“A Horse is a horse, of course, of course”
— Theme Song from Mr. Ed
“I’m going to catch that horse if I can”
— Chestnut Mare: Roger McGuinn and Jacques Levy
“The story is told that when Joe was a child his cousins emptied his Christmas stocking and replaced the gifts with horse manure. Joe took one look and bolted for the door, eyes glittering with excitement. ‘Wait, Joe, where are you going? What did ol’ Santa bring you?’ According to the story Joe paused at the door for a piece of rope. ‘Brought me a bran’-new pony but he got away. I’ll catch ’em if I hurry.’ And ever since then it seemed that Joe had been accepting more than his share of hardship as good fortune, and more than his share of shit as a sign of Shetland ponies just around the corner.”
― Ken Kesey, Sometimes a Great Notion
Good Christmas, y’all. Even though it’s over. Like John Lennon once crooned, I hope you had fun. I hope, also, that you didn’t have to travel far, for it weren’t no weather to be travelling.
I tried, this year, to arrange a Secret Santa sequence with my partners, but there weren’t no takers. I reckon pro forma escapades like Secret Santa have moved beyond passe’ into the realm of the mortifyingly futile. I lament this as being another sacrificed superficial blessing.
Yup, I always had a soft spot for Secret Santa. Perhaps this is because once, an anonymous version of the game conferred upon me the bounty of a single long-necked bottle of Budweiser. Like the one Jim Morrison is holding in the inside cover of the Doors’ pseudo-eponymous “Morrison Hotel” — to me the SS equivalent of a winning Powerball ticket. I think I drank it, warm, in a single gulp.
In a slightly early nod to auld lang syne, I offer the last of our titular quotes as a unilateral, anonymous Secret Santa gift to my readership. Thanks for putting up with me all the way through this tedious, troubling, fast expiring year.
It comes from what is certainly at least a co-favorite novel of mine – Ken Kesey’s “Sometimes a Great Notion”. It is an enormous, sprawling book, weaving threads of man versus nature, wildcat capitalists versus institutionalized unions, brother versus brother and even father versus son, in a narrative reminiscent of Steinbeck and a cadence worthy of Faulkner. The subject of our quote is a prominent, but non-central character. A simple, optimistic, authentic soul, known more routinely across the pages as Joe-Ben.
I got to thinking about Joe-Ben as l contemplated conditions this Christmas, perhaps not the merriest in anyone’s recent memory – particularly for those that toil in the financial markets. Investible assets of every stripe are down, some dramatically. Even my mother-in-law lost money this year. Fund performance is putrid, deal flow is non-existent, Wall Street bonuses are unthinkably light. SBF’s erstwhile side piece has rolled on him.
Metaphorically, the stockings of many of us are stuffed with horse sh!t, which begs the following question:
Is this a harbinger of scatological scenes yet to come, or of glittering equine ecstasy awaiting us just up the road?
I reckon we’ll find out, but as we shake the dust off from this holiday, my fear is that it may be a while before we rope that pony, and, meantime, we might be impelled to satisfy ourselves with the content of the stocking as we have found it.
Our once thoroughbred economy is showing signs of having been ridden hard and put away wet. It could gather itself, and who’s to say it won’t?
But I wouldn’t be playing the Exacta on that outcome.
A guy I once worked with recently summed up our current economic condition in the following four charts:
I won’t venture so far as to call these trends unsustainable, but I sure don’t like the way them arrows are pointing.
In a fit of frenzied pre-holiday largesse, the folks in Washington delivered up a ~$1.7T Omnibus Spending Bill, with a Secret Santa flair – insofar as its page count clocks in at more than ten times that of the (seasonally appropriate) New Testament. There’s something for everybody contained therein – including the obligors of this unintended bounty – the American Taxpayer – who was last seen running down the road with a stocking full of sh!t, with aspirations that (s)he will soon be mounted on a Chestnut Mare.
There is a bid on longer-term Treasuries, but it comes at the expense of a Tim Burton/Nightmare Before Christmas Yield Curve Inversion that will almost certainly sustain the globulins currently plaguing the Equity Complex and its technology leadership.
The Housing Market is collapsing:
Retain Sales, Industrial Production, Durable Goods Orders, PMIs all are cracking like walnuts. We have yet to complete our mission-critical busting of the Inflation Bronco.
FactSet projects a > 2% decline in Q4 earnings. But we won’t know for sure for more than a month. Meantime, the Gallant 500 (’22 Vintage) has declined more than 19%; Captain Naz to the tune of a third.
And thus we enter ’23.
Perhaps the time has come, though, to channel our inner Joe-Ben, who (Spoiler Alert) laughed his way to a tragic demise.
We might nonetheless do well to benefit by his example. Horse sh!t, after all, is a by-product of horses, which we may catch if we can. And if we do, perhaps we may find that, like Mr. Ed, they speak our language.
Perhaps, then, we can ride him through the desert, but if we do, we will be compelled to either name him, or acknowledge our inability to do so.
But during this holiday season at any rate, I find that three steed analogies is quite enough, so….
Happy Holidays, and, as always….
TIMSHEL