Amazona, Is a zone where
There is no doubt, No more fall-out
Why don’t you step, Through the mirror and see?

Bryan Ferry

With a couple of caveats — I’m glad Roxy Music made it into the Rock and Roll Hall of Fame.

First, the institution suffers from a major credibility gap — through its omission of such obviously deserving bands as (among others) Mott the Hoople, the New York Dolls, Emerson Lake and Palmer, Blue Oyster Cult (who at least retain the dignified consolation of having been inducted into the Long Island Entertainment Hall of Fame), and The Smashing Pumpkins.

Beyond this, like so many other great ensembles, Roxy ran out of steam pretty quick. Their first two albums, deeply influenced by Eno’s manning of the keyboard bench, are incomparable. The first one is self-titled; the second’s title is identical to that of this note.

It is their third album, though, that is my favorite. Eno was gone, and Ferry had taken over full stop. The music changed, but arguably, for a time, for the better.

Because that record – Stranded – is impeccable – featuring such gems as Mother of Pearl. And Amazona – the theme for this week’s analysis.

And while I may be late to the party, I realized that we – all of us – have entered Amazona: a zone where there is no doubt. Or fall-out.

But what (or where) is Amazona? Wikipedia, to which I recently donated the princely sum of $52 (after repeated solicitations, I stroked in $50, whereupon they asked me if I wanted to add another two-spot, leaving me with no viable alternative other than to accede) indicates that it is either a genus of parrots or a Portuguese horsewoman.

OK; fair enough, but Ferry, by contrast, suggests it’s a state of mind, and I like that too.

Because there I was the other night, in a football-starved condition, bleakly anticipating the long cold winter that follows the Super Bowl and thus tuned in to the (otherwise unwatchable) Falcons/Bucs broadcast on Amazon Prime. This is far from a first. Team Bezos has been airing one-off games for a couple of years now. But what hit me this time was that during each commercial, my television screen availed me with an option to, at the physical expense of a single click, buy the advertised product.

Maybe this had been going on for a long time, but it was new to me. So, by halftime, I found myself the proud owner of a brand-new Jeep Grand Cherokee, multiple drugs of (to me) unknown application and episodically redundant insurance policies issued by Progressive, Geico and Liberty Mutual.

This marks my entrance into the new world – one where, when enjoying electronic entertainment, not only am I tantalized by the possibility of refreshing beverages and new age pillows but can purchase them as a fluid part of the viewing experience.

Thus far, and to the best of my knowledge, CBS, NBC and ESPN are unable to match this product distribution prowess, and I fear that this will soon redound to their detriment.

And, from this perspective, it seems to me that Amazona should’ve been on For Your Pleasure, instead of Stranded. On the other hand, if one indeed finds oneself stranded, one could do worse than logging into Amazon Prime, and for one’s pleasure, purchasing whatever is offered by associated content sponsors.

The experience, for me, was a glimpse of the future, and lord help us when AI gets its act together and takes over the show. At which point ALL our technology will assault us with enough personally and precisely curated purchase prompts to beggar us into eternity.

But as anyone who was paying attention is aware, AI took it on the chin a bit in the markets this past week, as NVDA wannabes Oracle and Broadcom reported disappointments in the synthetic cognition elements of their enterprises. Which were of sufficient magnitude to place a damper on what otherwise was shaping up to be a pretty fair weekly showing for the equity complex.

To wit, the Gallant 500 breached (albeit modest) new heights on late in the week, before the above-named transgressors cast it down by an alarming >1% on Friday.

Prior to that, I found the vibe to be surprisingly upbeat, as driven, improbably, by a .25% Fed Rate Cut that everyone knew was in the bag. Chair Pow was rather dour in his subsequent remarks, hinting that future such actions would be few and far between.

But he’s out. By May at the latest, and I continue to believe that his exit will transpire earlier, as part of an effort by the Administration to co-opt the FOMC for political purposes. However, the latter showed some stones this past week by unanimously reappointing 11 out of 12 voting members (the 12^th – Atlanta Fed Chair Raphael W. Bostic – is pending resignation at the end of the year).

This renders 45/47’s path towards interest rate hegemony more difficult, but that is not to say he won’t succeed or at least try.

Because the electoral winds, as most recently exemplified by Miami’s having voted in its first Democratic Mayor in three decades, are blowing strong and ominous against him and his supporters. And these cats are known for neither their decorum nor strict adherence to established rules of engagement.

But sneakily, the Fed rendered some improbable aid and comfort in other forms to investors, specifically by initiating the purchase of ~$40B of its own securities this past Friday. In so announcing (at Wednesdays presser), Powell mumbled some gobbledygook about offsetting a growing challenge of reserve deficiencies. But I’m not picking up what he’s laying down.

Because in ancient times, these trades (the financial markets equivalent of copping a case of Bud Lite through an advertising link on a TV football game) were referred to as Quantitative Easing. And, particularly when Big Orange gets his man into the Fed Chairmanship, he and Bessent will indeed be cramming down rates.

Across the board and to beat the band.

The other market factor within his partial control – Commodities – has been for months showing signs of political manipulation which I expect to continue well into next year. Crude Oil – that most politically sensitized of commodities, is down nearly 20% in 2025. Wheat and Corn have yielded ground as well.

Precious metals, however, are a different story, which is not surprising given their historical reluctance to do the bidding of elected officials during periods of political strife. Copper is up >30%; Gold >60%. The biggest winner, though, is Silver, risen an astonishing 114% over this fast-expiring year.

This odd set of price trajectories has created a construct, not witnessed since 1980, where a single troy ounce of Silver carries sufficient value to purchase an entire barrel of Crude Oil

One way of looking at this is that when viewing a football game on Amazon Prime and considering (among other expenditure options) single click purchases of fine cutlery or petrol for one’s automobile, whether one would prefer to secure approximately two fill ups at the pump (42 gallons/bbl), or a single small silver spoon (weight range 1-2.5 troy oz.).

For me, this would present such a vexing quandary as to cause me to switch from the Falcons/Bucs game to the (commercial free) Ken Burns Revolutionary War series.

In further support of that trusty truism: what goes ‘round comes ‘round, and as identified by the WSJ as evidence of an AI-driven redux of 1990s dot.com risk, web infrastructure darling CSCO – the NVDA of its day – has just this past week regained the high ground it last achieved a generation ago:

CSCO’s millennial collapse was indeed rapid and frightening; its full recovery glacial, largely unremarked/unnoticed. But, while instructive, it probably has minimal implications for our fortunes in the dozen trading days that remain in 2025. One could also argue that the real action ceases by this Friday, as both Christmas and New Years fall disruptively in the middle of the subsequent two weeks.

Data-wise, and somewhat tardily, the November Jobs Report drops on Tuesday. And about the only other statistics on the ’25 docket are Friday’s release of the University of Michigan Consumer Sentiment surveys.

But in terms of the latter, my advice is either to ignore the results or expect them to be artificially suppressed. Because given recent doings in Ann Arbor, one can only assume that the mood there is some combination of distracted and depressed.

But, perhaps, the less written about this the better.

Other than this; 1) the recent shenanigans at U of M have led to the temporary elevation to the exalted position of Head Football Coach of a guy who formed a successful hedge fund during the Bo Schembechler era; and 2) it has put at risk the largest-by-a-wide-margin NIL deal between the University and its starting Quarterback.

One can take a dim view of these outcomes. Or, like me, deem them as yet further examples of capitalism and free enterprise backing itself up all the way.

But now my Beauty Queens (Side 1, Track 2 of FYP), the time has come for us to become un-stranded, and to begin acting for our pleasure.

One can presumably achieve partial success in this regard in Amazona. During the Falcons/Bucs broadcast. With remote at the ready. And — whether it brings you a Portuguese horsewoman or a flock of parrots – I wish you due happiness.

However, from a risk management perspective, you’re on your own on that one.

TIMSHEL

When we get back, I’ll drop a line

Jim Morrison

Forgive me, but I always get a bit keyed up on December 8^th, 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 22^nd 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 8^th. 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 16^th – 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 2^nd 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

The money feels good, And your life you like it well
But surely your time will come, As in Heaven as in Hell
You see, he feels like Ivan, Born under the Brixton sun
His game is called survivin’, At the end of The Harder They Come

Paul Simonon

First, farewell to James Chambers, better known as Jimmy Cliff, who left us a week ago. It’s hard to be my age and maintain your dignity without having at some point declared yourself a Cliff-Head. But for me at any rate, he made his bones entirely in the year 1972, by having played lead gangster Ivan in the classic Jamaican film “The Harder They Come”, for which he also wrote most of the soundtrack.

And let me ask you: has there ever been more of a badass than Ivan, with his two guns, yellow hat and striped pants?

OK, so he’s been mailing it in ever since. But who hasn’t? Most of our heroes quit trying about 50 years ago; many have hung around to collect the check.

But for Cliff’s Ivan – further immortalized in the above-quoted Clash song — the game was called surviving. And, like Tiff, he never had a chance.

Almost indisputably, Cliff’s finest composition, featured prominently in the film, is “Many Rivers to Cross”, which he wrote in 1969 – a full three years prior to the release of the movie.

In late November 2025, he crossed his last river.

Meantime, somehow, we are down to the last 23 trading days of ’25. The associated remaining 9.1% of the action is, improbably, more than we usually get on this late date (8.33%) – mostly due to the reality that the month begins on a Monday and thus offers up 4 full weeks of action (minus holidays).

Still and all, that’s not many rivers left to cross in ’25.

It’s been nothing if not strange. Particularly in the back half, which, for me, has been marked by more bizarro shit than I care to recount. Among improbable events, late this summer I found myself for the first time in my life rocking compression socks. I can’t call them my particular jam, but they served their purpose at the time.

Still and all, the markets have survived — even, by some measures, thrived. All our equity indices are up by double digits. Interest rates are down across the curve. As is Crude Oil. Earnings growth has also dwelt comfortably in the low teens all year.

We’ve got strong GDP and employment numbers. Inflation remains stubborn but not alarmingly so.

So, there is now every probability that we can bring ’25 on home in such a way as to look back with pleasure on the experience. With the only things likely to trip us up being the consequences of human nature.

Ah, human nature. Always lurking to trip us up. The toughest river we are compelled to cross.

A few examples from this very past (holiday shortened) week come to mind. In the realms of food processing, a Campbell’s Soup IT Vice President was caught in a hot mike moment claiming that the chickens that populate its iconic delights come out of 3-D printers, with the finished product earmarked exclusively for poor people with limited information and financially constrained culinary options.

This False Profit of Fowl is no longer with the Company.

And one cannot help but feel a little bit sorry for Bibi, now seeking a pardon from an Israeli President no one knew even existed (or, for that matter, the job itself). If he fails and bails – to New York at rate – Zor will arrest him. There is thus every likelihood that his options shortly will have dwindled to prison in the Land of Milk and Honey’s less than welcoming correctional facilities, or Rikers Island.

If he chooses the latter, perhaps he will benefit from some local civic distraction. Two days before Thanksgiving, the New York City Council tried to slip one past the goalie by voting itself a 16% pay raise. Complicating matters is the reality that the timing of the move –transpiring as it did between the election of a new mayor and their installation in Gracie Mansion — was illegal. The elected representatives of the 51 municipal districts will thus be compelled to wait until 12:00:01 on January 1^st to present the proposal to the new mayor for his signature.

I’m really glad this happened, as I gleefully anticipate, yet again, that delicious, ironic intersection between moralizing and profiteering. If approved, the righteous new movement for civic affordability will have, as their first official act, enriched a group (themselves) whose affordability challenges are perhaps not at the top of the associated hierarchy.

This puts Zor in a difficult position. He didn’t come to town to light up a bunch of aldermen who already get free lattes at Starbucks anytime they so choose, and if he signs the proposal, it will give the lie to this rhetoric. Alternatively, he could bust out a veto, and, by doing so, annoy the very group he most needs to do his bidding.

Once he has settled matters with his own City Council, he can pivot to myriad other monetary beefs that await him – including the funding of services operated by unions not particularly famous for setting aside their own well-being in the interest of their constituents.

But once this is done, we can all drop off our kids at free childcare centers, hop on free busses and amble into city-sponsored grocery stores to fulfill our wildest shopping dreams. One can barely contain oneself in anticipation of the paradise that New York will become once that happy day arrives.

But that’s all one month, two major holidays, and 23 trading days, away. Meantime, market participants not given to turkey comas but rather to the resumption of post-holiday trading activities were greeted Thursday night by blank screens signaling malfunction at the Chicago Mercantile Exchange’s Water-Cooling facility in Aurora, IL. Home of Wayne Campbell. And Garth Algar.

For nine long hours that night, it was “game off”, reminding me of nothing so much as that time a couple of years ago, when the Las Vegas Spere was forced to display the Blue Screen of Death.

But the markets handled the glitch with touching equanimity, with Cornel Naz, after the previous week’s ignominious drop, rallying to end November in near-flattish territory:

Many of my clients, however, have a sadder post-Halloween tale to tell. Of, in some cases, an alpha nightmare. While its underpinnings are strong, the tape is acting strange. I believe that conditions will ease over the next several weeks, and expect, among other matters, that Team Trump//Bessent will have taken over the Fed by Christmas.

I don’t think that this will be a wise policy move, but it will goose stocks into year-end and beyond.

It is not an easy environment in which to operate. But then again neither was Ivan’s Trench town, circa 1972.

I think, though, if we can channel Cliff’s Ivan, we can, if not prevail, at least go out, like he did, in a blaze of glory. And that, my friends, is something for which to give thanks.

TIMSHEL

Moon River, wider than a mile, I’m crossing you in style someday,
Dream maker, you heartbreaker,
Wherever you’re going I’m going your way,
Two drifters, off to see the world, there’s such a lot of world, to see…

Mancini/Mercer

This one goes out to you, Tiff – Tiffany Grant Tulley my recently departed half-sister –who, though I didn’t find out about it till a week ago, left us on November 9^th.

Yup, that’ s her. Looking a good bit like her mother, which is understandable.

Because while Tiffany and I shared a father (we think, but with me more certain of my patriarchal lineage than her), that’s where our bio connection began and ended.

She is pictured here on the Mendicino coastline – near where she lived. I know this, because she was not one to travel much. And she didn’t need to, because, as anyone who’s been there will tell you, Mendo is a beautiful place.

And I have another half-sister, Sabrina (of even more questionable paternity): she’s Tiffany’s full sister (we think) — two years her junior. And (as I am sure you will agree), it’s only fair that I share her image as well:

I have not encountered Sabrina in more than a decade, and perhaps (though perhaps not) it’s because she may be a Sister from Another Mister.

Of the two, it is Sabrina that appears more likely to share DNA with me – if for no other reason than that unmistakable schnozz which resembles the probosces passed down from Grant generation to Grant generation, since the days when the Cossacks, overlooking these flaws, for several centuries ravaged our women.

But there is biological evidence to the contrary, and, though this is a story upon which I am disinclined to elaborate, the transfer of said intelligence was sufficiently upsetting for me to sever ties with Sab for eternity.

On the other hand, I stayed in touch with Tiff – albeit sporadically. So, I was not terribly surprised, if a little vexed, that I only learned the sad news indirectly, a fortnight after her passing.

This much is certain: Tiff was brilliant. I’d like to state that it runs in the Grant family, but, near as I can determine, the modifier can only be applied fairly to me and her. Among other things, she had a stone-cold photographic memory, a condition that I routinely tested by allowing her one minute to peruse pages from obscure books, which she would then recite verbatim.

But she never stood a chance. Affairs just never broke in her favor, and some of this was her own doing. For example, she quit Berkely a month before graduating Suma Cum Laude — after having financed her own tuition by doing the books for a clothing store on Telegraph Avenue, run by a dude that was fall-down drunk every morning by ten.

Meantime, while the girls were of uncertain paternal lineage, it can be confirmed that she and her sister were indeed the biological daughters of my dad’s second wife (whereabouts unknown), and a woman to whom I owe an eternal debt of gratitude — for turning me onto Audrey Hepburn.

I was in my 30s before I realized that she named both of her daughters accordingly – Tiffany based upon a line from main protagonist (the divinely named Holly Golightly), played by Miss Hepburn, in the film adaptation of Truman Capote’s “Breakfast at Tiffany’s” (which, in outlier fashion, was a better movie than the novel upon which it is based).

“Sabrina”, of course, is the title character – played superbly by Miss Hepburn — in the Billy Wilder classic that also starred Humphrey Bogart and William Holden.

I also took a page from my step mama’s book, by naming my own son, whose 34^th birthday would have been this Wednesday, after the disturbed hero from “A Clockwork Orange”. As far as I am aware, the actor who played him – Malcom McDowell – is still with us. As is, presumably, my sister Sabrina. I’m not sure about my step mama, but the others are dead – including my son, my other sister, Truman Capote, Billy Wilder, Humphrey Bogart, William Holden and Miss Hepburn.

And it terms of the last of these, I think I fell in love with her during the scene in “B @ T’s” wherein, sitting on a windowsill of a Manhattan flat with a nylon-stringed guitar perched on her lovely lap, she authentically played, and sang, in a breathy voice, our thematic song.

Which is now one of my favorites. But this wasn’t always the case. This timeless classic, penned by no less than Henry Mancini (with lyrics by Johnny Mercer) was ruined for me during my childhood for being adopted as the theme song of Andy Williams, sung as smarmily as can be expected at the end of each episode of his weekly variety show.

But as for me, I will forget that outrage and think of the song only in conjunction with Audrey. And Tiffany.

There’s a moon river out there. It’s wider than a mile. We’ll cross it in style. Some day.

But not today.

It’s been that kind of year.

From a market perspective, we entered it in encouraging fashion. Political conditions favored the fortunes of the capitalist class. Artificial intelligence was poised to power our boats across any stream – no matter how wide. The regulatory vise was poised to come off.

The Prez and his family, themselves minting billions in crypto, were certain to use their political power to unleash the full force of digitized currency on the masses they presumed to control. They was also gonna squeeze the nuts of the Fed Chair and his cronies, forcing them to take short term interest rates down, while the Treasury Secretary took care of affairs at the longer end of the curve.

That’s adds up to a set of pretty fair winds for risk assets, and, indeed, our boats came out of dry dock in ’25 with sails unfurled into a gentle breeze. But we hit a stormy patch in early April, when 45/47 not only decided to unilaterally co-opt the world’s international trade protocols, but to do so in whimsical, inconsistent fashion. If it’s Tuesday, we are tariffing the shit out of everyone, if Thursday, not so much.

And so on and so on and shoobie doobie doo.

Ironically, the composer of that phrase, the incomparable Sly Stone, died in June. But by then the markets had recovered. Equity indices were on their way up; rates were coming down. BTC was trading comfortably in the six digits. The Fed began cutting in September, and it looked like we might at last reach the other side of that Moon River well before year end.

Somehow, however, we simply can’t seem to hold ourselves together. Like Tiff blowing off her last semester finals, we are acting, at present, against our own interests. Earnings have been about as pleasing as any mere mortal could wish them to be. And, just this past week, and after some hand wringing about whether AI was ahead of itself, that great corporate ship captain NVDA reported blowout earnings and guidance.

This delighted investors for all of about 15 hours, after which it and the rest of the equity complex sold off. Hard.

Contemporaneously, the deferred September Jobs Report showed strong gains — despite the impacts of the then-pending government shutdown (now ended) and the permanent dispatch of tens of thousands of public sector bureaucrats. Atlanta Fed Q3 GDP estimates now exceed 4%.

Thus, we enter this holiday week with the blessings of strong jobs and earnings data, surging GDP, significant downward pressure on interest rates, and, in summary much for which to be thankful and little about which to complain.

Yet not only are we in a pissy mood, but we are self-sabotaging in a way which perhaps only my sister(s) (either one) can fully appreciate. Indices are down. Vol is rising. BTC, recently up >50% from its April/Liberation Day lows, is now negative for the year.

I am tempted to refute this buzzkill and remind everyone of the penultimate lines of our song: “we’re after the same… …rainbow’s end, waiting ‘round the bend…”. Which of course is a hopeful message.

And there is hope. Particularly over this holiday week.

But then I think of Tiff. With so much going for her, and nothing ever going or going her way. And now she’s gone.

But we remain, and that same rainbow’s end is out there. In fact, it’s just around the bend.

It’s time to set our course and go.

TIMSHEL

As a former math major who earned a math degree but does not actually know much math (or, at any rate a good deal less than is generally assumed by the traders to whom I act as risk management cop), I feel particularly qualified to riff on our titular subject.

Further burnishing my credentials is my participation in that great but long-forgotten band – The Math Pistols – for whom I had the privilege of holding down the rhythm guitar spot some 45 years ago, and who delighted Madison audiences for several months with punk-inspired renditions of songs like Cat Stevens’ “Wild World” and Carol King’s “Will You Still Love Me Tomorrow?”.

After which, by popular demand, we broke up. But we did play the 1982 Mifflin Street Block Party on the roof of the Mifflin Street Co-op. And how many of y’all can claim as much?

If that doesn’t impress you, nothing will.

So, I may as well proceed by informing you that, routinely, I find math doing anything but mathing. If you’re a math major, you deal with this routinely. You can’t divide anything by zero. Negative numbers have no square root.

And even in word problems. The unresolved chronological emergence of the chicken and egg. The barber’s paradox: if a barber shaves everyone in town who doesn’t shave himself, and only those who don’t shave themselves, does he shave himself? The Monty Hall problem: should a Let’s Make a Deal contestant, after having made a door selection and having one of the other doors revealed to be worthless, change his pick (somehow, the answer is yes)?

One can look at non-mathing math in one of two ways – with frustration or with joyous acceptance. I choose the latter. And it has helped.

Because the parallels in the real world are striking. Take, for instance, the production of pennies, discontinued this past Wednesday after 238 years of fruitful multiplication. The math here simply wasn’t mathing (or, if you prefer, the economics were not economizing) – particularly insofar as producing a each one — the worth of which had been fixed for all time at $0.01 – costs $0.036.

OK; fair enough. But maybe we could do one more minted printing. Just another 3.8 quadrillion of them – to be used as a one-time payoff of our ~$38T debt. Of course, there are practical problems here – most notably the storage/transport of these new metallic Lincolns, the weight of which, at 2.5 grams/coin, would exceed 100 million tons.

Then again, the math of entire $38T and growing deficit ain’t, by any stretch, mathing. Reasonably reliable ratios (~125% of GDP, > $105K per capita, etc.) and the certainty of continued expansion tell a tale of unsustainability.

We ain’t gonna pay this back – at least by conventional means.

One would hope this was the motivation behind Chicago Treasurer/2026 Congressional Candidate Melissa Conyears-Ervin’s move to boycott the purchase of United States Treasury Securities, of which the lion’s share of the above-mentioned 38 Tril national hole is comprised. She does, after all, hold an MBA — from the conveniently located but heretofore unranked Graduate School of Business at Roosevelt University where she presumably received thorough preparation for managing the city’s $10B investment portfolio.

However, one would be wrong on that score as well; the move is instead a self-proclaimed one finger salute to 45/47. Indisputably, she has her reasons. But managing the financial affairs of a city which: a) now owes three times the value of its investment portfolio ($30B), b) takes in taxes about $2B and c) runs its own annual fiscal deficit in excess of $1B, one hopes that they are good ones:

As pointed out by the WSJ, the Windy City’s $10B of assets generated a 3.6% return last year, which falls short of the >4% yield on the U.S. 10 Year Note.

Presumably, though, the boycott is good politics –as she moves towards assuming the Congressional Seat of Danny Davis – retiring along with Pelosi after serving 14 terms. On the other hand, I think she stands about as much chance of losing as does JFK’s grandson Jack Schlossberg, now running to represent Manhattan’s 12^th District. Kalshi place’s Schloss’s odds at a meagre 25%, but given his connection to Camelot, I’ll take the over.

On a related note, and with only partially functioning math, the government re-opened this past week, after 7 weeks of furlough which nobody even noticed until the shortage of air traffic controllers disrupted the travel plans of the electorate. At which point peace and harmony prevailed on Capitol Hill.

One side benefit of this, albeit of dubious merit, is the deferred release of critical macroeconomic data – including September Retail Sales and (perhaps even more importantly) that month’s Jobs Report. However, no data point under the sun rises to the dignity of Wednesday’s NVDA earnings release, upon which not just the fate of the markets, but that of the economy and arguably of the entire world, rests.

Investors have demonstrated happy feet on the name, and, indeed upon the whole tech complex, wondering, in a non-mathing way, if this whole AI thing is all it’s cracked up to be. I wish I could help y’all here, but I’m fresh out of ideas and my subscription to Gemini just expired.

Some of the hand wringing is also owing to increased concern that the Fed, rather than cutting rates, is more likely to stand pat. So much so that the futures market now tilts probabilistically towards the latter:

I’d hasten to calm everyone’s fears about this. The decision is still 2 ½ weeks away and I’ll all but guarantee that it’s another slice at Fed Funds. If not, it’s so long Powell, been good to know ya.

More broadly, rates across the curve are coming down. By all accounts, the Treasury Department is active, if surreptitious, buyers of their self-issued securities and will continue to be so for at least the next year.

Whether this offsets the rate-rising impact of the Chicago boycott remains to be seen.

After that, the trajectory of rates will depend entirely on mid-term election outcomes. And it is a near-certainty that if the Democrats win, Team Bessent will be a less enthusiastic buyer of its own paper.

Till then, though, fixed income and equity securities should, at minimum retain a bid.

There may be some math that doesn’t math about the associated impact on inflation. But that, I suspect, is a trade-off that our betters are willing to accept. Among other matters, and as has been the case throughout history, the academic community sets the tone – as evidenced by a recently released internal report from Harvard University, indicating that grade inflation is now so rampant that the average Crimson GPA has reached a near-upper bound at 3.83.

I fell somewhat short of this threshold back in my undergrad days. At the University of Wisconsin, where, in 2024, the average GPA clocked in at a paltry 3.481.

I won’t say where I landed relative to the Wiscy standard back in ’82. Suffice to state that with the Math Pistols on the rise, I didn’t see much point in busting my hump.

But the Pistols broke up and I went on to grad school. Where non-English speaking, non-math majors cleaned my GPA clock.

Meantime, I am proud to be affiliated with an undergraduate institution that does not bestow the mark of perfection on its constituents for simply existing and showing up.

From this perspective, my world of non-mathing math comes full circle, the area of which is equal to the square of its radius, multiplied by T.

As even some non-math majors know, T is an irrational number, meaning it goes on forever. At last count, it has been calculated out to 105 trillion digits, a task which took a supercomputer 75 days to complete. And it’s not done. In fact, it is closer to the beginning, because there is no end.

Mathematicians have accepted this paradox with blithe spirit since T was first discovered. In ancient Egypt. More than 4,000 years ago. One could therefore argue that mathematicians have been non-mathing for more than 40 centuries.

Maybe the rest of you are simply catching up, and if so, it’s about time you did.

Because, viewed correctly, non-mathing math can not only be lucrative but fun.

TIMSHEL

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

Honey, got no money,
I’m all 6s and 7s (and 9s)

Mick and Keith

I begin, stepping intrepidly into the realms of the overly personal, by informing you that tomorrow is my birthday. My 66^th birthday. Which means I will be beginning my 67^th trip around the sun.

To which I only have one thought.

6-7!

If you’re wondering what I’m writing about, you’re not alone. But know this: 6-7 has taken over the world and no one knows why. The phrase was once believed to have originated during the height of the Roman Empire: with senators and the privy council uttering VI-VII, as a precursor to Caesar’s famous phrase Veni Vidi Vici.

This is not correct, however. In point of fact, it was first coined by a Musical Maestro Skrilla – in his Symphony 27 — 3^rd Opus for Oboe and Viola (aka “Doot Doot”). And then, somehow, a TikTok video superimposed it upon the persona of upper tier and still-emerging NBA player LaMelo Ball (who happens to be 6’7”). And off we went.

The phrase (often accompanied by an alternating upward/downward move of each hand, as though operating an invisible Slinky) has since dominated the pre-teen/teen lexicon. I first learned it from my older grandsons – age 10 and 8. I asked them what it meant, and they didn’t tell me because they didn’t know. Nobody does.

The inference here is that it has no meaning, which, I reckon is the beauty of it. Near as I can determine and depending upon context it reflects either greatness or mediocrity.

Or (if you’re into dialectics and who isn’t?) both.

I was at least relieved to rule out its association with the misandrist, arguably diabolical phrase 6-6-6, suggesting that a man is only datable if his salary is (at least) 6 figures, he is (at least) 6 feet tall, and his privates measure (at least) 6 inches in length. Though (not to brag) I check each box, I find the standard to be humiliating.

Instead, I prefer 6-7, which one can interpret any way one chooses. And aside from that, I believe it well reflects the realities of the world in which we live, as well as those of the markets in which we invest.

If one takes the effort to look around, one sees helzapoppin’. Lots to do; lots to see. One can go whale watching in Nantucket for example. Or visit the Great Wall of China. Until yesterday, all four of Americas fave sports were operating at full throttle.

There are high-profile regional elections tomorrow – none perhaps more impactful than that for the NYC Mayoralty. None are likely to change anyone’s life much (including in NYC, where the presumptive winner is likely to neither do anywhere near the damage that many fear nor confer the bennies for which many hope). But here’s the best news: it should be a boon to cable viewership and associated advertising revenues.

Referring to the latter, want new bathroom appliances? There’s a company out there that will simply build a new bathtub right on top of your old one and complete the process in a single day. There are supplements which will energize our sorry carcasses, improve our memories and extend, no matter what our anatomical footprint, our most pleasureful romantic interludes.

6-7.

There’s new technology out there which allows us to relax our weary, worried minds by doing our thinking for us.

Again, 6-7.

This last concept dominates the current market vibe – particularly during the Earnings Season. Our best loved companies are reporting blowout results, but experiencing, at least episodically, the wrath of the Investment Community concerned about how much all this is costing.

6-7.

The Government Shutdown carried across the November 1^st milestone, where, according to law, it must stop the conveyance of food benefits – allowing both sides of the political spectrum to accuse the other – not only of starving babies, but of doing so purposefully as the main objective of their policy agendas. Meantime, we can look forward to the prospect of a glittering new White House Ballroom to be enjoyed not by us, but by our betters.

6-7.

As expected, the Fed cut overnight rates by 0.25% this past Wednesday. But Powell was a little pissy in his presser, suggesting in particular that we cool our jets on further hackage and thus causing a petulant selloff into the close.

Well, 6-7. But I have a strong suspicion that if he doesn’t cut again at the December meeting (the 10^th), Chair Pow will almost certainly be deep sixed (sevened?) by 4(6?)7. Because we are entering the portion of the cycle when the politics of interest rate policy will begin their path towards crescendo. The powers that be must have lower rates by Spring – to goose, among other things, the Housing Market. And they will have them. The process has already begun.

It should thus come as little or no surprise that along with the distressingly (though benign) hawkish tone adopted by Powell in his remarks, comes news that Fed Balance Sheet reduction is at a practical end (for now at any rate). It is at the longer end of the curve where Fed activity will be most impactful. Don’t be surprised if, as opposed to shedding assets, our central bankers do a little shopping.

(Everyone say it with me –) 6-7.

To great fanfare, our heroes at NVDA witnessed their stock breaching into quaint >$5 Trillion territory. This figure, of course, is in eyes-glaze-over realms, but make me rather nostalgic. For those simpler days of 2018, when there as much hand wringing over the prospect of a single company’s (AAPL’s) valuation reaching for the first time to a dainty $1 Trillion.

The new figure is, of course, 5x this value, over a period where U.S. GDP growth increased an impressive 50%. But back in ’18, NVDA market cap, which backed of by the week’s end to an ignominious $4.92T, topped out at about $90B.

6-7, 6-7, 6-7, 6-7, 6-7.

Earnings season continues but we must wait till nearly Thanksgiving ere we are enlightened by the latest NVDA tidings. There’s plenty with which to occupy ourselves in the meanwhile. But one data point which we will be compelled to forego is the October Jobs Report – scheduled for release this coming Friday but postponed due to the (presumably temporary) shuttering of the Bureau of Labor Statistics.

The Fed, which however remains open, continues to project a ~4% growth rate for Q4, which is a heady performance.

Of course, there’s some spooky spots out there. Including that reflected by this little tidbit I unearthed:

I reckon nobody told the credit markets that Halloween is over.

In general, however, I think there is ample cause to embrace our inner 6-7, viewing it not as a wishy-washy non-factor, but rather as a joyful expression of glad tidings to come. Market conditions are on the whole favorable, and this is neither always the case nor a condition that lasts forever.

Because some of these days, 6-7 will also disappear from our awareness, as did its predecessor: Skibidi – another term of no coherent meaning.

So, I say, chin up, y’all. If I didn’t mention it before, tomorrow is my birthday. The start of my 67^th trip around the sun. It’s not beginning as I would have willed it, because of the miles between us. I deeply wish it were otherwise and recognize that it’s on me to make it so.

Because now is the time.

And in closing, I have only one more comment to make. But won’t offer it.

Because if you haven’t figured out what it is by now, it’s likely you never shall.

TIMSHEL

“The pigeon,” said Archimedes, “is a kind of quaker. She dresses in grey. A dutiful child, a constant lover, and a wise parent, she knows, like all philosophers, that the hand of every man is against her. She has learned throughout the centuries to specialize in escape. No pigeon has ever committed an act of aggression nor turned upon her persecutors: but no bird, likewise, is so skilful in eluding them. She has learned to drop out of a tree on the opposite side to man, and to fly low so that there is a hedge between them. No other bird can estimate a Range so well. Vigilant, powdery, odorous and loose-feathered -so that dogs object to take them in their mouths-armoured against pellets by the padding of these feathers, the pigeons coo to one another with true love, nourish their cunningly hidden children with true solicitude, and flee from the aggressor with true philosophy—a race of peace lovers continually caravaning away from the destructive Indian in covered wagons. They are loving individualists surviving Against the forces of massacre only by wisdom in escape.

 T.H. White “The Once and Future King”

By way of context, I will cop to being highly confused about King Arthur –a tragically elusive figure if ever there was one. He rose to the throne, supposedly, around the 6^th Century (500 years prior to Battle of Hastings and the attendant Norman Conquest) by implausibly dislodging a sword (Excalibur) embedded in a rock, as abetted by a dubious nymph called the Lady of the Lake. His main advisor was an addle- brained wizard who, according to some accounts, experiences time and memory in reverse chronological order . His war council wastes its blood and treasure in fruitless search for the Holy Grail. His wife steps out on him and falls in love with his best friend. His nephew usurps his throne, and both die in a battle of reclamation.

Cheery stuff, n’est ce pas?

About the only uplift one can derive from this story is that it is fictional. It is captured most notably in a 15^th Century Sir Thomas Malory work, the titularly Frenchified: “Le Morte d’Arthur”. But the legend has persisted – albeit with significant modification, across the centuries. It is the subject of an endless sequence of poems, plays and (in more recent times) films – but perhaps never better captured (at least since in Malory’s day) than in the 1958 T.H. White fantasy novel “The Once and Future King”.

It is from this last source that we derive this week’s theme, which has nothing to do with Arthur, Guinevere, Camelot, the Knights of the Round Table in general, or such illustrious members as Sir Lancelot or his son, the idealized-as-the-perfect-knight Sir Galahad, in particular.

Instead, it is White’s above-supplied tribute to pigeons upon which we focus.

These much-maligned, ubiquitous, feathered creatures are more often dismissed as disease-ridden pests than celebrated as a noble, virtuous and heroic subspecies. Nonetheless, White has a point. They co-exist, in frighteningly large numbers, with mankind – mostly by adapting to our conceits and idiosyncrasies. One almost never encounters either their young or their dead. Across history, they have been trained as messengers, reliably delivering information across thousands of miles with near-perfect accuracy. Though no one seems to like them, they bear our animosity with pacific tranquility.

Until recently.

Has anyone else noticed that these so-called flying rats seem to be getting significantly more aggressive in recent days? Not long ago (well, over the summer anyway), I had multiple episodes of a pigeon nearly flying into me. One of these was in front of the Metropolitan Museum of Art and nearly sent me to the same fate as that of Van Gogh – whose one-eared straw-hatted self-portrait resides therein.

One might thus fairly inquire: what’s eating them? Is it the government shutdown? The unannounced remodeling of the East Wing of the White House? Climate Change? Income and Wealth disparities? NBA gambling scandals? The Louvre heist?

Maybe they don’t like being tariffed (and this might be particularly the case for carrier pigeons who must cross into multiple jurisdictions to perform their sacred missions). If so, they have ample cause for complaint:

Alternatively, and upon reflection, their pique may be owing to the pending and near-certain elevation of that socialist dude (call him Zo) to the lofty position of Mayor of New York City. Here, he will have big shoes to fill, including those of Ambrose Kingsland (1851 – 1853), Shady Jimmy Walker (1926 – 1932), Fiorello LaGuardia (1934 – 1945), Michael R. (3-Term) Bloomberg (2002 – 2013), and, of course, the GOAT: William de Blasio (2014 – 2021).

Zo has promised several bennies to New Yorkers (e.g. free transportation and childcare), but nothing for the pigeons. They won’t be allowed on busses — fare-free. They will be compelled to care for their hatchlings in an unsubsidized manner. Whatever they are paying in rent, the rate will not be frozen.

It could almost make a pigeon feel disenfranchised.

Perhaps, also, they’re a bit nervous about Wednesday’s Fed decision, during which, according, at any rate, to the futures markets, a quarter point cut is in the bag.

If so, I think this is an unjustified worry on their part.

Some may be long BTC and therefore justified in having a nervous breakdown. Perhaps they should take heart now that Trump has sprung CZ.

Of equity markets they have little to complain, what, with the Gallant 500 and Col. Naz, for the 32^nd time this year, closing Friday at all-time highs. Moreover, this latest leg up has a holier look and feel than recent surges, being driven by what only can be described as an impressive earnings cycle thus far.

However, we’ll know a great deal more about that by the conclusion of this week, which features podium turns for no fewer than 5 out of the Mag 7 I have a hunch that these representatives of greater corporate beings won’t disappoint.

But maybe this is just another cause for pigeon aggression. Published reports indicate that bankers are about to book their biggest paydays in quite a spell, and, to the best of my understanding, their ranks include very few pigeons.

But pigeons aside, it appears to me that it remains a fairly strong environment for grail-hunting in the world of investment. They’s less than ten weeks left to this year. And lots of potentially positive catalysts loom. This coming week, I believe the Mag 5 rhetoric will please us. The Fed is most certain to cut rates. The tariff TACO trade – at least with respect to Canada and China – appears to be back in play. The gendarmes nabbed those muddle-headed jewel thieves this past weekend.

Yes, problems persist. There’s this nasty bit about the Fed’s Reverse Repo program collapsing upon itself, a phenomenon I won’t attempt to understand (much less Explain)

And across the Channel, The Bank of England’s quarterly report on financial stability warns of the possibility of an AI bubble (ya think?).

Unless your name is Soros (with deputy appellations such as Druckenmiller and Bessent), it seldom pays to mess with The Bank of England. It’s been around for well over 400 years, has stood solid through the American Revolution, the French Revolution, the Industrial Revolution, two world wars, and a whole bunch of other nasty shit.

Prior to that, matters were up for grabs. There was the above-mentioned, fictional Arthurian legend, the referenced revolution of 1066, The Hundred-Year War (actually, 116) and The War of the Roses. Somewhere in there, a nasty battle transpired between Richard II, his deposing successor Henry IV. It is a poignant tale which is a current obsession of mine.

Through it all, though, pigeons have not only survived, but, arguably, thrived. Among other reasons because they tend to their own business and little else.

There’s a lesson for all in this, including today’s more aggressive avian neighbors.

I only ask that they stay out of my face, and I will return the favor.

Otherwise, I can’t be responsible for the outcomes.

TIMSHEL

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

We appear to have survived the annual reminder of the ruination of what once was a fine holiday – Columbus Day. Celebrating, well, Italian Explorer Christopher Columbus. Who certainly was not the first human being to set foot on North America, nor even, it is likely, the first Son of Europe to do so. Heck, he never even made it to the mainland of this continent. Across 4 separate expeditions over more than a decade, he bounced around the Caribbean for a few months and then beat his ass back to the protection of his underwriters in Spain. He never made the big score he promised to Queen Isabella, but over the subsequent 5+ centuries, the venture certainly amortized itself. And then some.

Since 1792 – 300 years after his initial voyage – and up until some unspecified date in the recent past – this country has used the occasion of what is believed to be his birthday (nobody really knows the exact date) to celebrate Italian American culture, contribution and heritage. This seemed — to me at any rate, to be well enough. But it is not in the ethos of these realms to leave well enough alone. Instead, A re- thinking of that ancient history marks these transatlantic journeys as the beginning of an extended era of brutal, still on-going cycle of exploitation.

So, now, because not everyone buys into the narrative, the day has transmogrified into a hybrid, as marked by the addition of its designation as Indigenous Peoples’ Day – thereby creating a desperate struggle of the vibes between European Imperialists and the longstanding occupants of the land they claim to have had stolen from them.

So be it. But it does make me somewhat sad. Because I was (am) a big fan of Columbus Day – if for no other reason than that it features the best damned parade in the whole damned NYC marching calendar. Others may prefer the Halloween Spectacle (too rambunctious), the Macy’s Thanksgiving ritual (too crowded and best watched on television), the Saint Patrick’s pre-game stroll in advance of some serious imbibing (close — but ruined by the absence of floats), or the too-inclusive Easter Parade.

Nope. Gimme the Columbus Day saunter up 5^th Avenue. If you go, you’ll find me adjacent to the parade route, eagerly awaiting that Long Island Car dealership float, featuring the owner channeling his best Vic Damone while singing “That’s Amore” on continuous loop.

The Vicster:

This year, I have a long wait ahead of me. Because the Columbus Day Parade has been cancelled due to weather conditions.

And as I stand here, wet and bereft on 5^th Avenue, I can’t help but wish things were a little different. The spirit of today’s holiday, after all, is a celebration, not of Columbus, but of Italian Americans. Which Columbus was not, but which the Brooklyn-born Damone was. Maybe we change the name of the holiday to Damone Day? Make everybody happy?

Meantime, and particularly for us financial eggheads, Columbus Day also marks the beginning of a 10- week sprint to the conclusion of yet another year. Thus, as the last tuba is snapped into its case, as the last uniforms are return to mothballed closets, etc., another travelling show begins – the dance of the year-end valuations.

And what a show it promises to be. From a sheer drama perspective, it — even now — has all the elements necessary to be a real banger.

The government is, by degrees, shutting down, and this time, potentially, it’s more than just show. Each side is smelling the other’s blood. Whither this takes us is anyone’s guess.

Federal troops are policing several cities, and the list will probably expand.

Perhaps the most important Armistice of the 21^st Century is unfolding. But whether it sustains itself — or devolves into further madness — is entirely uncertain.

We continue to dance on the string of whimsical and whimsically articulated International Trade Policy. We’re flying blind in terms of government generated economic data. The Q3 Earnings Cycle, beginning, in time-honored fashion with the banks, commences this coming week.

This combination alone spices up the narrative. With no government data releases, it behooves investors to seek clues about overall economic health in the dominions of earnings. How are the credit card companies faring? What’s the technology spend? What quantity of goods are Amazon and FedEx shipping? How much are American corporations exporting and importing? And at what price(s)?

I suspect these matters will merit closer scrutiny than usual across the coming cycle. Which forces the rest of us to consider them as well. And, as we enter the proceedings, myriad indicators suggest that it promises, in general, to be a wooly ride.

Meantime, the subsuming of the Fed into the political vortex continues apace. Bringing the entire yield curve into play, and this well into next year and maybe all the way to the election.

In result, all asset classes are potentially on the move – so much so that it has driven that Coldplay Kiss Cam couple right off the financial pages.

And so, if you can’t find something to trade between now and Christmas, well, it’s all of your fault and note of mine.

The markets had a pissy selloff on Friday. And, not gonna lie – some of my peeps was spooked. Maybe they’re right, but I think the arrows still point up. Going into our Columbian celebratory weekend, with the government unable to fund itself, with crises from Portland to Putin to Palestine, it only made sense for investors to lighten the load a bit.

I don’t see a rocket ride from here, but with a ubiquitous Administrative State, which – let’s face it – is on a major roll, bent, through Monetary Policy and other dynamics to goose asset prices, with the ocean of liquidity still sloshing around a Nina/Pinta/Santa Maria market, the bovine is, in my judgement, likely to, er, Trump, the ursine.

It’s hardly the holiest of rallies – frighteningly narrow and driven by much gimmickry. The economic situation – even before the shutdown – is very opaque.

Absent the unabashed determination of the White House to lower rates and elevate asset prices, if conservatives on the Fed had any juice to reduce these forces, the issue might be very much in doubt. But it isn’t.

Somewhere, in the heavenly equivalent of 10 Downing Street, Margaret Thatcher, born 100 years ago today, is shedding an ironic tear.

And a good rule of thumb is as follows: in a free market economy, a government may be able to dictate pricing, but only: a) for a finite time, and b) at significant (though perhaps undefined) cost for having done so.

To me, this is what we are observing at present. With the political winds at his back and facing a life-or- death election in 12.5 months, Trump is operating a Command Economy. It won’t last forever, but it might enable him to skate through the midterms. Or it might not.

And in terms of the price we might pay, well, of course, it could take the form of a surge in Inflation, an economic concept upon which the government hopefully informs us it may be able to shed light in a couple of weeks. Or it could be something else.

But one problem it doesn’t solve, and which we’ll have to address at some point, is depicted in the following graph:

Raise your hand if you believe this is sustainable or will reverse itself on its own.

Didn’t think so.

But that is an issue for another day, my love. Meantime, we got us some trading to do. There’s money to be made and money to be lost.

But I reckon I’ll sit this one out.

Because the moon did in fact hit my eye like a big pizza pie. And the stars made me drool, just like a pasta e fasule.

And you know what that means:

Amore’.

That’s all we got. But l reckon it’ll do.

TIMSHEL