By: K(en(neth Louis) G(rant) and Nutlas
Kazakhstan, number one exporter of potassium
All other countries have inferior potassium
Kazakhstan, home of Tinshein swimming pool
It’s length thirty meter, width six meter
Filtration system a marvel to behold
It remove 80% of human solid waste
— “Oh Kazakhstan” Anthem of Recently Diminished Nation of Kaskhstan
Hello. My name Nutlas. Please don’t yourself worry about rest of name. It not important. I take over this blog to help my friend Borat, to make benefit of Recently Diminished Nation of Kazakhstan. He just make moving picture: “Subsequent Movie Film”, where he film try to give gift to Yankee Strong Man Vice Premier Mikael Penze, but it not work. He undercover now; don’t try find him. This not him:
He inform me to borrow Mr. Kenneth’s writing note.
Do not worry also about Mr. Kenneth. Mr. Kenneth safe.
I ask Mr. Kenneth readers to help find new Yankee Strong Man, so to grease his palm, for glorious benefit of Recently Diminished Nation of Kazakhstan, which offer reward of 30 dinars, along with bones of Johnny the Monkey, Kazakhstan most excellent Minister of Culture.
Kazakhstan in trouble. Kazakhstan no more sell its superior potassium to American Capitalists. Kazakhstan feel bad, can not more buy 8 track music making tape of Yankee minstrel Booker T. Jones.
Kazakhstan sad….
…OK, Nutlas, that’s enough. kg here. I was able to escape from that flimsy cage that Bilo rigged up. Maybe, next time, he should try to make it out of metal, or something other than that mountain of pure potassium piling up outside this village, which, by the way, I hardly find to be superior.
Listen up, y’all. I don’t have much time. There’s a goat-mounted policeman looking for me all over this hell hole, and I don’t know how long I can outrun him.
I’m pretty sure there’s serious market chaos on the horizon, mostly deriving from all this political madness. I just don’t see how hundreds of elections aren’t contested after Tuesday (and, unless you’re going to wind the clock back to 1861, when a sitting Vice President resigned to take up arms against the government he pledged to serve) there is no road map here.
I might be wrong, and lord knows I hope I am, but just in case I’m not…
I won’t make any election outcome predictions except the one set forth immediately above: we’re looking at weeks, maybe months of uncertainty as to the identity of our elected officials. This may or may not be true of the Presidency, but recent events there set the tone. The still-unresolved issue of post-11/3 votecounting in more than a half dozen states is almost certain to land back in the lap of the Supreme Court. But only after endless recounts and lawsuits in lower courts.
Now, think of the hundreds of close elections at every level of government wherein the loser is certain to dispute the result, and use all available means to nullify it. Tempers will flare. Everybody will be pissed off. What could possibly go wrong on the investment side when this sh!t goes down?
And I won’t make any market calls either, except this: volatility will spike. Particularly idiosyncratic volatility. The uncertain outcomes will goose or dilute valuation assessments for instruments in every asset class – perhaps at the same time. Nobody will have a clear idea of the going-forward rules of engagement, so fundamental analysis will be rendered entirely quixotic (yes, entirely quixotic, take that, Nutlas), if not Sisyphean (eat my rhetorical dust, you Kazakh crustacean!).
My guess is that one way or another, in its lame duck session, Congress will pass a bigger stimulus bill than has even been contemplated. Trump may (or may not) sign it, and, if it’s the latter, I think there’s a strong possibility that the veto will be over-ridden.
The markets, under these circumstances, may very well squeal with delight. However, under certain electoral outcomes, the benefits are likely to be transient. Consider, if you will, a scenario where a top policy goal is to dismantle the American Energy Sector over the next decade and a half. Companies will default on their gargantuan debt, and some in Washington, San Francisco and New York (well, maybe not New York) may weep with tears of joy and schadenfreude at these tidings. But what about the lenders? The bond holders? Will they gather themselves and smile through it? Will they extend payment plans? Will they lend more (to anyone)? Will they reissue?
In parallel attention, I’ve been keeping an eye on my peeps in Chicago. Their zaftig, billionaire governor just shut down indoor dining across the state, a move so blatant that even tree hugging Mayor Lori Lightfoot begged him not to do it. I figure it’s lights out – this time for good – for great institutions like Gibson’s, Nick’s Fish-market, R.J. Grunts, so many others. But here’s the thing: a lot of those establishments just completed the purchase of expensive safety equipment, such as plexiglass booths, industrial air purifiers and the like. Most borrowed to do so, and may, in addition to switching off their lights for the last time and hugging a final goodbye to their employees, leave their lenders holding the bag. The knock-on effects may be the financial equivalent of all those broken storefront windows on the Magnificent Mile.
Now, back to the Energy Patch. In similar vein, many energy companies have recently borrowed, in huge numbers, to purchase and install fracking equipment. You may hate fracking, but that’s not gonna pay back the lenders who shelled out capital to these enterprises. They will dump this debt on a market that won’t touch it. And lending – across the board — could seize up.
And it may bear mention that we are still dealing with a pandemic that appears to be gathering strength as the air gets colder. I’m going to have to assume this means further economic disruption, and incremental impediments to the flow of funds across the capital economy.
But then there’s the Fed, who will be impelled to buy everything in sight, or everything in sight will collapse. I think, therefore, that the Fed will blow out its balance sheet to >$10 Trillion before blossoms appear again in the District of Columbia (which may be granted statehood before any of this happens).
Because of this, I kind of reckon that there’s a buying opportunity in the wake of a risk off sequence that I believe is inevitable; I just don’t know when it happens. 2020 has been a tough read, and I acknowledge that I was wrong this Spring, when the market V bottom simply astounded me. It was clear, in retrospect, that I underestimated the impact of the walloping stimulus that our Central Bank laid on us in April, when, in six weeks, they printed as much new money as they did in the preceding six years. They can do more; much more. And they will. Don’t let anybody tell you they can’t. Or won’t. They will, the first time the equity, and even more so, the credit, complex feels the icy winds of what some are describing as the cold, dark winter immediately on our horizon.
And here, I offer a couple of points of additional perspective. First, I awoke yesterday morning to a nasty snowstorm outside my window. In addition, and as if out of some Stephen King/Halloween storyboard, the Federal Open Market Committee holds its next meeting on none other than November 4th, which happens to be my birthday, one where I expect to wake up not to a snowstorm, but to the most chaotic post-election sequence in at least six generations.
But I am currently fighting a losing battle to elude the single, remaining member of Kazak law enforcement, which is a helluva shame. Because his department is being defunded (sorry, re-imagined). It was a winnable war of attrition, but I am coming up short. So, I leave you with the sentiment that we are now facing a sequence of adult swim, like none we’ve ever encountered. I ask you to organize your investment affairs accordingly.
And how I take my leave, hoping to return someday. I have made a deal with Nutlas, who has agreed to my temporary release, on the condition that I award him the closing paragraph of this Subsequent Writingnote. But I cannot do so without first telling you how much I love you, how much I need you, how I long for the day of my escape from this prison, and hasten into your loving, welcoming embrace…
….OK Mr. Kenneth. That enough. We have deal. Deal is deal. This Nutlas. I pleased to announce winner to strongman contest: the Mayor of Yonkers in New York. He promise buy for his city all superior potassium that Newly Great Nation of Kazakhstan can produce.
Let us rejoicing begin, with a strongly boogie down on “Green Onion” by Yankee Minstel Booker T. and his slaves the MGs.
Мүмкін (Kazakh for TIMSHEL)