wallace story,

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We are in a cold war with China.

That is, as we say, not a prediction. It is an observation.

Feel free to disagree with it. But you also ought not to read anything too portentous into the term. Cold wars aren’t declared, after all. Observing their existence is the limit of what we can do.

In any case, what I mean by the term isn’t complicated. Two political belligerents are now engaged in a foreign policy whose objective is to thwart through all means short of firing weapons the expansion of influence, the establishment of additional international military infrastructure and the expression of

Source: Thor Ragnarok

A quick but important note: We don’t have a dog in this fight. But we are conflicted. We have subscribers at almost all of the firms being mentioned. Our principals have done business with many of them. We’ve been clients of some, too. We like most of them. On both sides. We also don’t really care what any of them think. Make of it what you will, but clear eyes, even with us.

THOR: How did you…KORG: Yeah, no. This whole thing is a circle. But not a real circle, more like a freaky circle.THOR: This doesn’t make any sense. KORG: No, nothing makes sense here. Thor: Ragnarok (2017)

The whole of Thor: Ragnarok is pretty outstanding, as far as action-comedy films go. But the prison scene is almost certainly my favorite.

For most of the last 40 years – at least since Tip O’Neill or one of his aides coined the term – the third rail of US politics has been Social Security.

It is strange to think about. We are all MMTers now, after all, and what’re a few trillion dollars among friends? In 2021, entitlement reform is a third rail in the same way that a high-voltage power line is a third rail. Sure, it will electrocute you, but who is going to go through the trouble of getting to it? We didn’t stop talking about entitlement reform because people were too afraid of it. We stopped talking about entitlement reform because neither of the two parties has even the faintest interest in it.

Yet even during its heyday, I would argue that Social Security was never really America’s third rail.

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From the original video to 9 To 5 by Dolly Parton

By Rusty Guinn

We humans are not very good at thinking about non-linearity.

When a process interacts with another process – or itself – our usually deep capacity for pattern recognition and estimation goes out the window. I could be referring to viral spread, or why we have concerns about B.1.1.7 becoming dominant in the US. I could be referring to the effects of leverage, concentration and liquidity in investment portfolios.

But not today. Today, I am thinking about the effects of a vastly larger

Siegfried bathes in dragon’s blood, from Fritz Lang’s Die Nibelungen (1924)

The Invulnerable Hero* is among our most treasured and recurring tropes.

It is the core feature of the great German epic, the Nibelungenlied. You probably know it better as the story of Siegfried from Wagner’s treatment of the story in his famed Ring Cycle. Siegfried slays a dragon and bathes in its blood, that is, everywhere except for the spot on his back covered by a drifting linden leaf. He thus becomes invulnerable to harm except in this very spot.

To those of you more familiar with the Greek epics, you will no doubt see the parallels with the story of Achilles. Thetis takes an infant Achilles to the River Styx and dips him into its waters. He thus becomes invulnerable at every spot

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The Zeitgeist on the day after a presidential inauguration is unlikely to catch anyone by surprise. It was the only topic of any significance in political news. It was the only topic of any significance in market news. The language used to describe this inauguration was central to nearly every topic over the last three days. Even sports.

The quantity of that coverage which would fit squarely into what we call Fiat News – news which is designed not to inform but to instruct the reader how to think about an event or topic – would also be unsurprising, I

The dirty little secret of every riot and protest and looting that ever existed in the history of mankind … IT’S FUN.Lucifer’s Hammer on Epsilon Theory, August 31, 2020

During the summer of 2020, as widespread non-violent protests for racial justice gave way to steadily creeping violence and property destruction, we published our concerns on these pages that there was practically zero political will – and zero political incentive – by either party to do what was necessary to reduce that violence.

Republicans and Donald Trump believed that the violence at a number of BLM-related events would be framed alongside deeply unpopular “defund the police” narratives as long as they continued. They believed, I think, that this framing would be electorally helpful. However perverse,

Source: Tesla, SpaceX

It is the Christmas season, which means that it is time for your usual obligatory reminders and warnings about consumerism. It is also Christmas in a pandemic year, so those warnings will come with an additional “Hey, we know your kids are upset about 2020 but don’t make it worse by trying to make it better with a boatload of crap they don’t need” on the label. That, and “Hey, maybe a year in which a lot of people are hurting would be a good one to teach what generosity really looks like.” And they’re all good warnings. The problem, of course, is that consumption really does make us happier, at least for a while. Then, inevitably, we do what humans do best. We adapt. To trigger the same chemical and emotional response, our brain tells us we need new

So an agent for a new over-the-top variety act finally gets a meeting with the biggest producer in the world. I mean, maybe ‘the world’ is selling it short. Word on the street is this guy’s even got God’s ear, if you can believe it.

Anyway, agent’s a working class type, will do just about anything to get this act on a big stage. Third and current husband’s last name’s Rothschild, and she met him at some place called Bilderberg. Sorry, not important to the story. But they were introduced by a fellow name of Henry Kissinger, apparently spent most of his life working as a secretary or something, so you know we’re talking about salt of the earth here. And I don’t want to tell a sob story, because everybody’s got one. Still, you oughta know she lost a friend a little over a year

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It isn’t very often that coverage of something as niche as SPACs (special-purpose acquisition companies) would make our list of the most linguistically connected financial news. Then again, thanks to 2020, I suppose we can’t really call SPACs niche news any more. Even if they were still consigned to the “weird stuff that seems very obviously designed to disproportionately benefit sponsors and allow management to do stuff they wouldn’t be allowed to do in other ways” bin, articles about the deal that triggered the Zeitgeist today probably would have risen anyway. Use

“Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”A Christmas Carol, by Charles Dickens (1843)

With Thanksgiving in the books, we are approaching a special time of year. No, not Christmas. Not Hanukkah. Not even the season when some dumpster fire of a team from the NFC East manages to limp into the playoffs with a 5-11 record.

It’s outlook season.

Now, we are critical of financial market commentary most of the time, for the rather uncontroversial reason that it is nearly always composed of an equal blend of five loathsome traits: backward-looking, narrative-conforming, book-talking, non-actionable and (most damning of all) boring. But in outlook season, financial news outlets, financial social media, and both buy-side and

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

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.I have a confession.I still don’t have much interest in writing much about the election. I certainly don’t have much interest in rewriting much of what we have already written on these pages.So if you’re looking for a discussion of why the political right appears to have outperformed at the polls in a turnout-based election, I will instead direct you to what we wrote before the election.And if you’re looking for a breakdown of the meta-game failures loudly decried in a well-publicized rant by Democratic Virginia Congresswoman Abigail Spanberger, I will instead direct you to what we

DISCLOSURESThis 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

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.I don’t think it would be especially insightful for us to point out that everybody knows everybody knows stimulus talks are what market participants are paying attention to. At this point, I think the idea that this is common knowledge is, well, common knowledge.We did, however, think that it would be interesting to see how different patterns of language were more or less common among stimulus-related news reports. In other words, we thought it would be fascinating to see which Fiat News expression of “what the stimulus is really about” was the most connected and which was the

Not yet the wise of heart would cease    To hold his hope thro’ shame and guilt,    But with his hand against the hilt,Would pace the troubled land, like Peace;Not less, tho’ dogs of Faction bay,    Would serve his kind in deed and word,    Certain, if knowledge bring the sword,That knowledge takes the sword away—‘Love thou thy land, with love far-brought’, by Alfred, Lord TennysonFrom time to time, these pages refer back to the piece that Ben wrote for Epsilon Theory before the election in 2016. In it, we argued that Clinton’s candidacy was in trouble. That piece included a phrase that to this day confounds and frustrates a lot of readers. Ben wrote that Trump would break us. Trump, on the other hand … I think he breaks us. Maybe he already has. He breaks us because he transforms every

2+ ET Live! is our interactive feature that is all about the narratives that infect financialYou have reached the maximum number of free, long-form articles for the month. Please join here to read the rest of this content. Paid Members can log in here.

In the Long Now, we have argued, the single most important executive skill is not talent identification and development. It is not strategic vision. It is not logistical or subject matter expertise. It is not organizational design and process management. You know, all the things B-School management professors who have never actually, y’know, managed anything have been teaching for decades.In the Long Now, the single most important executive skill is the ability to shape the external narrative of the company.That is a shame for all of us. This exchange robs our collective future of the manifold promises of productivity, ingenuity and growth that come from investing in that first group of things. Instead it offers us a mess of pottage that is short-term stock price appreciation. For airline

DISCLOSURESThis 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

This is Part 2 of The Projection Racket, a series of notes detailing the civic arguments underlying a movement to both (1) make our lives less dependent on political, social and financial institutions with structurally broken features and (2) to protect the rights of our fellow-citizens to do the same by eliminating the source of those structural breaks so that these institutions can serve both the collective and individual good. It is an explanation of what we mean when we say to “Burn it the $!#* down.”You can read Part 1 here. This is a long essay, and its arguments are best understood in full. But it’s 2020, so we’ve put together a TLDR, too.You can read our Executive Summary here.Source: Monty Python and the Holy Grail (1975)Arthur (reverently): Camelot!Galahad (reverently):

4+ In today’s episode, it’s all about BITFD and the almost hilarious extremes to wYou have reached the maximum number of free, long-form articles for the month. Please join here to read the rest of this content. Paid Members can log in here.

DISCLOSURESThis 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

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.Source: The Dungeonmaster (1984)Mestema: In a future reality I shall destroy you!Paul: I reject your reality and substitute my own!The Dungeonmaster (1984)We write a lot about how governments and businesses desperately want Official Numbers to be treated as synonymous with the real-world feature they are used to describe. You might say it’s kind of our thing here at Epsilon Theory. We even have a word we use for it: cartoons.We have written about COVID-19 cartoons being promoted by the Chinese Communist Party.And pension obligation cartoons.And top-line revenue cartoons.And labor

DISCLOSURESThis 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

DISCLOSURESThis 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

Source: The historically bad video to REO Speedwagon’s 1985 hit power ballad “Can’t Fight This Feeling”When I left home for college, the dot-com bubble was bursting.The unfortunate events of March 2000 were already in the rear-view mirror, but the summer months gave at least some renewed hope to speculators and investors alike. That was the certainly the spirit on-campus at Wharton, anyway, where it seemed that just about every other undergrad was still supplementing work-study income (or draws from mommy and daddy’s trust fund) with stock speculation using the miracle of E*Trade on university-provided high speed internet.Not me. Not really. Sure, I sold the shares of stock in the way-too-boring-for-1999 Dow Chemical Company I had gotten from them as part of a scholarship when I graduated

10+ In today’s episode…will the boys overcome the basic perils of 21st century neYou have reached the maximum number of free, long-form articles for the month. Please join here to read the rest of this content. Paid Members can log in here.

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.Homer: That’s it. They have awoken a sleeping giant!Marge: Homey, what are you going to do?Bart: Crazy scheme, crazy scheme, crazy scheme…Homer: Get me tools and a beer!The Simpsons, Season 13, Episode 15 “Blame it on Lisa”The crazy Kodak scheme we wrote about a week and a half ago is still an influential part of the Zeitgeist.It sits atop the Zeitgeist this week for two reasons. First, there has been another event in this absurd saga, and coverage of it has been significant. To wit, on Friday, the U.S. International Development Finance Corporation announced that it was putting

DISCLOSURESThis 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