By: Ken(neth Louis) Grant
Turning and turning in the widening gyre, the falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst are full of passionate intensity.
— “The Second Coming” William Butler Yeats
Please join me in offering a shout out to my man W.B. Yeats, for writing maybe the best damned poem in the history of the English language. It’s a dystopian vision of a New Nativity which (one must allow) captures certain aspects of the current ambiance with eerie precision. And I don’t want to freak y’all out, but the hundredth anniversary of the piece’s original publication transpires early this November. A point at which we will obtain actionable evidence as to whether indeed the center cannot hold, the presence/absence of conviction of the best, and the level of passionate intensity exhibited by the worst.
And believe it or not, these concepts will be tested beyond the mammoth event of the 2020 election. The weather will have turned by then, bringing with it a likely a new resurgence of the force of those viral cells everyone loves to hate. It’s not like they haven’t been partying all summer, and, if the infectious disease specialists can be trusted at all, this means that matters, on that front, are likely to turn incrementally problematic within a matter of a dozen or so weeks.
And surely this will breed more socioeconomic problems, as if we didn’t have enough of those with which to contend even now. The hard fact is that in all probability, our already treacherous economic slope is likely to steepen, challenging each and every one of us — whether or not we decide, through the election, to wallow in redistribution, re-regulation and retribution.
But we’ll get to all that. Beforehand, I have a number of notions to lay upon you regarding this week’s poem of choice, the first of which is that if you haven’t read it, you should. Clocking in at 23 lines, it will tax neither your time nor your bandwidth, particularly as compared to, say, Edmund Spenser’s “The Faerie Queene” (~35,000 lines) or even “Don Juan” by Lord Byron (15,920).
If you have encountered it, read it again. Brothers and Sisters, it will do you know harm.
Our title derives from its last line. It offers a great heading on its own (which is why I’m using it). But here, I am late to the party. The fabulous Joan Didion rode it to titular glory in a book of short stories about Haight/Ashbury in the height of its magical Mid-Sixties madness.
And, in thieving it from her, I should mention that it’s one of three book titles that have driven me, as an author, to mad jealousy.
The others? Well, first, there’s “Atlas Shrugged” by Ayn Rand: a flawed book which nonetheless also captures a terrifyingly identifiable portion of the current ethos.
Then there’s William Faulkner’s “The Sound and the Fury”. I had always thought the title was a bit over the top, until I got the joke. It derives from Macbeth’s speech in Act V, Scene 5, wherein he describes life as a “tale told by an idiot, full of sound and fury, signifying nothing”.
And the first quarter of “S&F” is narrated from the perspective of the mentally disabled adult son of the family tracked in the story.
Get it? For what it’s worth, I really liked the book, which, by all accounts won Faulkner the 1949 Lit Nobel. But (trust me on this one), it falls short of the magnificence of its “prequel”: Absalom, Absalom!” which (like Harper Lee’s “To Kill a Mockingbird and the posthumously released “Go Set a Watchman”) was written afterwards.
Anyway, these are the titles I envy.
And meanwhile, to me, the early returns corroborate Yeats’ admonition, at least insofar as: 1) the center is not likely to hold; 2) the best are indeed conviction-bereft; while: 3) the worst? Well you get my drift.
It’s true in a lot of realms, right? I’m going to do my best here to avoid the obvious political parallels; let’s instead focus on the markets.
Where, at the moment the center cannot hold. In any corner of the investment universe. The dollar is in free fall. As are global rates. Commodities, particularly precious metals, are being bid to the heavens.
Much of what has transpired over the last several sessions is framed by two critical data streams: U.S. (- 33%)/Euro GDP (-40%), and Q2 Earnings. The latter of course have had pockets of sheer delight, particularly the FAAGs (Facebook, Apple, Amazon and Google), whose CEOs faced a Capitol Hill Star Chamber Inquisition on Wednesday, only to, each of them, report blowout earnings on Thursday.
All of which has kept our stalwart equity indices on the march to higher ground. And I personally believe that the fix is in for the Gallant 500 to, at minimum, test, if not shatter, all-time high valuations.
Well, OK, but don’t you find it all just a little bit odd?
However, know this my lovelies. There’s a baller of a bid out there for financial assets of every stripe, as indisputably catalyzed by all of that funny money we’ve been printing over the last decade, and particularly this year. We’ve spent a great deal of it; of that there’s little doubt. But there’s more in the till, and it will get hoovered up. Consider, if you will, that the move to record low yields on the 10 year is transpiring at a point when the Treasury Funding Gap (measuring the need to float paper to meet anticipated obligations) has exploded:
Ten Year Yields:
Treasury Funding Gap:
This chasm will close, serenely, by new issuance, which inventory-starved investors will greedily gobble. And if they don’t the Fed will belly up, because it will have no other choice.
So, what to do? Maybe what we’re supposed to channel the rest of W.B. Yeats’ masterwork:
Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
I do indeed wonder about the nature of the beast currently slouching towards Bethlehem, and can conjure up any number of hideous creatures, literal and figurative, that could fit the bill.
But I’m not overly fired up to either inventory or describe them.
Just know this: from a market risk perspective, they are out there. In force. My guess is that they will impact the markets in unforeseeable ways, in the not-to-distant future.
So be forewarned. And if (when) you see the shadow of indignant desert birds, my I advise you not to ignore them.
But in these dog days of summer, I further suggest that you not to over-exert yourselves in search of the Bethlehem Beast. We’re not likely to have advance warning of his arrival, because as falcons turning in a widening gyre, we are genetically rendered unable to observe the falconer.
But when he gets here, we will certainly feel his presence.
And so, maybe, just maybe, instead of Yeats, we should focus on Didion’s version of Slouching Towards Bethlehem. There are lovely, petite, hard copy versions of this short-story compilation. I know this because I recently acquired one. Alternatively, you could listen to the audio version, through your earbuds. You know, the ones that are in the new container you now carry on your keychain?
One way or another, and particularly in your new PJs, and accompanied by your best friend, it’s an experience I can highly recommend.
And as for the rest? Well, Slouching Beasts come (and go) as they will. And there ain’t much we can do about them, except mind our business and hold on tight.
TIMSHEL