Alas, I recently jumped the gun on my mid-year analysis,
But as Frank Zappa, in his elegant, ethereal, eternal elegy “Stinkfoot” once warbled, a week’s gone by, and now it’s July.
We’ve thus traversed >180 spins in the ethereal cake mixer otherwise known as 2023.
But I’ve no intention of spitting out a recap of what has transpired these last six months. Rather, I will focus on where I believe we are – at this midpoint in our ritualized trip around the sun.
First, though, today is my mother’s birthday, or, rather, the anniversary of her birth. Were she around, she’d be blowing out 88 candles – one for each key on a piano. But she’s not, having breathed her last on New Year’s Eve, 2016 – the date on which fabulous Replacements founder Paul Westerberg turned 57.
Brian Jones died on her 34th birthday; Jim Morrison on her 36th. The latter was born 37 years to the day before the murder of John Lennon, who, in turn, was born four years to the day before John Entwistle.
I myself share a birthday with Walter Cronkite, Art Carney and Puff (yes, Puff), who was born on the day I turned 10. My brother and Barack Obama were born on the exact same date – the 60th birthday of the magnificent Louis (Pops) Armstrong. 54 years later – August 4, 2015, my eldest grandson James was born. His brother William came nearly two years later, on June 1, 2017 – the 50th Anniversary of the release of “Sgt Pepper’s Lonely Hearts Club Band”. Two more followed, the first, my namesake of sorts, on Cinco di Mayo in the year of the covid, and the last on his paternal grandfather’s birthday in terrible ’22.
Now that we got all the important stuff out of the way, let’s take a glimpse at where the rest of the world stands at Halftime ’23.
The French, as usual, are on strike. At issue is something to do with attempts to raise the retirement age. And wherever else we may differ upon this we can agree:
The French are criminally over-worked.
The United Kingdom has been busy cancelling Roger Waters gigs and denying Nigel Farage a bank account.
Putin is fending off military coups by latter day Lenin/Trotsky types, and then giving them uncharacteristically generous and thus highly dubious do-overs.
In Zurich, the sole surviving bulge bracket bank – UBS — is preparing a pant load of layoffs – some 35,000 in all. Most of the cuts will of course be on the Credit Suisse (an asset they picked up out of sheer patriotism, at approximately no cost) side.
To the victor goes the spoils; to the vanquished, the scraps.
There’s a new sheriff at the Bank of Japan. While the rest of the world is tightening, he is continuing to let them yens flow, the result being a weakening of the currency to levels that some view as problematic. It don’t seem to be much impacting Rising Sun risk asset valuations, though, as the NK225 continues it serge towards all-time highs, last breached more than thirty years ago:
Meantime, back in the States, well, there’s quite a lotta doings. The Supreme Court is en fuego – issuing a flurry of rulings – on affirmative action, freedom of expression and issues of debt cancellation funding. All of which resulted in half the country stewing while the other half rejoices. And all I can state is this: had each of these rulings gone the other way, we’d be facing an identical, if oppositely oriented, distribution.
A judge in St. Louis threw out a defamation lawsuit filed by a guy that won a global chess championship, by (allegedly) receiving electronic signals from a device planted up his ass.
Closer to our home narrative, and no sooner had the Debt Ceiling Crisis been settled, than the Treasury Department did what the Good Lord always intended. Issued a galaxy of new debt. Estimated to aggregate to ~$500B in June alone. By all accounts, they’re just getting started.
And who can blame them? When, after all, in the history of mankind, did any individual or organization receive an expanded credit line and simply save it for a rainy day? I remember, for instance, when my grad school student loans came through. I was encouraged to borrow as much as possible at the then-bargain rate of 9% (this may seem nonsensical to the uninitiated, but at the time, the Prime Rate stood at 18%). And when the checks came in, man, it was beautiful. My most difficult challenge was determining what I wanted to buy first.
Paying it back, of course, was a different matter. Took me more than a decade. But I did it. It was the Reagan/Bush I era, and nobody was offering to simply journal the obligation into oblivion for me. Now, please do not misapprehend me – had the cancellation option been dangled in front of me, I would’ve been delighted. Might’ve lined up the previous night, like I did for Zep ’75, to partake. And I wouldn’t have given a care that only Congress is legally authorized to appropriate funds to this, or any other, formal purpose.
But that’s how the Supreme Court read it, and, for what it’s worth, now, as a guy who only pays out, and never receives, from the government, I’m with them.
Investors must be fairly confident that the issue of stroke-of-pen debt forgiveness will never even arise with respect to the General Obligations of the United States, because the above-mentioned mega auctions were met with enthusiastic success.
Treasury, of course, will keep issuing, and will almost certainly pass the $1T threshold – an amount exceeding the entire National Debt at the point when I began borrowing to finance my fancy Master’s Degrees – by some time this autumn. Investors appear to have the means and willingness to absorb these offerings.
And, in result of these and other tidings, the markets ended the first half of the year on a decidedly upbeat note. Our equity indices are surging, Vixen Vix is pleasantly accommodating. Apple, as widely reported, surpassed the $3T threshold last week. Funny, it seems like only yesterday that they were flirting, amid much skepticism, with a quaint $1T. But one of the first things one learns in Finance – both in academia and in the field – is that the first tril is always the most difficult to achieve.
After that, it’s pretty much a milk run.
And if so, perhaps NVDA (just surpassing the $1T mark) is a singular bargain. A good deal rides on this whole AI obsession, and on this topic, I have only one observation.
Over the past week or so, I have noticed that the associated nomenclature has added the modifier generative. As in, we are no longer discussing AI, but rather generative AI. I’m not sure whether this is good or bad, accretive or dilutive, constructive or destructive.
But it does sound sorta menacing to me.
And that’s about all I got for now. We’ll all need to step aside a bit for the 4th, but in its immediate aftermath, it will be game on. Earnings, Jobs Reports. Inflation Reports. GDP estimates.
It will be complicated but oh so edifying. Or maybe not. We’ve come halfway around the sun, yet again this year, and appear to be not much wiser for our journey.
I often wonder what my moms would think about it all. But there’s not much mystery in that, as she was never one to withhold her opinions out of either deference or delicacy.
She survived 163 half trips around the sun. And then was no more. And, as I approach the 130 mark, I wonder if I’ve learned anything at all.
I think at one point I did, but then I forgot.
Maybe, I can learn again, and it is in this hope that I bid y’all a Happy 4th, and, as always….
TIMSHEL