Let’s quickly dispense with our weekly croak list, shall we?
First, Ethel Skakel Kennedy, matron of the legacy Kennedy Clan, has left the building, and we can only wish her a pleasant journey. Orphaned at 28 by virtue of losing both her parents in a plane crash, she found succor in the arms of maybe the randiest politician in American history (yes, more so even, than her more famous brother-in-law), she bore witness to his murder (covered up even more flagrantly than that episode in Dallas, but that’s another story). Tragically lost two sons. One nephew flew his plane ineptly into the drink; another created a 30-year public scandal by murdering a neighbor.
Certainly, she was one tough broad. And I think she could have easily lived another couple of decades, to perhaps 120, if it not for the worst tragedy of her life: her eldest son, the bearer of her husband’s name, endorsing not only a Republican, but the evilest one of all, Donald J. Trump. No one could’ve expected her to survive that. And she didn’t.
I also want to offer a quick word about the inspiration of this week’s theme, Pitcher Luis Tiant, who was born in Cuba and died last week where all Cubans go to die – in Maine. Had a great career, but I don’t really have much to say about him. Other than this: the combination of his ethnicity and the force of his heater caused him to acquire the nickname Senor Smoke. Which is about the coolest handle of which I am aware in any sport.
And that’s all I have to say about that.
But now Smoke is gone. And where there’s no smoke, so the saying goes, there’s no fire. Perhaps this is owing in part to all the precipitation endured across the Eastern Seaboard over the past fortnight. But away from these soggy environs, one is also hard-pressed to find a single spark of heat-inducing light – particularly in the markets.
With what promised to be a raucous October now nearly half in the books, the Gallant 500 has sleep-walked through barely a 1% range. Treasuries have been covered by a wet blanket, with 10-year yields now, depressingly and again, above 4%. But that there game is in its early innings, its outcome highly uncertain.
Looking immediately ahead, I’d be tempted to predict that things are about to flame up. But they already should’ve, what, with data releases, geopolitical strife, domestic political psychodrama, two devastating hurricanes, potentially crippling job actions, and the like, and none of it seeming to move the valuation needle by perceptible amounts.
We nonetheless must proceed as though the fire is about to ignite, and whether it evokes smore-producing conditions or the need to bust out the axes and the hoses remains to be seen.
What we know thus far is as follows. Jobs and Inflation figures suggest robust economic activity. The earnings season commences against the backdrop of lowest analyst expectations in a year. The next shoe is certain to drop soon in the Middle East. Eastern Europe remains in an opaque quagmire.
There’s some shit going down in the Chinese markets, but I’ll be switched if I can begin to unpack any of that.
With respect to the election, the betting markets have shifted dramatically in Trump’s favor. Republicans are even more likely to recapture the Senate, due to: a) their having to defend less than half the seats of their opposite numbers; b) the retirement of Joe Manchin and the overwhelming likelihood of West Va. replacing him with a Republican; c) the equally high probability that Tester’s MT will flip. The House? Who knows?
I’m not inclined to place much credence in any of this. Looks like it will both be close and full of surprises at the national level. I am hoping for a split outcome, because I don’t think any organized and united government is capable of doing anything but harm.
We are compelled to invest and trade against this backdrop, and, as related last week, I am concerned about the aftermath of the election. There’s gonna be a lot of pissed off people, no matter what the outcome, and they’re gonna stay pissed off. So much so that they may be inclined to disrupt the serenity of those of us who will at any rate strive to accept the results with equanimity.
If all this renders your toes cold, the warming reality is that while at the index/factor level, the embers are dark, there are sparks action aplenty popping for individual securities:
This implies what us market cheerleaders like to call a stock picker’s tape. And I wish all of you good fortune with respect to your selections.
Longer term, though, an explosion may indeed be on the horizon, with the Irresistible Force of economic vitality meeting the Immovable Object of broad-based insolvency and other financial transgressions. The resulting blast should be entertaining, if painful, to observe.
It’s all a helluva shame though, because if we weren’t all such self-righteous over-extended dillwoods, the prospects for future economic bliss are breathtaking to contemplate. Say what you will about technology, it continues to create miraculous increases in productivity. And not just in those dweeby realms as telecommunications and Artificial Intelligence. Consider, if you will, the evolution of agriculture. Over the course of my (admittedly over-long) lifetime, the trajectory of corn yields per acre takes the following path:
I believe we can and will improve upon even this retrorocket ignition. It’s not difficult to imagine clairvoyant weather models adding significant precision, along with wonderous machines that can assess the yield potential of every square centimeter of acreage, the presence or approach of nasty boll weevils, the efficacy of various pesticides, etc.
One can easily extrapolate from there to other wonders, involving health science, transportation, manufacturing, etc.
The question is: can we get there before we drown ourselves in indebtedness?
These matters, are, of course imponderable in the short term; we must instead attend to what lies immediately ahead.
It still feels too damp for me to anticipate the warmth of crackling logs, with ill winds threatening from multiple directions. I wouldn’t be inclined, for the moment, to try to stoke up any blazes in my investment activities.
Perhaps better, for now, to chill. And I’d be inclined to light a cigar to put me in the proper mood.
But with no fire, as indicated above, there’s no smoke. That much, at any rate, is axiomatic.
As to what else is going on amid the current confusion, unfortunately my friends, I must leave it up to you to determine.
TIMSHEL