The 10th Man

Epstein Killed Himself

November 7, 2019

There is a burgeoning conspiracy theory that Jeffrey Epstein was murdered in his jail cell. Although it’s not really burgeoning, is it? Most people really believe this. I think once a majority of people believe a conspiracy theory, it becomes fact.

Out of all conspiracy theories, this one is certainly plausible—Epstein potentially had a lot of damaging information on a lot of rich, powerful people. But it is also plausible that Epstein lived a life of saturnalian excess and was not looking forward to the sparse and potentially brutal conditions in prison.

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And it is also worth pointing out that corrections officers are not known for their empathy—or their grasp of social psychology and the broad political implications if Epstein was permitted to end his life. Never, ever bet against government incompetence.

I like that theory better than the theory where Spiderman parachutes into Epstein’s prison cell and gives him hemlock. That’s the thing with conspiracy theories—they assume there is a conspiracy, and conspiracies are difficult to hold together. Do rich and powerful people conspire? If they do, how do they keep it secret?

I don’t know, but I do know this—the people who believe that rich and powerful people conspire tend not to be very successful people, because they are always blaming others for their problems.

Insert Conspiracy Theory Here

One thing I have commented on in The Daily Dirtnap is the mainstreaming of conspiracy theories. I mean, even Trump himself tweets them out.

You would be surprised at how deeply conspiracy theories have been mainstreamed into the discourse of the financial industry. Like, lots of people believe that the government buys stocks. That there is this thing called the Plunge Protection Team where there is a guy sitting in a closet in the Treasury building buying e-minis on a Dell computer whenever the market goes down.

There is a theory that JP Morgan, the bank, is short literally all the silver in the world to suppress silver prices. And so on.

You don’t find these things in the corners of the dark web. They are right out in the open. The biggest financial media outlets give these people a platform to share their beliefs. The most disturbing thing about my industry, hands down, is that the vast majority of people working in the capital markets believe things that are simply not true.

On a micro level, there is no money to be made in conspiracy theories. If there really was a PPT (and yes, I know about the President’s Working Group on Financial Markets), then you should be able to make money off it in a systematic way. But you can’t, so it’s just somebody to blame when things don’t go your way when you’re short. If you’re long a bunch of silver and it won’t go up, blame someone else for your problems.

If It Feels Like the Country is Falling Apart…

On a macro level, belief in conspiracies is a direct result of loss of trust in institutions. In Epstein’s case, the corrections officers failed at their job, the judicial system failed at its job, and the media failed at its job. These are institutions, and the health of this country is based on the strength of its institutions. What makes extreme political beliefs possible anywhere in the world is a loss of trust in institutions.

The internet also tends to amplify fringe beliefs, which everyone knows by now.

I see Epstein memes in my own Facebook feed, from people who, up until this point, had been apolitical. Their first foray into politics is in the form of a conspiracy theory.

If I were a psychiatrist and I were presented with a patient who believed things that simply were not true, I would call that person delusional and I would prescribe an atypical antipsychotic. I take great interest in mental health—when the human mind malfunctions, what do you do? We have tools to deal with that.

What do you do when the country, collectively, believes things that aren’t true? Take a pill? Turn it off and turn it on again?

Sure, there has always been a fringe element in the US. But they were confined to the fringe, and that’s not so true anymore. The fringe is now the center. Bernie Sanders—nobody else seems to have the courage to say this—is a large-C Communist. He is very popular. On the other side, there is a faction of Trump supporters called QAnon who do nothing but traffic in conspiracies.

If it feels like the country is coming apart, it’s because it is.

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Like I said, there is no money to be made in this stuff. The money is made by staying in the sane center—and profiting off of the craziness. Negative interest rates would be crazy. The S&P 500 at 5,000 would be crazy. The VIX at 8 (or 80) would be crazy.

If volatility increases in politics and social psychology, it stands to reason that it might increase in financial markets. I haven’t been too high on tail risk in the last several years, but I am starting to come around.

Your Turn

I’ve been writing in The Daily Dirtnap for some time about this mainstreaming of the fringe, about how political risk is seriously underpriced, and how all kinds of curveballs could be thrown in the election campaign next year.

Now I want to get a snapshot of where The 10th Man readers are on all of this, because this is a giant, complicated mess that is going to have far-reaching implications. Implications on a societal level, yes, but also implications for the markets and your portfolio.

So – could you do me a favor and take this survey on politics, investing, the media, and the general health of the US as a country?

Take The 2020 Survey Now

Yes, it’s pretty wide-ranging but it shouldn’t take you too long to complete—there are plenty of multiple choice questions in there.

I’ll leave it up for a week, so if you could take a few minutes I’d really appreciate your time. Results coming soon to a 10th Man near you (but of course, all answers will remain anonymous). Thank you.


Jared Dillian

 

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David Strongman

Nov. 7, 2019, 3:28 p.m.

How did Epstein kill himself by strangulation, with what? no ligature has been reported at his body or near his body. Too many co-incidences, video recording failure, gaurds not doing a 30 min check for 3 hours, replacement cell mate,maybe he was helped along to his time of reckoning.
Regards, David.

p.eisenkramer@gmail.com

Nov. 7, 2019, 12:22 p.m.

Hi Jared,

    I mostly agree with you about conspiracies - in fact, one thing you didn’t mention is that
many conspiracies (e.g. JKF assassination, 9/11) have multiple (conflicting) theories.

    However on Epstein, how likely is it that both guards fell asleep and that the video malfunctioned just at the time of his death?  Also, consider the large number of powerful people who would (for obvious reasons) want him dead.  Also, see this about the autopsy:

https://www.zerohedge.com/political/jeffrey-epsteins-brother-says-there-were-unexplained-injuries-shoulder-wrist

Also see this about conspiracy theories which turned out to be true:

https://www.zerohedge.com/geopolitical/american-conspiracies-cover-ups

Paul Eisenkramer

jack goldman

Nov. 7, 2019, 11:43 a.m.

Jared, you do not know what happened with Epstein, why pretend? I don’t know. You don’t know. Fact. We don’t know. His cell was designed to make is impossible to commit suicide. Prisoners have commented it’s impossible to kill your self in that cell. Cameras happened to malfunction? Guards were asleep? If it quacks like a duck it’s probably a duck. All I can say is I don’t know. Same with stocks, bonds, and the future of my life. Probabilities yes. Do I know if my wife will be alive or faithful next year. I hope so. I have faith. But I don’t know. If I can’t know my own wife what can I really know? We are all just guessing. Someone really blew it in the mortgage markets in 2008 and many conspiracy theories are true.

lawrence stirtz

Nov. 7, 2019, 11:19 a.m.

I will not take your survey, never an opportunity to truly express an opinion not in the structure of the survey design.
However I am sure you understand the probability of a conspiracy being successful but I am just as sure the general public does not. A brief explanation is that the steps are path dependent which means that if each step has a 50% chance of success that the whole scheme if it is successful has about a 6% if it has 4 steps while if it has 1 step the success rate is 50%. This says to me I only need to know the number of steps to evaluate its potential. simple huh!

Jerry Russell

Nov. 7, 2019, 10:42 a.m.

In this case, I side with the other “nine men” who agree that “Epstein” was murdered. Even the high profile forensic pathologist Dr. Michael Baden says that “Epstein” suffered multiple bone fractures typical of homicidal strangulation. Baden said that in his 50 year career, he had never seen this pattern of injuries in a suicidal hanging case. The failure of either the media or law enforcement to draw the obvious conclusions, proves that public is fully justified in its lack of confidence in those institutions.

Ron Kirby

Nov. 7, 2019, 10:01 a.m.

Jared, as John Mauldin has said in his essays, it probably doesn’t matter if Trump or some leftist wins the election in 2020. They both would embrace something like MMT to carry out their spending agenda, essentially monetizing debt by printing money. I don’t know if either side would get it through Congress, but just the possibility alone—perhaps even just the nomination of someone like Warren—could provoke a dollar crisis considering the already high amounts of debt being held by foreigners. Japan gets away with this because they basically pass debt around amongst themselves, but the US doesn’t have this luxury.

In any event, if the Dems nominate a Socialist from Warren to further left, we—the independent voters, about a third of all voters—will have to hold our nose and vote for Trump even though we despise him personally. We haven’t forgotten Churchill’s words: “Socialism starts with good intentions, and ends with the gestapo.” I’m also sure these words will be plastered on billboards all over the country if the Dems nominate one of the Socialists.

Adam Schwartz

Nov. 7, 2019, 9:55 a.m.

In the “2020 Survey” I wish question 4 had included the option: gotten more polarized.  I think Americans have moved both further to the left and to the right.

Liz deForest

Nov. 7, 2019, 9:27 a.m.

I took your survey, but it lacked nuance.  We are value investors by temperament and are holding quite a bit of cash waiting for the next opportunity.  We have enough bonds to last us through years and we have good stocks we bought years ago that we check in on periodically.  I don’t think we are particularly divided, but I remember the Vietnam War years from when I was a kid.  From my perspective that was much worse.  I remember the media hysteria during the Reagan years.  I was young and thought Reagan was leading us into WW2.  I am not so easily provoked now.  The debt bubble won’t end well, but civilization will not collapse either.  Tough times are great opportunities and we have made our best purchases during bad times like post 2008 and during the tech bubble.  I purchased our bond holdings during the tech bubble and they are chugging away.

kmardenjr@worldclasslogistics.com

Nov. 7, 2019, 9:23 a.m.

I love reading the 10th man articles as they are always written in layman’s terms, and usually get me to laugh at least once. Thank you Jared and keep up the good work.

Four things about the Jeffrey Epstein “suicide” that just really don’t add up and could be very coincidental, but are still very troubling.

1. Both guards that were on duty to protect and monitor a “suicidal” extremely high profile convict fell asleep for three hours on their job…BOTH.

2. Cameras in the cell and outside the hallway “malfunctioned” the entire time that is in question, so there is no video proof of anything. Again, in a very high profile case.

3. ABC news came out and said that they had information on over 1,000 high profile names that were involved with Epstein, but executives @ ABC squashed the story. (Usually if everyone is telling you there is nothing to see here…there is)

4. A former NYC medical examiner with over 50 years experience in the field and has worked past high profile cases including the JFK assassination and OJ Simpson case (along with others) came out and said that after reviewing the case he has never seen the types of injuries sustained by Epstein in any suicide case he worked in 50 years.

I know these four details don’t prove a conspiracy theory and yes I know they could all just be coincidences, but I also don’t think they help prove your theory over anyone else’s.

Just my $.02

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