I was glad to come, I’ll be sad to go,
But while I’m here, I’ll have me a real good time
Ronnie Lane, Rod Steward, Ron Wood
Well, that went over like a Led Zeppelin. Yes, I promised to devote less of this real estate to my musical meanderings and to focus more keenly on The Markets. Many will recall that I offered this in response to what I believed – gut feeling – to be the catalyst for a previously unthinkable, unceremonious, and unilateral unsubscribe request from a weekly recipient.
So, I pledge to Cut the Crap and what happens? A wholesale bail out by my distributional troops. Actually, no one, to the best of my knowledge, quit on me this past week, but that strikes me as being entirely beside the point.
Logic, in any event, impels me to restore the crap, and to do so immediately. Because — are we going to allow ourselves to observe unremarked the surviving members of the Beatles and the Stones cutting tracks together? Hardly. The concept of Mick, Keith, Paul, Ringo and the (perhaps dispensable) Woody coming together is simply too scintillating to exclude from this most public of historical records.
All that’s been confirmed thus far is that Paul has laid down bass lines for a couple of new Stones numbers and that Ringo will soon contribute some percussion. This alone is cause for great elation, but there are tantalizing rumors of more, much more, to come. The Rolling Steatles may cut and album of new, collaborative material, and then go out on tour.
There’s some talk about Ringo bagging off here, but I pay it no mind.
Ringo, I’m certain, will do as he is told.
Come what may of this, it behooves us to celebrate the moment, and to rejoice in the reality that whatever other forms our bitches may take, we lived in a time where these living, breathing deities historically transformed life as we know it. They are, none of them, getting any younger. Paul is 80. Mick and Keith will each reach that milestone this year. Ringo? A spry 82. True enough – Woody is mere fondling of 75, but I figure he’s mostly just along for the ride. The 80th anniversary of George’s birth transpired on Saturday, but sources have all but confirmed that he will be unable to make the scene.
I hope the lads give it a full go, and I don’t even care how good or bad the music they create is. This is an opportunity for them, and, indeed, all humanity, to proudly state: “This happened. This was”. It would be divine. The closest analogue I can devise is the release of the 2019 film “The Irishman”, which was entertaining, but more significant in its bringing together of De Niro, Pacino and Pesci – under the directorship of Marty. Somewhere down the road, folks are gonna look at this thing and say “Wow. How cool was it that these guys were able to get the band together — one last time.
The same can be said for the Bea-stone Boys. Only more so. Because they were bigger, so much more important, than even those great Italian American tough guy players on the 20th/21st Century Silver Screen.
And that, my friends, I all I have to say about that (for now).
It is also important to point out, crap restoration-wise, that the action in the markets is just that – crap.
Allow me to elaborate. As widely lamented, last week was the worst one going for the Equity Complex this year. So be it. It had feasted for > 1.5 months and a subsequent bio/econ voiding cycle was entirely inevitable. The evacuation, while not particularly pleasant, was finite and orderly.
Almost undoubtedly, the big catalyst was continued Inflation pressures and their attendant impact on interest rates. Yields at the long end of The Curve are up an astonishing 60 basis points this fastexpiring February. One would have expected that this might, at, minimum, have served to flatten it a But one would be wrong on that score. Short-term rates – particularly around the 6-month expiry, have sky-rocketed to ~5.2%, and the curve now looks this-wise:
After Monday’s Patriotic Presidential Pause, while we wasn’t exactly going great guns, we were hanging in there – until, that is, Wednesday afternoon. The Fed released its hawkish minutes — and it was all downhill from there – as capped off by Friday’s rout, initiated as it was by the release of an unexpectedly elevated Inflation level embedded in the Fed’s favorite such statistic – the dreaded and ominously nomenclatured PCE Deflator.
To me, the main takeaway from what we’ve learned thus far this year is as follows. Americans continue to binge, often on inadvisably assumed debt. The Labor Market is tilting red, including (unthinkably as of a couple of years ago) surging wages. All the above is Inflationary, and – here’s the thing – it’s almost all on the Demand side. Feel free to flush the entire argument about “supply chains” and their “transitory” nature. The only way this round of P disappears is for the almighty consumer to push away from the buffet table.
If our misanthropic, inept but intrepid policy makers truly wish to tame the pricing beast, they must cool the demand fires, and this won’t be a pleasant operation. It may not require a full, undignified financial bowel evacuation, but it will, at minimum, impel the removal of the blockage that seems to be plaguing our economic innards.
Investors aren’t digging any of this over-much, but are, under the circumstances, holding themselves manfully in the face of the associated abdominal pain. My guess is that they will continue to do so. I seriously doubt that they will repeat last week’s less-than-stellar performance. There’s a bid somewhere down here, but not one that is likely to demonstrate much in the way of sustained vigor.
And now, we enter the dregs of Q1. Nearly all Earnings precincts have reported, and the returns are dismal as expected. They haven’t mattered much, though. Equities are moving in lock step with one another, and paying little heed to anything but Fed Policy and Inflation:
Next week features some PMIs and little else, but even the February Jobs report is postponed until 3/11. The FOMC doesn’t meet until after St. Pat’s Day – on the cusp of the Vernal Equinox.
Not much meat to chew on in the meanwhile. If we want our proteins, we may be forced to eat our beans. And we know what happens after that.
So, again, I have few qualms about restoring the crap. Which, after all, makes the grass grow.
The Rolling Steatles are shading coy about their collaboration, and one can hardly fault them for this. Don’t commit to anything they can’t deliver. Let the rest of us build up the speculative anticipation. I reckon we’ll wait it out as best we can.
And in this spirit, I’m going to call – yet again – for Woody to focus instead on reuniting with the surviving members of the Faces – Rod the Mod/Kenney Jones. I don’t think he added much to the Stones, and his accepting the role of being Keith’s wingman broke up the Faces. Thus, this one move marked the ruination of two great bands.
But now, as we are in restoration (not ruination) mode, is time to amend all this. John and George are, well, you know, gone. As are Charlie, Brian Jones, Ronnie Lane and Ian McLagan (Bill Wyman is still around but retired > thirty years ago – not just from the Stones, but also, hopefully, from tapping 14-year-olds).
So, let’s roll with Paul/Ringo/Mick/Keith and Woody/Rod/Jones.
And that, my friends, is what I’d call having a real good time.
TIMSHEL