On soft gray mornings widows cry, The wise men share a joke
I run to grasp divining signs, To satisfy the hoax
The yellow jester does not play, But gentle pulls the strings
And smiles as the puppets dance, In the court of the crimson orange king
Peter Sinfield (12/27/43 – 11/14/24)
A quick word about Pete Sinfield, original lyricist for King Crimson and ELP. His run was brief and then he disappeared. Composed our titular lyrics. Died on Thursday.
And that is all I have to say about that.
Meantime, yes, the Election, about which I have vowed in this space never to write again, is behind us, forcing, among other things, a reversion to myriad matters more mundane, but evoking mental gymnastics as to what it all means.
The results were certainly unambiguous, utterly obliterating my clever but ultimately erroneous hypothesis as to the chaos which would ensue under certain outcomes. I will state, however, and in my own defense, that the count was too one-sided for any such shenanigans to unfold, and that had it been close, I might’ve been right. But the electorate has stated its preference and will abide the consequence. Resistance, for the time at any rate, is futile.
I have read, as an exception, of initiatives which channel those global social trend setters in South Korea – through a movement called 4B, under which the damsels of the land withhold the full menu of their charms from sinful, forlorn bearers of Y chromosomes, as retribution for political transgressions which they ascribe disproportionately to us. But I’m not terribly concerned at this point. My personal and observed experience in this regard suggests that it will be difficult, perhaps impossible, for you ladies to hold to this discipline.
But here’s another problem with moving on: we’ve entered the dreary, information-bereft back half of the quarter – which also features two vibe-enhancing but market-disruptive holidays. We await, of course, that holiest of quarterly market events – the ritualistic NVDA earnings report, schedule to drop on Wednesday. The Fed weighs in one final time a week before Christmas. But other than that, Bubkis.
So, we’re kind of stuck, with nowhere to point our peepers but into the past. Most notably to the last 6 weeks of 2016. When Trump, improbably, was President-Elect. Replacing not Biden, but Biden’s former boss. When the loser of the recently completed contest was a member of the fair sex. When every member of the Supreme Court could articulate associated membership criteria.
And exemplary of our fixation on what is visible in the rearview mirror, Friday night gave us a Dallas boxing extravaganza in which the top card featured the 58-year-old ear-biting, Prince-logo-face-tattooed former Heavyweight Champion Mike Tyson against a twenty-something Youtuber. The streamers went wild, so much so that they crashed the Netflix feed. But the results were as expected, proving, yet again that much as we’d all wish to turn back the clock, it just ain’t how the world works.
And regrettably, there are signs that 45 (aka 47) is back to his old tricks. He’s in a frenzy to fill his court of cabinet sycophants, and dubiously demanding unilateral latitude to push these through using a sketchy tactic called Recess Appointment, under which nominees are approved when the Senate is conveniently out of session and thus unable to vote yea or nay. There is even speculation that he will contort a few regs to force both houses out of session and proceed with his plans. If he does, both parties will usurp, probably for all time, the chamber’s critical Advice and Consent role.
And some of his selections reflect a combination of his world-class narcissism and his inability to avoid rubbing the face of his political opposition in scat. He has chosen a few wise men, but also a handful of yellow, string-pulling jesters. We all know who these are: the Fox News guy at Defense, Gaetz at Justice and RFK, Jr. at Health and Human Services come to mind.
With respect to the last of these, one cannot help but wonder how his daddy would’ve felt about it all. As cabinet members go, few in history (dating all the way back to the brilliant but perfidious, adulterous Alexander Hamilton) were as unhinged as Bobby Sr. He single-handedly took on the mob — at a point of their maximum power, going so far as to arrest one of its leaders and deposit him, with little more than the shirt on his back, into the deepest jungles of South America. Egged Brother John on to confront the Russians in the Bay of Pigs, with nearly catastrophic results. Took, according to widely published reports, sloppy seconds (deferring of course to his brother) with Marilyn. These and many other actions on his part confirmed his permanent status as one bad hombre’.
So, part of me believes he would be proud of his renegade son, but overall, I gotta think he would’ve been appalled. His long-suffering widow died a few weeks ago, at a moment almost contemporaneous to her boy’s announcement that he was joining Campaign Orange. And I suspect that for Bobby, pride in Junior’s DNA-driven proclivities to assault the status quo would have failed to negate his disappointment of his abandonment of the political party to which he and his family owe their fame and (along with bootlegging and stock manipulation) fortune.
The common thread across these selections is that perhaps the main thing that Papa Carrot learned from the triumphs and trials of his first go round is that this time, he would surround himself exclusively with his own peeps.
I think this is a missed opportunity to cast himself in more statesmanlike hues. Could’ve nominated a true expert in medical policy to reform our dysfunctional health care system, a distinguished, conservative jurist to attack the many ills at Justice, a military leader with sufficient managerial credentials to efficiently lead the three million employees associated with our armed services. This would’ve paid off politically, but it’s not how he rolls. He is incapable of abandoning the travelling circus or its jesters, and, because of this, Trump II promises to be a terrifying high wire act.
While noting the irony of creating a new government bureaucracy to attack the waste of government bureaucracies, I am encouragingly intrigued to see what can be done by that hedge fund dude and the century’s most successful serial entrepreneur to eliminate the massive overspending of government agencies. But I suspect that they’re in for a tough time. And will find that sending a rocket to Mars and back is a milk run compared to removing the individuals and agencies who have so long been sucking on the federal teet. I am rooting for them, as so should we all.
But the markets, after an initial burst of euphoria, have turned a skeptical eye towards the totality of these tidings. To be sure, they’ve other matters about which to fret. The Fed’s rate cutting ax is showing signs of going wobbly. Earnings have been robust relative to expectations, but The Street has been assertively scaling back 2025 expectations since Labor Day:
None of this worries me overmuch. Yes, the initial post-election rally had the look and feel of eight years ago, when the investing world began to contemplate the bennies associated with a transfer of power from the market scolding Democrats to the Real Estate cowboys that replaced them. With a few stumbles along the way, this bull market is still in place, and I do not believe it has yet stomped its last stomp.
But markets remain fickler than even those 4B objects of our rejected desires, and it pays to prepare for the caprices their wandering preferences.
One salient example is the performance of the USD, which, as measured against a bevy of other lovely units of legal tender, has rallied a lusty, passionate > 6% in last 6 weeks, and has lurched especially heavenward the days since the election results became clear.
But what the delicious dollar giveth, it can taketh away. I suspect that much of the flight of these fluttery wings is driven by expectations of higher domestic interest rates.
And, as everyone knows, she is fast losing her luster against the younger, flashier more luxuriant BTC.
All of which brings me to my final point of the week. Proponents of the incoming administration have, with trademark energy, pointed to post-election rallies in certain markets as incontrovertible evidence of unmixed investor endorsement of the righteousness of their contemplated policies.
Well, maybe, but one doesn’t hear much about these matters when Madame Market expresses her wrath and withholds her favors. And the silence diminishes credibility.
A huge proponent of this rhetorical strategy is a user of my professional advisory services, who, at the point of this correspondence, remains a favorite for the post of Treasury Secretary.
He parted ways with me this past Spring and never said goodbye. And he would be the second former client who held a cabinet post. The other being the Mooch. Who used to caricature me as a clownish ex- hippie, and who only did a drive-by during Trump 1. Other jesters followed and are now ascendent anew.
And all we can do is smile as the puppets dance — in the Court of the Orange King.
TIMSHEL