By: Ken(neth Louis) Grant
Spot Check Billy got down on his hands and knees,
He said: “Hey Mama Hey, let me check your oil, alright?”
She said “No, no, honey, not tonight,
But if you come back Monday, come back Tuesday, yeah, and then I might”
— Lowell George/Little Feat
Yeah; there’s a fat man. In the bathtub. With the blues.
Do you hear him moan? If not, maybe you should check your ears. Because he’s moaning like a motherf@cker.
In fact, many fat men. Literal and metaphorical. All with the blues. All moaning.
I would gladly count myself among them, but the truth is I’m not, or at least am no longer, a fat man. Down like > 60 big ones from my high a couple of years ago. You should see me now; you really should. But under the circumstances, I reckon it’s not possible.
I moan nonetheless. In part for all of the moaning fat men. In all of the tubs. Across the entire world.
In extending out from last week’s theme, it should be noted that the world’s second ever militarized nuclear weapon, dropped on the moaning Japanese city of Nagasaki, was also named Fat Man. But the 75th anniversary of that shindig isn’t until August 9th. So, perhaps we’ll revert to the subject in a couple of weeks; perhaps not.
Meantime, midweek, at least to me, the Gallant 500 looked like nothing so much as a bunch of fat men, not moaning, but bellowing, with bodacious bluster. And why not? They had waddled their way to positive territory for the year, and within a skinny 100 handles of all-time-peak valuation. Fattened their fat @sses through Thursday’s open, but then, presumably, fatigue set in. Which will happen to fat men.
Those that bought in around the Thursday mid-morning high of 3280 took something of a bath.
One has to feel sorry for fat men these days, because in addition to the shade they routinely throw across the sunlight, mad shade is being thrown at them, from every direction. And all they can do is take it. And, maybe, jump into the tub, apply some Mr. Bubble, and start bellowing out the blues.
And I suppose that now is as good a time as any to say a sad farewell to one Peter (Greenbaum) Green, Founding Member of Fleetwood Mac, and a leader in the long line of great Jew Blues guitarists. Actually, there aren’t a great deal of them, but the cupboard is, on the other hand, far from empty. There’s the great Mike Bloomfield, for instance (also dead). And I think that you can justifiably throw Mark Knopfler on the list, not to mention Mountain’s Leslie West, and of course, my all-time fave: Jorma Kaukonen, of Jefferson Airplane/Hot Tuna fame. As probably the biggest JA/HT fan you’ll ever meet, I’m here to tell you that you should check Jorma out. But you probably won’t. And as us Tuna-heads are fond of saying: “if you don’t know Jorma, you don’t know Jack”. There’s a pun in there, but you’ll have to discover it yourself.
Back to Peter Green, though, for a second, who shed his mortal coil on Saturday. First, most of you probably don’t know what he looked like, which is this:
Kind of Christ-like, no?
I was pleasantly surprised at the notices his demise received on the wires. He was, after all, the forgotten Macster. Split before all of that Buckingham/Nicks Hollywood BS catapulted their latter-day, smarmy pop to fame and fortune. Green spent those years in relative anonymity. But never disappeared altogether. He made his mark.
And, for the purposes of this publication, it should be noted that while could belt out the blues with his throat and axe like few other Jews alive, he wasn’t a fat man. In fact, in perhaps his best-known piece, a blues tune called “Oh Well” that you should definitely check out, he admits as much himself:
“Don’t know about the shape I’m in, I can’t sing, I ain’t pretty and my legs are thin.. Don’t ask me what I think of you, I might not give the answer that you want me to”
But now he’s gone, and it devolves to the rest of us to attend to the myriad problems that plague us.
As for me, I think we’re in a bubble. I’m not suggesting that it’s going to burst immediately. But eventually it will, as it must. The physics of the situation pretty much dictate that bubbles explode at their maximum achievable point of expansion, and we may not be there yet. But this bubble is filling up with a range of menacing, terrifying, gaseous risks that cannot expand it much further and still allow it to remain intact. And, as I did when this whole mess began (an unthinkable trimester ago), I am taking the liberty of summarizing them in the following table (note: all observations are intended to reflect market impacts; not the views and opinions of the recently unmasked author of this publication).
A Read ‘Em and Weep Inventory of Prevailing Risks
I could go on, but presumably you get the idea. The squeaky-clean fat man is moaning up a storm, and something in the markets has gotta give, right?
On the other hand, there’s trillions of dollars of under-deployed cash – at Treasury, the Fed, and yes, even in those institutional investment accounts and (astonishingly) personal savings accounts. Piles and piles of paper bearing the images of American fat men from days gone by. And if that’s not enough, as indicated above, borrowing is so cheap, that they’re almost begging you to do it. As one example, thirty-year mortgage rates hit an all-time low this past week:
Please Ignore the Wording in The Upper Left and Note the Path of 30-Year Mortgages:
Between this and the delicious goodies sure to come next week in the form of Stimulus 3 (in which episode Congressional members seek to outflank one another in an hysterical effort to deliver to tastiest package they can to the electorate, before exiting – stage left – to their districts, for a wheezy, tepid, victory lap) there’s cause for optimism. I’m pretty sure that the market’s gonna be happy with the bill, because, after all, what fat man worth his cellulite doesn’t like free candy?
Still and all, investing at these levels reminds me of nothing so much as taking plunges for small change, and, like Lowell George tells us in this week’s song: “don’t want nobody who won’t dive for dimes”. And I don’t. Want nobody who won’t dive for dimes, that is.
And dimes, insofar as 10 of them equate to a single unit of our fat, flabby unit of account are moaning as well. The Dollar Index, in case you hadn’t noticed, is absolutely getting bitch-slapped this last while:
DXY: Fat Benjaminz Taking the Plunge:
And it’s not just against other bloated, misogynist currencies that it is being bested. Commodities of virtually every stripe – Grains, Oils, Energy, Softs, Precious Metals, Industrial Metals, and the like, are all regaining some long-lost mojo.
Heck, even our portly, porcine pets – Live Hogs — have managed to gin up something of a bid in the last few sessions. Perhaps this is due to the new rules being put in place in certain urban jurisdictions, demanding that specific forms of food be served to every thirsty tavern patron within city limits. Chicken wings didn’t make the cut, but it’s a fair bet that hog jowls did.
So, let’s dime-dive, shall we? It’s a little bit like day drinking. It’s not the sort of thing of which you perhaps should make a habit. But on the right day, with the right company, it can be pure magic. Let’s just make sure we contemporaneously fill our bellies with government sanctioned sustenance.
And, by Thursday morning, we may be famished anyway, as, at 8:30 Eastern, the Commerce Department is scheduled to offer up its first morsel of information on Q2 GDP. Current consensus estimates are for a drop of 35%, which I gotta guess is a significant record plunge. Better fill our bloated belies and our body basins while we still can.
I’m filling the tub right now, and ask you to please jump on in with me. The water’s a bit hot, but we’ll get used to it, and my oh my, won’t we be cozy in it together?
If you’re answer is no, I hope it is followed by a hopeful, thematic: come back Monday, come back Tuesday, yeah, and then I might. In fact, I’d like to lock down Tuesday.
Beyond this, a good deal of the dive diming this coming week will likely be driven by earnings. It ought to be interesting, given that this week’s roster of fat men at the podium include the fattest of the fat: AMZN, GOOOOOOOG, FB, AAPL, which, along with MSFT (which reported this past week), command an astonishing 22% of the heft of the Gallant 500. A single set of software, hardware, social media, e-commerce and internet search engine companies hoover up all but 78% of what comprises our benchmark index.
That’s a lot of flabby virility in the bathtub, my loves, leaving < 80% to be split across the rest of the private economy. You know? The part that feeds, shelters, heals, transports and clothes us? They’re all in wet, tight quarters.
So, if the fat men are moaning, they come to do so honestly.
Like I stated above, I’m moaning myself. And you know the reason why. Eventually, we’ll all have to get out of this damned tub, dry ourselves off, and get to where we have to go.
Though it is wrought with peril, I remain determined, and particularly look forward to walking my thin legs to our divine, final destination.
And in conclusion, as Peter Green(baum) might say about all of this: “Oh Well”
TIMSHEL