Will all your money, buy you forgiveness?
Keep you from sickness, or keep you from cold?
Will all your money, keep you from madness, keep you from sadness?
When you’re down in the hole?
The Glimmer Twins
If you’re bored, give our title tune a listen. It was recorded in 1980, as part of the otherwise-forgettable “Emotional Rescue” sessions – at a time when, already long past their prime, The Stones still managed to pump out a gem or two on each record. To me, even this era of descent from the mountain top is long over; they haven’t, to my ears, laid down a memorable track for at least four decades. I don’t fault them for continuing to trudge into the studio though, having long believed that artists of every stripe should be judged largely by their best work, and that their choosing to carry on at lesser amplitudes is their earned prerogative. As far as I’m concerned, the band that gave us “Let it Bleed” can thus do whatever it wants, for as long as it is able.
Meantime, “Down in the Hole” is an example of a divine ensemble on the decline, catching, yet again, their full creative fire — even as their embers were otherwise dwindling.
Because – let’s face it – we’ve all been down in hole at various points in our existences. I’ve been there many times myself. Never, however, have I been in a K-Hole. Didn’t even know there was such a thing. Until recently, when I was enlightened by my niece who is a naturopathic doctor that specializes in K treatment.
I was forced to disclose to her that I am a K virgin, never tried the stuff, let alone having fallen into the hole which bears its name. Most of you probably know this, but the condition is one under which an individual, using the general anesthetic Ketamine, has done so in sufficient quantity and/or with sufficient enthusiasm to render them in a state entirely disassociated with body and environment.
Sounds like fun, don’t it?
For some, apparently, it is. Others slip into the K-Hole and regret it. On the whole, I think I’ll pass.
The world, of course, has been overindulging in K for quite some time. And, arguably at some point, dove right down into the Hole. Though probably a waste of effort, I have endeavored to determine precisely when the formal descent transpired.
The US, always at the forefront, was way ahead in this game. For lack of a better alternative, I pinpoint its arrival into the K-Hole to when the Minnesota North Stars re-located to Dallas (1993), thus, for a time, depriving Minnie of an NHL franchise, and deeply ruining the frozen vibe on all levels. The Minnesota North Stars are now the Dallas Stars (I asked myself)? Something went deeply wrong here, causing a contagion which, more than 30 years hence, we have failed to remedy. And it matters little that seven years later, the Twin Cities copped a new expansion franchise called the Wild.
We were in the K Hole – perhaps never to emerge.
Beyond these shores, my best estimate, not of when the global K-Hole materialized but rather when it subsumed all above-ground oxygen, was in 2022, when Ferdinand (Bongbong, yes Bongbong) Marcos Jr. – son of Kleptocrat Ferdie Sr. and his 50-dozen-shoe-possessing wife Imelda, assumed the Presidency of the Republic of the Philippines – a position held by his father (who managed to steal about $10B of loose change out of the joint) for some 20 years.
There’s Bongbong. Lookin’ sharp by any standard.
His name, of course, suggests a preference for ganja, but word is — in Manila and adjacent realms, he rather inclines towards the blow.
There is no documented association between Bongbong and Ketamine, but that doesn’t mean one doesn’t exist.
And even if it doesn’t, I am still formally accusing this nepo-statesman of being the catalysts for the worlds collapse into the K-Hole.
Because this is the Filipino equivalent of a Stalin scion being next in line to replace Putin. Or Hunter revving up for the 2028 throwdown here in the States.
Our immersion into the global K-Hole has taken many forms. There was the magnificent spectacle of the exploding beepers. Mexico elected a Jewish lady as president.
Just this past Friday night, a Japanese Man playing an American game astonished the world by pitching a 10 strikeout/2 hit gem AND hitting three home runs – all to send a team paid like maharajas back to the World Series to defend its title.
New York City, the global center of capitalism, is about to elect a socialist mayor, who somehow is sweeping the election with plans to offer free transportation, free childcare, the arrest of Netanyahu, the raising of taxes and the freezing of rents. Let’s call all this, shall we say, aspirational. You can’t raise taxes anywhere in New York without the approval of Albany, which wants the money for itself. I will also be watching with interest as he seeks to deal with the city’s transportation unions, who are not only unlikely to match Zo’s largesse, but instead sure to demand larger sums for hauling around NYC’s free riders.
Disembodied conditions also, of course, plague the financial markets. But then they always do. Gold and Silver are making new highs every day. Credit markets begin to wobble in menacing ways, as catalyzed by a couple of disturbing bankruptcies.
These latest developments are particularly troubling insofar as they threaten to kill what has been one helluva debt issuance party. One of them (First Brands) is a tale as old as time – involving, apparently, multiple borrowings against a single pool of collateral. From what I can read, the issuers here didn’t look too closely, because they had buyers for all this paper and a fat commission to book.
All of which has me thinking that excess demand for credit investment is a dangerous thing. When credit buyers want to buy, sellers always find a way to accommodate them. Inevitably, this leads to a deterioration of credit quality, and much Hijinx is then certain to follow. We found this out in the lead-up to the Great Financial Crisis but apparently learned nothing from the exercise. We are almost certain, instead, to receive this lesson yet again.
Lest anyone pass off this bad paper issuance as a one-off, I draw their attention to recent action in the auto loan market:
Much as I’d like to pass this illustration off as a leveling of a playing field, which now enables the insolvent to cop sweet new rides, I can’t help but feel a bit concerned about the implications for debt markets.
Also, of course, I fear (though I hate to mention it) that some of those represented in the tan line may be, indulging, ad perhaps at serious risk of falling into the K-Hole while behind the wheel.
And of course, the U.S. Government – itself in hock to the tune of ~$37 Trillion, is now in a disembodied battle to legislatively unleash the incremental borrowing it needs to pay its bills. It is in slow-motion shutdown mode, sort of like the HAL 9000 computer in “2001: A Space Odyssey”.
The disassociation with the real world here is breathtaking to behold. All God’s Children know that the borrowing limit must rise, just as it has done 78 times during my lifetime alone. This time, the political parties have chosen to stand off against one another – a prelude to many such standoffs which will transpire over the next year as part of what promises to be a particularly nasty Midterm election. In the process, the pols will drag the rest of us down into the K-Hole with them.
And, through it all, the K-Holed Investment Community continues to bid up risk assets. It’s not a particularly heavenly ascent, but at minimum, buyers materialize at every downturn:
All of which goes to prove that in the K-Hole, FOMO rules the day.
And, as we further immerse ourselves into these rounded depths, we can probably expect more of this sort of thing, going forward.
Meantime, The Stones are set to drop another new album, while the rest of us yawn. Yes, we’re down in the K-Hole, but if you’re there with me, everything’s gonna be alright.
TIMSHEL