Before I begin in earnest, I must say that this Putin character is really starting to get on my nerves.
I hope I’m not the Lone Ranger here, but either way, I’m happy to have unburdened myself.
Meantime, and on a cheerier note, it looks and feels like Spring. Those eternally elusive “green shoots”, are swelling out in every direction. The air is warmer, and, on my home turf of Manhattan, the human flies and bees that populate the place are buzzing away. I got full corroboration of this while strolling down 6th Avenue midweek, and encountering the following image:
To me, this was the most authentic signal that NYC is back, as nothing says “Gotham” (OK; maybe Essa Bagels) more than an Inflatable Rat. I hadn’t seen one gracing the streets of the city since immediately prior to the lockdown, but now the old mixer is back in action.
I have written about this before, but if I hadn’t taken the dubious decision of a career in risk management, I might’ve enjoyed getting into the Inflatable Rat game. There’s sustained, unlimited demand, and quite unlike other “durable goods” industries, the value of the inventory actually increases with age, wear and tear.
I mean, nobody particularly wants to see a shiny, new Inflatable Rat. Quite to the contrary, the grimier, the gnarlier the condition of the mock murine monster, the better. To wit, if its rubbery skin features a gash that can requires a duct tape patch, it only adds to the meant-for menace of the messaging. They are easily stored, and only require jets of hot air to be rendered operational.
Yup, ya gotta love those Inflatable Rats. And even though I gain no direct benefit from their presence, seeing them gives me a warm, fuzzy feeling inside, and I hope it does for you too.
To me, their re-emergence is especially poignant at this particular pass, as exemplary of a capital and commercial economy that is none-too-tidy, and, arguably, full of hot air.
And our Feature Rat embodies these traits with uncanny precision, save for one omission: his owners failed to construct him with a proper tail. This runs in contrast to my thematic analogue because whatever else can be said about this here market, it certainly has a fat, nasty and potentially lethal tail.
The week’s action featured, perhaps most prominently, the continuation of the most abrupt selloff of longer dated Treasuries in history – taking Madam X’s yields — almost — to the shockingly salacious threshold of 2.5%. I hate to do this, but I am compelled to remind y’all that I implored everyone to hop on when her hems were dangling at ~1.7%. Her younger sister, that capricious Vixen VIX, has swooned down to a supine 20 handle – barely half of where she reposed as those Russian tanks were crossing the Ukrainian border.
In somewhat counterintuitive fashion, commodities across every asset class resumed their surge. Soybeans are now at a shocking >$17/bushel. Nat Gas is at an all-time high. As is Cotton. But I wouldn’t trouble myself on any of these scores, because, as I have asked before, who needs Soybeans, Nat Gas or Cotton?
We do, by contrast, occupy dwellings, and rents are surging – particularly in rat-infested NYC. And as for aspiring home purchasers? Well, take a look at this if you dare:
All the above projects out to an Inflatable Rat of a pricing picture. I don’t yet have a read on how bloviated March inflation numbers will be, but given what I am able to anecdotally discern, it looks like a blowout.
Maybe this is a good thing, though, because inflation is about the only expedient for what I believe to be the biggest menace facing the economy at the moment – the truly terrifying level of indebtedness we’ve managed to accumulate over the last several years:
What’s Owned to the Man: Consumer And Corporate
And this is to say nothing of what is owed by Washington, in the fifty state capitols, and by the nearly twenty thousand municipalities that dot our national landscape.
As I have repeatedly stated, I believe that this is what’s killing Powell by degrees. He needs to demonstrate the stones necessary to impose and sustain higher interest rates, and, meanwhile, we are in hock up to our noggins. If he hikes aggressively, it devalues of the paper held by The Man, who will not be particularly pleased with these outcomes. If he is more docile, inflation will surge, borrowings will accelerate…
…and so on and so on and shoobie doobie do.
Meantime, Friday marks the roll from Q1 to Q2, and raise your hand if you’re giddy about the prospect of reviewing and acting upon Q2 data flows.
And then there’s that whole Eastern European mess, about which I have little unique insight. I do, however, believe: a) that the situation is fluid (mostly to the downside); and that: b) even a tidy, unrat- like, negotiated solution will fail to offset the political reality that we’re gonna have to ice out that annoying (did I mention how annoying he is?) Putin for at least a couple of years.
In turn, this will cause sustained economic disruption and virtually ensure that inflation will continue to plague us all the while.
But God bless those equity investors, who have taken it all in with touching equanimity. General Dow (Ret.), The Gallant 500, Captain Naz, and even Ensign Russ have climbed back to levels last breached around Groundhog Day, when no one actually believed that rat bastard Putin would pull the sh!t he has since pulled.
Yes, he’s getting on my nerves.
But I deem it hardly helpful for the President to call for his removal, even if his staff scrambled to arrange a tortured walk back of the former’s clearly articulated statement to this effect. Spin away, my spin-meisters, and feel free, as you no doubt will, to operate as though the meaning of any statement and action can be re-engineered to suit domestic political agendas.
But know that Putin took the message in its original intent. The Commander in Chief of the United States has called for his removal, which can only be achieved by coup, assassination, or some combination thereof, and he will act accordingly. Not much constructive emanates from this sequence, I judge.
But what the heck. It’s Springtime. Baseball is back. And so are the Inflatable Rats.
In my giddiness to snap the above-supplied image of same, I failed to discern precisely what the beef was that summoned its presence. I do know that it was some sort of labor dust up. And though my heart and wallet reside with Management, I will wish the sponsors Godspeed on their efforts.
But I hope they have it in them to bear in mind that for us filthy, rodent-like management types, the effective allocation of capital and other scarce resources has seldom, if ever, been more challenging.
TIMSHEL