He was someone, who to know was to drink with, and to drink with, was, unfortunately, to pay for.
Thomas Hardy
If we’re so happy, why do I flinch, if our feet should accidently touch?
And why, when we undress, do I blush?
If we’re so happy, why are we drinking so much?
Dave Rotheray — Homespun
Well, why the hell not? Drink so much, that is. And, for what it’s worth, the same answer applies when we’re not happy. Which we’re not.
And why the hell aren’t we? Happy that is.
Well, why the hell not?
Doesn’t much matter, but I got to thinking about liquor as the cure to our dour condition when reviewing an article in Friday’s WSJ – about the joys and hardships associated with the bending of the elbow.
First, the good news: wine is now more a more potent potable than ever before. Bordeaux grapes, after hovering for eons at ~12%, are now > 13% alcohol content.
But now the bad. Apparently, as indicated in the following chart, booze not good for us:
So, according to the American College of Cardiology, I should have died 18 years ago. Thanks, guys. For nothing. A piddling 50 drinks a week – by my booze-impaired math a mere 7 drinks a day, and you’re half again as likely to turn tits up?
Somebody should’ve told me about this around, say, 1982.
Timelier tidings are also of concern. Recent housing data indicates a continued downturn — not just in existing home sales, but now even in home construction. And, while Big Paulie’s pad remains on the market, a hedge fund whale has announced the construction of a residential compound for which he has budgeted a big fat $1B (that’s $1B with a B). As this guy is something of a protégé’ of mine, being: a) a few years younger than me; and b) another Kenny G, I advised him that for an equivalent sum, he could purchase the equivalent of more than 40 of Big Paulie’s White Houses (maybe including the one on Pennsylvania Ave), or, like 700 of Don Carlo’s digs. But youth must be served; he will have his own way.
He and his ilk, when not gorging themselves on Real Estate and professional sports franchises, are busy cutting off funding to the endowments of the universities that launched them. Including The University of Pennsylvania, founded by Benjamin Franklin, and whose alma mater: “Drink a Highball at Nightfall” may be the greatest musical composition this side of Bach’s Brandenburg Concertos.
And the market is having none of it. The equity tape stays quite weighty. Madame X (Ten-year Treasuries) is knocking, ever so demurely, on the door of 5% and her wilding younger sister – Vixen VIX – is apparently throwing ‘em back like it’s Purim or something:
Energy traders appear to have finally gotten the memo about the potential impact of recent geopolitical events on the price of their flagship products and have bid them up energetically. The other commodity significantly on the rise, perhaps due to its well-understood benefits in relieving the after-effects of our excess imbibing, is Coffee:
Not gonna lie: I could use a cup right now.
Meantime, we’re more than a fortnight since the 10/7 attacks, but the elite (as well as the unhinged) of this nation are divided as to who they should direct their ire against. Angry protests about Israeli reprisals began many days before any such action even transpired. I don’t seem to recall any such outrage associated with the Russia/Ukrainian dustup – the civilian casualty totals of about 20x those in the Gaza throwdown notwithstanding.
And what does the world – the market in particular – expect Israel to do? Roll over and get stiffed? Though they have taken their sweet time, they will go into Gaza. Hard. And then there will be a retaliatory strike. The West might even gather the liquid courage to go after Iran’s second biggest cash cow (behind, of course, U.S. monetary giveaways) – their flow of Crude Oil exports. Yet Crude continues to trade at levels below where it resided a month ago, around the time when Netanyahu assured the U.N. General Assembly that all was quiet on the Gaza Front.
And, if this here thing spins out of control, which it very well might, what’s gonna happen to Madame X? The Russian invasion offer a clue. Traders, at that time, bid down yields by ~30 bp. Now, in the wake of these attacks, yields are up by an equivalent amount.
So, I kinda reckon that Madame X is more of a long than a short at this moment.
We should at any rate hope that I’m right. Recent publish reports suggest that the amount of junk debt that is scheduled to roll over the next couple of years now exceeds 2007 levels and stands at a gaudy 19%. These outfits, due to their impaired financial state, were compelled to borrow at junk rates when the benchmark (none other than Madame X herself) was fixed at much lower yields than today. When they approach their bankers, hats in hand for another round, it will thus presumably be priced, if at all, at much higher rates. Some may fail to complete the trade; bankers may get scared away altogether.
I don’t even want to think about it.
The slim-majority-holding Republican Congressional Caucus is no closer, is indeed further, from electing a leader than it was when a few Jumoke’s decided to shitcan their last Speaker. The third attempt to put Jim Jordan in the top job received fewer votes than the second round, which received fewer votes than the first.
Nice job, guys and gals. It’s a great time for an intraparty squabble, what, with the debt ceiling deadline looming, a burgeoning, escalating war, and a presidential election just a year away. As I type this out, Minority Leader Jefferies is the top vote-getter, which tells you all you need to know about the GOP Caucus.
And unless something changes across the political landscape, we’ll have ample cause to drown our sorrows come January of 2025. The only three visible feasible outcomes are: 1) Biden beats Trump one on one – with the Dems gaining seats and retaking the House in the process; 2) Trump takes Biden down, mano a mano, and God help us then; or 3) Trump loses the nomination but runs as a Third-Party Candidate, utterly gutting the Republican Party in the process.
Not a lot to give hope in terms of an investor-friendly policy environment.
But hey, the market keeps trading, the bartenders keep pouring, and we stumble on. This coming week, we can anticipate with brain-impaired glee, the first Q3 GDP estimates, and the beginning of the big kid earnings cycle, as ushered in by Meta and Amazon.
Meantime, the war in the Middle East will continue to boil. There is chaos in Washington. I don’t believe a crash is imminent, but I cannot fathom a justification for any sustained rally.
I’d retire to an adjacent watering hole, but truth is, contrary to what’s written above, I don’t drink. At all. I am so bereft of alcohol intake that I fail to capture even the below zero dip, in the above-supplied graph, associated with a pissant 3 drinks a week.
I kinda wish I did drink, because it often seems like I’m missing the party. But my body simply doesn’t take to the hair of the dog.
It’s not that I’m happy, and often wonder if excessive sobriety is to blame. Meantime, I can only rephrase our titular rhetorical question and ask why, if I’m so unhappy, I’m NOT drinking at all.
Maybe it’s because I don’t know you. Because if I did, it would mean drinking together.
Which doesn’t sound like a bad idea.
So long as you pick up the tab.
TIMSHEL