So where to now St. Peter? If it’s true I’m in your hands,
I may not be a Christian, but I’ve done all one man can,
I understand I’m on the road, where all that was has gone,
So where to now, St. Peter? Show me, which road, I’m on
— Elton John and Bernie Taupin
ST. PETERSBURG. Somehow, some way, I find myself at this particular dateline, and no, I don’t know which road I’m on. So how I got here, I can’t rightly say. Last thing I remember, I knew that I had to get away. Ideally to a remote location (at least from a provincial perspective). I’ve been bombing on Zero Hedge lately, and what, with all of this Putin intrigue, I may have thought that the ancient metropolis, founded in the early 18th Century by Peter the Great and nestled on the banks of the historic Neva River at the eastern shore of the Gulf of Finland, might have been the ideal destination. I also have a vague recollection, on Valentines’ Day, of looking the town up on the map, and finding that the city’s boundaries and immediate points of watery ingress form the image of an amorous fish:
Which is pretty cool, because I love fish – particularly amorous ones. So why not St. Pete, the northern capital of Russia, and a town that sports nearly 6 million inhabitants.
From there, all one has to do is hail a properly provisioned seafaring vessel, and boom, in a few hours, one is in Helsinki, which is also pretty cool. All of which begs the question: why go to St. Petersburg at all?
Well, among other reasons, the town has an interesting nomenclatural history, having, during World War 1, been renamed Petrograd, and in the wake of the ensuing Russian Revolution, adopting the murky, menacing handle of Leningrad, only to be renamed St. Petersburg when the Soviet Union collapsed.
But we live in an era where nomenclature is definitely a cause of vexing concern among the masses. Consider, if you will, the case of gender-based pronouns. On second thought, don’t consider the case of gender-based pronouns. Or if you do, please don’t tell me about it. In addition, beyond the recent shade thrown at me from the readers of Zero Hedge, the publication is actually chockful of references to hedges of every stripe.
Elsewhere in the nomenclature game, it’s NBA All-Star Weekend (transpiring on my home turf of Chicago), and if you went, I hope you enjoyed this horrifying spectacle, or at minimum endured it. But please bear in mind that from a nomenclature perspective, there are few Pelicans in New Orleans, certainly no Jazz in Utah (or less than any of the other 49 states), and no Lakes in LA. There is Heat in Miami (most of the time) Phoenix is full of Sun(s), but nobody has worn Knickerbockers in New York since the Wilson Administration. Depending upon how you define the term, there are Wizards in Washington, but ones that I do my best to avoid.
Grizzlies in Memphis? Please.
And the truth is I’m not in frigid St. Petersburg, Russia, but rather am warming my jets in its identically named municipality on Florida’s sunny Gulf Coast. And I must say, it bears scant resemblance to its Russian counterpart. No sweeping cathedrals. Not a river in sight. Finland is a galaxy away. And the weather, especially in February, is a whole lot better than that presumably being experienced by the denizens of the Northwest Province of the realms of Putin and Peter the Great.
I’m guessing most of y’all are on to me by now. I don’t really have much fodder for market commentary this week. Maybe that’s for the best; maybe you need a rest as much as I do.
So let’s revert briefly to the NBA theme, shall we? There are indeed Bulls in Chicago (including my home squad), but they are not, per se, exclusive to that jurisdiction. Fact is, bovine sentiments prevail everywhere across this fair land. Our equity indices, Corona notwithstanding, spent the last four days hovering in < 1% ranges at record valuation levels. The USD is rocking like it’s 2019:
So violent is this move that the 1/100th Benjamin unit rose even against the Swiss Franc, issued by a jurisdiction where no St. Pete exists. Also against the Russian Ruble – currency of the home country of the original St. Pete.
I’m not entirely sure why the greenie is as white hot as it is, but then again these FX markets have always puzzled me. I can only tell you that it makes me wish I had travelled abroad, which, as indicated above, was my original intent. I did read, over the last couple of days, that our trade deficit against the economically depleted Eurozone reached a recent all-time high, and if so, maybe we can blame the chart on the left.
Back stateside, we bore witness to yet another oversubscribed set of bids on bonds made available for repurchase by the highly accommodative United States Federal Reserve. Now, whether this is mere preventative medicine to stave off a liquidity crisis, or simply a gift of free funding to our much-maligned, malingered and generally put upon bulge bracket banks is a matter of debate above my pay grade. What is indisputable, though, is that the Fed Balance Sheet is ballooning. Again:
And this with market conditions being about as good as they get: equities at record levels, the USD on a rocket ride, and raising the question as to how big it would be on a weaker tape. But in the meantime, markets are certainly in fine form. Take Sugar, which at least until this past week, is exploding:
Sharp-eyed observers will indeed notice the recent sell-off, but no one above the age of nine should shrug off the moonshot from < twelve cents a pound before Halloween to nearly sixteen cents in the lead up to Valentines’ Day.
They say the stuff isn’t good for you, and of course they’re never wrong. But by my own estimate, I myself am more than 60% sweet stuff, and was happy that the market was starting to recognize my true value.
Until, that is, this past week. Because what Sugar giveth, Sugar taketh away.
Feel free to short me, if that’s what’s in your heart. But the part of me that is not sugar is mostly gas which has been a baller short since the first indications of a mild winter began to blow our way.
A big part of me weeps for NG investors these days. They just can’t seem to catch a break.
But on the other hand, this was, in my experience, the best market in which to specialize for a very long time. I had a very successful former PM/friend who played this game like a boss. When I departed my oversight role at his firm, I’d occasionally get an email from him with nothing but a chart of a big move in the commodity, and the picture told everything I needed to know.
God blast him. He’d nailed another big move. But those days are over, and I think he’s retired. Young. And rich. But out of the Natural Gas Market.
All of which leads to our quote and the question embedded therein: where to now, St. Peter? I don’t think the First Pope/Keeper of Heaven’s Gate can tell us much. I’ve asked him recently, and, instead of Northwest Russia, he directed me to the Southeastern Portion of the United States.
So we’ll have to figure this out for ourselves. But Uptown, Downtown, it really doesn’t matter what road we’re on. It may be helpful, at times, to remain aware of whether we are on the East Side or West side, if for no other reason so we can feed ourselves. But even if we get this wrong, I will love you no less. In fact, I will love you more. Particularly during Valentines week. Please know this. No matter what.
I do think that the markets will continue to rise, but if I knew for sure, I’d be St. Peter myself. And I’m not. I’m not even a Christian, but I am doing all one man can.
I hope and expect you are doing the same, because if so, whatever road you’re on, it stands every chance of rising to meet you.
TIMSHEL