There’s blood in the streets, it’s up to my ankles,
Blood in the streets, it’s up to my thighs
Jim Morrison
I had a different theme in mind for this last note of 2024: specifically, Greenland, which Trump (like Truman and Andrew Johnson unsuccessfully before him) is seeking to purchase from the Danes. I have always been a little hung up about Greenland, but I reckon this topic must wait for another day.
Because, scanning the wires on this ‘tween holiday weekend, I encountered some shocking news. The Morrison Hotel on South Hope Street in Downtown Los Angeles has burnt to the ground.
The establishment once gave title and inspiration to an eponymous album by The Doors, their penultimate effort, released to mixed reviews, in 1970. Its front window is featured on the cover, and now it’s in ashes, as illustrated with the following “before and after” imagery.
Looks like a total blowout, but you never know. The album, meantime, remains among the treasures of American musical cannon in general and of The Doors catalogue in particular. It’s not their best; that distinction belongs to the flawless L.A. Woman, released in’71 a couple of months before Jim’s death — as impeccable a final statement from an historic artistic genius as any of which I am aware. I remember, around 1980, trying to copy the vinyl version onto a cassette, and finding an insufficiency of capacity on the latter, giving up because I couldn’t bear to part with a single note.
In the intervening decades, history has been kinder to Morrison Hotel, and appropriately so. After dropping 3 or 4 mind-blowing records, the Band got a little weird with their next release – The Soft Parade – with its jazzy instrumentation and rambling titular score. Even this is a pretty good album, but not up to the standards of the legacy created by the group.
Morrison Hotel informed the world that The Doors were back. Spies in the house of love, lamenting up- to-the-ankles/thighs blood in the streets.
And we paid notice. Me and my boys were so taken by Jim’s mystique that upon seeing the following image on Morrison Hotel’s inside jacket, we all took to drinking Bud longnecks.
But after LA Woman, and little more than beyond the release of Morrison Hotel, the music was over. Jim died. The band tried to carry on, but to little avail.
The Morrison Hotel became a tourist attraction and then, over the last few years, as a home for undocumented foreign nationals. Perhaps it self-combusted, in solidarity with those who are in favor of the taxpayer-funded support of these unfortunates. Or in solidarity with those who are against this policy.
Meantime, another year has flown. And one would believe, from a market perspective at any rate, that we’d end the proceedings on a high note. But one would be wrong on that score. All God’s Children are shedding risk, selling stocks, Treasuries (Ten Year yields are at a proximate twenty year high, and Corporates are on full-on offer). Heck, even the magnificent BTC, rising a mere fortnight ago to a respectable 106 handle, is now resident at a shameful, undignified 94 and change.
And this with no FTX-type bankruptcy to contemplate.
Today and tomorrow’s sessions may bail out this buzz kill wind up, but I have my disappointed doubts. Risk taking, for the time at any rate, is on the wane. Perhaps this is due to all that uncertainty out there.
The new Congress takes hold on the unfortunate date of January 6th; you know who arrives two weeks hence. The House is facing the near certainty of another farcical Speaker election. The Republicans hold a 1-2 seat majority, and I’d be shocked if the current occupant of that position can muster the votes on the early ballots to hold his place. I think this is a real shame, because he is certainly well-spoken, appears to be civilized and reasonable. But I think they’re gonna shoot him, as the first round of the same type of circular firing squad that claimed the hides of Paul Ryan and Kevin McCarthy.
The blogosphere, which can always be counted upon to manufacture outrageous content, has floated the improbable name of Elon Musk as a candidate, dismissing, in doing so, the inconvenient reality that by logic at any rate, the Speaker of the House should be a member of the House. I hope, for Elon’s sake, that this notion withers. I think, for all the soaring heights he’s reached, his assumption of this exalted position would render him regretful he ever rose to world domination, and maybe even sorry he was ever born.
Across town, the Fed rotates out four existing, and rotates in four new FOMC voting members, with the latter group featuring the perfidious Austin Goolsbee, erstwhile architect of the Obama economic program, but who, as a tenured professor at the University of Chicago, ought to have known better.
I don’t think it will matter much, though. The Fed is fairly easy to read these days, and when the consensus emerges, as it has, that it will slow its rate-cutting ways, I think it is to be counted upon. The economy ought, as referenced last week, to be able to sustain itself with these still relatively benign financial conditions.
All remains to be seen. I think we begin the year with risk tailwinds, but in time-honored fashion, I advise my clients to take it slow entering ’25. There is a school of thought, to which I don’t subscribe, that urges investors to think of calendar rollovers as mere human device; that nothing changes between, say, Dec 31st and Jan 1st other than that which is simply a biproduct of societal protocol. Under this mindset, nobody should change their investment thinking or strategy as this Tuesday fades into Wednesday.
I take the other side of this argument, believing that, come Wednesday, it’s a whole new ballgame. Investment fund performance becomes a matter of record, and the grueling process of the new track begins. Parameters for compensation across all forms of variable payout (including, importantly, corporate executive compensation) are etched in granite.
It becomes time to roll the rock up the hill again.
On a more touchy-feely level, I think each year tells its own story, and the early portion can be viewed largely as introductory chapters. Yes, they can and often do set the tone, but often with many unforeseen bumps in the road likely to emerge as the calendar unfolds.
This coming year should be no different. Lots of changes, as indicated above, are on the horizon. There are two wars to settle (or not). There are taxes to lower, regulations to crush, oil to pump and tariffs to impose. We may annex Canada, co-opt Panama and yes, purchase Greenland.
Markets may fall, but if so, they will rise again. Just like we anticipated when we over-interpreted the lyrics of L.A. Woman’s title song, particularly the Mr. Mojo Risin (an anagram for Jim Morrison) refrain.
We all hoped that one fine day we’d find him bouncing into town, and taking a look around him to see which way the wind was blowing. Perhaps he’d check into The Morrison Hotel and find cause to bark out some blues respecting his demise.
He never did return. And now The Morrison Hotel is a pile of rubble and ash.
The risk management message here, is clear. The landscape changes. In unexpected ways. At unanticipated times. It behooves us all to remain mindful of this, and to resist temptation to place full reliance on what we see before our eyes.
So, in closing, I wish everyone a Happy New Year, and urge y’all to keep your eyes on the road, and yes, your hands upon the wheel.
TIMSHEL