When we get back, I’ll drop a line
Jim Morrison
Forgive me, but I always get a bit keyed up on December 8th, and this year is no exception.
Because, across the ages, lotsa shit happened on that date. For one thing, it is the day, in 1776, when General Washington is said to have first crossed the Delaware River – setting the stage for our first significant victories – at Princeton and Trenton.
But more about 12/8 in a bit.
Because first, I feel compelled to weigh in on the sale of Warner Brothers to Mag 7 Junior Member Netflix – bringing the former’s iconic cast of characters – everyone from Bugs and Porky to Stanley Kowalski and Blanche DuBois — officially into the world’s fave streaming family. And to wonder if it doesn’t, from a market perspective at any rate, mark some sort of top.
Because delving back into the far recesses of my memory, I recall a courtside conversation with a mid-level WB executive whose son and mine were on the same munchkin hoops team. A mere fortnight after a millennial turn that was feared would cast us all into darkness, his company had merged with AOL – NFLX of its day insofar as it was the dominant force in the then-emerging forms of entertainment technology. A few weeks later, and for a brief time, options-endowed employees were insta-millionaires.
Sitting with him in the bleachers that winter, I asked my friend how the merger was progressing. “What merger?” he asked, and I said Time Warner/AOL.
“Don’t know” he responded “I’m still working on the integration of Warner Brothers with Time/Life” – a business combination consummated in the Mesozoic era of the late ‘80s – more than a decade earlier. Still and all, there was a huge buzz respecting the latter deal, as evidenced by the following image of Combined Company CEOs Steve Case and Gerald Levin:
Say what you will about the merits of the hook-up, which, on paper at any rate, was intended to integrate the world’s best catalogue of entertainment content with a new-fangled and unimaginably powerful technology delivery protocol:
YOU CAN’T FAKE A LOOK OF LOVE LIKE THAT.
If Case looks happier than Levin, it is with some justification. While Warner’s catalogue proved eternal, AOL’s technology quickly faded to also-ran status, History shows unambiguously who took, and who got taken, in that there deal.
More broadly, during the interval between the merger announcement (2000) and its consummation (2001), Captain Naz lost half its value (and this months before the famous attacks of the latter year):
The Captains Journey: Q1 2000 – Q1 2001
It took the Good Captain almost a decade and a half to recapture its previous high ground. Meantime, by 2003, AOL had crumbled, but Time Warner shuffles on. E. Fudd is still on his quixotic hunt for that Silly Wabbit, Time continues to pump out highly regarded if a bit pompous content – not only through its flagship publication but also via other snooty rages such as Travel and Leisure Magazine.
As if to prove that nobody learns nothin’ never, the Company merged with AT&T in 2016. But, of course, that didn’t work neither. Warner spun out in 2022, and ran independently, until, that is, last week’s announcement of its acquisition by the swarthy Netflix.
We wish them godspeed. But it sure seems like every time Warner Brothers, founded and run for so long by the toughest family of Jewish businessmen in these here parts, gets itself passed around, something bad happens in the markets. And in this instance, the parallels to the AOL episode are especially eerie, involving the sale of WB to a telecom flavor of the month.
Meantime, back to 12/8. While personally triggering for me but worth mentioning nonetheless, in 1886, a pain in the ass organizer named Samuel Gompers formed the American Federation of Labor.
In ’41, FDR gave his “day that will live in infamy” speech.
And now we get to the real stuff. On December 8, 1943, Jim Morrison (quoted above) was born. On his 22nd Birthday (1965), the Catholic Church issued the formal findings of the Second Vatican Council – the first official ecumenical conclave in 400 years. I’m not sure what they decided, but it seems to have done little harm. Or good.
And then, of course, 15 years later, we arrive at the night when John Lennon was murdered.
The year was 1980 – 45 years ago. He was 40 when he was shot, so has long since passed the threshold, which all of us much reach, where he has been dead longer than he lived.
It breaks my heart.
But with that, we have run the gamut of events about which I care that transpired on December 8th. No matter; it’s enough.
Here’s hoping that by contrast at any rate, today is quiet.
Because the week heats up from there – primarily due to the long-impending FOMC rate decision to be announced Wednesday afternoon. By now market participants have come to their senses and realized that a rate cut of at least 25 bp is in the bag.
For the bajillionth time, political forces impel this action, but the associated cause was certainly aided by a November ADP Jobs Report showing an alarming 32K contraction.
Meantime, over at the Bureau of Labor Statistics, after having cancelled outright its October release, it has pushed back the November data drop till the 16th – several days after the FOMC speaks its wisdom.
Two days hence, this self-same BLS is said to be prepared to proclaim its November Consumer Price Index estimates. The release date for Producer Prices remains uncertain. But about these we can infer two things – that again for political reasons, the Administration will seek to influence prices to the downside (particularly foodstuffs and energy products), but that in order to do so, it must reverse the tide of surging commodity price baskets that now prevail:
Since I’ve nothing better to do on this (not so) hot afternoon, I’ll reiterate my belief that Wednesday’s podium turn will be Powell’s swansong. The political winds are blowing less than fair for the powers that be, which must steer its boat out of harm’s way by next Election Day.
Under these circumstances, the obvious thing to do is to throw a few old horses like Chair Pow over the Port side, which, again, I anticipate before Christmas.
If we get through today, there will be 16 trading days that remain to 2025, and I am reasonably confident we can endure them without much bitching things up.
But as for 12/8, much is out of our control. Jim Morrison’s birth had little apparent impact on the content of the 2nd Vatican Council. Nor did the latter save some cockroach, 15 years later, from plugging John Lennon several times in the back.
It is only with rare wisdom that we bear these things in mind, and to react appropriately.
I’m off now, but I can say with near-certainty that when I get back, I’ll drop a line.
TIMSHEL