And if you take my hand my son, all will be well when the day is done
Peter Yarrow
Reporter: How do you find America?
John Lennon: Turn Left at Greenland
I am finally getting around to writing about Greenland. As some of you may recall, my attention was turned away from this topic by the late-breaking news that the Morrison Hotel had burned down. I thought, of course, this was a one-off, but now the entire region is in flames. More about that below.
Also, before we turn our attentions to that big icy mass North and East of our natural borders, duty impels me to say a word about Peter Yarrow, left-most name in the eponymous trio of Peter, Paul and Mary, who left us, at the gratifying age of 86, last week.
I was never a huge PPM fan, believing that the best that can be said of them (apart from the Mary Travers smoke show) was that they were right in the middle of it – contributing little but indisputably joining in. If the American popular music scene of the 1960s used protocols established by the American Youth Soccer Association, the trio would’ve undoubtedly earned, and received, a Participation Trophy.
Mostly, they made hits out of other peoples’ songs. They did have a couple of nice original moments, including Noel (Paul) Stookey’s “The Wedding Song (There is Love)”. Also, of course, there’s “Puff the Magic Dragon”, a wistful ode to what we leave behind as childhood turns to maturity. This is required listening for everyone up to the age of ten, and is perhaps more timely now then ever, because, while Peter’s Puff frolicked in the autumn mist, his latter-day namesake spent his time in alleged serial sex abuse and is now cooling his heels in the New York City Metropolitan Detention Center, awaiting a trial that is likely to send him, not sadly into his cave, but into the State Penitentiary for life.
Then of course there’s our title song, which, indeed, is worth a listen. Or two.
We can also bid farewell to a couple of other names from the past: Anita Bryant, the Florida Orange Juice hawking homophobe/recording artist. Down the road in Coral Gables, Sam Moore, who with fellow Floridian Dave Prater formed the pleasing soul Duo Sam and Dave, similarly gathered to the dust of his forbears.
There’s not much to say about this other than the obvious reality that it was a tough week for geriatric crooners hailing from the Sunshine State.
And now let’s put on our cold weather gear and head to Greenland, where we begin with the above- supplied snippet from a John Lennon interview immortalized in the 1964 film “A Hard Day’s Night”. Yes, if one is departing Heathrow on one’s way to JFK, one’s jet heads due Northwest and then indeed turns left (Southwest) in the General vicinity of that big icy island.
I have always been a paranoid about Greenland. So big. So Cold. So Wild. A few folks living in primitive villages on the Southeast Coast and the rest of that enormous territory a wilderness, with the only creatures subsisting there being Darwinian marvels who can freeze and starve with biological impunity.
I am not proud of this, but I have a recurring dream of being stranded in the dead center of this gargantuan land mass.
I imagine I’d be hungry. And cold. Unable to call out for help because, from what I am told, the cell phone service there sucks.
And finally, it would make you cry to learn what passes for a bagel in them parts.
But Trump wants it. Along with Canada and the Canal. His left turns thus continue — from the Greenlandic (yes, Greenlandic) capital of Nuuk to Ottawa. And from there, he turns left again, due South, and traverses the 2,189 Nautical Miles — to the canal we financed, built, ran, and then gifted away under the regime of the (recently departed) Jimmy Carter.
I have read the arguments in favor of these moves (well, except the Canada one, which is flat out ridiculous). Greenland is full of Rare Earth Metals, of which we are in chronic short supply. From there, our armies can incrementally menace Russia, China, North Korea and maybe even Iran. It would, moreover, be a perfect opportunity to stick it to the Danes, which currently protect it. And, let me ask you: what have the Danes done for us lately? Or ever?
The Canal is obviously strategic, else why did we build it in the first place (other than to create perhaps the world’s most famous palindrome: a man a plan a canal panama)?
But, Oh My Heavens! Doesn’t the President Elect have more important matters with which to attend? He’s taking The Oath next week, and, meantime, his predecessor is doing all in his power to block and/or reverse his election-winning policy agenda. Borrowing costs are rising dramatically and presumably in direct contravention of the objectives associated with the full 1% reduction of bank overnight rates effected by the Fed in 2024. Two nasty wars continue to rage.
The November “Republican Sweep’ ushers in a government united across its two elected branches, but one that features a House Margin of (depending upon how you count it) 1 to 2 seats.
The Morrison Hotel is gone and much of the surrounding area continues to either burn or smolder.
It would seem, considering these and other annoyances, that there are better ways to spend the fortnight before one’s swearing in to the Highest Office in the Land than to pump out sideshow spiel of expansive geographic influence.
And nothing for nothing, but the markets are beginning to show their displeasure. As the ball dropped last week, all the ingredients were in place for a renewed, re-energized rally. Instead, after seven sessions, our indices are trading down on the year.
There was a strong Jobs Report, which investors, as they do from time to time, took this as a negative. The inferences they drew as to a more conservative Fed Policy are certainly well-founded. Though memory fades, I recall that All God’s Rate Predictin’ Children were prognosticating a number and timetable for reductions that was nothing short of fantasy based. They were wrong. Cuts came, but later and in smaller magnitude than was gleefully prophesied.
And while market economists are busy factoring higher rates into their models, I suspect that they are still shading towards the Pollyannish. The Fed may not cut at all this year, and, if Inflation perks up, may instead do some raising.
I’m with them on this one. As I’ve stated many times, I don’t endorse Fed rate relaxation as a means of tweaking the capital economy. Instead, I believe that the Central Bank should hack away, not when it can, but rather when it must. Because, when the latter contingency emerges (e.g. during a recession), it’s a stone-cold bummer if they’ve already blown their load.
And the above-mentioned Capital Economy simply does not need thos largesse. In addition to there being scant justification for the bestowal of these gifts, I must point out yet again that the most recent rounds of slashing have done nothing useful at the short end of the curve and have arguably catalyzed the higher yields observed at the long end (that is, where everybody actually borrows).
But this much I promise you – the prices one currently encounters for risk assets are entirely transitory; they will diverge materially ere, say, St. Patrick’s Day arrives. Maybe sooner. There’s a passel of economic data about to drop – including the two big Inflation measures and Retail Sales just this week alone. A lofty expectations earnings season will then commence. Trump will take office and there will be a full-court sprint to pass a budget (featuring an extension of the 2017 Tax Cuts AND a Debt Ceiling increase), through the slightly shady protocols of Reconciliation, immediately thereafter.
I suspect that Big Daddy will immediately seek a deal with his Opposite Number Putin, wherein the latter will cop some Ukrainian Real Estate, but, in consideration of same, will turn its tanks back to the homeland. I think he’ll make good on his threats to turn up the raging fires in the Middle East.
All of which WILL move markets. I continue to believe that the tailwinds are stronger than those blowing in our face, as demonstrated in SoCal, winds of any kind are dangerous, and nobody in a position to do something about it appears keen to make me look good respecting my recent bull prognostications .
Still and all, if I were you, I’d hold on to at least my core positions, with an expectation that doing so will be accretive to your early innings ’25 returns. An accretive set of pre-conditions are indeed in place, and, more likely than not, should take hold.
But, on the other hand, a good deal can go wrong. And I can’t think of any buzz killing scenario more likely than Papa Bear converting his current bluster into action. Cogent arguments are afloat that his rhetoric is merely a negotiating position. He is wielding the threat of heavy tariffs as a rhetorical tool to get the best deals he can.
But 100% levies on Denmark if they don’t cough up Greenland FFS? Denmark is not in the Top 20 U.S. exporters; their ~$11B of sales to us is about 2% of what we purchase from China and Mexico, and >0.1% of the aggregate amount of shit we buy from other countries.
Including Canada. From which we purchase $430B of said shit. Their entire GDP is a shade over $2T, an amount barely more than half of pre-fire California.
So, yes, we can saber rattle with all these countries. Greenland, Denmark, Panama, Canada, China, Mexico – even California. But where will that leave us when day is done?
I’d ask Peter Yarrow, but….
TIMSHEL