By: K(en(neth Louis) G(rant)
“Yellow matter custard, dripping from a dead dog’s eye”
— John Lennon
I’m sorry; you just ain’t. Not The Walrus. NTW.
If it makes you feel any better, neither am I. None of us are.
One who aspired to, and nearly reached, this pinnacle, has just left us. And here of course I’m talking about Eddie. NGL: Van Halen wasn’t my cup of tea (great musicians but not a lot of great songs), but you gotta give it up to Eddie. Everything about him exuded magnificence (sh!t, even appearance-wise he was f@#king beautiful), and the tributes he’s receiving are well-earned.
For me, one factoid tells the tale. He played the signature lick on Michael Jackson’s “Beat It”. VH was just emerging at that point, while Michael was the undisputed King of Pop. Their convergence served, as much anything else that comes to mind, as the soundtrack for the times.
Smarmy rhetoric bores and disgust me, but this is what I love most about America. Eddie was a Dutch immigrant; MJ was a black man from a working-class family in Gary, IN. Each climbed from humble origins to unambiguous cultural royalty. Both played in ensembles with their brother(s). They came together for one divine moment – black meets white; rock meets soulful pop. This doesn’t happen in, say, France. Or even Sweden. And I think, as we seek to withstand this extended interval of wallowing in our flaws and sins, we could do a whole lot worse than take a moment to appreciate the magic that can happen – here and nowhere else — when we stop whining and start working. Together.
But this note is not dedicated to Eddie. Rather, it goes out to John. John Winston (Ono) Lennon. Who would’ve turned 80 this past Friday. Didn’t make it; was capped in front of his own home in 1980. Before anyone (including him) had ever heard of Eddie. Michael was a worldwide celebrity by then, but his transformative record: “Thriller” (featuring the hit single “Beat It”) was still years away.
Neither of them could touch Lennon, who sang “I Am the Walrus”, but didn’t mean it. Clearly, he was posing mere hypotheticals; asking hundreds of questions and purposefully answering none of them. Left it for us to figure it out, but the answers are elusive and varying. Old flat-top, for instance, had Feet. Down. Below, His knees. But about all he could tell us definitively was that 1+1+1=3.
You say you want a revolution? Well, you know, we’d all love to change the world. And I’ve good news for y’all. The world is changing. Whether we like it or not.
It’s difficult to determine whether for better or worse, but I have my own opinions on the subject. So, too, do investors, who have resumed the bidding up of risk assets into the stratosphere. Our intrepid skipper, Captain Naz, is rewarding those who boarded his ship on 12/31/19 with a 35% compounded return, across what even the most seasoned salts would describe as choppy waters. Meanwhile, our sultry sirens of risk mitigation – Madame X (U.S. 10 Year) and Vixen VIX, have left us at the altar, return-wise. But they are fickle creatures, so we’ll have to see how all of this plays out.
You say you got a real solution? Well, you know, I’d love to see the plan. But here, requests fall on deaf ears. Whose got a plan? Nobody that I can determine. Lots of probing diagnoses of problems. But solutions? Plans? Not so much.
You ask me for a contribution? Well, you know, we’re all doing what we can. Mad props must be given in this respect to our elected officials in Washington, who are trying like the dickens to slather the masses with more money that: 1) we don’t have; 2) might not actually need; 3) must borrow (presumably with new batches of printed money), and which 4) must ultimately be paid back (either by us or our progeny), through some combination of higher taxes, rampant inflation and a diluted dollar.
Meanwhile, there has been some reasonably encouraging economic news of late, which I fear that investors might be over-interpreting. Particularly with the re-energized pandemic lurking like a lizard on a windowpane, an insolvency tsunami visible on the horizon, as well as the depressive prospect of higher taxes, increased regulation, redistribution and other policies, I struggle to see much upside. Be that as it may, the Non-Manufacturing survey issuing from the Institute of Supply Management was a blowout (this is important because it cover such impaired industries as Restaurants, Leisure and Entertainment). And the Fed, as it whips out its knee-pads and begs Congress for more fiscal stimulus, is putting out Q3 GDP growth estimates that bring joyful tears to the eyes of even this crusty curmudgeon at the keyboard:
Now, unless I miss my guess, a ~35% bump would be a significant all-time record. The Wall Street consensus (blue line) is lower but is still growing, and in any event impressive.
The initial estimate drops on 10/29, and need I remind everyone that this is two days before Halloween? What promises to be the strangest Halloween in our lifetimes? The report comes out on a Thursday; All Hallows Eve is Saturday, followed by Monday’s All Saint’s Day, which ushers in the real week of terror. From an investment return perspective, I’m not overly optimistic, but then again, I’m a crusty curmudgeon.
One way or another, the Fed’s plea has indeed reached the ears of those who allocate our taxpayer dollars. and it looks like both sides are keen to get something done. Egg Man investors, by their actions, are egging them on. Of course, it’s all nothing more than a political battle in front of a high-stakes election, and who am I to quibble with this sort of thing (Not The Walrus, I can assure you)?
There is also a growing consensus that a Blue Wave (rising in probability if one chooses to believe the polls) might actually be accretive to valuations. To which I can only offer the following words of ambiguous wisdom issuing out from those Fabulous Fields of Strawberry:
Always know, sometimes I think it’s me, But you know I know when it’s a dream, I think a no will mean a yes but it’s all wrong, That is I think I disagree
Yes, I think I disagree, as Lennon might have. He wasn’t one to mince words, but he’s not here to tell us whether or not it applies to our current situation.
I reckon we’ll find out soon enough, but I just kind of have my doubts that the above-mentioned scenario, with its attendant promise of higher taxes/regulation and redistribution, to say nothing of the plans that some have in store for our Health Care System, the Energy Patch and Wall Street, is going to catalyze much of a boon for investors. And I just urge all within eye-shod to consider these contingencies as they navigate through these choppy, shape-shifting market waters.
You say you’ll change The Constitution? Well, you know, we’d all love to change your head. Well, at any rate, I would. Love to change your head, that is. Because Constitutional changes (and reasonable facsimiles thereof) have emerged as a highly plausible prospect. The Second Amendment is in play, and (as an anti-gun guy) the only negative observation I’ll make is to warn the anti-firearm contingent that it is going out tiger hunting WITHOUT its elephants and (of course) guns. Supporters of Â2 (including Tigers from Clemson, LSU, Mizoo, etc.) are not likely to have their tails pulled with equanimity.
So, in case of accidents, they should always take their mums. And I personally believe that the sacred First Amendment is also under attack, has been for quite some time, and that the threat is growing. If you doubt this, just ask the dwindling roster of conservative academics at institutions of higher learning – or, for that matter, anyone issuing formal rhetoric against the progressive orthodoxy.
And my worries extend beyond the introductory components of the Bill or Rights. Trends right now
clearly point to an end to the filibuster, a packing of the Supreme Court and (perhaps) the addition of a couple of blue stars to the Betsy Ross (now deemed a racist by cancel culturists and their corporate underwriters) flag. To the best of my knowledge, none of these requires a change in the constitution per se, but these are bold, paradigm shifting “if looks could kill, it would be us instead of them” moves.
So, when you tell me it’s the institution, all I can state is that institutions are on the verge of dramatic change, and I’m not feeling all that giddy about the new forms they are likely to take. But Lennon’s response was of course superior to mine. Better free your mind instead.
So, can we all do a little bit of that? Freeing our minds instead? For investors, this is aspirational: neither likely nor wise. In fact, in the short term, I encourage everyone to focus their minds on traversing the difficult path that lies ahead for all of us. Maybe afterwards we can do it. Free our minds, that is.
In the meanwhile, Happy Birthday, John (and to his son Sean too, who shares the date with him). We remember the tearful goodbye we said to you nearly forty years ago. We lost Michael (reputation tarnished but music enduring) in ’08 – another difficult year. Eddie bounced just this week. In 2020, which history may show to be a turning point. If so, I doubt it will be deemed to have been for the better.
Man, oh man do we need The Walrus now. But we don’t have him. And, in my darker moments, I’m not even sure we have the Egg Man. But know this: I want you. I want you so bad it’s driving me mad.
And now, with cellophane flowers of yellow and green, towering over my head, newspaper taxis are appearing on the shore, waiting to take me away. And there’s nothing left for me to do but climb in the back with my head in the clouds, and I’m gone.
In case there’s any doubt, I’m gonna look for the girl with the sun in her eyes.
And I hope I find her where JL left her — at the plasticine porter/looking glass tie train station turnstile. Because Walrus or no, that would do wonders to free my own (troubled) mind.
TIMSHEL