This one goes out to Bob. And Neil. With gratitude and admiration.
So alike; so different. But both stand at the pantheon of much of what makes life worth living these days.
The songs. Yes. The songs. Where would we (I) be without them? What, for instance, would I play you?
Miraculously, both dropped albums of original music this past week, and oh boy did we/I need that.
First, Bob. “Rough and Rowdy Ways”. His 39th LP release. Routine readers know my boundless admiration for him, and I cannot extend a better review than to state my belief that somehow, impossibly, it lives up to his sublime standard. The material on this album is also all new. So there’s that.
But I’ve written too much about Bob, so let’s move on to Neil, shall we? This week, after a wait of 45 years, he put out a record called “Homegrown”, fulfilling an urban legend that takes me back to my boyhood. I was then, as now, obsessed with Neil (and Bob), but back in them days, us unhinged fans of what is now (not then) referred to as “Classic Rock” were starved for information. Which stands in sharp contrast to now, when we are overwhelmed by it. Today, if one chose to (and who’s to say this would be unwise?), one could spend all waking hours studying a guy like Neil, and still not get through it all.
But back then? Not so much. So, we hung on to every little tidbit. And one of the juicier morsels involved published reports that Neil’s BEST material remained locked in a vault, not intended to be released during his lifetime. The mind raced. Didn’t think this was even humanly possible. Better than “After the Goldrush” (my personal fave)? Better than “Harvest”? Well, now “Homegrown” has been released, and while Neil is still with us. As I’m typing these words, I’m giving it my first listen.
When I’m done, I’ll let you know what I think.
But let’s revert to “Harvest”, from whence I derive this week’s theme. Another urban legend about Neil (there are many, but this one is confirmed) is that after he finished making the record, he invited Graham Nash over for an early listen. Being Neil, this did not involve the then-ritualistic sitting on the sofa, sparking one up, and popping the disc on a killer sound system. Instead, they rowed into the middle of a lake on his ranch (“Broken Arrow” in Redwood City, CA). At Neil’s signal, the album resounded off the water, as emanating from two enormous speaker sets: one inside his house and one inside his barn. Shortly into the first strains of “Old Man” (the record’s sublime opening track), Neil gave the signal to switch it off. He then shouted the following words to his landlubber engineer:
“More barn!!”
And on this Summer Solstice/Father’s Day, transpiring, as it is, in one of the strangest years in living memory, I’m suspecting that Neil had been right all along: we do indeed need more barn. Not just in music, but in life. Not just in life, but in the markets.
For the latter, “more barn” implies a greater focus on the grittier elements of our capital economy. Not those quantum-quick semiconductors, not that slick, righteous social media. Instead, the stuff with the pungent smell, that gets under our fingernails.
So, with the increasingly fancy pants Gallant 500 and other equity debt benchmarks doing, in my judgement, just fine, I thought I’d take a look in the barn, and, as I suspected, its extra gamy in there:
I started with those kings of the barnyard: Live Hogs (where else?):
Hogs: Rolling in the Mud
I love this market; always have. But I have a confession: it historically took a backseat in my heart to its sister commodity: Pork Bellies, traded mostly by my kosher-keeping co-religionists, during the entirely civilized hours of 10:30 – 2:00 (Eastern). But Pork Bellies were delisted a couple of years ago (a pox on whoever made this call, the fact that he is one of my best friends being irrelevant. FWIW, I forgive you).
And this left me with no alternative but to transfer my porcine amorous attentions to what I will call the pre-belly/not-yet-frozen pigs.
They’ve barely been able to catch a bid in what seems like forever, and in fact, at ~$52.6 per 40,000 lb. unit, are trading at their lowest level in at least five years. And to the best of my knowledge, they are not even covid super-spreaders. If you’re looking for what ails us, this may be a sound spot to start.
The other edible commodities markets are doing a better job of holding their own, but could also, in my judgment, use some incremental barn love.
But I don’t really expect any of you to assist me here. So, let’s turn our attention to those entirely more elegant equity markets. Following is a breakdown of the rolling one-year SPX performance by sector:
It doesn’t take much close examination to determine that anything that zings or blings (IT, Communications, Consumer Discretionary) is vastly outperforming those elements of the economy that produce products you can touch, taste, and yes, smell.
I reckon this will continue on for a spell, and maybe that’s what the Good Lord intended.
But I can’t help myself; I pine for “more barn” in our return profiles.
Meantime, as I expected, risk assets picked up some ground previously yielded this past week. Bond spreads came in or held their ground, $1T of new issuance notwithstanding. Perhaps this is owing to Chair Pow (as expected) backing up his FOMC rhetoric and buying some corporates. Our equity indices, while fading towards the end, had a reasonably strong week of action, and I am delighted to report that Captain Naz, after alarmingly yielding the 10,000 ground, has recaptured this critical foothold.
I’m not sure how much upside there is in any of this, but I repeat my warnings about being short. There are tons of private cash on the sidelines, and this is laying aside the Fed and other Central Banks, who have created for themselves, like magic, the biggest checkbook in history. By all accounts, they have their pens loaded and ready to sign at the first indication of trouble.
So I expect the good times to keep rolling (at least after a fashion) –due to, as I wrote a few weeks back, the miracle of Modern Monetary Theory, which posits that a baller central bank like our own Fed can print as much money as it wants, lend it to whomever it pleases, and, by doing so, suffer few consequences. MMT is being tested before our very eyes, and so far, so good. The economy has ample access to cash, banks are lending, borrowers are borrowing, mortgage applications are soaring, as are metrics like Retail Sales.
True, our monuments are toppling, and our cities are burning. Even George Washington, the FATHER of our country, finds versions of himself facedown and full of flames, (among other places) in the historic city of Charleston, SC – just a couple of days before Father’s Day, for chrissakes!
And anecdotal reports suggest that city life is just getting too difficult for a lot of urban dwellers. I even heard a report that if you want to move your stuff from San Francisco to El Paso, your U-Haul charge is $2,500. By contrast, if, somehow, you’re headed in the opposite direction, the cost is $500. Because who in their right mind would move from a fly place like El Paso to a cow-town like SF? So, trucks are scarce in NoCal, while reposing in unloaded abundance in West Texas.
Still and all, barnyard creature that I purport to be, I nonetheless pine for the City. I can think of nothing better than taking a stroll with you on the Upper West Side, grabbing a slice, and sitting on some shady bench to eat it. Together. Hell, I’ll even buy. And we’ll make plans.
So maybe it’s not ALL barn that we need, but I’m still gonna put in my claim for MORE barn. Jesus was born in one of these, you know.
But he hasn’t been around for >2,000 years. We still have Bob and Neil, though. Which is about as close as I reckon we’re going to get in these troubled times. And we should all take a moment to appreciate their continued presence/output. Because they won’t be around forever. And when they go, we will be sad. Because who on earth will to replace them?
And as for “Homegrown”, after first listen, I give it about an 8. “After the Goldrush” it ain’t. Or “Harvest”. I’d also rank it below a few others, including “Tonight’s the Night”. It has a sublime ‘70s feel to it, but then again, that’s when it was actually recorded. By contrast, “Rough and Rowdy” is all new.
But it was only one listen, through my I-phone earbuds. I think doing Neil’s “barn” thing would help.
First things first. In order to get to “more barn”, we’ve got to have at least some barn to work with. Right now, we have none. And, like I stated above, maybe that’s the first problem we need to address.
TIMSHEL