Your dancing child with a Chinese suit, He spoke to me I took his flute,
You know I wasn’t that cute to him, Was I?
But I did it because you lied, because he took you for a ride, because time was on his side,
And because I… …I Want You
— Bob Dylan
I begin by thanking the teeming millions for their touching outpouring of support on last week’s note about my parade fixation — particularly the Macy’s Thanksgiving Day Parade. I received one note that was particularly special to me, but we won’t get into that, now, will we?
It is my sad duty to report that from a personal Thanksgiving Day bucket list perspective, the holiday was something of a bust. I was up in the mountains, without access to a television, and must shamefully report that perhaps for the first time in my six decades roaming this here planet, the parade spectacle ensued without the benefit of my observation. Maybe this is just as well given that the Ronald McDonald, Snoopy and a few other backbencher balloons suffered injuries had them limping their way to the 34th Street finish. Alex, wherever you are, I am yet again sorry misunderstanding your transitional wisdom.
I also failed to watch a minute of football. But I reckon I’ll live to survive that particular tragedy.
But here’s where the glitches turned into outright fiasco. No. Turkey. Or stuffing. Or sweet potato pie (I love sweet potato pie). Had reservations at a restaurant. Confirmed them. Twice. Then we all got dressed and headed over to the joint for the roasted bird they promised. The lights were on, but (as is often the case), there was nobody home. We were in fact very fortunate that a food mart/gas station was open, and that we managed to score some Potato Buds, a couple of packets of bacon and some frozen fries. And we made do. I think that on the whole, the experience was one that is reminiscent of that overused line by German philosopher Friedrich Nietzsche: “that which does not kill you makes you stronger”.
It was certainly a holiday to remember, but now it’s over and we must move on. The caprices of the calendar are such that Black Friday – that day of frantic shopping that has often devolved into violence, comes immediately on the heels of Thanksgiving. Not this year. Published reports suggest that the malls were full of more crickets than humans. But there is hope, as indications suggest everyone has finally given up the physical shopping ghost, and has fully embraced the on-line mode of personal consumer enterprise. I reckon we’ll find out soon. Because tomorrow is cyber-Monday, the electronic analogue to the before-midnight lines of the lines that used to form in front of Walmart. Here’s hoping that the pundits are correct, that the on-line point and click action will be hot and heavy.
As a further bit of hopeful news on that score, I am pleased to report that I find myself in a bit of a consumption frenzy, or, to be more accurate, an almost unchecked desire to purchase everything and anything that is brought to my attention and available for purchase. Most of my wish list comes from watching advertisements on television, but one way or another, lately, I can hardly witness a product offering without feeling an overwhelming desire to acquire what is being described. In summary, when I see something all I can say is “I want that”.
And it doesn’t matter what it is. I am, for instance, currently feeling extremely acquisitive about such goods and services as pillows made by a Minnesota guy in a blue shirt, insurance products of every kind, cars from all leading auto manufacturers, chicken wings, and of course, adult undergarments for both genders designed to battle the tragic problems of incontinence. I am especially enamored of pharmaceutical products: the ones where the ads show the happy Grandma twirling her little darling in the daisies, or the old guy blowing jazz to beat the band. When they get to the list of side effects (diarrhea, nausea, shortness of breath, muscle spasms and even death), it’s all I can do to stop myself from calling my doctor and begging for a script.
I’m hoping and guessing that virtually everyone feels the same way as I do, because if so, it will indeed be a Happy Christmas, economically speaking.
Investors, of course, remain in acquisition mode, as all of our martial indices – including that laggard Ensign Russ, continued to seize new ground — at least until Friday, when (perhaps in response to a turkey coma that I did not have the privilege of experiencing this year) they retreated modestly.
And now it’s December. How, possibly, can it be December? It’s probably a glitch in the I-Phone 11s that I just purchased for myself and my entire staff. But maybe they did it on purpose, and if the crew in Cupertino indeed arranged this winding the calendar forward to goose holiday sales, they pulled off perhaps the greatest marketing stunt of this young century, because, among other matters, the dates line up with my scant inventory of non-Apple devices that I have used for purposes of corroboration.
So the year’s almost over, and I don’t mind telling you that when the ball drops at the end of this month, I’m will be more wistful than usual. Because I’m gonna miss 2019. A lot. Some bad sh!t happened, to be sure (for example, I lost my daddy and we all lost Ginger Baker), but so it goes. On the other hand, I had some of the times of my life. I think we all did. Well, most of us anyway.
I think, for all of this, we all owe a debt of gratitude to Jerome Powell, Mario Draghi Hideki Kuroda, and whoever sets monetary policy in China, because without their divine largesse, we might be singing a different tune this holiday season. They’re still giving money away, with no signs that (to mix a metaphor) the gravy train is likely to end any time soon. The global economy, against all odds, seems to be showing signs of a modest (to mix yet another metaphor) second wind. And even the bi-polar folks at the Atlanta Fed have perked up (further mixed metaphor alert) and are whistling a happier tune:
I won’t lie, though. I do worry about the folks in Atlanta, who don’t seem to have the ability to make up their minds. Beyond this, there’s really almost nothing of substance upon which to report. Which is good, unless risk management is your game. Because the sad truth is that us risk managers need some fire and brimstone injected into the proceedings from time to time, just to remind everyone of how vital we are to their existence.
I attribute the glad tidings to a combination of suppositions that pass for such — mostly because they aren’t sad tidings. The Impeachment saga, at present, appears to whimpering. With the 2020 election season now hard upon us, the Progressive platform has taken such outlandish contours that it becomes almost unthinkable that it can prevail from a political perspective. I don’t wish to put too fine a point on this, but market participants have clearly, at least for the moment, discounted the probability of a Liz/Bernie outcome to the statistical equivalent of zero. Whatever one’s personal viewpoints, that much is true, because if the tides turn, and the full-on takeover by Washingtonian bureaucrats of all private affairs gathers steam, then investors, who have real money at stake (even if it most of it belongs to someone else) can only take one rational step. Sell EVERYTHING. And they’re not. They’re buying.
The China thing remains a risky mystery, but then again it always has. Back to before the Ming Dynasty, and kind of like Dylan’s flute. I will state this, though. If Trump indeed manages to assist in the maintenance of the economic balloons at higher elevations than Ronald and Snoopy on Thursday, and then cuts a deal with the Chinese, say, this spring, we are all going to have to give him his props for political strategy. Further, if market valuations and economic statistics are to be believed, so far so good.
Corporations, and All God’s Children, seem to have faith, because they are borrowing to beat the band:
I draw your attention to the footnote at the bottom of the right-hand graph. The ’19 figures do not reflect a full year’s action. They certainly don’t include November, and October and September might not even be in these tallies, because, you see, it takes a little while to compile these statistics.
Somewhere down the road, all of this money is presumably gonna have to be paid back. But as this holiday weekend winds down, why worry about that? To yet again do some thieving from the great Everett McKinley Dirksen (R, IL), $2.5T here; $2.5 T there, and it soon starts to look like a lot of money. And as for $250T? Well, even Dirksen detractors must admit we’re there.
But for borrowers, the price is right. Due to the complete absence of inflation, real interest rates are almost certainly negative. So why not grab with both hands? I doubt this would all be transpiring if the economic and political prognosticators that CEOs somehow manage to justify keeping on their payrolls felt we were staring in the face of an all-out trade war.
An early glimpse at 2020 suggests that it will have a tough act to follow. There were events this year, financial and otherwise, that were sufficiently remarkable to take one’s breath away. I suspect we will face greater headwinds next year, but then, again as a risk manager, I’m supposed to say that, right?
But I don’t see much on the horizon in Month 12 that is likely to end the 19 party. And, on this weekend of ritualistic gratitude, I ask you, yet again, to remember how last Christmas felt, and to take in one more dose of gratefulness, before we return to the somber slog of bringing this year to a productive close.
That’s all I got, though. For now. I think I’m gonna lie down and rest. I hope you never experience this, but a Potato Buds coma makes a turkey coma feel like a walk in the park. And then do some shopping
Maybe I’ll buy you something. And don’t worry, I still want you. But I also want that. Maybe I can have both, but some of it is out of my hands. And that, my friends, is what this great game is all about.
TIMSHEL