With all matters ’24 winding down and little of import scheduled on the tape (OK; we got FOMC this week, but I can’t work up much enthusiasm about it), I will attempt to school y’all as to what is really wrong with our Health Care System. This in the wake of that poor son of a bitch getting plugged during morning Midtown rush hour, and even more so the rise legions of misinformed souls who, with varying levels of irrationality, are applauding at least the intent, if not the consequence, of his action.

I take this whole thing somewhat personally for a couple of reasons. First, the murder happened on my turf. I have walked by that very spot thousands of times. I have occupied a half dozen offices – including my current one, within a couple of blocks of the crime scene. I park in the adjacent hotel garage regularly. For 10 years, I owned a Condo less than half a mile away.

The topic also touches me professionally, first because I have also spent many years working on projects, albeit with minimal success, designed to bring incremental rationality to health care costs. Moreover, I am, like > 50 million other Americans, a customer of United Health Care, paying for not only my own family’s coverage, but also that of my employees. They have been, upon occasion, maddening to deal with, and have outright pissed me off more than once.

But they are not the head of the dragon, nor, perhaps, even its tail.

But before I get to that, it is my pleasure to celebrate the following chart with you, which touches my soul almost as much as the image of the refurbished Notre Dame Cathedral I shared in last week’s note:

To what, for the uninitiated, I am referring is the essential end of a multi-year condition known as an Inverted Yield Curve, under which rates for shorter duration debt exceed those of longer maturities. And that ain’t natural. If you borrow a few bucks from a buddy and promise to pay him tomorrow, you’d expect to pay a lower vig than you would if your agreement called for you to cover this loan in, say, 2027.

The Economics books tell you that an Inverted Yield Curve is a recessionary indicator, but I don’t think this is what’s been at play here. I think that the Treasury Market has been, since lockdowns at least, distorted by both Monetary and Fiscal Policy, and that a return to normalcy is a boon to rational capital allocation.

But back to UNH. Their projected 2024 profit is ~$23B – hardly chump change. But measured against the above-mentioned 50 million system users, and considering they have business lines other than insurance, their profit per patient < $500/year. Moreover, with a market cap that hovered before this Luigi dude gunned down their CEO at ~$500B (it is by this measure the 16^th largest company in the world), the return to investors, owners of this business, is ~4.6% — again not chump change but less than the yield on 2-year Treasuries that prevailed before the Fed began cutting rates.

I sympathize with those who, having treatment coverage denied or delayed, have formed a rage against the insurance company itself, but their anger is misplaced. It is the system, not its custodians, that causes most of the problems.

Allow me to elaborate. First, and most broadly, the vital economic ecosystem known as Health Care is the most structurally distorted of any which I am aware. As an unavoidable reality, Supply AND Demand are set by the supplier. You don’t walk into a doctor’s office or a hospital and inform them of your preferences, they inform you of your needs. There’s nothing anybody can do about this. They also control the oversight mechanisms, but more about that below.

Further economic distortions emerged after WWII, when, facing a labor shortage, American Industry began to offer Health Care as part of compensation packages. Among other matters, there’s a tax arb here; for most of us, the dollars paid for health care coverage are worth as much as direct compensation –are perhaps even more valuable because they are received without a tax liability. Employers cover these costs and deduct the payments from their taxable income. In this way, trillions of dollars transferred across the economy escape the avaricious clutches of the tax man.

These two elements of Health Care economics have created incentives for overconsumption, as we all tend to gorge ourselves on any product or service for which somebody else is footing the bill. It is also at this point when Health Insurance became a misnomer. In other forms of insurance, we pay a premium to cover the adverse impacts of an unfortunate contingency. But with Health Insurance, nearly all economic burdens are underwritten by the insurer.

There are also misapprehensions as to who is covering these costs. Large corporations ALL underwrite their own risks in these realms and use companies such as UNH simply to merely push the paper around. When coverage for 40% of our fellow citizens paid for by taxpayers, most notably through programs such as Medicare and Medicaid are added in (the National Institute of Health estimates that 2/3rds of 2024 medical costs were paid by the government), the percentage of the costs of medicines, treatment and the like that are paid by insurance companies themselves drops to the low double digits (or below). Yes, it is your UNH rep that informs you that they won’t cover your hip replacement, but more often than not, they’re simply following guidelines of third-party underwriters.

This is not to suggest that insurance companies don’t play games to goose profits. They most certainly do. It’s the American Way.

We can also blame lawyers, who have boosted liabilities (contingent and actual) into the stratosphere. But I have some sympathy here, because, whatever else happens, lawyers gotta get paid.

There are, in addition, a few other distorting dynamics. First, particularly in this environment of accelerated technological development, many tasks that doctors perform (and for which they charge doctor-level fees) could, with greater ease, lower cost, and perhaps greater efficiency, be undertaken by machines and Health Care personnel without medical degrees. This would liberate physicians to apply their time and efforts to maximum treatment benefit, but I am not optimistic that any change in that direction will be speedy in its rendering. Doctors are like everyone else, insofar as that they don’t like giving up revenue streams. So, they continue to apply stethoscopes, blood pressure monitors and thermometers to our bodies every day, and this drives up costs and reduces treatment availability as well.

The American Medical Association lords over these matters, and one upsets them at one’s own hazard.

Perhaps the most difficult inefficiency to address is the disproportionate skew of Health Care expenditures for a given individual towards treatments taking place at the end of that person’s life. That infallible source – NIH – estimates that the percent of outlays in the last 12 months of an average person’s life is between 10% and 12%. This may not sound exorbitant, but if one recalls that human life spans are now approaching 80 years, it is 10x the amount expended in earlier years of our mortal existence.

The last days of my daddy – that old mixer Stuart Charles Grant, who I don’t believe darkened a doctor’s door for six or so decades, but who in in the last several months of his life spent more time inside medical facilities than out, is an anecdotal example.

And it did no good. He died anyway — I suspect within the same timeframes as would have prevailed if he had chosen to stay home. On the night of her death, they airlifted my mother from a suburban Chicago hospital to Northwestern Memorial, where, upon doctor’s advice, I authorized the same fatal morphine dose that she easily could’ve received without leaving her Lake Forrest deathbed.

We all have stories like these…

There are other issues as well, of course. At the lower end of the socioeconomic spectrum, we encounter untold instances under which all medical services begin in the Emergency Room and extend into the priciest realms of Health Care.

But in general, we have a system under which the supplier sets the demand levels and associated price, where consumers pay for only a small fraction of the products and services consumed, thereby incentivizing overconsumption and disincentivizing price disclipline, where doctors rule and lawyers run wild.

And an efficient mix between costs and competent treatment? Fuggedaboudit.

For anyone who cares to know, our projects involved creating a capital and trading market to swap expense streams for various diseases – most notably diabetes, the treatment of which we spend more than we do on Crude Oil. In our imagined Utopia, markets would set the price of care, based upon those righteous forces that govern other marketized elements of the economy. It could work, but our failed experiences suggest that the idea, best case, is ahead of its time.

The problems, meantime, appear to be intractable, but I think an honest rendering would suggest that we obtain better outcomes than those jurisdictions that feature universal Health Care. You may prefer the latter, but you may want to check with your friends in the U.K. to determine their wait times and experience quality for even the most basic and essential elements of their medical treatments. And please bear in mind that nothing’s for free, and that you’ll pay one way or another. Finally, with our government covering 67% of Health Care costs, we’re closer to socialized medicine than you may imagine.

I’m even more certain that plugging several holes into the back of an insurance CEO is, at best counterproductive and, at worst, catastrophic. We can choose to gaze into those dewy brown eyes and proclaim the hitman a visionary martyr. I don’t, however, feel it will accomplish much and may cause serious incremental carnage.

In the final analysis, like the physician referenced in Luke (4:23), we must seek to heal ourselves. Our problems are chronic and solutions elusive. But let’s at least start with a proper diagnosis, and then work diligently towards constructive, rather than damaging, murderous ends.

TIMSHEL

Whatever else maybe transpiring, ‘tis, from my perspective, a season of comings and goings, of demise and resurrection – several of which events compel my comment.

So, let’s get to it, shall, we?

Though I’m not over-proud of this, I am most joyful about a departure. After 25 years of historically erroneous commentary, pompous virtue peddling, and other misdemeanors, New York Times Columnist Paul Krugman is about to Peace. He has annoyed me for most of my adult life — so much so that when, in the troubled Autumn of 2008, with the financial world collapsing, the Nobel Committee awarded him its coveted prize, given in happier times to world-changing geniuses like Hayek, Friedman, Stigler, Miller, Markowitz and Sharpe, it sent me into a months-long depression.

Not only has Krugman been wrong about so many things for so long, he has done so with criminal arrogance. In 1998, for example, he famously instructed the world that within less than a decade, the Internet would be no more impactful than the fax machine. His interventionist bona fides have impelled him to proclaim, with maddening certainty, dire consequences for any and all free market enhancing policies, and Economic Eden associated with any command-and-control actions taken by our betters (including him). Preferring, instead, infinite taxation, deficit spending, redistribution and government control.

He may be the only individual on the planet that believes that the government has not borrowed enough, spent enough or taxed enough in recent years – on its way to our current >$36T deficit.

In summary, he has, with petulance and certainty, proclaimed that only an elite ruling class is capable of making sound decisions and that anyone who doesn’t understand this is ignorant, vain, and border-line evil.

All of which renders (as an aside) the morally ossified New York Times (which, several years ago, proclaimed that it would abandon factual reporting in favor of the pursuit of “more righteous” ends) his perfect venue. Well, we’re still stuck with the Times, but at least Krugman is gone. Hosannah!

Also gone is that whacky, loveable Bashar al-Assad, who managed to get his ass out of Syria and (presumably) into a Turkish Palace before the victorious rebels blew it into the Land of the 72 Virgins. What follows in Damascus and surrounding environs remains to be seen, but it’s hard to be over- optimistic.

On a more righteous note, I am thrilled beyond words at the resurrection of the Notre Dame Cathedral in Paris. It burned down before the lockdowns, and even then, they said it could not be rebuilt. But it opens again this weekend, and the pictures are breathtaking.

It hath risen! And I think it bears emphasizing that the approaching €1 Billion it took to finish the job all derived from private donations – a feat running in deep conflict with Progressive principals, many of whom proclaimed it was gone forever. I’m sure Krugman has an opinion here – some combination of the impossibility and/or evil intent of such largesse. But he’s gone, and the newly refurbished Notre Dame Cathedral has re-emerged in all its magnificence, in the 5^th Arrondisemont, on the banks of the Seine.

Moreover, a Friday Wall Street Journal article proclaimed the return of the Nehru Jacket – a drive-by fashion statement whose viability was limited to a few months in 1968. The Beatles were photographed wearing them, and everyone else then had to have one:

56 years later, and with a starting price take of $4 Large, its current versions are less of a proclamation of hip countercultural sensibilities than it is a statement of personal opulence. So be it.

I will cop to mixed feelings about this. First time ‘round, I forced my parents to buy me a Nehru, and then, as is the case with all my peers, paid for this with wages of embarrassment.

By the time Woodstock rolled around, nobody with an ounce of self-awareness would be caught dead in a Nehru.

And I would be remiss if I failed to acknowledge that all this is transpiring precisely 44 years after that horrible night that Lennon was assassinated. He’s now been dead for a span covering >110% of his short but magnificent life. He had more music in him, to be sure. And, were he alive today, I believe he’d be rocking a new Nehru like a boss.

Meantime, the market persists in its euphoria, much of it presumably owing to the political resurrection of ‘Ol 45. For some, this divine intervention cannot arrive too soon, but the reality is that it won’t transpire for another 6 weeks. There is a justified worry as to what incremental mischief the Krugmanized outgoing administration can unleash, and, not gonna lie – the late Thanksgiving Weekend news drop of the sweeping Hunter pardon was a rather disturbing indicator. This, of course, was inevitable, but I could’ve done without his casting it as a heroic gesture in the name of sound jurisprudence and good governance. The truth, I suspect, is that they knew that HB was not gonna go to prison quietly, was perfectly capable of taking down his whole Shakedown family.

I don’t blame him for this though, and I suggest to those who are outraged that if they wish to pardon their relatives, they get busy running for President, and, when elected, pardon away.

The markets have, as indicated above, taken these comings and goings in stride – perhaps appropriately so, as there’s not much visible to me overly likely between now and year-end to throw this rally off its stride. Inflation numbers drop this week, and I suppose we should keep a lazy eye in those quarters.

And one concerning aspect of this is the alarming rise in Coffee Prices, which much of the Western World, including me, cannot abide:

More broadly in terms of Inflation pressures, we may wanna pay attention to the reality that 80% of the dollars floating around the planet today were created after the lockdown:

But that, I submit, is a problem for another day. In this season of departures and resurrections, I prefer to focus my attentions more acutely on ethereal matters. Like the return of the Nehru Jacket. Which was very quickly replaced in our sartorial affections by Bell Bottoms. Which had a good run, but ultimately disappeared, and have not, unlike the case with the Nehru, re-emerged.

Thus, in closing, while we all gotta go, whether we are resurrected, by contrast, is out of our hands – partly in those of God but also as dictated by the caprices of human sentiment. With respect to the former, I can pray at Notre Dame Cathedral. As for the latter, I’d ask Krugman, but, alas…

TIMSHEL

Rented a tent, a tent, a tent,
Rented a tent a tent, a tent, rented a rented a tent

For reasons which I have difficulty articulating even to myself, I have recently revisited Kurt Vonnegut’s “Sirens of Titan”. As is the case with many in my generation, Vonnegut’s work was, one of my early portals into the world of literature. At the time, I thought he was better than Shakespeare, but my tastes have since evolved. He put out some good stuff, but much of it was sloppy and some entirely drek.

Nothing he wrote was better than Sirens of Titan – a science fiction work which elaborately but plausibly reduces the reasons for the creation of the earth to realms beyond trivial. I reckon the point is to poke fun at existential navel gazers, seeking more profound answers which fit into their own cosmic narratives. I think, in doing so, he performed the Lord’s work.

An early chapter in SoT is entitled “Between Timid and Timbuktu” – an oblique reference to the reality that most words contained in limited edition dictionaries are related to the concept of Time. A subsequent section — “Tent Rentals” pays homage to the rented-a-tent sound of thrumming war drums as armies enter battle. Vonnegut knew something about this, having not only fought in WWII, but in the Battle of the Bulge. Having not only fought in the Battle of the Bulge but having been taken Prisoner of War therein. Having not only been taken Prisoner of War but having endured one of the worst massacres of the entire conflict – the fire-bombing of Dresden in February 1945.

Meantime, the glossary space between Timid and Timbuktu and the concept of martial tent rentals seemed to me to be particularly relevant — as the national holiday melted away and as we marched – inexorably and for better or worse – into the final month of a fast-paced, action-packed year. Time is indeed hurtling forward, not with Timidity but plausibly toward Timbuktu, and those looking for sanctuary can probably do no better than seeking to occupy rented tents and making do as best they can.

Published reports confirm that November was the strongest return month of the year. It wasn’t a milk run though. After some initial post-election euphoria, markets yielded some ground – only to regather themselves for the final, magnificent charge that continued all the way through Black Friday.

I’d be remiss in any failure to acknowledge the Gallant 500’s introductory breaching into a 6 handle, but special commendation, is owing to Ensign Russ – commander of our nautical small craft/small cap forces. The good ensign piloted his boat to double digit gains, but as the accompanying chart shows, it wasn’t all smooth sailing.

Still and all, I am leery of small cap rallies at this point in the year – particularly when the political trade winds blow fair, fearing that they are fueled by a combination of short squeezes and stays of executions for companies which, under other circumstances, might be facing naval tribunals, and, for some, ultimate dispatch into the drink.

Maybe this time it will be different, but I advise my sea-faring small-cap seeking minions to resist the temptation to open ‘er up full throttle.

And now it’s December and one wonders where the time went. It hardly began in Timbuktu and is now anything but Timid. I suspect that the investing army will continue its push to higher elevations – through year end and perhaps beyond.

And why not? I hear the rented-a-tent pounding of the market bulls. They’re on the march and looking to stampede. I don’t believe, from a risk management perspective that it would be wise to wave a red cape in front of them.

I do, however, believe that whatever direction the markets take early in ’25, the first move – particularly if it is acute – is a fade. An improbable early January selloff is likely to be a buying opportunity, and any (higher probability) lurch towards the heavens will run out of steam and reverse itself.

Why? First, because I said so, and second, because that’s just the way it works ‘round here.

As always, we’ll be dancing to the tune of the tech tape. Which looks strong to me heading into year end, but ominous in its broader implications. I read today on Bloomberg of the emergence of an ill-omened new AI app called Death Clock, which purports to predict the exact day of users’ gathering to the dust of their forebears. It has reached about 125K of the curious thus far, but I will cop to be both Timid about this and to preferring a one-way ticket to Timbuktu.

I suspect, meanwhile, with holiday fare presumably digested by now, investors will eagerly turn their attentions to the solemn, ritualistic exercise of the year-end “marking-up-o-the-tape”. This doesn’t happen every year, but at the end of what has been thus far a strong ’24, and with everybody looking to get paid, it’s virtually in the bag. This Friday brings Jobs tidings, and, before the bells jingle, we’ll be treated to new Inflation figures and a final Fed meeting.

But they are more or less beside the point – largely because the investing universe is uber-fixated on the prospects of cashing in some big orange dividends to be harvested in ’25. Had the election gone the other way, these data drops would’ve been more important. All God’s Children would have been focused on the Jobs Market, Inflation and Fed Interest Rate Policy.

But right now, the joyful chorus is ringing “who cares?”.

I do suspect, however, that we will care about some macro issues in the coming months. Or should. In an eerie verisimilitude to the ebbs and flows of the capital economy that we experienced during Trump 1, the once and future Leader of the Free World is engaging in some (dubious in my judgment) saber rattling at important international trade partners.

For instance, just this past weekend, he issued a warning to our BRIC buddies – a multi-jurisdictional consortium of developing nations, acronymed after Brazil, Russia, India and China, but now, as ordained by the Gods, expanded to include South Africa Egypt, Ethiopia, Iran (!) and the United Arab Emirates, not to even think about creating their own currency. Because we will bring the full measure of our retaliatory forces to bear on them if they do.

Fortunately, his associated rhetoric does not extend to sending the can smashing infantry into these hostile climbs, but rather to the imposition of punitive tariffs. And I remained concerned about the attendant implications. I have a hunch that Americans buy some important stuff from these BRIC layers, who will, inevitably, respond in kind. Not exactly accretive, all of this.

Trade wars last reached this temperature in 2018 – the only year in Trump 1 in which our valuation armies yielded ground. Particularly in December of that year, when: a) the nose-to-nose confrontation between the U.S. and China reached its peak; and b) the Gallant 500 beat an ignominious retreat that ruined what was trending towards a solid, if unspectacular return year:

Also that month, Fed Chair Pow began to sound ominous rate raising rhythms – only to do a 180 in January and launching the G5 to its best sequence since 2013 (and one that has not been surpassed since).

Well, a quick review of current contemporaneous conditions indicates that not only are tariffs again on the docket, but there’s every possibility that the Fed could revert to its late ’18 hawkish stance. Particularly, if as is entirely possible, impending tariff policy morphs into an Inflation problem.

Investors may seek to mitigate these risks by renting the most expensive tent ever manufactured. BTC, which flirted with $100K a couple of weeks ago, but has since retreated to microscopically more affordable levels of 97 large and change. This may seem like an elegant accommodation at present, but how it holds up when the shells start flying is another matter.

So, I do indeed expect a war and wish all the best of fortune with their tent rentals. Only time will tell how all this plays out, nestled as it is between Timid and Timbuktu.

Of course, in any properly constructed dictionary, the ordering would be reversed. The ancient city nestled on the banks of the Niger River comes, alphabetically, before the adjective describing lack of courage and confidence. But like I said. Vonnegut was sloppy. And so am I. And so, perhaps, are you.

And so is the world. Which is always, in one form or another, is in a perpetual state of war. Maybe this is why, somewhere in the distance, I continue to hear the following chant:

Rented a tent, rented a tent, rented a tent a tent….

TIMSHEL

I warned everyone that there might not be much fodder in the coming weeks, particularly given my promise to eschew the moth-to-flame topic of domestic politics. Which I mean to keep. For now.

The early returns on this prediction are mixed. There’s no new information about the much-anticipated Faces reunion. Market data has slowed to a trickle. NVDA survived its earnings release, energetic efforts by the Gloomy Guses seeking to nitpick it notwithstanding. A few PMIs dropped on Friday, and they beat expectations in the U.S., but collapsed in Europe, where they have long toiled in the nether regions.

By a cruel quirk of the calendar, the next round of Inflation numbers is scheduled for release on Thanksgiving Wednesday. When they’ll be blowing up the balloons on the Upper West Side FFS! I suggest that you pay them little heed, as they are unlikely to be sustainingly impactful.

By deductive reasoning, I am thus impelled to point my rhetorical weaponry largely towards next year. And the first factoid I can share is that at long last, the 5-century countdown to the celebrated-in-song Year 2525 can finally begin.

For the uninitiated, “In the Year 2525” is a song by the long-forgotten duo of Zagar and Evans, which, apart from banking some coin on the tune (which sincerely hope they saved), is primarily notable for being: a) the only recording act to have ever reached Number 1 in the U.S. and U.K. and never to have charted again; and b) perhaps (other than the fabulous Electric Flag/Hendrix drummer Buddy Miles) the only credentialed musicians spawned from the plains of Nebraska.

I never liked the song. But my friends did. Even the lyrics are entirely dispensable. But I do owe them a debt of gratitude for supplying me, albeit in modified form, with a theme for this week’s note.

But before we get to what happens next year (i.e. 2025), there are a few emerging ’24 matters with which to dispense. On Friday we learned that the New York (football) Giants will be dime-less in ’25 and beyond – having finally bailed on one of the biggest loser trades in recent sports memory: their $160M investment in Danny Dimes – 6 years into his tenure and less than 12 months after having signed that astonishing deal. He won’t bank the whole buck sixty, more like half. But I impute, after crunching some numbers, that this nonetheless amounts to over 800 million dimes.

And while we’re on the topic of sports, I read with interest that the Number 1 ranked high school player in the country – Bellville MI’s Bryce Underwood, just flipped his allegiance to the (hated by me) University of Michigan. He had committed to LSU, but apparently the lure of the academics at the former institution, and that of playing for his home state’s flagship school, was too many for him.

That and the $10.5M that the Wolves just stroked to him. And I’m not gonna lie — it all depresses me. The B1G now stretches from Westwood to the Jersey Shore. Stanford and Cal, located on either side of the San Francisco Bay – immediately adjacent to the Pacific Ocean, have now joined the Atlantic Coast Conference.

And now, high schoolers are inking eight figure contracts to play college ball. Mark my words – these will be nine figure contracts well before the decade ends, will be sufficiently large to cause even Danny Dimes (late of the ACC’s University of North Carolina) to wish he had a couple of years of eligibility left. But he doesn’t, and in the meanwhile College Football is rapidly becoming unrecognizable.

And if you doubt this, consider that Columbia won a share of the Ivy League title. I happened to be present, as a grad student, at their breaking of their infamous 44 game losing streak when they beat Princeton in 1988. I remember so clearly the joyful “back to Jersey” chants of a half-filled Baker Field on that sunny Autumn day, which seems like a lifetime ago.

Finally, we approach Turkey Day, for the first time in the field of my awareness, without the presence of Alice Brock, eponymous heroine of Arlo Guthrie’s epic saga “Alice’s Restaurant”. She left us on Thursday – precisely one week before the couldn’t-be-beat Thanksgiving dinner she is legendary for hostessing.

Moving on to ’25, after due consideration, I believe that it’s gonna be a baller year for the markets. True, some of this is based upon my favorable reading of the gale-force political winds that prevail, but it begins with my embedded belief that there is simply too much liquidity chasing too few investible assets to keep a lid on valuations.

This would be true under any policy regime other than the ones about which: a) Progressives dream; and b) were roundly rejected by the And I don’t think that the inflatable orange float that will land on Pennsylvania Ave on Jan. 20^th offers a unilateral windfall to the investment universe.

So, I don’t expect the next phase of the rally to be particularly righteous, but the new regime will do some things to break some of the chains that have been impeding an even stronger rally. And here I begin at the Federal Trade Commission, which will bid a not-so-fond farewell to the odious Lina Kahn – the minute that carroty hand is placed on the bible. She worked tirelessly, and with considerable effectiveness, to ensure that no capital markets activity transpired on her watch. But she’s about to Peace, against the backdrop of a huge backlog of IPOs, secondaries and other juicy transactions of similar look and feel.

Yes, the calendar will explode, and it should be accretive to our objectives. For one thing, a hot deal calendar just vibes well, and, perhaps more importantly, the prospect of raising capital unimpeded by obstructive regulation should focus everyone on the holy task of putting it to good use.

We are also well rid, from a market and atmospheric perspective, of that cockroach Gensler. Not only was he a terrible CFTC Chair, and an even worse Head of the SEC, but his path has been that tired and detestable journey from Goldman Sachs Partner/Centimillionaire to Social Justice bureaucrat, bent on blocking the Road to Riches of everyone else — after he banked his own. We haven’t had a great deal of luck with these types, dating back to Former Goldman Chair Jon Corzine, who served as Senator then Governor of New Jersey (whose current governor is also a Goldman Fat Cat) – after which he ran a pretty decent financial firm – MF Global – into the ignominious dust.

At the SEC, Gensler tried to ram through Green New Deal, DEI, ESG initiatives, none of which have much, if anything to do with the regulation of securities markets. More broadly, the list of his hostile actions against market participants rivals that of Ms. Kahn at the FTC. The new administration has yet to name his replacement, but another term under his stewardship would have been dreadful, and his removal alone is cause for celebration.

My boy Bessent, after a knock down/drag out fight, did in fact cop the top spot at Treasury. I am inclined to pardon him for his documented slights to me – particularly as it will be difficult for me to eschew entirely the temptation to pimp his name/our affiliation out to those with whom I interact professionally. Please forgive me for this. And try to walk a mile in my shoes. If you were a risk manager still trying to make a living in risk management, and if you served as the long-time risk manager to the incoming Treasury Secretary, you might do the same.

Bessent and I tended to agree on nearly every matter pertaining to economic policy, but I am troubled by his 11^th hour embracing of tariffs – something I never discerned in our twenty years of interaction. Yes, sometimes tariffs are necessary and certainly the domestic market protecting/intellectual property thieving Chinese are perhaps sorely due for some of this tough love.

But tell me how tariffs — a program under which a government collects a fee on import-based transactions, is anything other than a tax? More often than not, they are passed along to consumers; if not, the provider of the goods and services swallows them. Either way, the government cash register rings. And someone pays. And then the tariffees start to do some tariffing of their own. Prices rise, and only governments benefit. So, let’s tariff away, but not call it anything other than it is.

I reckon, though, the tariff hyperbole will not translate with the flourish with which it has been pushed, and that one way or another, we’ll survive. Part of the Bessent pitch is the unshackling of the Energy Sector, and whatever one thinks about environmental impacts (and my belief is that in a world where India, China and much of the Third World will voraciously consume fossil fuels, our own restraints are futile), cheaper and more abundant energy will be a boon to our economy. The Health Care and Manufacturing Sectors should also benefit from the arrival of the new Washingtonian sheriffs.

I anticipate this feel-good hypothesis will drive incremental gains between Thanksgiving and Christmas, and that we’ll come out of the gates strong in the early portions of next year. At which point we’ll hit a brick wall of unspecified composition. This is as God wills it and should not cause over-consternation.

U.S. markets will continue to obliterate the competition:

I suspect that Interest Rates will remain stubbornly elevated, that the Fed will be less inclined to help the cross-town managers of fiscal policy, that Musk and the other dude will face great difficulty in attacking the expense side of the deficit, and that at some point, the massive credit bubble that we have (ignoring history) blown ourselves will reach a bursting threshold.

I don’t reckon that it will take to The Year 2525 for this reckoning, but I am not paid to offer 500-year prognostications. On the other hand, I’m not paid to offer prognostications of any kind.

Meantime, it’s Thanksgiving and we’ve many blessings with which to garnish our tables. Markets are strong and likely to remain so. No, we won’t have Alice, at whose place it is said that, excepting her, you can get anything you want. And now she’s gone for good. Maybe she never was there at all. But the menu is abundant, and the kitchen is warm.

The Lions are champs of the Ivy League – for the first time since 1961.

This is about all for which we can hope in this forlorn world, so let’s stuff ourselves now, shall we?

2525 can wait.

TIMSHEL

On soft gray mornings widows cry, The wise men share a joke
I run to grasp divining signs, To satisfy the hoax
The yellow jester does not play, But gentle pulls the strings
And smiles as the puppets dance, In the court of the crimson orange king

Peter Sinfield (12/27/43 – 11/14/24)

A quick word about Pete Sinfield, original lyricist for King Crimson and ELP. His run was brief and then he disappeared. Composed our titular lyrics. Died on Thursday.

And that is all I have to say about that.

Meantime, yes, the Election, about which I have vowed in this space never to write again, is behind us, forcing, among other things, a reversion to myriad matters more mundane, but evoking mental gymnastics as to what it all means.

The results were certainly unambiguous, utterly obliterating my clever but ultimately erroneous hypothesis as to the chaos which would ensue under certain outcomes. I will state, however, and in my own defense, that the count was too one-sided for any such shenanigans to unfold, and that had it been close, I might’ve been right. But the electorate has stated its preference and will abide the consequence. Resistance, for the time at any rate, is futile.

I have read, as an exception, of initiatives which channel those global social trend setters in South Korea – through a movement called 4B, under which the damsels of the land withhold the full menu of their charms from sinful, forlorn bearers of Y chromosomes, as retribution for political transgressions which they ascribe disproportionately to us. But I’m not terribly concerned at this point. My personal and observed experience in this regard suggests that it will be difficult, perhaps impossible, for you ladies to hold to this discipline.

But here’s another problem with moving on: we’ve entered the dreary, information-bereft back half of the quarter – which also features two vibe-enhancing but market-disruptive holidays. We await, of course, that holiest of quarterly market events – the ritualistic NVDA earnings report, schedule to drop on Wednesday. The Fed weighs in one final time a week before Christmas. But other than that, Bubkis.

So, we’re kind of stuck, with nowhere to point our peepers but into the past. Most notably to the last 6 weeks of 2016. When Trump, improbably, was President-Elect. Replacing not Biden, but Biden’s former boss. When the loser of the recently completed contest was a member of the fair sex. When every member of the Supreme Court could articulate associated membership criteria.

And exemplary of our fixation on what is visible in the rearview mirror, Friday night gave us a Dallas boxing extravaganza in which the top card featured the 58-year-old ear-biting, Prince-logo-face-tattooed former Heavyweight Champion Mike Tyson against a twenty-something Youtuber. The streamers went wild, so much so that they crashed the Netflix feed. But the results were as expected, proving, yet again that much as we’d all wish to turn back the clock, it just ain’t how the world works.

And regrettably, there are signs that 45 (aka 47) is back to his old tricks. He’s in a frenzy to fill his court of cabinet sycophants, and dubiously demanding unilateral latitude to push these through using a sketchy tactic called Recess Appointment, under which nominees are approved when the Senate is conveniently out of session and thus unable to vote yea or nay. There is even speculation that he will contort a few regs to force both houses out of session and proceed with his plans. If he does, both parties will usurp, probably for all time, the chamber’s critical Advice and Consent role.

And some of his selections reflect a combination of his world-class narcissism and his inability to avoid rubbing the face of his political opposition in scat. He has chosen a few wise men, but also a handful of yellow, string-pulling jesters. We all know who these are: the Fox News guy at Defense, Gaetz at Justice and RFK, Jr. at Health and Human Services come to mind.

With respect to the last of these, one cannot help but wonder how his daddy would’ve felt about it all. As cabinet members go, few in history (dating all the way back to the brilliant but perfidious, adulterous Alexander Hamilton) were as unhinged as Bobby Sr. He single-handedly took on the mob — at a point of their maximum power, going so far as to arrest one of its leaders and deposit him, with little more than the shirt on his back, into the deepest jungles of South America. Egged Brother John on to confront the Russians in the Bay of Pigs, with nearly catastrophic results. Took, according to widely published reports, sloppy seconds (deferring of course to his brother) with Marilyn. These and many other actions on his part confirmed his permanent status as one bad hombre’.

So, part of me believes he would be proud of his renegade son, but overall, I gotta think he would’ve been appalled. His long-suffering widow died a few weeks ago, at a moment almost contemporaneous to her boy’s announcement that he was joining Campaign Orange. And I suspect that for Bobby, pride in Junior’s DNA-driven proclivities to assault the status quo would have failed to negate his disappointment of his abandonment of the political party to which he and his family owe their fame and (along with bootlegging and stock manipulation) fortune.

The common thread across these selections is that perhaps the main thing that Papa Carrot learned from the triumphs and trials of his first go round is that this time, he would surround himself exclusively with his own peeps.

I think this is a missed opportunity to cast himself in more statesmanlike hues. Could’ve nominated a true expert in medical policy to reform our dysfunctional health care system, a distinguished, conservative jurist to attack the many ills at Justice, a military leader with sufficient managerial credentials to efficiently lead the three million employees associated with our armed services. This would’ve paid off politically, but it’s not how he rolls. He is incapable of abandoning the travelling circus or its jesters, and, because of this, Trump II promises to be a terrifying high wire act.

While noting the irony of creating a new government bureaucracy to attack the waste of government bureaucracies, I am encouragingly intrigued to see what can be done by that hedge fund dude and the century’s most successful serial entrepreneur to eliminate the massive overspending of government agencies. But I suspect that they’re in for a tough time. And will find that sending a rocket to Mars and back is a milk run compared to removing the individuals and agencies who have so long been sucking on the federal teet. I am rooting for them, as so should we all.

But the markets, after an initial burst of euphoria, have turned a skeptical eye towards the totality of these tidings. To be sure, they’ve other matters about which to fret. The Fed’s rate cutting ax is showing signs of going wobbly. Earnings have been robust relative to expectations, but The Street has been assertively scaling back 2025 expectations since Labor Day:

None of this worries me overmuch. Yes, the initial post-election rally had the look and feel of eight years ago, when the investing world began to contemplate the bennies associated with a transfer of power from the market scolding Democrats to the Real Estate cowboys that replaced them. With a few stumbles along the way, this bull market is still in place, and I do not believe it has yet stomped its last stomp.

But markets remain fickler than even those 4B objects of our rejected desires, and it pays to prepare for the caprices their wandering preferences.

One salient example is the performance of the USD, which, as measured against a bevy of other lovely units of legal tender, has rallied a lusty, passionate > 6% in last 6 weeks, and has lurched especially heavenward the days since the election results became clear.

But what the delicious dollar giveth, it can taketh away. I suspect that much of the flight of these fluttery wings is driven by expectations of higher domestic interest rates.

And, as everyone knows, she is fast losing her luster against the younger, flashier more luxuriant BTC.

All of which brings me to my final point of the week. Proponents of the incoming administration have, with trademark energy, pointed to post-election rallies in certain markets as incontrovertible evidence of unmixed investor endorsement of the righteousness of their contemplated policies.

Well, maybe, but one doesn’t hear much about these matters when Madame Market expresses her wrath and withholds her favors. And the silence diminishes credibility.

A huge proponent of this rhetorical strategy is a user of my professional advisory services, who, at the point of this correspondence, remains a favorite for the post of Treasury Secretary.

He parted ways with me this past Spring and never said goodbye. And he would be the second former client who held a cabinet post. The other being the Mooch. Who used to caricature me as a clownish ex- hippie, and who only did a drive-by during Trump 1. Other jesters followed and are now ascendent anew.

And all we can do is smile as the puppets dance — in the Court of the Orange King.

TIMSHEL

Nothing in the streets, looks any different to me

Peter Townsend

Careful watchers of this space are aware not only of my recently celebrated personal milestone, but also that I had used the same headline – STFU — two weeks in a row.

This was an oversight on my part. But being as how, though not retired, I am now officially of retirement age, a guy who is now officially a Senior Citizen, I’m gonna call it a Senior Moment.

But I cannot resist the siren’s call to write my own post-mortem on the just ended quadrennial election cycle. The good news is that if yas can stand another synopsis, I’ve got one for yas.

After which I promise to STFU.

It did not play out the way I anticipated, but few outside the faithful expected Team Orange to run the table in such dramatic fashion. Part of me is surprised they won at all, but all the sources at my disposal confirm that they did.

In the lead-up to the Big Day, two factors were apparent: 1) the outcome would be decided by turnout and independent tilt; and 2) beyond each party’s base, most of the votes would be cast not in enthusiasm for their preferred candidate, but by which of the two they disliked the least.

Especially with respect to 2), whichever side emerged as the losers would have only themselves to blame, because, given the substandard quality of each candidate top ticket candidate, their opposite numbers were running a race that it was theirs to lose.

Had that loser been Team Trump, I’d have an embarrassing abundance of material with which to castigate Republicans, who, for the fifth time in eight years, had staked their fortunes entirely on a petulant, undisciplined narcissist, given to forget generous friends while never losing his remembrance of anyone who he perceived to have slighted him. A guy who relishes tweaking his opponents, and, in doing so, often leads with his chin. A former president who did some good things in his term (his risky vaccine moonshot which the other side lied about and for which it took unmerited credit comes to mind), but whose performance in the period between his 2020 election loss and Biden’s inauguration, ranks, in my judgment, as perhaps the worst 10 weeks in Presidential History.

I don’t think he planned or led an insurrection (if you’re President of the United States and want to stage a coup d’etat, you don’t do it with a few dozen mostly unarmed civilians and one guy in a Viking hat), but his failure to act immediately to stop the outrage, his orders to his Vice President not to certify the result, and his unwillingness, to this day, to accept the outcome as legitimate – all diminished the office he held and gave enormous aid and comfort to his political enemies.

He is, in sum, a guy prone to infinite unforced errors, which, as president in today’s world, could play out on a massive, tragic scale.

No way a guy like that deserved a second term, but, nonetheless, here we are.

Migrating away from the counterfactual to the actual – Vice President Harris and the Democratic Party, my god, where to start? At 100,000 feet, the mantra over there, for ages, has been that they and they alone can discern right from wrong — on complex, two-sided issues (with said opinions, by the way, correlating ~100% with their political agenda) and that anyone disagreeing with them is misinformed, stupid, evil, or some combination thereof. They have made little effort to hide that a small cabal of elitists – top tier politicians, billionaires, celebrities, academics and bureaucrats — call all the shots for them, as exemplified in myriad ways.

The first that comes to mind is how they pick their candidates. Except for Obama’s astonishing rise in 2008, it’s been two decades since they allowed their party regulars decide who runs at the top. Before she lost to Trump in ’16, and had not the Party Elders stepped in, Hillary would’ve been defeated — by Bernie – FFS! — as would Biden have been in ’20. But, knowing Bernie would lose, they anointed Joe last time around, then, when he emerged victorious, co-opted his presidency from a policy perspective.

Nobody – particularly Democrats – wanted to see him run again, but he leveraged a surprisingly strong outcome in the ’22 Midterms (to which, ironically, he contributed very little) to cement himself into the ’24 contest. Feeling stuck, the party Puppet Masters blatantly, aggressively gave the lie to his decline into an incontinent, doddering Aqualung, who is probably incapable of managing his own minute affairs, much less run the largest and most important organization on the planet. In time-honored fashion, they excoriated anyone who dared to express a concern in this regard, and up to the very end, were emphatically insisting that not only was Old Joe up to the job, he was, in fact, at the top of his game.

Meantime, they not only did all in their power to ensure that he would match up against Trump, who they rightly considered the most beatable of all potential opponents but sought to further tip the scales through combinations of lawfare, attempts to remove him from the ballot, and other extra-democratic measures.

But the truth about their boy’s condition would out, and when it did, they simply shoved him aside, and, instead of canvassing party members as to their preferred replacement, promptly anointed the multiple box-checking (woman✓, minority✓, uber-woke✓) but politically pedestrian Harris.

As was perhaps inevitable, she initially surged. Raised $1B and somehow spent it all — leaving, improbably, a $20M hole when the dust settled. Busted out a chill vibe. Either obfuscated or adjusted her policy positions to poll-tested panderings. When the electorate became increasingly impatient with these joyful platitudes, she attacked her opponent as being a fascist.

But nobody (including me) can even accurately define fascism, and I suspect that a large portion of those who voted for Trump consulted their recollections of his first term and determined that there was little in our governance reminiscent of Hitler or Mussolini.

As a last refuge, they busted out our icons, Obama, Oprah, Bey, etc., who scolded organically friendly audiences that even considering anything but a vote for Kamala as an ill-conceived betrayal.

Yes, they were trying to tell everybody else how to properly think and feel, as the exclusive arbiters of such matters. But the voters rejected this, and the results are as we find them.

There was an eerie calm in Manhattan before and after Election Day, and it was hard to even locate the polling place. This stands in sharp contrast to 2020, when, even after I voted, poll watchers were trying to pull me into every other building on the Upper West Side, presumably, to vote again. Harris won 2/3rds of the NYC vote, but even after the results were tallied, nothing in the streets looked any different to me.

So, to the losers, our self-perceived betters, I say: stop telling us how to think. We can do nothing but aspire to your wisdom and erudition, but it is we (and not you) who must live with the consequences of our choices, which, if nothing else, in a just world, grants us the right to some agency.

The wages of your arrogant lecturings are embedded within the election results, the latter manifest, in no small part, in a rejection of your pomposity. And even if you’re right about a lot of stuff (which you may very well be), it is upon us to face the consequences. I think the voters understood and accepted this and decided accordingly. Even if it means a 4-year headache from listening to Trump’s bloviating.

In these early days, there are signs that both sides are tiring of their endless bickerings. The Harris concession speech, was, by modern standards at any rate, gracious and forward looking. Published reports suggest that the lame duck Justice Department is preparing to drop all pending actions against Trump, and that even the 34-conviction New York case may be dismissed. This would be wise on their part.

The other, victorious side has shown some elements of grace as well. I strongly suggest that y’all pay particular attention to their official pronouncement not seek to end the filibuster, the reality that: a) this would most certainly have happened if the results had been reversed; and b) to do so would greatly ease the enactment of their legislative agenda notwithstanding. This is a prime example of enlightened governance, and one which I believe will redound to the benefit of both party and nation.

I’d sure like to see more of this type of thing, and maybe it will happen. But I’m not overly optimistic.

The markets are nothing short of giddy at the outcome, and perhaps we should forgive it some temporary, light-hearted amusement. Certainly, and on balance, the incoming administration and legislative caucus offer a more appealing menu for investors than do their opposite numbers.

But I am hardly expecting a cake walk when the leaders of the new revolution take hold, as they will surely face the same types of legislative inertia that nearly always descends upon single-party sweepers. The tariff policies could be crippling. Trump will raise the temperature of an already boiling Middle East, and there are profound risks involved in this.

Both candidates ignored the expanding deficit, which throws off the following alarming trajectory:

This is now Trump’s problem (and, of course, ours). And it is unsustainable. Perhaps Elon will indeed ride in on a Space-X horse, fire everybody, and save us all a shit ton of money.

But I wouldn’t bank on it. Those getting fat at the Federal trough must have a cache of Polaroids. And unless we find some way to control our borrowing binge – in every form that it takes – dire outcomes are inevitable. I just don’t know when.

Meantime, yes, there’ll be a new(old) cast of characters. But we will face the same challenges and opportunities with the same human strengths and weaknesses with which to deal with them. It may work out, and I hope it does. Meanwhile, I reckon I’ll pick up my guitar and play. Just like yesterday.

Because the new boss is the same as the old boss, and, if we’re not careful, we will be fooled again…

TIMSHEL

Ride… …I’d like to ride again someday,
I think I still know how to play,
I play games now, but it’s not fun,
A cowboy’s work is never done

Sonny Bono

Somehow, when I woke up this morning and looked at the datebook, I found it to be my 65^th birthday.

Sixty. Fucking. Five. That pretty much says it all.

On the bright side, at least I woke up.

Yup, did that.

By the caprices of the calendar, I reach this milestone amid considerable chaos – most exemplified by tomorrow’s quadrennial election – the wildest such affair since… …well at least since that 2020 monkey circus.

So, everyone will be distracted, and as it happens, it appears I will spend most, if not all day riding solo. I think I can live with this, but as a special, once in every 6.5 decade treat to myself, I’m gonna pile more than the usual set of digressions into this note.

I have a few birthday wishes, if anyone cares to know of them. I wanna stop short of calling them my Bucket List. Because. I. Just. Can’t.

For one thing, I’d like to catch up with a few long forgotten, marginal players in my life’s history.

Like the guy from 4^th Grade who spent all day, all year, bouncing off the walls with two magic markers (the active ingredient of which, at the time was airplane glue) up his nose.

Or an old work colleague who – unfortunately it must be told – had accumulated enough DUIs to ensure his permanent loss of license on his next offense. Enterprising fellow that he was, he worked out a system under which, at the end of his daily homebound MTA commute, he’d bolt for the bar at the train station, chug down five shots of Makers Mark, sprint to his car and speed home in time to arrive within the seven- minute window he calculated it would take before the alcohol reached his bloodstream.

Or my college acquaintance, Pete, who after an especially energetic night of debauch, stumbled into his bed – only to find out that he had done so at the wrong house, causing its rightful owner considerable horror and Pete serious bodily injury.

I do wonder how them cats are doing.

I also would very much like, if only once more in my lifetime, to wander the main campus of Columbia University – where I both studied and taught, and whose quad I have stomped over for more than forty years. One needs a pass to enter the premises these days, and (having trekked up there on Friday) I find that even alumni/former faculty status will not avail you of ingress.

I’d like the Bears to beat the Packers. Just once.

I would also love for the surviving members of The Faces (Rod the Mod, Woody and Can Smasher Jones) to do a farewell tour – more than 50 years after their last engagement.

There’s a sizeable list of folks to whom I’d like to speak my mind, and it’s possible that I may do so with one or two of them. But only if: a) happenstance so specifies; and b) I can authentically convince myself that the cost (perhaps substantial) of doing so is likely to fall short of the elusive, uncertain benefit.

I reckon I’ll be watching the markets this week, but don’t expect any clarity. I won’t again reiterate the reasons behind my concern that the outcome will be disputed to the point of disruption (though they remain valid), but I’m even more certain that we won’t know the full outcome for days or weeks – particularly at the Congressional level.

I’m gonna further wish for a split government result, because I truly believe that a unified coalition accruing to either side will do little useful and inflict much damage.

I also, as I blow out my candles will hope that the incoming administration energetically supports Israel, realizing, in doing so (among other matters) that while that forlorn sliver of land is Ground Zero for now, the ultimate objective of the other side is the damage/destruction of the United States itself.

I hope the Fed keeps it tight and that elected officials resist the temptation to distribute mad bennies to those who rode with them through this crazy election. I am, however, not optimistic on that score, because whoever wins will be on the receiving end of an endless set of bills of fare for services rendered (real or perceived).

I hope y’all take a little pause before determining what it all means and deploying capital accordingly. As we won’t know whether and to what extent the investment winds blow fair or ill for some time to come.

And yes, I’d like to ride again someday. Because I think I still know how to play. And when I say that the games I am currently playing are not fun, I suspect I’m not alone in this settlement.

But like the man says, a cowboy’s worth is never done. So, while I won’t fault you for pausing to wish me happy returns of the day, I suggest that you subsequently saddle ‘em up without much delay.

Because my 66^th spin ‘round the sun promises to be a wild ride.

TIMSHEL

Following on last week’s GTFO opus, I migrate to another of my fave acronyms, as captured in our title.

But before doing so, I have an obligation to fullPhil. I must offer a few words about Phil.

His death, even at the ripe age of 84, came as something of a shock to me, and I suspect I’m not alone. But Phil is a bit elusive in my mind. Deadheads, of course, believe him to be a bottom thumping god, but this is the same crowd that feels (dubiously in my judgment) two drummers were essential to a band that, whatever else, may be said about them, was not particularly driven by can smashing beats.

I can’t tell but suspect that Phil was pretty handy with his bass, and certainly innovative in mapping each of the 5 (yes 5) strings to different sections of the Dead’s iconic-if-excessive 20-story Wall of Sound speaker system.

But I don’t think he was ever quite comfortable with it all. He was trained as a violinist and only converted to bass at Jerry’s request. He fit the sound like a glove, but never stood out. And never embraced the rock lifestyle. He was, for instance, married to the same woman for 5.5 decades.

He looked stupid with long hair:

That’s him on the right. Next to Jerry, who also looks kind of stupid in this picture, but can be forgiven because he was, well, you know, Jerry.

Whatever his interaction with drugs, they certainly ended long ago. In these ways, he kind of reminded me of an American, string-plucking version of Charlie Watts, who also perfectly but uncomfortably melded into a great band where others commanded the spotlight.

More than anything, he was on a mission. He recognized Jerry’s singular greatness and made it his business to do all in his power to help him realize it. In this he succeeded, and for this, we thank him.

And now it’s time for me to STFU about Phil.

Other than this. His death transpired during a highly chatty season, one that has me wishing everyone would STFU. I may be a little early on this one, however, because one can at least hope that by Wednesday week, the implied message will: a) be obvious; and b) generally complied with.

In fact, though, I fear quite the opposite, and this has me, as your risk manager, more than a bit worried. And it’s not so much the results of the voting tabulations that has rendered me jumpy, but rather what happens in the aftermath of the counts, when the nominal outcomes (you know – the ones where the candidate that has garnered the most votes is declared the victor?) are compiled.

I won’t prognosticate an outcome. Because I don’t know. I suspect it will be close, which will be problematic for reasons further explained below.

Perhaps more importantly, I have made the editorial decision to withhold endorsements, for the following reasons: 1) I dislike the choices on the ballot 2) what’s good enough for the Bezos Washington Post (which had endorsed every Democrat dating back to Ike) is good enough for me; and perhaps most importantly: 3) me stating my preference might very well be the deciding factor, and I simply don’t want the responsibility.

So, I’ve decided to STFU in terms of projected results and associated personal preferences.

But as the ghastly day approaches, I dread it will not be the be the end of our current national nightmare, but rather the beginning of a new one – for the obvious reason that Tuesday week’s outcome stands every possibility of being no outcome at all.

My logic is neither original nor especially nuanced. Specifically, if there is any possibility for nullifying results, particularly in closely contested races, it’s clear that resources are being marshalled to do just that.

Now, at the risk of overtly telegraphing my political pre-dispositions, I must state that it is the lawyers, who all tilt one way, that I fear the most. They’re out there in force. And ready to act – at the National, State, County, and Municipal levels. They’ve made no secret of their intent to do so, and I suggest, as is only consistent with sound risk management practice, that we take them at their word.

So, if Trump wins, they’re gonna sue. They’ll find judges friendly to their cause in every state with a narrow outcome, who in turn will issue injunctions blocking the certification of results. If they’ve got nothing else, they’ll bust out that old, tired riff about voter suppression (difficult to prove but impossible to completely refute). It won’t matter if they ultimately prevail; the objective here will be to delay. Meantime, and at their instance (or at minimum with their full sanction), the cities will burn.

And even if their candidate carries it off, they’ll use the same tactics to disrupt the sign-off on closely contested Senate, House, Gubernatorial, Mayoral and Aldermanic contests.

In sum, I highly doubt we will know specifically who’s running this here the show till at least Thanksgiving. And maybe not until Christmas. Or later.

Were this not bad enough, Trump is scheduled to be sentenced for the 34 felonies of which he stands convicted – for the unpardonable transgression of securing a loan that the bankers approved, and that he paid back on schedule– on November 26^th. And waddya think the Judge Juan (whose daughter is a seven- figure political consultant to the Democratic Party) is gonna do? Let him off on good behavior? No, he’s gonna hit him with all he’s got.

It is thus entirely possible that while the entire election cycle is in adjudication, the presumptive president-elect will have been sentenced to hard time at Rikers.

Moreover, even if we somehow survive this sequence and emerge unshattered in early January. Who is designated to certify the electors associated with a Trump victory? None other than Kamala Harris, who: a) will be mad as a wet hen; and b) will have precedent to impede the process, given what happened last time ‘round.

So, if this comes to pass, Daddy Orange will have no one to blame but himself. By refusing, with unmatched, trademark petulance, to accept the official results of the 2020 election – even to this day, he declared to the entire world, but mostly to his political enemies, that any and all tactics available to engineer a preferred political outcome are fair game.

It was one of the greatest unforced errors in electoral history, handing the weapons most favored by the opposition to them on a silver platter.

One can feel them licking their chops. They probably will not be unilaterally successful with this tactic, but they will have done enough to render governance as problematic as it was during the Trump 45 era.

And he will not have the ability to respond in kind if Harris wins (as well she might). First, he is likely to be fully occupied with the task of staying out of jail, as even his defeat is unlikely to stem the hot-blooded desire of those in a position to do so to incarcerate him. Beyond this, nobody – particularly, I suspect, Republicans, will want to listen to his bleating about being ripped off a second time. He’s already shot his wad in this respect. The gleeful, victorious Dems will dismiss him like the petulant child he is, and then focus on the more uplifting task of dividing up the spoils of their triumph. The Republicans, perhaps realizing under this scenario that while he did indeed draw an inside straight in 2016, he has captained them to four consecutive losses in the intervening years (’18, ’20, ’22 and ’24), will gladly try to forget him.

But until these matters are settled, there will be a significant lack of visibility in market realms, and, while I may be wrong, the election could go smoothly with the contours of the results plain and unambiguous, the risk of the whole thing devolving into a pig circus is, in my judgment, elevated, and I encourage my minions to take this into consideration as they contemplate their risk sizings.

Yeah, there’s other stuff going on. A decidedly “meh” earnings season is entering its most critical stage. Q3 GDP drops this week, with estimates in a spiffy 3% range. The Middle East caldron is simmering to a full boil. The October Jobs Report comes out on All Saints Day and is projected to be rather tepid.

But all of this is mere side show, because we’ve November 5^th and its aftermath with which to contend. I don’t know. but fear it will devolve in ways that will cause consequences which I shudder to fathom.

But now it’s time for me to STFU. The election of course, is a week from tomorrow, and I am unable to resist the temptation to conclude with yet another of my preferred acronyms.

So, I offer everyone a friendly C U Next Tuesday, with all well-earned love and respect.

TIMSHEL

I ask you: is there a more righteous acronym under heaven than our titular letter sequence?

Especially lately, and especially for me, as I have found over the last fortnight or so, that nearly everything my senses encounter evokes a GTFO reflex. Including the markets.

But, as always, we’ll get to that anon. The markets, I mean.

Meantime, a quick inventory of the upper reaches of my GTFO list is perhaps in order.

This past weekend featured the closing of the Super K, on U.S. Route 27, in Bridgehampton, NY. Improbably, it was the last fully stocked K-Mart in the Lower 48 – in Bridgehampton, FFS! And I say good riddance! Because Bridgehampton can make much better use of this primo real estate — by opening a few more hair/nail salons, bad restaurants and overpriced tchotchke boutiques, as, presumably, the Good Lord intended. So, says I, GTFO K-Mart! GTFO of Bridgehampton!

And GTFO Major League Baseball, whose seemingly endless season is coming to a nauseating close, but not soon enough. After yet another sequence of interminable, mind-numbing contests, the mighty engine of capitalism at last prevailed, with the three teams that feature by a wide margin the highest payrolls emerging as the only surviving participants. Two of them, the only two to have eclipsed the $300M salary threshold, are from New York. The third (and likely champion), used to play in Brooklyn but now operates in Los Angeles, and just paid some Japanese dude >$700M for his services.

One of the NY teams is owned by a former boss of mine, to whom I owe a lot. He’s one of the greatest investors of all-time, but never made a better trade than his purchase of the Mets – for which he obtains a full tax write-off, an antitrust exemption, and an asset that can only appreciate in an era of globalization and global telecommunications.

You can’t therefore blame him for “investing” in his payroll/roster, snapping up (and arguably overpaying), for the last three years, nearly every available top tier player. The message is clear – the way to win is to treat your franchise like an Investment Bank, or, worse yet, a hedge fund. OK; fair enough.
But let’s not try to pretend that he and his ilk are latter-day versions of Branch Rickey or Red Auerbach.

Embracing this reality in NY is particularly problematic, as their franchises have a maddening habit of throwing wads of cash at brand name athletes on the decline, and then congratulating themselves for so doing. In the case of the Yankees – newly crowned A.L. champs, much of this is funded by taxpayers, who spent $2B on a new stadium and then gifted the property to a Tampa-based ship-building concern, whose name is synonymous with the franchise. For these reasons and others, and though I have lived here for more than half my life, I can never root for New York teams. In fact, I say: GTFO New York teams!

The latest example of the NY money-whip has-been-trade is the Jets Aaron Rodgers saga, with whom, as a Bears fan, I have a legit lifelong beef. GTFO, Rodgers! He’s had a busy couple of weeks, first losing to the Vikings, then getting his coach fired, then losing to the Bills, then plucking his boy Davante Adams from the dubious environs of Vegas.

Lastly, they finally cut a deal with the holdout prima donna that they plucked away from the Eagles. Anything else we can do for you, Rodgers? After all, we’re all here to serve you.

On further reflection, just GTFO.

Moving on, GFTO Sinwar, the late leader of Hamas, who is most distinguished by: 1) having masterminded the 10/7/23 terrorist attacks, and 2) bearing perhaps the most aptly diabolic surname in history (Sin war). The Israelis did him on Thursday, and his last act was to throw a wooden stick at the IDF trainees and reservists who planted several bullets into him. He’s presumably now enjoying his 72 virgins, but my hope is that at least a few of those lovelies had previously yielded their maidenheads.

And of course, GTFO U.S. election. I’m so over it and I suspect that the rest of y’all are as well. There isn’t much I can add to the erudite analysis of this monkey show, though I do take note of published reports that Trump’s lopsided advantage in political exchanges such as Polymarket are in part the result of a handful of speculators cornering the Trump market. Kind of like Nelson Bunker Hunt did, unsuccessfully, in the Silver Market, a couple of generations ago. If true, it the spreads should normalize soon, as those who drove up the price artificially seek to unload their holdings at an inflated price, in classic “pump and dump” fashion, and giving rise to a new variant of same: the Trump pump and dump.

Or if you prefer, the Trump chump pump and dump.

Notably, the Polymarket exchange is a crypto-based platform — within which one must transact in digital currency USDC – a so-called stablecoin that is pegged 100% to the USD. And I am almost, but not quite, prepared to lob a GTFO to crypto.

Because, c’mon! We’re more than a decade into this thing, and I still don’t know what it’s all about. Billions and billions pour into it — all, so it seems, on a purely speculative basis. It rises and falls based upon such factors as interest rate differentials, geopolitical trends, risk appetite and others.

Great. Just what the world needs: another macro instrument that no one understands. Meantime, at least on these here shores, nobody seems to apply it to any practical purpose. As the crypto saga unfolded, I had become intrigued the blockchain technology upon which it is based. Blockchain can be described (albeit imperfectly) as a multi-user encrypted record transmission and repository system, where every participant accepts its content. It is therefore in a perpetual state of reconciliation – without impeding the record-keeping of individual users. The idea is simply too powerful not to ultimately take hold. But it hasn’t — at least yet. Nobody is using blockchain, or if they are, they’re sure keeping quiet about it.

Meantime, in a world of increasing uncertainty, benchmark crypto instruments are lurching back towards all-time highs. Somebody must know something, and, as such, I am unwilling to issue a broad-based GTFO to the asset class. But it should be forewarned: I’m watching. And my patience is growing thin.

Balancing matters out, it would be irrational, for now, to consider offering a GTFO to the capital or commercial economy, which remains a matter of miraculous wonder. One can, here as elsewhere, always complain, but considering all it has endured, it is mind-boggling to contemplate its resilience. Prices are indeed too high, but not escalating in Weimar Republic fashion, as well they might have.

Half of this country GTFOs the other half, and the other half GTFOs the half. And, as a major component of its branding/strategy, GFTO Group 1 has issued an all-out assault on fossil fuel production. But, under its governance, said production has reached a new all-time high:

Presumably, if fossil fuel-hating GTFO Group 1 prevails next month, these figures will drop dramatically, and at a time when geopolitical tensions in the most important region for energy production are as elevated as they have been in more than five decades.

But God Oh Mighty! Q3 GDP drops Wednesday week, and just look at where it projects:

I think it wise, though, to keep the economic GTFO gun loaded and at the ready, because so much of this vigor is fueled by borrowing from The Man, leaving so little in reserve for future adventures and emergencies:

Much of this may merit discussion at this week’s International Monetary Fund/World Bank conference in (where else?) Washington, where they may also discuss the reality that global sovereign debt will, for the first time, exceed $100T this year. Though space limitations preclude further articulation, I doubt there are two more ossified organizations under heaven than the IMF and World Bank — to whom I also say GTFO.

On balance, though, and temptation to do so notwithstanding, one can hardly bust out the GTFO to the equity markets – which, not only in the U.S. but globally, continue to gobble up new high ground. The benchmark Taiwan index is up >30%, including blowout performance last week by the country’s only valuable corporate asset – Taiwan Semi – and all as the Chinese (who will certainly take over its island neighbor sooner or later) conducted its largest ever flyover of military jets into the former’s airspace.

And Germany. Somebody explain how that country’s securities, whose banks are insolvent, whose economic footprint is rapidly disappearing, is experiencing new valuation elevations in its own markets.

Ravenous investors appear to have an insatiable appetite for risk assets, as well they might. Central Banks declared open bar > 15 years ago have yet to either stop serving or turn on the registers. Under such circumstances, who but the teetotaling and/or most effete among us is likely to push away from the table?

Instead, investors hurl GTFOs at risk factors including an unmanageable credit bubble, horrible governance everywhere with no remediation in sight, the powder keg of Mid-East violence, natural disasters and other manifestly unpleasant but transiently ignorable matters of concern. We’ve all got stocks to buy, after all. And crypto. So, for now at any rate, it’s begone with these hazards, and GTFO to their potential consequences.

All of which will run its course. Why? Because all things subject to downward acceleration at 9.8 meters/second² must. Just as it now seems as though nothing can arrest or even impede the market’s bid, there will come a time when it will seem as though such a thing as a bid never existed.

As we move towards the depressing spectacle of November 5^th, as we await the next sandal to drop in the Middle East, the earnings cycle will accelerate. That’s all a lot of fat to chew, and I would urge folks to step lightly with their risks.

Because as indicated above, whatever commands our obsessive focus will run its course. The K in Bridge is gone, the baseball season will soon conclude, Rodgers is fading, Sinwar is dead, and November 6^th is blessedly on the horizon. We’re probably stuck with the IMF/World Bank, but they can head up my new GFTO list, which should not be a problem to compile.

However, that’s for another day – perhaps one where I’ve better conquered the demons that plague me.

So, instead of issuing y’all a hearty GTFO, I will instead conclude with the time-honored, uplifting…

TIMSHEL

Let’s quickly dispense with our weekly croak list, shall we?

First, Ethel Skakel Kennedy, matron of the legacy Kennedy Clan, has left the building, and we can only wish her a pleasant journey. Orphaned at 28 by virtue of losing both her parents in a plane crash, she found succor in the arms of maybe the randiest politician in American history (yes, more so even, than her more famous brother-in-law), she bore witness to his murder (covered up even more flagrantly than that episode in Dallas, but that’s another story). Tragically lost two sons. One nephew flew his plane ineptly into the drink; another created a 30-year public scandal by murdering a neighbor.

Certainly, she was one tough broad. And I think she could have easily lived another couple of decades, to perhaps 120, if it not for the worst tragedy of her life: her eldest son, the bearer of her husband’s name, endorsing not only a Republican, but the evilest one of all, Donald J. Trump. No one could’ve expected her to survive that. And she didn’t.

I also want to offer a quick word about the inspiration of this week’s theme, Pitcher Luis Tiant, who was born in Cuba and died last week where all Cubans go to die – in Maine. Had a great career, but I don’t really have much to say about him. Other than this: the combination of his ethnicity and the force of his heater caused him to acquire the nickname Senor Smoke. Which is about the coolest handle of which I am aware in any sport.

And that’s all I have to say about that.

But now Smoke is gone. And where there’s no smoke, so the saying goes, there’s no fire. Perhaps this is owing in part to all the precipitation endured across the Eastern Seaboard over the past fortnight. But away from these soggy environs, one is also hard-pressed to find a single spark of heat-inducing light – particularly in the markets.

With what promised to be a raucous October now nearly half in the books, the Gallant 500 has sleep-walked through barely a 1% range. Treasuries have been covered by a wet blanket, with 10-year yields now, depressingly and again, above 4%. But that there game is in its early innings, its outcome highly uncertain.

Looking immediately ahead, I’d be tempted to predict that things are about to flame up. But they already should’ve, what, with data releases, geopolitical strife, domestic political psychodrama, two devastating hurricanes, potentially crippling job actions, and the like, and none of it seeming to move the valuation needle by perceptible amounts.

We nonetheless must proceed as though the fire is about to ignite, and whether it evokes smore-producing conditions or the need to bust out the axes and the hoses remains to be seen.

What we know thus far is as follows. Jobs and Inflation figures suggest robust economic activity. The earnings season commences against the backdrop of lowest analyst expectations in a year. The next shoe is certain to drop soon in the Middle East. Eastern Europe remains in an opaque quagmire.

There’s some shit going down in the Chinese markets, but I’ll be switched if I can begin to unpack any of that.

With respect to the election, the betting markets have shifted dramatically in Trump’s favor. Republicans are even more likely to recapture the Senate, due to: a) their having to defend less than half the seats of their opposite numbers; b) the retirement of Joe Manchin and the overwhelming likelihood of West Va. replacing him with a Republican; c) the equally high probability that Tester’s MT will flip. The House? Who knows?

I’m not inclined to place much credence in any of this. Looks like it will both be close and full of surprises at the national level. I am hoping for a split outcome, because I don’t think any organized and united government is capable of doing anything but harm.

We are compelled to invest and trade against this backdrop, and, as related last week, I am concerned about the aftermath of the election. There’s gonna be a lot of pissed off people, no matter what the outcome, and they’re gonna stay pissed off.  So much so that they may be inclined to disrupt the serenity of those of us who will at any rate strive to accept the results with equanimity.

If all this renders your toes cold, the warming reality is that while at the index/factor level, the embers are dark, there are sparks action aplenty popping for individual securities:

This implies what us market cheerleaders like to call a stock picker’s tape. And I wish all of you good fortune with respect to your selections.

Longer term, though, an explosion may indeed be on the horizon, with the Irresistible Force of economic vitality meeting the Immovable Object of broad-based insolvency and other financial transgressions. The resulting blast should be entertaining, if painful, to observe.

It’s all a helluva shame though, because if we weren’t all such self-righteous over-extended dillwoods, the prospects for future economic bliss are breathtaking to contemplate. Say what you will about technology, it continues to create miraculous increases in productivity. And not just in those dweeby realms as telecommunications and Artificial Intelligence.  Consider, if you will, the evolution of agriculture. Over the course of my (admittedly over-long) lifetime, the trajectory of corn yields per acre takes the following path:

I believe we can and will improve upon even this retrorocket ignition. It’s not difficult to imagine clairvoyant weather models adding significant precision, along with wonderous machines that can assess the yield potential of every square centimeter of acreage, the presence or approach of nasty boll weevils, the efficacy of various pesticides, etc.

One can easily extrapolate from there to other wonders, involving health science, transportation, manufacturing, etc.

The question is: can we get there before we drown ourselves in indebtedness?

These matters, are, of course imponderable in the short term; we must instead attend to what lies immediately ahead.

It still feels too damp for me to anticipate the warmth of crackling logs, with ill winds threatening from multiple directions. I wouldn’t be inclined, for the moment, to try to stoke up any blazes in my investment activities.

Perhaps better, for now, to chill. And I’d be inclined to light a cigar to put me in the proper mood.

But with no fire, as indicated above, there’s no smoke. That much, at any rate, is axiomatic.

As to what else is going on amid the current confusion, unfortunately my friends, I must leave it up to you to determine.

TIMSHEL