While this may come as a surprise to some, my resume includes a period in the realms of Law Enforcement. Specifically, in the year 1985, I found myself in the rather odd position of working for an outfit known as the Illinois Criminal Justice Information Authority (ICJIA).
I was, at the time, between master’s degree stints, having completed the first of these sequences under the mentorship of one of the leading socialist economists of the period, but having yet to embark on my MBA adventure. At the University of Chicago. Where they take a dim view of Marxist economics.
Thus, in addition to having worked closely with the IL-5-0, I am the holder of two graduate degrees – one sprinkled with the fairy dust of socialism; the other grounded in the academic philosophy of the Mecca of free market economics.
Arguably, though, it was my experience at ICJIA, and not the U of C, that set me on the dark path to unapologetic capitalism, and a dour skepticism of government run enterprise. ICJIA is a state agency, funded by taxpayers, ostensibly for the purpose of studying crime patterns and sh!t. I feel this was and is worth doing (maybe even more so than reviewing SPX candle charts), but the whole setup bothered me in a niggling fashion.
Because more than half of the payroll and associated expense budget was allocated to lobbyists, who, ensconced in a glittering office tower on the banks of the Chicago River (on a clear day and with proper bodily contortions, it offered a view of Lake Michigan), would ply legislators in Springfield and Washington to fund the rest of the operation. So, I was working for a taxpayer-funded organization which devoted more than half of its resources to the objective of securing incremental taxpayer funds, for more of the same.
Though elegant in its circumlocution, the whole ecosystem left, for me, something wanting.
But I did enjoy my stay at ICJIA – made some friends, routinely availed myself of the in-house masseuse (just kidding) and got paid for doing almost nothing useful. And there was one additional benefit, which has lasted me a lifetime. Because it was at the “Authority” that I met Roger.
I’ll protect his full identity by omitting his sir-name. He was a rather ordinary fellow, nice enough, but not like a best bro type, you know? I haven’t encountered him since I left ICJIA that snowy day in December ’85 and set my course towards the leafy environs of Hyde Park. On that journey, Roger and I had an indirect connection – he was at the time dating the daughter of one of my heroes – future Nobel Laureate/U of C Professor Merton Miller, whose class I took shortly before Roger dumped Miller’s snippy female offspring.
But what elevated Roger to the pinnacle of my life’s experience was this. He had a bulletin board in his (windowless) office that he transformed into a condiment museum. Its contents were individual packages of, well, condiments: salt, sugar, pepper, mayonnaise, Sweet N Low, ketchup, mustard, tabasco sauce, Worcestershire sauce, relish, jelly, jam; even wasabi – before wasabi was a thing.
People would travel great distance to view this wonder. One couple hitchhiked from Salem, Oregon to have a look. The exhibit received a favorable writeup in the uber-hip (at the time) Chicago Reader.
It was, to summarize, a shrine. A condiment museum for the ages. And, every time I’m feeling a bit blue, I think of it. And I feel better.
Because – let’s face it – any schmuck can create a second-rate condiment museum. All that is required is a cork bulletin board and some push pins. The condiments themselves you can pick up just about anywhere. For free. But to really throw yourself into such a project, to develop a multi-generational monument to culinary accessories, requires artistic commitment that one cannot but admire.
We need more of this sort of individual initiative, particularly at the moment.
I got to thinking about all of this after a disappointing week for the Gallant 500 and its fellows. Indices sold off every day – not in dramatic frenzy but rather in minute dribs and drabs. Twenty basis points here; thirty basis points there. They tried to rally ‘em each afternoon and failed every time.
As a correction, it didn’t amount to much, totaling a meager 1.7%. It was the type of bear market that would have fit tidily into Roger’s condiment display.
But one wonders why. We had embarked upon our Labor Day weekend revelries with benchmarks resting at new, unbreeched, dazzling thresholds. I ascribe some of the selloff to the post-summer blues, but apart from this, the capital economy appears to be in roughly the same state as it was when we bailed a week ago Friday, at an all-time pricing high.
I reckon there were bite sized pockets of news – most of it bad. Apple got gored by the federal courts, which removed the paywall it had put in place for the sale of phone Apps. And what is a phone App other than a modern day, digital version of a singly packaged condiment?
The supply chain remains disrupted, as illustrated by the following Port of Los Angeles logjam chart:
Now, there are worse places for a seafaring vessel to be moored than on our Pacific Coast, presumably with a view of Catalina Island looming enticingly on the stern. But It’s certainly possible that the cargo, waiting days and weeks to be unloaded, is needed by someone. However, there is an elegant solution available, one of which I know Roger would approve. Why not simply turn the content into condiments? Tiny, individual packets of steel. We could then employ thousands of new federal workers to put on wet suits to fetch them.
It was also a tough week for the issuers of government paper, on a global basis, and I truly hope that the buzz kill doesn’t impede the folks at ICJIA, as they lobby away, and when not doing so, pump out crime statistics to beat the band. Because, if I’m taking an accurate read of what’s going on in their home city and state, they’re gonna need more number crunchers and bigger computers to achieve an accurate tally.
I also reckon everyone’s waiting for the next piece of footwear to fall in Washington, where the locals are in a frenzied race to add to the entitlement state and expand both tax levies and the national debt. Published reports suggest that the associated bills, running more than ten thousand pages, are being rushed into a September passage deadline. I would pity those who must tramp through these texts and render an informed vote, but fact is, no one is going to read this drivel. Because: a) legislators don’t tend to read bills before they vote; and b) no one could coherently consume that volume of text within the specified time frames.
To put this in perspective, the entire Encyclopedia Britannica clocks in at under 15,000 pages. The King James Bible (Old and New Testaments) cover just over 8,000 sheets. Throw in the Quran and you’re still under 10K. If you’ll pardon me for so stating, it may very well be that Congressional time would be more profitably spent perusing any of these than slogging through the text of the pending budget monstrosity.
I also hear that there are some throw downs associated with the particulars, but that these battles are over a trifling $1,000,000,000,0000 to $2,000,000,000,000. My guess is that they settle somewhere in the middle.
There’s also this whole vaccine/virus unpleasantness, about which I have to say the following. __________.
In general, though, there are risks aplenty with which to contend. And valuations, last week’s selloff notwithstanding, remain rich by virtually any coherent measure. I don’t feel, in result, that it’s a particularly constructive environment for investing under any known methodology.
But I don’t believe that the selloff will extend itself. Much. Because that would be too rational. Too appropriate. The Master Puppeteers: the big investment ballers, our elected officials and (perhaps most importantly) the Fed, have too much vested in astronomical valuations to allow such a thing to happen.
To me, all roads continue to lead to the Fed. Which has threatened to slow the money printing machine this fall. Really? With the covid conundrum continuing and in crescendo? With higher taxes and massive new entitlements being cooked up as I type these words? With their paymasters down the street needing their cover to mask all the other nonsense that’s going on?
At most, we can expect a taper of condiment dimensions, and, if (when) matters take a turn for the worse, a supersized reversal of this.
All of which will require enormous focus and commitment from investors if they wish to thrive or even survive. This includes a Roger-like commitment to tight risk management. I’d stick to my strategies but be quick to take profits on individual speculations, as these may be few, far between and elusive. I encourage you, in other words, to take your profits in individually sized, condiment-like proportions.
As mentioned above, I haven’t encountered Roger in more than thirty-five years, but think of him often. Wherever he is, whatever he is doing, I hope he has preserved and maybe expanded his condiment museum. My guess is that he has and is. Through times of feast and famine. A commitment to condiment ethos is a difficult thing to sustain, but if anyone could do it, Roger’s the man.
The same, of course, can be said of portfolio management, where we could do much worse than following the example he has set.
TIMSHEL