Not gonna lie — from a general news perspective, I’ve had better weeks. Election Day Tuesday, my birthday notwithstanding, didn’t turn out as I would have wished it. Never thought I could root for any Cuomo other than Mario – any office in the land. But was forced to pull for his boy Andrew in the NYC Mayor’s race. And he lost. Badly.
I really liked the divinely named Winsome Earle-Sears, Virginia’s Lt. Governor. Who ran for the Dominion’s top spot. And got crushed.
I’ll never understand New Jersey – home of the highest state income taxes in the land and surrounded by economic agents from jurisdictions that would love to view it as a tax efficient alternative. If they weren’t so greedy – and particularly with Zor about to enter Gracie Mansion, the Jersey crew could be rocking the joint.
But no. Now that the current governor/former Goldman Sachs partner centimillionaire (all of whom, once they cash in, become touchingly liberal) has been term limited out, they replaced him with someone who will, with purpose, squander the opportunity.
California voters, ostensibly in response to a similar stunt by Texas, passed a 5-seat gerrymander. And, in general, it’s fair to summarize the Tuesday result in the following manner: if the midterms were held tomorrow, the Democrats would probably win by slaughter rule. At which point we can bust out a few dozen impeachment articles and have ourselves a real good time.
It only got worse from there. On Friday, we lost James D. Watson – co-discoverer of the DNA Double Helix structure, at the pleasingly advanced age of 97. He was kind of a crazy dude, but I will miss him, nonetheless.
The unkindest cut, however, came with the announcement of the pending discontinuation, after 208 years of publication, of The Farmer’s Almanac. And even though: a) it’s not done yet/will put out one last annual edition; and b) I have never cracked a single one of its pages, I feel the loss.
Adding to the confusion is the reality that there are two Farmer’s Almanacs – the soon-to-be-discontinued, above-mentioned periodical, and an even more ancient one, originated in 1792 (during George frickin’ Washington’s first term and in the midst of the French Revolution’s Reign of Terror), called, appropriately, the Old Farmer’s Almanac, which will continue to role out its annualized wisdom – in print and digital form.
Given that the Old Farmer’s Almanac launched a full generation before the regular Farmer’s Almanac, one wonders about the nomenclature. Did the former publication use the introductory geriatric modifier at the start, or did they only add this when the rival publication emerged in 1818? The question reminds me of the old joke about Famous Amos and his eponymous cookies. And the associated ponderings as to what, other than his indisputable cookie making acumen, what made him famous in the first instance and allowed him to so declare himself as a celebrity ere a single sheet of dough emerged from the oven?
All the above put kind of a buzz kill vibe onto the markets. Which a month ago would have bothered me not at all but is beginning to get under my skin.
And I believe I know part of the reason. Specifically, this past Wednesday the U.S. Supreme Court heard the first Oral Arguments in “Learning Resources v. Trump, and Trump v. V.O.S. Selections” — a combined case intended to determine, once and for all, the legality (or absence thereof) of the current administration’s wandering, often indecipherable International Trade Policy.
And it seems like a particularly sticky wicket because of all the unknowns. We begin with the timing of the decision, which, under normal protocols, would likely not take place until the end of the SCOTUS session next June. However, given the stakes, I have a hunch that they move quicker on this one.
There is also a good deal of uncertainty as to the predisposition of the justices themselves. Multiple published reports suggest that even the conservative contingent is expressing skepticism as to whether this policy is consistent with Presidential protocols. And, for my part, I join them in this doubt. In addition to my general disdain for economic transactions under which private agents are the payers and governments are the recipients (which I believe to be necessary but should be kept to a minimum), my reading of our laws grants the power of taxation not to the President, but rather, to Congress.
Finally, I’m not sure how the following Harvard Matrix should be populated:
Gun to my head, I think the market does better – at least in the short term – if The Court gives Trump his way – mostly because if the Big Guy can’t do his tariffs through the front door, he’ll do it through the side or back.
But I don’t know.
And, given all the above, it’s little wonder that the tape felt a bit wobbly this week.
Meantime, there are weird doings in the short-term bank funding and Repo markets – at a point when (coincidentally or otherwise), margin debt is surging from one all-time high to the next:
And were that not enough, the government shutdown is now squeezing out U.S. airspace. However, perversely, I believe this is a good thing. Nothing will bring politicians to heel in my opinion quicker than a bunch of cancelled and or delayed flights – particularly with Thanksgiving looming. So, my bet is that Congress gets its act together and passes a Continuing Resolution within the next fortnight.
To this end, it does appear that the Labor Department is fixin to release Inflation and Retail Sales figures this week. Apparently, pricing and affordability were wedge issues in last week’s elections – particulary in New York City, where, seconds after the Times Square year-end ball drops, the new mayor will take office and everything will be free.
And adding to this positive pricing vibe is Trump’s insistence that we believe him instead of our lying eyes and that prices are not increasing but actually coming down.
Phew, that’s a relief. Not only is everything cheaper, but the trend paves the way for the series of interest rate cuts which I am convinced, come what may, are imminent. Particularly after last week’s election pendulum swing, either Powell accommodates this, or he’s gone by Christmas.
I believe in light of all the above, the market is in double helix configuration:
It ain’t pretty. Nor is it easy to trade.
But it is our DNA. So we learned from James B. Watson and Francis Crick.
Both are now dead, as will shortly be the Farner’s Almanac.
I’m not gonna pretend to understand the DNA stuff, or even the weather and gardening content of the Almanac. Instead, I simply hang on to the reality that both have served us for ages – the former since we emerged from the primordial ooze; the latter for more than two centuries.
These are the tools bequeathed upon us by the heavens. Let’s use them wisely, and weep for no troubles but our own.
TIMSHEL