I remember about the rabbits, George
Lenny
The reference to the rabbits from Steinbeck’s “Of Mice and Men” is one of the most overused idioms in the pantheon of the written word.
So, I don’t wanna write much about the rabbits. I am more interested in the mouse. The transition from the leporine to the murine is catalyzed by a milestone event that took placed on New Year’s Day, when Disney’s 100-year copyright of Mickey Mouse partially expired, and certain images entered the Public Domain. However, and owing to the unsurpassed creativity of the Disney legal team, it should be recognized that not all Mickey images have been liberated; only those from the seminal Steamboat Willie series, first released in 1923:
Yup. This little guy is now free to consort with us all, and there ain’t nothing the Disney suits can do about it. And so delighted am I about this that I am going to display the image again:
I struggle to resist the temptation to ascribe a larger meaning to all this – the eternal struggle between Man and Mouse, that sort of thing. But I fail. And I come up short, as the best I can do is refer to that Disney All-Time Master Work: “Mary Poppins”, and words of “Sister Suffragettes”, sung by the magnificent Glynis Johns (Winifred Banks), who shed her century old mortal coil only last week:
“Although we adore men individually, we agree that as a group they’re rather… …stupid”
Yes, rather stupid, that’s about the size of it. All of which begs the question: what stupidity awaits us on the immediate horizon?
Here, of course, we face an embarrassment of riches. Somehow, the Iowa Caucuses have arrived at our doorstep, and won’t that be a brain-bereft exercise? While I’m quite fond of our quirky election protocols, they are, as a group, rather stupid. We commence matters in the Hawkeye State, where no contender has ever dared speak in other than glowing terms about the Corn Bill and Ethanol without departing tits up.
So, we’re perpetually stuck with an inefficient transfer payment to the commodity producers of Middle America, simply for the privilege of enabling well-positioned politicians to emerge unmarred from that idiosyncratic caucus proceeding.
Small wonder that entering into the final week, the Crude Oil chart looks like a John Belushi EKG:
Corn, by contrast, closed Friday at a stone cold 5-year low, and that on record Open Interest:
I will thus cop to being a bit puzzled as to what is going on in Commodity Land (more about this below), which seems to be the main locus of early ’24 action. Maybe it’s this whole Iowa thing. But after Iowa comes New Hampshire and then South Carolina, where further stupidity will certainly prevail.
Meantime, financial assets are off to a bit of a mousy start in ’24, with stocks and bonds both down a titch. Heck, even the BTC rally has suspended itself, and how stupid is that?
But the action picks up from here, with morsels of data cheese aplenty for whiskered, twitching mouths to gobble. We began on Friday, with a surging Employment Report that nominally obscured some nits. Such as a shrinkage of full-time gigs, the diminishing quality of the jobs created, the artificial boost derived from the strike-settled auto industry bringing production back on line, the alarming percentage of the workforce now under the grip of multiple paymasters, and a puzzling trend under which for ten out of the past eleven months, the revisions from previous months pointed downward.
We can all take comfort, however, that the mice in the factory are fully engaged. And next week, in addition to the commencement of the earnings season, we can feast ourselves on the monthly Inflation Numbers. The trends here are encouraging, and, in the battle between mice and men, it should be noted that the cost of cheese, like that of corn, is residing at its dead lows on record Open Interest:
But the battle rages on. And us bipeds with opposable thumbs can perhaps rejoice in the upward sloping characteristics of the Cheese Forward Curve:
Thus, the most important risk management information I can currently convey to you is that Cheese is in Contango – which may be the deciding factor in the battle between newly liberated Mouse, and Man. Lenny, of course, didn’t care. He was more interested in the rabbits.
But without laying a full-fledged spoiler on everyone this early in January, it did not end well for Lenny. Our fates may be more favorable, but we must exercise prudence and caution, lest (dare I say it?) the cheese stands alone.
TIMSHEL