I wanna tell you, now’s the time, I wanna tell you that you’re goin’ to be mine,
I can’t tell you how I feel, my heart is like a wheel,
Let me roll it, let me roll it, let me roll it, to you
Paul McCartney
Finding the thematic cupboards a bit bare this week, I am forced to resort to the trudging over ancient, over-travelled ground, from both an allegorical and substantive perspective.
First the allegorical. Our title owes itself to Paul, from a Wings work called “Band on the Run”.
I didn’t want to like this album, released in 1973 as, somehow, in less that 3 years, his 5th post-Beatles LP. It was overplayed to be sure. Paul, by that time had not only swapped the mercenary Linda in and John out but he and his wife were dubiously rocking twin Bowie-esque (Aladdin Sane vintage) mullets, and it seemed as all we held dear was rapidly crumbling before our eyes.
But I’ll be switched if this is not a solid record — one that has admirably stood the test of time. The Title Song, “Jet”, “Hellen Wheels”, and of course the above-purloined number (which may be the best track of all) reinforce the point.
I could say more but won’t, and instead will force myself to move to the substantive.
At present, in a trend that shows no signs of decelerating, almost all relevant news issues forth from Washington. Blink over the Beltway these days, and you’re likely to have missed something important. And as is axiomatic from a market perspective, the more that the pertinent the information flow derives from our national capital, the worse off investors are likely to find themselves.
Plus, I hate writing about Washington, have a desire to channel neither Woodward, nor Bernstein. But the tidal wave of action emanating from that quarter renders me, for the most part, choiceless.
Even last week, in my probing analysis of the DeepSeek phenomenon, I was forced to dedicate a couple of paragraphs to Public Policy, wherein I expressed the wish that the Big Guy would slow his roll.
He has instead taken the opposite tack, and – not gonna lie – it’s making me a bit nervous.
In three weeks since removing his hand from that bible, he has moved towards the firing of tens if not hundreds of thousands of government workers, has adopted territorially acquisitive rhetoric towards a half dozen currently sovereign jurisdictions, laid the foundation for trade wars with > 75% of our global commercial partners, rounded up untold numbers of undocumented migrants designated for deportment, glibly hinted at an extra-Constitutional 3rd term, and, most menacing in my judgement, made the following dubious forays into the Private Capital Markets.
I’ve already begun my tirade about $TRUMP – a new crypto unit owned and controlled by the Leader of the Free World. A president with his own currency. What could be better? What could go wrong? Not enough space here to express my outrage here — but remember – you heard it here first: this will end badly for all of us.
And now, we’re floating the idea of a Sovereign Wealth Fund: a private investment pool controlled by the government, like they have in the Emirates and Scandinavia, where they are drowning in the revenues generated by fossil fuel production. Our own Balance Sheet, sadly, tells a different story, approaching $40 trillion in unfunded liabilities and expanding that tally at a pace of ~$2 trillion/year.
OMG: where to start? Aside from the mundane but holier alternative of using these funds to pay down, or at least impede the increase, of our mind-boggling indebtedness, there is the question of size. Papa Bear will surely want to go bigly. There are currently about a half-dozen Sovereign Wealth Fund with assets > $1 trillion. The largest of these is Norwegian (~$1.7T), followed by Chinese vintages: two such pools that combine to a tidy $2.5T.
So, anything less than $3T or, better, $4T, would be a stone-cold embarrassment.
Who invests this hoard and how it is deployed is another cause for worry. Consider, by way of example, an incisive analyst who (after extensive research) determines that the best asset in the whole damned universe is $TRUMP. And wouldn’t that be nice for those with the foresight to adhere to the President’s agenda? Heck, he could walk away from his 2nd (certain to be final no matter what he says) term as the world’s first trillionaire. He is also able to either light up his bestie Elon, or, if the latter displeases him, to render him, from a financial perspective at any rate, sorry he was ever born.
More likely is a diversified hodgepodge of assets – with or without Tiktok – at sizes which cannot help but move markets (not a good thing). And that’s before it gets political. Which it will. No matter what anyone says. Big Guy: a word to the risk management wise – maybe give this a miss.
There’s also talk of a T-branded ETF investment platform which… No. I. Just. Can’t.
All the above has one other thing in common – the absence of engagement with the Legislative Branch of Government. Nothing undertaken or contemplated thus far and to the best of my knowledge, involves the bothersome protocol of Checks and Balances.
Presumably, the administration will eventually be compelled to map at least some of his agenda through those Marble Halls of Capitol Hill, and I fear that all this other activity will, at minimum, be distracting, if not outright dilutive, to his objectives.
All of which has virtually obliterated the non-Oval Office news cycle, which, under more normal conditions, would have been meaty enough on its own.
The Fed has taken a modestly hawkish turn, GDP remains robust, the dubious, confusing jobs report showed continued energetic demand for Labor.
The earnings season has moved past its peak, and the results were, at best mixed. 6 of the 7 now-MAGA Mags have weighed in, and only NVDA remains for us to absorb.
Several trading sessions after the DeepSeek puke, it appears to me that our omnipotent chip maker will be just fine, as all signs point towards, if anything, accelerated GPU demand. To wit: 1) two of the big barking dogs (MSFT and AMZN) experienced selloffs due to admitting that their computing capacity is failing to keep up with expanding demand, and 2) ALL of these titans are doubling down on their AI investments, DeepSeek be damned:
It’s hard for me to view this as being anything but accretive to NVDA.
And the indexes, while bouncing around modestly all week, ended on a low note, absorbing, as they did, a triple-whammy of bad news, including a sucky AMZN earnings report, a set of Employment statistics that gave the lie to anyone in a parallel universe still clinging to irrational hope of additional imminent rate cuts, and, (not to be outdone) some additional Trumpian Tariff saber rattling.
In result, the markets are deeply underperforming the wild MAGA optimism of a few weeks hence. Our indices are barely registering a positive pulse, with Col. Naz showing a vapit 1.1% ytd gain. And if you want to understand how bad that is, consider that the IBEX 35 is up ~9.5%:
Spain is Kicking our Asses:
Like the late, great Hoyt Axton once wrote, I never been to Spain, but I kinda like the music. I hope someday to get there.
But of this much, I am sure. We didn’t elect these clowns to witness those lazy Spaniards beating us by a factor of nearly 9.
At some point, while not necessarily abuse it, we’re gonna have to use it, because we can’t refuse it.
And my unifying theory is that investors are partially rejecting the rapidity of Trump’s roll.
Which is a shame because this here market is dying to go up, and, I feel, only the chaos emanating from 47’s frenzied flurry of activity is impeding it from doing so.
He did indeed tell us that now’s the time, that we were going to be his. So, we let him roll it to us. And now we must take the consequences, whatever they may be.
TIMSHEL