“Ashes to ashes, funk to funky, we know Major Tom’s a junkie,
Strung out on heaven’s high reaching an All. Time. Low”
Bowie
Let us acknowledge up front that this is a stupid lyric. I do like the song, but c’mon, Dave. Ashes to ashes, funk to funky? Seriously?
I will give him his propers for writing a sequel to “Space Oddity”, the song that launched him into the Stardust Stratosphere. And I have no real issue with him re-imagining Major T as a smack addict, as, when previously encountered, he was floating round a tin can, and – let’s face it – any condition, from that vantage, has gotta be an uptick. One may also say, in fact, that Bowie was ahead of his time, what, with all that re-imagining that was going on a few years back (not that the latter worked out so well).
So, the purloined quote is mere device, a lead-in, if you will, to the main topic at hand, which, unfortunately and tediously, pays homage to the end of yet another era.
I read with unmixed sadness that Sam Ash, that iconic purveyor of six string razors, is closing its doors — all godforsaken 42 of them, after a hundred frickin’ years. In touching verisimilitude, the announcement was made by one Derek Ash – great grandson of the franchise’s eponymous founder.
It was a good run. But it’s finished.
I must cop to not having helped their cause over-much across the decades. I did buy one ax there – at the flagship 48th Street location. It was a Brian Moore i2000f – with a lovely Maplewood finish, double humbuckers, and a switch that could alternate the pickup settings between single and double coil (don’t ask me what the significance of this feature is, because I have no idea):
But I broke it, and not, I’m ashamed to say, in Pete Townsend fashion.
It fell 90 degrees — from perpendicular to horizontal, causing a fatal fissure just at the point where the neck meets the machine head. This is known (or should be) among us shredders as the Humpty Dumpty crack, one which all the king’s horses and all the king’s men…
And now Sam Ash is gone. Along with the Village Voice. And the Minnesota North Stars, who shamefully moved to Big D and became the Dallas Stars. For reasons I am unable to explain even to myself, I was outraged by the move, and this notwithstanding the reality that: a) I’m not much of a hockey fan; b) I certainly never pulled for the North Stars; and c) the NHL replaced the 10K-Lake representative with an outfit called The Wild.
But there was something about a hockey team called the Minnesota North Stars morphing into the Dallas Stars that outraged all I hold as holy in this forlorn world.
One is tempted here to derive no lesson other than the old “ashes to ashes” bit, which, paraphrasing Genesis 3:19, is never explicitly included in biblical text. Instead, it is prominently featured in the Anglican Book of Common Prayer, which, in turn, dates its origin back to the 16th Century – during my old sandlot pal Edward VI’s time. So, let’s give a shout out to Eddie the 6th, who: a) replaced his Pops: Henry VIII; b) at the age of 9; but c) died at 15. Say what you will: The Book of Common Prayer is an impressive legacy for the boy king.
So, yes, ashes are said to revert to ashes – in life as well as the investment game. Consider, if you will, the example of Bernie, who built a Potemkin-like trading colossus, out of the financial equivalent of ash and dust, which, inexorably returned to dust when market conditions precluded its ability to present itself as anything else.
But sometimes, ashes reconfigure themselves not into ashes, but rather into something spectacular. Consider, if you will, a recent announcement by the FTX Bankruptcy Trustees indicating that claimants are now likely to receive as much as $1.50 for every dollar invested. One way of looking at this is that being stiffed by FTX turned out to be one of the most lucrative investments of the emerging decade.
Much of this miracle is owing, in circular fashion, to the remarkable rally in Bitcoin, which rallied 4x from its contemporaneous-to-FTX-collapse, before rudely pulling back again. Coincidence? I think not.
Still undetermined is the fate of Renaissance Capital, founded by a physicist named Jim Simons, who left us this week, and whom we would be remiss not to honor. He was as important a figure in hedge fund history as any you could name, having built Renaissance out of the dusty ash of an idea – that market prices were not always random and could, with some regularity, be anticipated by quantitative models — into perhaps the most successful alternative investment platform of all time. He formed it in such a way, using legions of quant geniuses building quant models before anyone had an idea that such a thing was possible, that his platform is likely to continue to thrive. But the jury’s still out.
More broadly, it falls to our lot to discern what in our path will assume the Sam Ash/Village Voice/Minnesota North Star configuration and revert, for all time, to the ashes from which it derives, and what will re-emerge, Phoenix-like. I wanted to understand the latter a bit better, so as to more effectively report it back to you. So, for those who don’t know this, the avian form of the term (from which all other forms derive) originates around 8th Century, BC, in the region of Mycenaean Greece, and tells of a creature rising from the ashes of a predecessor, a recently toe-tagged bird of the same feather.
The good news here is that risk assets are showing aquiline symptoms, with equity indices, fixed income securities and sundry other speculative instruments encouragingly bouncing off recent bottoms, and, in doing so, demonstrating admirable staying power.
Dare I say momentum?
We’ll be better able to answer this question by mid next week, after the big, ritualistic CPI/PPI drop. A blip upwards will equate to the closeout sale on 48th street, while a downtick will extend the Phoenix trajectory. I think these numbers, assuming that they come in within reasonable ranges of expectation, are of less import than the feel of the tape would suggest, but I reckon we’ll see.
And, somehow, now, we are in the Middle of May, which ushers in the back half of Q2, wherein the information flow slows to a bare trickle.
So, I really don’t know. I suspect the current low-vol conditions will ensue for a few weeks. Any downward draft will likely be met with significant buying pressure, but there’s hardly context for a surge at this point. My best guess is that we’ll end the quarter at proximate valuations to those we currently observe.
Still and all, I can’t help but lament and worry about all the changes – observable and otherwise – that are transpiring all around us. Maybe the fanciest office I ever had – one that embarrassingly transcended both my professional station and my associated comp – overlooked the Sam Ash HQ. At that time, 47th Street featured about a dozen guitar galleries. Now, there’s nary a one. Much earlier in my career, I had a brief, improbable stint working for CBS, which at the time owned the Fender Corporation. They had a merch store on the 20th floor, next to the cafeteria, where in addition to buying Walter Cronkite coffee mugs, they had a full suite of Strats, Teles, and Mustangs. At the noon hour, one would always find innumerable suited geeks hacking away ineptly at some basic blues.
As a guilty pleasure, I occasionally joined this throng. Perhaps it was my embarrassingly superior chops that got me fired from that gig.
Ashes to ashes, though. Cronkite is dead, and Fender is now owned, you guessed it, by a private equity concern.
And, one might add, considering the shuttering of Sam Ash and my careless mistreatment of my BM i2000f, axes to ashes. I have replaced it with a hot pink Paul Reid Smith job. But I think I’ll hold on to the former. Because you never know: the Book of Common Prayer could be wrong, and the Greeks right: ashes may not always revert to ashes, but instead, rise-Phoenix-like, into new, stronger versions of their former selves.
TIMSHEL