OK, a quick word about Greg: a man for his time and place. Loved the music, the persistence, the reinvention. And I forgive you for the folly: for letting your road manager take the fall for your cocaine bust, for that nonsense with Cher, for firing Dickie. You proved, as much as anyone this side of Dylan, that the road does indeed go on forever….
I dedicate this Memorial Day edition to John Fitzgerald Kennedy, the 35th President of the United States, on this, the 100th Anniversary of his birth.
His record on this earth (well, what is publicly known at any rate), is beyond the stuff of legend. It is so indelibly burned into the brain of Americans as to almost transcend its own historical context, which, significant as it was, should’ve been bloody good been enough. To recap briefly, 35 was the scion of a powerful family whose wealth may have derived from dubious, ill-gotten sources. He matriculated (where else?) at Harvard, joined the Navy during WWII, got his PT boat rammed by the Japs, and organized a 3-mile swim to relative safety, dragging an injured crewman that entire distance with his ‘effin teeth! He then entered politics, copping a Congressional Seat, knocking the entrenched Henry Cabot Lodge out of the Senate, blowing by Johnson and Stevenson in the 1960 Democratic Primary, and then winning a (perhaps Daley enabled) squeaker over Richie (aka #37) Nixon in the General. Like Nixon (who established detente with the Soviets and the Chinese, and instituted Wage and Price Controls), his (albeit brief) stay in the White House was marked by astonishing divergences from his party’s play book. He cut taxes, and presided over an economy that was growing at 5% with 1% inflation and did not engage in deficit spending. He took on the Red Scare on two separate occasions in 1962 – first an unsuccessful invasion of Cuba’s Bay of Pigs and then a triumphant showdown with Khrushchev, the end of which featured the dismantling of Soviet missiles on Castro’s turf.
He sowed the seeds for the Vietnam War (which didn’t turn out so good), but also established the Peace Corps and the American Space Program. Finally, though he didn’t live to see it, he was the visionary behind the Civil Rights Act of 1964, a milestone that your humble correspondent believes may have been the last useful piece of legislation ever enacted by the World’s Greatest Deliberative Body.
Of course, just as he was cranking up his re-election campaign machine, someone (and, being a grassy knoll kind of guy, I’m not convinced we know the full story) blew his head off. Like Jim Morrison, John Lennon, Roberto Clemente, Abe Lincoln and so many others, his untimely demise only added to his status at as an historical icon.
His is, and will presumably remain, among the most recognizable visages in history. But what strikes me most about him is this: he was a man. A real man. Of course, part of this is is his well-documented status as a world-class horn-dog, whose bedroom exploits might give contemporaneous superstar Wilt Chamberlain a run for his money. But there was more than that to consider, more, even than his military record, more than his political record, more than his movie star demeanor and epic life story. If you get a minute, listen to some of his speeches: his acceptance speech at the 1960 Convention, his Inaugural Address, his remarks in Berlin (and for the truly obsessed) his Commencement Speech to the (presumably hated) Yale University Graduating Class of 1962 (The Peace Speech). There and elsewhere, his stood tall, articulated clearly and spoke (for the most part) what was on his mind.
Shortly after his death, his fetching, accomplished widow, Jacqueline Bouvier Kennedy Onassis, described his fleeting time in the White House with a single, sublime term: Camelot.
I got to thinking about this, on 35’s 100th B’Day, from the perspective of the stark contrast to the current paradigms in Washington. Yes, my friends, Camelot appears, for the time being, to be transformed into CamelNOT.
Here, I write not to disparage the current administration, many of whose efforts I applaud, and for whose success I am ardently rooting. No, my friends, the problem goes deeper than that, and it says here that the situation from this perspective would be no less dismal had the outcome of the 2016 gone the other way. If you doubt this, give a listen to Hillary’s recent commencement address at, her alma mater, Wellesley College, in which, conveniently and characteristically forgetting her lifetime of serial dissembling, chose to lecture the graduates about the importance of truth telling.
But one way or another, for the time being, our biggest challenges continue to emanate (or so it would seem) from Washington. Last week’s pre-holiday action featured the nebulous content of the Fed Minutes, the release of a Presidential Budget Plan that seemed to please no one and anger many, the micro-analysis of Our Leader’s first overseas capitol hop, and of course, the drip-drip-drip of leakage about collusion with the Russians.
But for now, choosing not to obsess over these matters, the markets instead ignored them entirely. Domestic Equity Indices rallied, unimpeded, to new all-time highs. Rates, both domestically and globally, drifted downward. The VIX, after showing signs of life last week, actually managed to submerge, yet again, to all-time lows of 9.81:
(By the way, while I LOVE the WSJ, I ask them PLEASE to stop writing about how robots are going to displace all humans in the investment profession. Guys: you’re really starting to depress me).
Meanwhile, economic and financial statistics have been, of late, encouraging – at least on balance. Friday’s poorly attended trading session featured a modest upward revision to the heretofore dismal Q1 GDP Report. True, we only came up to a dismal 1.2%, but that’s a clear sight better than the original print of 0.7%. Durable Goods and New Home Sales came in on the light side, but PMI and Weekly Jobless Claims told a happier story.
Perhaps most encouraging of all is the final (or near-final) tally on Q1 earnings, which evidenced a 14% rise. Arguably as important is the firming/convergence of top-down and bottom up estimates for Q2:
It occurs to me, on the whole, that we’re at something of an inflection point here. The markets, as I suggested a couple of weeks ago, and then (so it must be admitted), I retracted last week, are showing signs of wanting to break out. The technical are strong and a flight to the upside is certainly possible. My best guess is that the main gravitational pull derives from the high-probability series of new tape bombs emanating out of the White House, a dwelling that at present is clearly occupied by persons other than Arthur, Lancelot, Galahad and Guinevere, or for that matter, John, Jacqueline, Lyndon, Lady Bird or Everett (McKinley Dirksen, that is).
In any event, I don’t think that valuations stay where they are, come what may. The SPX breaking through 2,400 was impressive, but current levels strike me as being nothing more than a weigh station between more heavenly elevations or a reversion to that wearisome 23-land. It’s of course a holiday shortened week, and June, other than a few important tidbits like next Friday’s Jobs Report and Chair Yell’s Flag Day (6/14) turn at the FOMC podium, will be relatively bereft of pertinent information flow.
The tape, in short, will be tricky, even if everyone in Washington behaves themselves. We’ve been here before, my loves, but that may be of little comfort. We are all of and in our times, and clearly, there’s no Knights of the Round Table, nor even inspiring figures like JFK to shore up our fortitude.
So, let’s take a moment today to celebrate 35, whose final resting place is on the sacred burial grounds of Arlington National Cemetery, which was once the estate of last week’s anti-protagonist, R.E. Lee. After that, it’s back to the grind, and, CamelNOT or not, we have no choice but to strive to prevail.
TIMSHEL