You’re killing me. Again. You birds are killing me. In fact, you’re killing me so badly, I have a new name for you. You are killingbirds. Maybe not all of you, but definitely the tree-hugging, wing-nutting contingent out there, are, every last one of you, killingbirds. My protests notwithstanding, you keep flapping your flightless wings, and warbling out your one or two-note melodies. And I’m not sure I can take it anymore.
To the rest of you, I offer my heartfelt apology, but the killingbirds out there have left me with no alternative: before I go, I must mock you. In fact, I must mock you in wicked, Monty Python fashion:
Killingbirds: your father was a hamster and your mother smelled of elderberry.
So there.
I’m sorry to be so harsh, but this time you deserved it. Your coupe de grace took the form of an editorial published on the NBC website, which advocated for the removal of Harper Lee’s “To Kill a Mockingbird” from school reading lists – ostensibly because it provides validation for the questioning of a woman’s rape claims.
Now, I’m going to assume y’all are at least nominally familiar with Mockingbird’s plotline, which tells of a widowed father, the leading lawyer in the forlorn, depression-ridden nowhere of 1936 Monroeville, AL (current population: 6,519). It unfolds through the eyes of his then-six-year-old tomboy daughter: Jean Louise “Scout” Finch. The dual narrative describes her father Atticus’s loving attempts to raise his two motherless children, while courageously defending a crippled black man on a bogus rape charge. While it does not, to my thinking, rise to the dignity of a bona fide literary masterpiece, TKaM is a pleasing, satisfying read, capturing a moment in time, a place in history, and released at a point (1960), when America was most ready to receive its embracing vibe. It is also one of the few works where the film can truly be said to be better than the novel upon which it is based.
Until nearly the end of her long life, it was the only work the reclusive Miss Lee ever published (urban legend has it that the adorable, lisping Capote, who, somewhat improbably appears in the text as a neighbor/bestie, actually may have ghost-written the piece). However, shortly before her death last year at age 90, she uncovered among her personal papers a manuscript for another book “Go Set a Watchman”, which describes the lives of the Mockingbird characters 20 years hence. In it, Jean Louise is a grown sophisticate living in New York, who returns to the environs of her childhood to confront a number of demons, including the passive racism of her father.
There was considerable hype in the release lead-up for Watchman, and I dutifully bought it on the day it dropped. I thought it was a very good book, but the critics were disappointed. It sold a lot of copies, but beyond that, it is likely to be largely forgotten. Perhaps this is because the uncovering of Atticus as a bigot was too disturbing a development for Mock fans to process.
One ironic element of the backstory is the recently-revealed nugget that while Watchmen, in terms of the chronology of the storyline, is a sequel, with respect to the order in which the books were written, it is actually a prequel. Miss Lee wrote Watchman first, and publishers rejected it. They were, however, enamored of the flashback scenes from Scout’s childhood, and suggested she rewrite the book to focus on these.
Well, she went them one better and wrote an entire book about those earlier times. The suits greenlighted “To Kill a Mockingbird”, and it went on to sell 40 million copies. The film won 3 Academy Awards, including the Best Actor Prize for Gregory Peck, who forever will be emblazoned into our brains as the sober, steady, enlightened (and decidedly non-racist) Atticus Finch.
All of this should’ve been well and good, and in fact it was. Until our moral betters at NBC decided that one of the all-time most iconic works of racial tolerance is in fact a sexist screed that serves to delegitimize the claims of rape victims.
Who knew? And now we stand corrected. If we’re wise, we will learn for the experience and impute our original sin on the entire American experience – all ~240 years of it. Here, we will be guided by our morally infallible killing birds, and I’m sure we’ll all be the better for it.
While I copped my original paperback copy of Mockingbird at Barbara’s Bookstore on Clark Street, and paid cash, my purchase of Watchman was undertaken in an entirely digital fashion. Here, I availed myself of Amazon’s Kindle service, with amounts deducted from my Amazon Prime account. Based upon this past week’s news flow, there’s a lot of this latter-day form of commerce taking place. The eponymous, sponsoring company took to the podium this past Thursday to announce a quarterly earnings performance 7.5 times the Street’s consensus (53 cents actual vs. 7 cents expected). The company also reported blowout revenue increases from its core shopping business, which shipped, or zapped, $26.4B of product this summer. But get this: Amazon Retail actually lost money in the quarter. The entire profit margin (and more) was made up by the performance of Amazon Web Services, a charter member of the oligopoly that is set on a technological takeover of the world.
And AMZN was hardly alone. On that same fateful Thursday afternoon, The-Alphabet-Formerly-Know-As-Google clocked in with shockingly strong numbers, as did Microsoft and Intel. The nexus of these tidings, as perhaps was to be expected, catapulted the U.S. equity complex from what was shaping up to be an “off” week, to yet another jolly romp to all-time records. And I doubt that the romp/ramp up is over – yet. Apple and Facebook report next week, and the former, having finally busted out the exorbitantly expensive X phone, enters the sequence with the tailwind of having sold out the product in a matter of minutes. With respect to the latter, while no particular previewing nuggets have come my way, I… kinda… suspect …they’ll have a happy story to tell.
Last week, in fact, featured happy talk – not just in equities, but virtually everywhere one cared to listen. Hurricanes notwithstanding, the first glimpse of Q3 GDP reached into a heavenly 3 handle. Other macro statistics also brought tidings of growth, with Durable Goods Orders and New Home Sales both coming in at the upper range of estimates or beyond. Draghi addressed his minions mid-week, to announce modifications to QE, with lower monthly purchases being offset by an extension of the period over which said purchases would take place. The market took this, on balance, as being dovish.
Brent Crude rallied to close above $60/barrel for the first time in 2 years, and carried the GSCI to similar valuation milestones along with it:
In Washington, the precision execution of our governing processes continued apace, with a budget now almost prepared for the President’s signature, a milestone thought to be an essential pre-requisite to the Holy Grail of Tax Reform.
In reviewing the confluence of these events, I find some common threads. Global economic growth does indeed appear to be accelerating, and if something useful can actually be accomplished in the realm of Tax Reform, well, let’s just say that the infallible, oxymoronic “smart money” believes that the benefits have yet to be priced into current valuations.
But let’s revert to the land of Amazon, Alphabet and the rest of the chosen few. I believe that the unifying theme of the giddy goodies they are sending our way is an acceleration in the demand for disrupting technologies. Cloud services, Edge Services (apparently the cloud of clouds), Big Data Applications, Electronic Commerce, Digital Payment Services – all are achieving escape velocity. And, while no one should doubt that our Silicon Valley Chieftains will be the most visible beneficiaries of these trends, it strikes me that they are deeply reflective of a gathering round of capital investment away from the FAAMANAG complex. But thus far, the Market Gods are bestowing their blessings almost exclusively on the Big Dogs of tech:
The chart shows that the equal-weighted RSP actually lost value this past week, even as the glittering stars of TMT shined to super-nova proportions, in the process launching the capital-weighted SPX into the stratosphere.
I think, over a finite interval, the other constituents in the indices may be where the action lies. They’re spending like never before on new technologies, and I wouldn’t necessarily bet against their successes.
In the meantime, I might keep my eye on broad-based index divergences, which have been becoming more noticeable in recent sessions. To wit, on Friday, the spread between the return on the NDX (+2.2%) and the Dow (+0.14%) was the widest recorded in 15 years.
Bond yields, at least in these realms, are also on rise, and, if I’m correct about the looming technology boom, and, if the kids in Washington actually pass rational tax reform, the 30-year Fixed Income bubble could face a mortal threat (I can’t believe I’m actually writing that).
In any event, capital, stationary to the point of oblivion over the past few months, appears to be on the move, and, though I’m reticent to lean this way, I see this as a constructive development. Certainly, the fix is in for the rest of 2017 – it’s inconceivable – particularly now that October tax selling is nearly over – that anything other than a catastrophe can knock this rally off its kilter. But if I’m reading tech trends correctly, the good times could roll well into 2018 and beyond.
Much as I hate to sound optimistic in a world which is now characterized by an unmixed assault on the sensibilities of snowflakes, I must yet call ‘em as I see ‘em. I also will step out on a limb and predict that Miss Lee’s Magnum Opus will grace the curricula of educational institutions as long as the band plays. In one of its key passages, Atticus instructs his children that “it’s a sin to kill a mockingbird”, and he was probably right.
I’m here to declare the mocking of a killingbird, on the other hand, to be fair game, as long as one doesn’t abuse the practice. So I take my leave with the following Pythonesque admonition:
Away, progressive killingbird types, or I’ll mock you a second time.
Remember, you were warned.
TIMSHEL