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The Zeitgeist – May 7, 2021

Summary:
Here’s what we’re reading and working on this week at Epsilon Theory. To receive a weekly full-text email of The Zeitgeist, please sign up here. It’s free, and your email will not be shared with anyone. Ever. Every item in this email is a discussion thread on the Epsilon Theory Forum – a safe space to speak your mind, a safe space to find like-minded truth-seekers. Watch from a distance if you like, but when you’re ready … join us. Now Hiring From a Wall Street Journal article on Thursday: Millions Are Unemployed. Why Can’t Companies Find Workers? In a red-hot economy coming out of a pandemic and lockdowns, with unemployment still far higher than it was pre-Covid, the country is in a striking predicament. Businesses can’t find enough people to hire.Rising

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Here’s what we’re reading and working on this week at Epsilon Theory.

To receive a weekly full-text email of The Zeitgeist, please sign up here. It’s free, and your email will not be shared with anyone. Ever.

Every item in this email is a discussion thread on the Epsilon Theory Forum – a safe space to speak your mind, a safe space to find like-minded truth-seekers. Watch from a distance if you like, but when you’re ready … join us.


The Zeitgeist – May 7, 2021

Now Hiring

From a Wall Street Journal article on Thursday:

Millions Are Unemployed. Why Can’t Companies Find Workers?

In a red-hot economy coming out of a pandemic and lockdowns, with unemployment still far higher than it was pre-Covid, the country is in a striking predicament. Businesses can’t find enough people to hire.

Rising vaccination rates, easing lockdowns and enormous amounts of federal stimulus aid are boosting consumer spending on goods and services. Yet employers in sectors like manufacturing, restaurants and construction are struggling to find workers. There are more job openings in the U.S. this spring than before the pandemic hit in March 2020, and fewer people in the labor force, according to the Labor Department and private recruiting sites.

If only there were some mechanism by which companies could entice people to work for them. I dunno, it’s a real head scratcher.


What Sort of Business is Investment Banking?

If you haven’t read Marc Rubinstein’s note we published this week, it’s well worth checking out!

So fortunate to have the chance to republish some of Marc’s notes, and his meme-craft is beyond compare. Honestly, this is the best meme I’ve seen on Fintwit in a loooong time.

The Zeitgeist – May 7, 2021

Origins of the Panopticon

Also well worth checking out is the podcast we put out this week — In Praise of Bitcoin. I think this is our best pod yet, not just for what it has to say about Bitcoin, but as a good entry point to what Epsilon Theory is all about.

Part of what Epsilon Theory is all about is pointing out modern implementations of the Panopticon … a proposal from the late 1700s for the perfect prison, where the inmates (that’s us!) willingly enforce the jailer’s discipline on themselves.

An ET Pack member sent me this DM regarding the origins of the Panopticon concept, which I found fascinating! Yes, Jeremy Bentham proposed the design as a perfect prison, but it was his brother Samuel who originally conceived the idea as a way of forcing shipyard laborers to accept fiat and snitch on each other regarding their favored form of compensation: leftover lumber.

Ben, forgive me if you already know this bit of panopticon history, but I didn’t see it mentioned in the original ET Panopticon note, nor hear it in the recent Bitcoin podcast. I thought you’d enjoy it if you aren’t already familiar:

I believe it was in fact Jeremy’s brother, Samuel Bentham, who developed the concept for the Panopticon.

The inspiration for its development came from Samuel’s time working in British naval yards and trying to develop a way to enforce laborers to ACCEPT MONETARY WAGES as a form of remuneration. They didn’t want the currency, they wanted “chips” — bits of unused material from the ship building process for which they could negotiate value.

Excellent reading on the topic here. And credit for my knowledge of this to the late, great David Graeber, who mentioned it in Debt, IIRC:

https://newxcommoners.files.wordpress.com/2013/01/linebaugh-ships-and-chips1.pdf

The Zeitgeist – May 7, 2021

But the Windmills!

From a Wall Street Journal article on Friday:

As Texas Went Dark, the State Paid Natural-Gas Companies to Go Offline

The Electric Reliability Council of Texas activated a program that pays large industrial power users to reduce their consumption during emergencies. But the grid operator, known as Ercot, didn’t know who was being paid to participate in this program and what type of facilities were getting shut off, it has since acknowledged.

The Journal’s analysis of grid records shows that participants included dozens of critical pieces of natural-gas infrastructure. Ercot ordered them to stay off for more than four days, as gas prices surged to extraordinary levels and some power plants stopped producing electricity because they couldn’t get enough fuel to function.

The estimated value of the program for the five days of the blackout was about $2 billion—and participants including oil-and-gas companies earned a portion of that for turning themselves off at Ercot’s behest.

“Ercot officials told the Journal that it was unaware it was cutting off some gas supplies when it ordered the big industrial users to stop using power.”


The Best Way to Rob a Bank – Epilogue

Here’s a follow-up from our note on the Greensill fraud and all its associated raccoons: Greensill made its bankruptcy filing!

We’ve saved this document for posterity on our servers, and you can download it here: Greensill BK Filing.

I haven’t had the chance yet to review this masterpiece in detail, but I’m certain that there must be some choice nuggets in here for enterprising Epsilon Theory readers to unearth.

The Zeitgeist – May 7, 2021


About Ben Hunt
Ben Hunt
He is the chief investment strategist at Salient, a $14 billion asset manager based in Houston and San Francisco, and the author of Epsilon Theory, a newsletter and website that examines markets through the lenses of game theory and history. Over 100,000 professional investors and allocators read Epsilon Theory for its fresh perspective into market dynamics.

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