“And I only am escaped alone to tell thee.” – (Book of Job 1:15)
Yes, this is a biblical quote, but I lifted it from Melville. Who stole it from the Old Testament and used it to open the final chapter of (you guessed it) “Moby Dick”. Which is a book about whales. Which are the subjects of this week’s essay.
I chose them for my theme after hearing rumors that the famous Blue Whale in the basement of New York’s Museum of Natural History (as of this week a vaccination center) is now sporting an enormous band aid on its dorsal fin:
The implication is clear: the whale has been vaccinated (and so, too, should you be). The museum confirmed as much in an April 20th tweet that reads:
Please join me (if you wish) in taking comfort at the iconic leviathan’s upgraded immunology status. I hadn’t been overly worried about her, but now I know she’s safe. Unfortunately, the same cannot be said for the nameless Native and African American figures who, in days gone by, were at Teddy Roosevelt’s side, as he sits on his horse, gazing out from in front of The Museum, onto Central Park West. They gone. And nobody knows (or, at minimum, is saying) where they disappeared to.
On the other hand, no one would ever mistake them guys for whales, and, as such, their salvation is arguably none of our concern.
It’s the whales we’re worried about. Including market whales, for whom, if one cares to fret over their future prospects, one does so honestly. This past week they had to dodge some Ahab-like harpoons, most prominently some chatter out of Washington that the government is fixing to tax capital gains up to, like, infinity percent. It turns out that this was a warmed-over sound bite from the election. Moreover, it is likely to be either hosed down or fail entirely in Congress, but it caused sufficient agita to catalyze – get this – an actual selloff of equities on Thursday.
By the week’s end, the equity complex, including the (mostly) landlubbing Galant 500, had regained its footing; but still, the cycle ended, somehow, at levels below where it began on Monday morning.
But then again, it’s been tough all year for market whales, what, with all of that GameStop blubber, followed by the blow out of tiger-shark Archegos. The year-to-date performance results are hardly a bloodbath, but as of Friday’s close, while most of our indices are up double digits, the medians for the funds I track are pretty much flattish.
Perhaps this is all prelude, because next week promises to be a whale watchers delight. In addition to the highly anticipated NFL Draft, all five of the big corporate fish (MS, AAPL, GOOG, AMZN, FB) are set to step their fins up to the earnings podium. And if that weren’t enough for the binoculars-peering set, Thursday morning, we get our first glimpse at Q1 GDP. For those keeping score in the mocks, Trevor Lawrence is a virtual lock to go Number 1, and as for those Atlanta (who picks 4th and may take a quarterback, a tight end, or trade down) Fed GDP estimates?
It does look like the heat’s rising – on both the oceans and on terra firma. All of which begs the question as to the health and safety of that loveliest market whale of all – Madam X, the United States Ten Year Note. She survived a dreaded auction of her manifold wares early in the week, and then rose with a gusher issuing from her spout in the wake of the above-mentioned prattle on tax hikes. By Friday’s close, she could be found at the shallow yield depth of 1.56%.
As I’ve prognosticated before, if she stays in this range, risk assets should continue their assault on the heavens. Perhaps this is what the Good Lord intended.
But one way or another, if we’re looking at any market whale to save, Madame X is where we should concentrate our assistance. And, if we assume her “Ahab” is inflation, we must remain on the alert. The price of pretty much everything — in the markets and beyond — is on the rise. As a point of reference, the Bloomberg Basket of Commodity Products (BCOM), and the cost of shipping its content across the mighty oceans (BDIY), are at or approaching a five-year highs:
Madame X has heroically staved off these assaults and may continue to do so, but if she is harpooned to or beached upon higher yield elevations, investors won’t like what happens next.
“And I only escaped alone to tell thee”. But this isn’t strictly true. In addition to Ishmael, the fish himself survives. And so did we. Because you were with me. And I thank the Good Lord for that. But the waters out there are choppy – for amphibious mammals and us earthbound humans — and we need each other if we are to make it to safe ground.
“The drama’s (not) done. Why then here does any one step forth? Because one did survive the wreck… … On the second day, a sail drew near, nearer, and picked me up at last. It was the devious-cruising Rachel, that in her retracing search after her missing children, only found another orphan”.
And thus ends “Moby Dick”. The Book of Job concludes on a more hopeful note. Prosperous, healthy and God-fearing, the Lord tests the last of these by taking away J-man’s blessings, causing the latter to question the man upstairs. But in the end, he casts his own doubts aside, saying, in the King James Version: “Wherefore I abhor myself, and repent in dust and ashes”.
Whereupon God restores all of Job’s sh!t back to him. And he lives to be 140.
From all of which we can conclude that both whales and righteous folks stand a chance of survival in these mad psychodramas. Most of us aren’t in the former group but can at least strive to be a part of the latter. I gotta believe that this is our best hope.
TIMSHEL