By: K(en(neth Louis) G(rant)

When we were young and green, we shared our dreams, together, and you were my friend,

We had our good times, PAL, we thought they’d last… …forever, but nothing lasts forever,

Nothing lasts forever,

Time goes by, and people change, it’s best we go our separate ways,

And it was wrong to think that we would always be, you see? Nothing lasts forever,

Nothing lasts forever,

Time goes by, it takes us all, and nations crumble and empires fall,

And who were we to think our love would never end, my friend, nothing lasts forever,

Nothing lasts forever…

— Ray Davies, Kinks, Preservation Act II (dedicated to Pal on the 29th anniversary of his birth)

Pity so few of you are hip to Pres I/Pres II. They’re great records. Plus, it would save me some splainin’.

Anyway, check them out.

And please join me in hoping that the long-rumored Kinks reunion actually goes down. But let’s keep it real here: it ain’t easy holding a band together when there are brothers involved. Sometimes it lasts, forever (Van Halen); sometimes not (Oasis, Credence).

So, “Preservation” is a 3-disk rock opera about a corporate-controlled society (run by that fabulous, outlandish degenerate: Mr. Flash) replaced by a totalitarian one, headed up by the dour, humorless Mr. Black. The narrative kind of ambles around, albeit with magnificent hooks throughout. But the storyline, like those of most rock operas (Tommy, Quadrophenia, The Lamb Lies Down on Broadway) is confusing and (arguably) just as well left untold.

Until, that is, the present day, because, in addition to that (pie crust) promise of a Kinks reunion, if ever there was a time that we were in preservation mode, it is indeed upon us.

So welcome to Preservation Act III. How y’all preserving about now? Never mind, I don’t want to know.

As for me, well, the following sort of sums it up. I did indeed catch the Macy’s Parade, but it kind of creeped me out. Too Zoomy for my tastes. What, with crudely recorded images of the Grinch balloon piped in over what clearly wasn’t contemporaneous time. Kind of reminded me of those unnerving, infomercial-like Democratic and Republican National Conventions, held remotely this past summer.

But anybody who knows me will understand my belief any parade is better than no parade at all, and we can leave it at that.

In the meanwhile, I want to take this opportunity to give a long-overdue shout out to Mr. Flash, the villain of Preservation Acts I and II. He rose, from the humble origins as a “second-hand car spiv”, to head up an entire nation, corruptly hoovering up all the cash along the way. Yes, they called him the scum of the earth, they said he was a rogue and a villain. But deep inside of him, he was only human, just an ordinary man, with ordinary plans…

That Flash was the quintessential corporate operator, a filthy capitalist out of central casting is beyond dispute. And I say God bless him and his good works. He built (scrapheap) cities, sent all the people into factories, complete with their cloth caps and trilbies. No, they got no style, but at least they had jobs. He’s not somebody I would particularly want to hang out with, but I think the feeling is mutual.

His latter day, virtue-signaling, political correctness-kowtowing equivalents give off a different vibe; of this there is no doubt. They only flaunt their wealth in private, while paying perpetual public obeisance to widely distributed cultural protocols.

I don’t wanna hang out with them, either.

I’m just glad they came around is all. Particularly the Big Pharma guys and girls. They are on the receiving end of a never-ending stream of shade throwing, but they and their minions have been working around the clock on vaccines and therapeutics for this here pandemic virus, and it appears that a number of them are on the verge of cracking the code. God bless them, too. Even if they meet with failure, or tarry/test our (long-taxed) patience, it won’t be for lack of effort. More importantly, they’re our best hope for actually, finally, emerging from this mess, even as they are caricatured as wild-eyed money grubbers, bent on exploiting the masses at every turn.

Let’s pray for them, shall we? Because, I don’t know about you, but I’d rather back them horses than rely on solutions emanating from the bureaucratic realms of the CDC, WHO, or any occupant of executive houses located in jurisdictions such as Albany, Sacramento, Harrisburg or (of course) Washington.

And hats off also to that dubious crowd that oversees the production of smart phones, manages the pipes of the internet, administers limitless pushbutton commerce, or provides us with communication platforms — to spout out whatever nonsense pops into our brains at any given moment. Can you imagine what 2020 would have looked and felt like had they not done what they did? Created what they created?

Well, it would’ve sucked is what. Not that it didn’t suck bad enough as it was, but it certainly would’ve sucked worse without the profit-driven efforts of companies like Pfizer, Moderna, Astrazeneca, GlazoSmithKline, Apple, Amazon, Gooooooogle, etc. Not everyone agrees with this, but many who don’t will nonetheless impatiently wait for the vaccine, while doing all of their business, consuming all their entertainment, sourcing all their information, and pontificating to their hearts content — on platforms provided by these presumably villainous corporate enterprises.

As we wind down ’20 and stumble into ’21, it will be fascinating to witness the desperate waltz between corporate colossus and rising woke consensus. Ultimately, these hosts are on a collision course, as our tech titans in particular rise to a level of commercial power not seen since the days of John D. Rockefeller, Sr. They have danced a détente dance with the progressives for a couple of decades, but it can’t last forever (nothing does). Both groups must ultimately awaken to the reality that they are on opposite sides of a pitched political struggle. I know who I will be rooting for, and, by any fair rules of engagement, who is likely to win.

Mad props are also owed to the custodians of professional sports. Virtually all are billionaires, featuring decidedly unfashionable demographics (gender, race, ethnicity, socioeconomic status, etc.). But I’ll be switched if they didn’t pull off their seasons. The bubble-bound NBA was a somewhat depressing blurb. The World Series looked like a Salvador Dali painting, or perhaps more appropriately (especially when one set one’s eyes on the cardboard cutouts they put in the stands) Munch’s masterpiece “The Scream”:

But they strapped in and played anyway. And as for the NFL, it has been about the only thing that has saved me this fall from inserting my head into an oven, gas on; burners off. The smart money said that they wouldn’t snap the ball. But they did. For the love of the game? Probably. But also because there was too much capital at risk not to.

And what about my man Satoshi (if he ever indeed existed) and his crew? Figured out a way for economic agents to transfer units of value between one another without a financial intermediary intermediating. It followed on that these value units didn’t even need to be paper issued at the whims of governments and their banking agents. Newfangled dollops of worth became all the rage about three years ago, but then everybody sort of forgot about them, and nobody can say for sure why. My theory? It was the cannabis. Yes, it must’ve been the cannabis. Now, where were we?

Oh yeah, now I remember. They’re back. Setting aside a rather ignominious selloff that traversed the most recent holiday, Bitcoin, Ethereum, Ripple and those other whacky cryptos are on a rocket ride to new all-time highs. Technically, there’s no upper bound to where they might climb, and I suspect they are destined to soar to higher elevations — ere they – yet again – do that whole Icarus inversion thing.

And what’s to sink them? Well, at some point, I think the latter-day Mr. Blacks and their buzz-killing thugs are gonna step in and clip their wings. The hard fact is that currency issuance and control is (perhaps apart from military) the most powerful element of societal governance, and governments are not likely to allow their paper to roll over and get stiffed by a bunch flashy upstarts. There’s simply too much freedom embedded in the concept of crypto to abide in a world, where, increasingly, the appropriate ways to think and act are not a fit subject for polite difference of opinion. Everybody’s business is now everybody’s business. And crypto flies in the face of that reality.

Their day of reckoning, too, is coming ever closer. Take a look at the USD of late, as it plunges to threeyear lows against its peers, and soon, its overseers are likely to take action. But then again, the Dead Prez also don’t buy you as much these days in terms of stocks, bonds, soybeans or (again) crypto.

Oh well; the dollar had a good run for a couple of hundred years and may yet rise again.

But nothing lasts forever.

We had our good times, though, didn’t we, PAL?

But as for now, as for me, I’m gonna go into preservation mode. The curtain has risen on Act III, and if I have to specify what I most wish to preserve, then I have failed, we have failed.

And we haven’t. And won’t. Fail, that is.

Time goes by, it takes us all. And nations crumble. And empires fall. And who were we to think that we would always be?

Well, we were us. And it was enough. Still is.

Why?

Because it HAS to be. Because some things. Last. Forever.

TIMSHEL

By: K(en(neth Louis) G(rant)

They all said Louise was not that bad, it was written on the walls and window shades,

And how she’d act the little girl, a deceiver, don’t believe her, that’s her trade,

Sometimes, a bottle of perfume, flowers and maybe some lace,

They bought Louise ten cent trinkets, their intentions were easily traced,

Still everybody thought it kind of sad, when they found Louise in her room,

They always put her down below her kind,

Still some cried when she died this afternoon,

— Paul Siebel

I walked alone down the miracle mile, I met my baby by the shrine of the martyr,

She stole my heart with her Cajun smile, singing “Voulez voulez voulez vous?”

She loved the million-dollar words I say, she loved the candy and the flowers that I bought her,

She said she loved me and then she went away, singing “Voulez voulez voulez vous?”

And if you hear from my Louise, please tell her that I say hello…

— Donald Fagen and Walter Becker

Louise she’s alright, she’s just near, she’s delicate, built like veneer,

But it makes it all too concise and to clear that Johanna’s not here,

The ghost of ‘lectricity howls in the bones of her face,

While these visions, of Johanna, have now taken my place

— Bob Dylan

I actually don’t have that much to convey about theft — of whatever form it might assume. But whatever itis, we’ll attend to it in a bit.

First, I must offer my tribute to Louise, who flew off like a little bird this past week.

The lyrics presented above are for my musical Louises, whom I have loved for ages (almost, in aggregate, as much as I have loved you). One might call them my muse-ises, and I continue, even now, to follow their sirens’ song. They never managed to fare too well across the lines of verse, and maybe this is why I love them as I do.

A good-hearted (if recently departed) woman of the town, a lovely New Orleans street walker, an accessible lover to a man whose mind is on someone else. In addition to shared nomenclature, these ladies have the following in common: not a great deal of good fortune ever comes their way.

The history of the real Louise is told in more uplifting tones, sung in major, rather than minor, keys.

She lived something of a charmed life. Achieved respect and success in everything she tried. Travelled the world; arguably changed it. Met thousands of people, and I never heard her utter an unkind word – to or about anyone.

We haven’t been in regular contact in recent years, but she was my friend, nonetheless. And yes, you count me among those who cried when she died that afternoon.

Her death seems to have been a quiet one (no, the covid didn’t get her; it was the cancer). I (as the saying goes) did not even know she was sick. And there has been a surprising absence, given her widely distributed profile, of public tribute in the wake of her passing.

I’m assuming that the silence is in accordance with her final wishes. I think she would have wanted it that way.

Louise did not make it to the milestone of the Certification of the 2020 Presidential Election. Maybe none of us will. Though she was dying, I’m sure she made a point of voting – albeit in New Jersey, where (one can argue) voting is an exercise in futility.

And I, the living, will cop to running out of patience with this whole “contest-the-outcome” charade. It needs to wind down immediately (as the saying goes), if not sooner. I truly hate to plague you with political analysis on this pre-holiday weekend, but there’s not much else going on, so here goes.

Regular readers will know that I have been, and for the time being, remain, sympathetic to Trump. I have not failed to notice his myriad pathologies but have liked many of his policies. I have disagreed with him on a number of matters where he turned out to be right – historically right, and I turned out to be wrong. The two most prominent examples of this are Immigration and Free Trade. I’m trained to embrace Woodstockian/big tent approaches on these issues. But let’s be honest here: does anyone really think that it’s a particularly good time to open up our borders?

I believe the same sort of, er, re-imagining applies to International Trade. And all you need, to understand why, is the following factoid:

China manufactures over 90% of our computer components and > 95% of our antibiotics.

Whatever else happens, we have to find a way to repatriate this sh!t.

Trump knew this and was moving in the right direction. Had he been re-elected (which he was not) further progress was likely. I’m not guessing that the repatriation of products vital to our existence is a particularly prominent element of Biden’s policy agenda.

I also think that though it may take some time to manifest, history will give Trump due credit for mobilizing the private sector/regulatory bureaucracy and cranking out what looks to be an effective vaccine in record time. If this stuff actually works, then there’s light at the end of the corona tunnel. It might’ve happened anyway, but that’s beside the point. Trump pushed and pulled it off.

A quick word about the politicization of vaccine development efforts. Did Pfizer delay the announcement of its successes until after the election? Almost certainly. Was this decision politically motivated? Of course. Could an earlier disclosure have altered the outcome of the election? It’s entirely possible.

But I think Pfizer made the right call. Imagine, by contrast, that they released the results of their latest trials on, say, November 1st. Further envision a scenario where the good news tipped the voting outcomes in key states, in such a way as to have altered the tally. Now, consider the entirely feasible scenario under which the progress of vaccine development hit some sort of snag this winter (which still could happen). The public outcry, the accusations that the company misrepresented itself for political reasons, would have been deafening. The company would have faced an existential threat. My belief is that this is the reason their lawyers delayed spreading of the good news. And I think they made the right call.

Trump’s pissed, and maybe rightfully so. But politics (as the saying which Trump lives by goes) ain’t beanbag. Again, history will credit him for his work on this breakthrough, but only if he doesn’t allow the worst of his instincts to overtake him now. Because, if he doesn’t straighten out, he stands to lose what might otherwise be a much kinder legacy than is currently, by the casual observer, assigned to him.

Was there a lot of shady stuff going on before and around 11/3? Of course. I voted on Long Island and then bounced into Manhattan. Up till about 10:30 p.m. (more than two hours after the polls closed), poll workers were begging me to come in and vote. I’m pretty convinced that I could have cast up to a half dozen ballots that evening — with nothing more than my driver’s license (which expired the next day) and utility bill in hand.

But this kind of stuff has gone down since we were living in caves and counting ballots in the form of stones. When they added them all up, Joe Bag of Doughnuts was ahead. That’s not gonna change.

So, when my crew asks me whether Biden stole the election, my answer is as follows:

Maybe, probably, but he stole it fair and square.

And now it’s time to move on, because otherwise, we will have a real problem on our hands. There is simply no path for Trump to cop the electoral votes he needs to flip this bitch, and if he manages to invalidate electors and throw the outcome into the House of Representatives, all hell will break loose.

It’s just not worth it. Better for him and his acolytes to set an example of withdrawing with a (microscopic) shred of dignity. Maybe focus on those Georgia Senate races, to ensure that the progressives don’t run the table, because if they do, it could be (fossil fuel-powered) lights out.

But absent this act of discretion and grace, I think we’re about two weeks away from the Nixon/Watergate/Goldwater Moment, when respected members of a toe-tagged president’s party take a solemn trek up to the White House, to tell their man that his race has been run.

All eyes are on December 15th, when the Electoral College is scheduled to meet, and, more importantly, vote. My hopes and expectations are that the drama will over by then. The 15th, of course, is a Tuesday, but I’m focused upon the preceding Friday – December 11th. This is the deadline by which Congress must pass, and the President must sign, a Continuing Resolution to fund a federal government that will otherwise run out of money to wisely spend. There’s not a titch of doubt that Congress will act, but will Trump act out? This is a moment to watch closely, because he may view his signature as surrender. On the other hand, if he doesn’t sign (veto over-ride, anyone?), it might be tantamount to treason.

We probably don’t get there, and the hard fact is that the entire topic bores me to tears. But there’s really very little else about which to ruminate in terms of market matters. It’s quiet, and, outside of Washington, will remain so probably through the remainder of this “can’t-end-fast-enough” year.

It’s a good a time for a holiday respite, hard-earned this year as any I can remember. Then we can get back to business.

The most likely scenario I can conjure, over, say, the next rolling quarter, features the following components:

• Covid surges continue to plague us.
• Further economic disruptions ensue – particularly if, as is possible, continued vaccine progressprovides political cover for lockdowns.
• The new Congress (inaugurated on January 4) passes an enormous fiscal stimulus.
• Biden (inaugurated January 20) signs it.
• Everyone drawing a paycheck for doing so is relatively pleased to spend the winter at home.
• The economy ambles through, and then explodes as the covid circus leaves town (when theweather warms up and/or the vaccine is widely distributed).
• The Fed remains at its post, ready and willing to supply reinforcements as needed.
• Investors show their gratitude by hoovering up available securities.

No, my children, I don’t expect any of this to end well. As measured against the Gospel According to Saint Milton (Friedman) or Saint Friedrich (Hayek), it’s unholy; positively parasitic. But like Dylan’s Louise once said: “name me someone who’s not a parasite, and I’ll go out and say a prayer for him”.

And, holy or not, it’s the most likely scenario.

Unless Trump b!tches it up, by refusing to snarf off. Which he might, but I don’t think he will.

So, I think we have a plan, are connected, and are on our way towards our desired paradise.

But enough is enough. This note is about Louise, whose journey is over. They brought her home on the mail train. Somewhere to the south I heard them say. Too bad it ended so ugly. Too bad, she had to go that way.

And yes, the wind, is blowing cold tonight. So, all there’s left to say is “Goodnight, Louise, Goodnight”, and, as always…

TIMSHEL

By: K(en(neth Louis) G(rant)

Now that the hubbub has died down, it’s time to review the milestone with a more objective eye.

Please know that I have no issue with any of the frenzy. We came by it honestly, and lord knows the wait was long enough. Yes, we violated all prevailing public health protocols, and it must be acknowledged (I fear) that other elements of longstanding decorum were sacrificed as well. I hope everyone got what they needed out of it, and, more importantly, got it out of their systems.

It’s not every day, after all, that we celebrate the quadricentennial of the Mayflower landing at Plymouth Rock, but after the party is over, the time arrives for clear-eyed assessment.

Upon this we can hopefully agree: those four hundred years sure went fast. It doesn’t seem that long ago that the Good Ship (captained by famous forsaken lover Myles Standish) set sail from that Dutch port, pledged to form a new civilization — in the name of God, Country, King and “convenience to the general Good of the Colony”(Mayflower Compact – Plymouth Rock/New World – November 11, 1620), and alit on what is now the unique metropolis of Provincetown, MA.

But the fact is that a great deal of water has flowed, over the last four centuries, under the bridge that brought European settlers to the terra firma of this continent. That some of the streams boded ill there is little cause for debate. Native Americans got a lot of land stole from under them. Buncha them got killed. We created, with decidedly mixed results, the rubric of Social Media. But there were also some heavenly tides. Woodstock, for instance. And the advent of air conditioning.

All of The Good that took a long while to manifest. First, we had to ditch “King”, and replace “Country” with a new one of our own. Wrote ourselves a Constitution. It’s not a perfect document (we have been compelled to amend it 27 times), but undeniably a functional one. Had an Industrial Revolution. Built highways, railroads and airplanes. Landed on moon. Fought (and won) two world wars.

After the second of these quaint skirmishes (WWII), we went on a pretty good run of about seventy-five years. But then came 2020, which caused us to question whether it has all been worth it. My guess is that most would answer in the affirmative (a pox on the 1619 crowd!), but another set of queries ensues: Have we shot out wad? Should we batten down the hatches/re-swab the deck of the old Mayflower and head back to the Netherlands?

Reasonable minds can disagree about this, but the market has certainly rendered a judgment. The Gallant 500, which closed at a proximate record on Friday, was nary a gleam in its forbears’ eyes in 1620, but backward extrapolation (through the confluence of accretion and inflation) would place its value back in them days at a fraction of a penny.

So, anyone who had the foresight to buy and hold — from the point of Mayflower dockage to the present day is looking at, by my rough calculation an aggregate return in excess of 3 Million percent.

Oh ye Ladies and Gentlemen of Foresightful Yore, I salute you.

The biggest question of all (at least insofar as it pertains to the primary matters with which this publication concerns itself) is as follows. Can it go on? Will the long-term investors in the year 2420 look back at this current moment and smile at their having recorded another multi-million percent return?

Sadly, my clairvoyance (to the extent that it resides anywhere outside of my own imagination) does not extend out that far into the future.

But over shorter time horizon, I’m feeling pretty constructive about the forward path for stock valuations.

My reasoning is not terribly nuanced. We got through the election without overmuch fuss (particularly considering what might have transpired) and ended up with a divinely-rendered, split government. Enough of the population was sufficiently motivated to dispatch The Big Orange to have accomplished this objective, but the electorate has wisely withheld bestowing upon them a free hand to do the worst of their bidding.

The economy is showing surprising vigor. I view a big fiscal stimulus to be a lock, perhaps choreographed to be signed by Biden on 1/20/21, in the immediate hours after he pulls his hand away from that bible (unless it happens sooner).

The biggest risk we face, rising in terrifying crescendo, is this blasted virus. And, from that angle, the market view ain’t so pleasing. We all knew that the cold weather would be problematic from this perspective, but the numbers, five full weeks before the official start of winter, are beyond depressing.

Further economic disruption is all but inevitable.

Looks like we’ve done little thus far other than grabbing this big corona cat by the tail.

So, what we gonna do? Print away the problem, of course. The folks in Washington are going to give out money they don’t have, which does not, in fact, exist (at present), and worry about the consequences somewhere down the road (maybe 2420).

I’m not, as a guy with an advanced degree in the dismal science, in a position to endorse the strategy from an economic policy perspective, but am pretty convinced it’s as good way as any to light up the longsuffering (not) investor class. In fact, I’m on the verge of busting out my careworn argument about the scarcity of investible securities (as measured against an increasingly infinite supply of fiat currency, they’re scarce and getting scarcer, so get ‘em while you can).

It’s not gonna be a smooth ride. Latter day market progeny of Captain Standish should anticipate some chop, perhaps rising to a full-on typhoon status by the time as we make our obligatory left turn in the vicinity of Greenland (a locus that has always fascinated and terrified me). This is the coldest spot of our journey, and none should be surprised if it transpires in or around the bitter month of February. By that point, the whole “all ashore that’s going ashore” trope will be rendered moot. Landlubbers like me will have no alternative other than to hang on tight and retch over the rails.

Market participants are currently trying to make sense of it all, and can be forgiven, as illustrated in the following chart, for acting out a bit:

Not gonna lie: this graph unsettles me – in part because I have no idea what it means. By my troth, I can’t even read it properly.

So, all I can rely upon is the Bloomberg annotation at the top. Because when, after all, has a Bloomberg annotation ever been misleading? This annotation informs us that factors have been unusually volatile this year. Should we be concerned about that? Sufficiently so to ask Captain Standish to reverse course?

Well, it’s probably too late for that. And, in general, I would guess that factors will indeed continue to be volatile, may, in fact bounce around like little covid buggers, for as far as I can see over the foggy horizon.

But I do not expect this dynamic to substantially disrupt our progress – at least in the short term – towards that glorious point of disembark — over on the other shore. I am less certain as to whether we reach our final destination, which, by forward extrapolation, would place the 2420 Galant 500 closing price (currently ~3585) to somewhere around 10,755,000,000.

We’re a long way from there, but let’s face it: we’ll all be pretty old by the year MMCDXX.

What’s important is that we take the journey together. You and me.

But first we gotta get through the last VI weeks of MMXX (the CD in the middle will have to wait it’s turn). From a market data perspective, there’s not a lot left on the calendar. The November Jobs Report drops on December 4th. Not many other numbers left to crunch. And before that, we must pass through the portal of Thanksgiving, on a bittersweet (for me) November 26th. To be held without the joyous diversion of watching a helium-filled Snoopy bounding between the buildings that line 6th Avenue.

This Thanksgiving will be a tough one – for me personally (some of you know why) and presumably for most of the rest of you. It’s possible to feel that there is little about which to give thanks this year. But I won’t choose to look at it that way.

I will be giving thanks for you. And all you are and all you do. And for the Mayflower, which kicked off this party in grand style on November 11, 1620. Readers are of course at (sweet) liberty to adopt different viewpoints. And, if they choose, to outfit a modern-day version of a vessel named for the blossoms of the fifth month on the calendar, to set their course towards a return to the Old World.

But when they issue that time-honored, titular command, I’ll be answering with my feet, by going (or, more appropriately, staying) ashore.

With you by my side, I’ll take my chances from there.

TIMSHEL

By: K(en(neth Louis) G(rant)

Somebody took the papers, and somebody stole the key,

And somebody nailed the door shut, tell me who do you think it could be?

— Lou Reed

At least we didn’t kill each other; there’s that. I’m unaware of a single election-related murder. Maybe I missed a few, but it sure seems like if any had gone down, I would’ve heard about them.

To me, it all boils down to the following: it appears that we managed to hold a national voting sequence without burning the whole joint to the ground.

And this, my friends, is what passes for good tidings in this Great/Once Great/Great Again/Not All That Great/Never Great nation.

Try fitting that on a baseball cap. Maybe a purple one.

The election is now over, and, arguably, we can agree on one thing:

The ending did not come a moment too soon. Blessedly (at least as I see it), the outcomes left everyone a bit frustrated, harboring beefs, carrying grudges, gob-smacked by the unfairness and insanity of it all.

Perhaps it was ever thus; maybe this was what the Good Lord intended.

So, my first piece of post-election risk management advice is as follows: Cool. It. Down. I know that’s what I’m gonna do. I’m going with Lou: ‘round the corner, looking for Miss Linda Lee. Because she (like you) got the power, to love me by the hour, give me double you L-O-V-E.

Hey baby you want it so fast. Don’t you know it ain’t gonna last?

Of course, it makes no difference to me.

Except it does. Make a difference to me, that is. I DO want us to cool it down. Because, really, there’s nothing worth getting all that hot and bothered about (except you, you are worth the heat).

Best of all – unless there are pending electoral Easter eggs (and who’s to say there won’t be?) – it looks like our governance will be played out in split screen (sort of like a big, bureaucratic Zoom video call), implying that not much overly dramatic is likely to transpire out of Washington for a while.

Allah be praised! Because I cannot imagine that there is a single godforsaken soul left in the Lower 48 that would rationally entrust any action or decision of even remote consequence to any current, former, or future denizen of that metropolis.

About the only truly political statement I make at this point is to express my joy that a critical segment of the electorate managed to rise above the deafening din, to roundly reject the dubious concepts of identity politics, and the casting of longstanding institutions as being conceived and rooted in such villainous paradigms that they needed to be dismantled, destroyed, or somehow discombobulated.

Inshallah.

I reckon, though, we’ll have to endure at least another couple of weeks; maybe more, of acting out some final scenes. Sadly, the psychodrama will extend into January, where: a) not one, but two Georgian Senate Seats will enter a runoff; which b) could decide control of the Senate.

NGL, people, I could live without that.

However, assuming that Big Orange stomps his way back to Mar a Lago without kicking up too much of a fuss, that the Speakership of the House does not devolve to the four-headed monster known as The Squad, that the Senate is configured in such a way as to preclude such egg-headed actions as raising taxes, adding states and Supreme Court seats, toe-tagging the Energy and Health Care sectors, etc., there’s cause for significant investor optimism.

Because, c’mon man: how insane is the notion of raising taxes here? Who on earth benefits from that? The Federal Government? Please. They’re going to spend like sailors, with borrowed money, and then instruct the Fed to print away the debt. States and municipalities want to raise taxes, too, and will compete with the federales for our indisputably limited and depressingly depleting supply of taxable income. All of which will cost jobs. Livelihoods. Lots of them.

And all in the midst of a plaguing pandemic. The only turnout more impressive than the national vote count was the truly astounding reproductive chops of them little covid buggers. Yes, my dears, virus counts are surging, and it looks like we’ll be battling this wearisome worm all winter, as the weather up north, if nothing else, cools it down. Laying aside the crippling prospects of a tax hike, we’re way better prepared now. Critical supply and delivery chains are in better order. We are much more proficient at identifying, isolating and eradicating breakouts. Businesses have made adjustments that were unthinkable in, say, February. As have consumers. Infection counts are mounting, but fewer are dying.

Forgive me for saying so, but I also believe that certain state governors (you know who you are) will act with more rationality and economic care in terms of their virus-mitigating measures under a Biden Administration, than they did under Trump I (to say nothing of what they might’ve done under Trump II).

Meanwhile, laying aside (again) the prospects of crippling tax hikes, by all accounts, the economy is roaring back with surprising vigor. GDP, jobs numbers (mad props to anyone, going back to, say, the summer, who had The Under on a 7% October unemployment number), frigging manufacturing PMIs? All blowouts.

Come what may, there’s also another whomping stimulus package in the offing, and, from a valuation perspective, whether it comes under the lame duck session or is deferred till after the new dawn of Joe Six Pack’s inauguration, shouldn’t matter much to investors. It’s coming, and markets should price it in.

While virtually no one noticed, the FOMC met at the end of the week, and announced — nothing. But y’all know what I think about this. They’re in. They will do whatever is necessary; whenever it becomes necessary. Because they have to. Investors should also feature this in their pricing considerations.

Arguably, they already have. Risk assets surged all week, and my guess is that this trend will continue – albeit unevenly.

Sadly, one way of viewing this is through the lens of the incremental shade we are throwing the Dead Prez, which have been sucking wind and continuing their fade with respect to almost everything against which they are measured – stocks, bonds, commodities, other currencies, crypto, etc.

But in a year when all four men whose faces grace the granite of Mount Rushmore (notably, all have their mugs on variants of the USD) have been re-imagined, in varying ways, as racist war criminals, what else could you expect?

I reckon we’ll survive even this.

In sum, we have, in all likelihood, a split government, a recovering economy, enormous tail winds in terms of fiscal and monetary policy, and tons of cash looking for a home. Most of the value-suppressing pressures of post-election quagmires have disappeared (note: my bad on prognosticating that we’d emerge with hundreds of races unresolved and in violent dispute. FWIW, I’m delighted to have been wrong). These are pretty encouraging conditions for our Great/Once Great/Great Again/Not All That Great/Never Great markets.

Meantime, I’m calling this note early. I won’t declare myself a winner, because that’s not how I roll.

I leave with the advice look for buying opportunities.

And to cool it down.

Yes, somebody’s got the time, time. And somebody’s got the right. And all of you other people, are trying to use up the night. I already told you, though, I’m going ‘round the corner. However, rather than Miss Linda Lee, I’ll be looking for you.

And I expect you to be there when I arrive, because anything else would be unthinkable.

Let’s cool it down together, shall we?

TIMSHEL

By: K(en(neth Louis) G(rant) and Nutlas

Kazakhstan, number one exporter of potassium

All other countries have inferior potassium

Kazakhstan, home of Tinshein swimming pool

It’s length thirty meter, width six meter

Filtration system a marvel to behold

It remove 80% of human solid waste

— “Oh Kazakhstan” Anthem of Recently Diminished Nation of Kaskhstan

Hello. My name Nutlas. Please don’t yourself worry about rest of name. It not important. I take over this blog to help my friend Borat, to make benefit of Recently Diminished Nation of Kazakhstan. He just make moving picture: “Subsequent Movie Film”, where he film try to give gift to Yankee Strong Man Vice Premier Mikael Penze, but it not work. He undercover now; don’t try find him. This not him:

He inform me to borrow Mr. Kenneth’s writing note.

Do not worry also about Mr. Kenneth. Mr. Kenneth safe.

I ask Mr. Kenneth readers to help find new Yankee Strong Man, so to grease his palm, for glorious benefit of Recently Diminished Nation of Kazakhstan, which offer reward of 30 dinars, along with bones of Johnny the Monkey, Kazakhstan most excellent Minister of Culture.

Kazakhstan in trouble. Kazakhstan no more sell its superior potassium to American Capitalists. Kazakhstan feel bad, can not more buy 8 track music making tape of Yankee minstrel Booker T. Jones.

Kazakhstan sad….

…OK, Nutlas, that’s enough. kg here. I was able to escape from that flimsy cage that Bilo rigged up. Maybe, next time, he should try to make it out of metal, or something other than that mountain of pure potassium piling up outside this village, which, by the way, I hardly find to be superior.

Listen up, y’all. I don’t have much time. There’s a goat-mounted policeman looking for me all over this hell hole, and I don’t know how long I can outrun him.

I’m pretty sure there’s serious market chaos on the horizon, mostly deriving from all this political madness. I just don’t see how hundreds of elections aren’t contested after Tuesday (and, unless you’re going to wind the clock back to 1861, when a sitting Vice President resigned to take up arms against the government he pledged to serve) there is no road map here.

I might be wrong, and lord knows I hope I am, but just in case I’m not…

I won’t make any election outcome predictions except the one set forth immediately above: we’re looking at weeks, maybe months of uncertainty as to the identity of our elected officials. This may or may not be true of the Presidency, but recent events there set the tone. The still-unresolved issue of post-11/3 votecounting in more than a half dozen states is almost certain to land back in the lap of the Supreme Court. But only after endless recounts and lawsuits in lower courts.

Now, think of the hundreds of close elections at every level of government wherein the loser is certain to dispute the result, and use all available means to nullify it. Tempers will flare. Everybody will be pissed off. What could possibly go wrong on the investment side when this sh!t goes down?

And I won’t make any market calls either, except this: volatility will spike. Particularly idiosyncratic volatility. The uncertain outcomes will goose or dilute valuation assessments for instruments in every asset class – perhaps at the same time. Nobody will have a clear idea of the going-forward rules of engagement, so fundamental analysis will be rendered entirely quixotic (yes, entirely quixotic, take that, Nutlas), if not Sisyphean (eat my rhetorical dust, you Kazakh crustacean!).

My guess is that one way or another, in its lame duck session, Congress will pass a bigger stimulus bill than has even been contemplated. Trump may (or may not) sign it, and, if it’s the latter, I think there’s a strong possibility that the veto will be over-ridden.

The markets, under these circumstances, may very well squeal with delight. However, under certain electoral outcomes, the benefits are likely to be transient. Consider, if you will, a scenario where a top policy goal is to dismantle the American Energy Sector over the next decade and a half. Companies will default on their gargantuan debt, and some in Washington, San Francisco and New York (well, maybe not New York) may weep with tears of joy and schadenfreude at these tidings. But what about the lenders? The bond holders? Will they gather themselves and smile through it? Will they extend payment plans? Will they lend more (to anyone)? Will they reissue?

In parallel attention, I’ve been keeping an eye on my peeps in Chicago. Their zaftig, billionaire governor just shut down indoor dining across the state, a move so blatant that even tree hugging Mayor Lori Lightfoot begged him not to do it. I figure it’s lights out – this time for good – for great institutions like Gibson’s, Nick’s Fish-market, R.J. Grunts, so many others. But here’s the thing: a lot of those establishments just completed the purchase of expensive safety equipment, such as plexiglass booths, industrial air purifiers and the like. Most borrowed to do so, and may, in addition to switching off their lights for the last time and hugging a final goodbye to their employees, leave their lenders holding the bag. The knock-on effects may be the financial equivalent of all those broken storefront windows on the Magnificent Mile.

Now, back to the Energy Patch. In similar vein, many energy companies have recently borrowed, in huge numbers, to purchase and install fracking equipment. You may hate fracking, but that’s not gonna pay back the lenders who shelled out capital to these enterprises. They will dump this debt on a market that won’t touch it. And lending – across the board — could seize up.

And it may bear mention that we are still dealing with a pandemic that appears to be gathering strength as the air gets colder. I’m going to have to assume this means further economic disruption, and incremental impediments to the flow of funds across the capital economy.

But then there’s the Fed, who will be impelled to buy everything in sight, or everything in sight will collapse. I think, therefore, that the Fed will blow out its balance sheet to >$10 Trillion before blossoms appear again in the District of Columbia (which may be granted statehood before any of this happens).

Because of this, I kind of reckon that there’s a buying opportunity in the wake of a risk off sequence that I believe is inevitable; I just don’t know when it happens. 2020 has been a tough read, and I acknowledge that I was wrong this Spring, when the market V bottom simply astounded me. It was clear, in retrospect, that I underestimated the impact of the walloping stimulus that our Central Bank laid on us in April, when, in six weeks, they printed as much new money as they did in the preceding six years. They can do more; much more. And they will. Don’t let anybody tell you they can’t. Or won’t. They will, the first time the equity, and even more so, the credit, complex feels the icy winds of what some are describing as the cold, dark winter immediately on our horizon.

And here, I offer a couple of points of additional perspective. First, I awoke yesterday morning to a nasty snowstorm outside my window. In addition, and as if out of some Stephen King/Halloween storyboard, the Federal Open Market Committee holds its next meeting on none other than November 4th, which happens to be my birthday, one where I expect to wake up not to a snowstorm, but to the most chaotic post-election sequence in at least six generations.

But I am currently fighting a losing battle to elude the single, remaining member of Kazak law enforcement, which is a helluva shame. Because his department is being defunded (sorry, re-imagined). It was a winnable war of attrition, but I am coming up short. So, I leave you with the sentiment that we are now facing a sequence of adult swim, like none we’ve ever encountered. I ask you to organize your investment affairs accordingly.

And how I take my leave, hoping to return someday. I have made a deal with Nutlas, who has agreed to my temporary release, on the condition that I award him the closing paragraph of this Subsequent Writingnote. But I cannot do so without first telling you how much I love you, how much I need you, how I long for the day of my escape from this prison, and hasten into your loving, welcoming embrace…

….OK Mr. Kenneth. That enough. We have deal. Deal is deal. This Nutlas. I pleased to announce winner to strongman contest: the Mayor of Yonkers in New York. He promise buy for his city all superior potassium that Newly Great Nation of Kazakhstan can produce.

Let us rejoicing begin, with a strongly boogie down on “Green Onion” by Yankee Minstel Booker T. and his slaves the MGs.

Мүмкін (Kazakh for TIMSHEL)

By: K(en(neth Louis) G(rant)

Yale Economist Arthur Okun: “Money must be carried from the rich to the poor in a leaky bucket”

Grateful Dead Guitarist Bob Weir: “I may be going to hell in a bucket but at least I’m enjoying the ride”.

This is exchange, between the professor and the musician, actually took place. I was there. In the room. We were in Memphis. Or Nashville. Or Knoxville. Don’t remember, but it was definitely in Tennessee.

OK; not really. I made it up. But gosh oh mighty, it’d be cool if it happened like that.

I think about the Dead routinely, but lately, my mind turns to Okun. I wish he wasn’t right, but I think he was. The bucket leaks. I’m more on the fence as whether (or not) we’re actually going to hell, whether the mode of transport is indeed a bucket, and, if so, if the bucket conveying us there is a leaky one. But maybe we don’t need to find that our right now, because the answers will come to us, one way or another, in God’s own time.

When Okun first busted out this riff, his point was that impelled wealth transference leads to less being received than is taken away. I think this is a sound insight, particularly when viewed against a related hypothesis (so compelling that it’s actually called Okun’s Law) which suggests that when such redistribution transpires through forces of incentivization (e.g. a profitable company hiring a productive employee), the multiplier effects are actually positive. Everyone gains. In these instances, and in keeping with our theme, the bucket doesn’t leak; instead, its content grows in volume.

Sadly, this news came too late for Hank Williams, who once complained to us (as only he could): “my bucket’s got a hole in it, I can’t buy no beer”.

Maybe for the rest of us, there’s still time. As we embark upon a likely journey that will change the way we roll, as we use the economy to right past wrongs, as we allow capital and resources to be allocated, not by market forces, but rather to effect someone’s preferred social outcomes, we could do worse than remember Okun. And his bucket. And his Law.

Meanwhile, leaky buckets abound. The pandemic and its mitigants? Leaky buckets. 8 months into a pandemic and them covid buggers are leaking like crazy through our porous masks. Positive diagnoses and hospitalization rates are climbing to new records, and it ain’t even gotten (that) cold yet.

When (if) we get a vaccine, that, too, will be a leaky bucket.

That politics and the pending election is a leaky bucket in my judgment beyond dispute. Voting processes and protocols are being altered in real time. In Pennsylvania, for instance, not even the Supreme Court was willing to stop the ballot-gathering process from being extended to three days after Election Day, and now, the Penn Supremes have decided that the mail-in signatures don’t even need to match.

So, a few Keystone votes are bound to leak in here or there. Got a problem with that?

Further, I must point out, in wearying, repetitive fashion, that even if the Big Race has a clear winner, dozens of contests at levels below are likely to be thrown into dispute. There are almost certain to be endless recounts and court challenges. I can’t imagine that any of it can be untangled for many weeks, and here I must also remind everyone that the Inauguration Date for the Senate and House is not January 20th, but rather January 4th – seven short weeks after the election itself.

As such, there is a strong possibility that the 117th United States Congress will be unable to convene, on schedule, with its full complement of (dubious) characters. Both sides are incentivized to delegitimize it, and it says here that both (or, at least one – the loser) will. It will, under these circumstances, be difficult to leak out much legislation for several months. But you won’t find me complaining much about that.

I’m hesitant to add the media to our list, but only because I don’t think the analogue fully captures their LB ethos. They are, in reality, more leak than bucket. They whiz out opinion as fact and then tell us or (try to) what it means. They exaggerate stories that fit their narratives, while suppressing news that don’t. So, I’ll throw them into our inventory, while reversing noun and modifier: the media is a buckety leak.

And all of these are mere drops in the bucket of reasons that the markets themselves are nothing but a bunch of leaky buckets. Where to start? Well, much to my embarrassment and annoyance, domestic interest rates are leaking yield in an upward direction. I have a problem with this; the dude minds. This will not stand. Mostly because I don’t like being wrong, but my beefs don’t end there. Uncle Sam, that old mixer, is gonna need to borrow like never before. So are states and municipalities; all will struggle to come up with the extra rate juice. Corporate and individual borrowers will face the same cruel fate.

The USD is leaking towards multi-year lows, losing its innards against even such dubious substitutes as Grains and Cryptocurrencies (remember them? Their buckets, of late, overfloweth). And this even with rates rising, a counterintuitive trend that would have given Okun, had he not died forty years ago, fits. Because higher rates are, according to the textbook, not supposed to extract from, but rather inject vigor into, the Dead Prez.

I now move, reluctantly, to the realms of credit, the gargantuan buckets of which are not now observed to be leaking, but which are under so much pressure that the tiniest dent could cause their bottoms to fall out. However, the prospects of continued economic disruption, higher taxes and increased meddling into the affairs of borrowers, notwithstanding, I see no cause for particular concern on this account.

All of which brings us to the equity bucket. Not much noticeable leakage there, but I cannot help but worry that there’s too much stress on that particular pail to hold its volume much longer. If (when) a leak does spring, it is not likely to be a small one.

Probably, though, that’s a problem to address down the road a bit. In the meanwhile, we’re in earnings season, and this coming week, all of the big dogs (you know to whom I refer) are set to lift their legs and leak out their Q3 results. Here’s hoping that the sequence is not, at least in a colloquial sense, a golden shower.

Of course, standing on the other side of these forces is the Fed, on record as being willing to allow purchasing power leak – in the form of inflation – at a significantly greater pace than that which has been implied in their policy position of years passed. Their ability to goose, and then sustain, valuations, through a near-financial collapse, and then a global economic shut-down, has been one of the miracles of our lifetimes. They’re almost certain to be busting out bigger buckets in the very near future, and I’m sure you’ll join me in my wish that these vessels are of solid constitution.

I should also mention that this coming Thursday brings tidings of the first Humpty Dumpty Q3 GDP estimate. You know, if you’ve been paying attention that this particular egg fell off the wall earlier this year, and that all the king’s soldiers and men, as led by the Fed, have since been scrambling to reconstruct it. The precedent is not a happy one, but I’d hasten to remind readers that, Lewis Carol did manage to patch Humpty together for a cameo in his most famous work. If you doubt this, you can visit him, cast in bronze, just north of the pond in the Central Park Conservatory. And, given the current “Through the Looking Glass” vibe we must all endure, I think you should. Check out Humpty, that is.

But if you’re like me, you’re worried about current seepages, and even more so about leaks that may spring, through events unfolding in the coming weeks and months. My best risk management advice is to keep some resources in reserve, some powder dry – outside of your portfolio bucket. I’m not suggesting that it is either now leaking, or about to, but, at minimum, if other such containers become porous, while yours happens to hold firm, you may find yourself with unique, historic replenishment opportunities.

I reckon I’ll cut it short here. All of this is making me thirsty, but my problem is not Hank’s. He couldn’t buy no beer, while I (due mostly to a cruel twist of DNA) can’t drink none. Bobby may have been right about us going to hell in a bucket, but I can’t really enjoy the ride, because I’m not going there, at least for now, with you by my side.

And all I want to do is be with you. Always. All the time.

About the only short-term solution I can muster is to focus on the work and ask you to do the same. Because this, at minimum, is something we can do, joyfully, and together. Plus, like Churchill said, if we’re going through hell, let’s just keep going.

Maybe it’s time to have that beer anyway. And, if leaking ensues, we’ll just chalk it up to the whims of biology.

Because, when all is said and done, we are all, each of us, leaky buckets.

Unless, of course, you’re Humpty Dumpty, in which case you’re a broken, if not yet scrambled, egg.

TIMSHEL

By: K(en(neth Louis) G(rant)

I begin with an apology for any offense given through the paragraphs that follow. None is intended. This week’s introductory parable (which sets up, in time-honored fashion, the subsequent, probing, market risk analysis) is intended in the spirit of fun. Which, one must admit (whatever their views on current affairs) is in depressingly short supply at the moment.

So, imagine a man, an Ordinary Joe. So ordinary, in fact, that his actual name is Joe. It had to be Joe; his parents had no other alternative. Because he is so ordinary. A Joe Six Pack, a Joe Bag of Doughnuts, he is largely bereft of outsize talents – save one. He is affable. Superhuman affable; an affability for the ages. Episodically too affable? Well, that’s not for me to decide.

But it is an affability that enabled him to rise very high in his (wisely) chosen field of politics. Higher, in fact, than all but a couple dozen folks (all men) had reached during his lifetime. An affability that took him to the penultimate rung of this ladder, and, for more than thirty years, he sought to climb that last step. Then, just when this last, aspirational objective appeared to be out of reach for him, 2020 happened, with all of its signifying sound and fury. This, among other matters, unearthed another redeeming and heretofore undiscovered (or, at any rate, underappreciated) feature in Joe – one that now holds great promise to carry him all the way to the White House:

Joe is not the Other Guy.

And just so we’re clear, there were actually two other guys, coming in “one-two punch” sequence. The first was a crazy old codger who somehow developed mad vibe with the young bloods. He was always yelling about something, and mostly at us. Honeymooned in the Soviet Union. Sidled up to Castro for f$kcs sake. Wanted to give away a bunch of sh!t. Never said how he was gonna pay for it.

He kicked up quite a fuss, and, for a time, in the early Spring, it looked like he was poised to take his party’s nomination. And this justifiably freaked out the Party Elders. Joe was their last hope to avoid him leading them, lemming-like, over the proverbial political cliff, and, together, they avoided this catastrophe. Within a matter of about three subsequent weeks, they rolled over the outlandish old dude with the wild hair and the Bolshevik sensibilities, and stuck Joe in the top spot.

The Party Elders rejoiced, because they knew Joe would do as he was told, but, as everyone was aware, the victory was a mere stop at the weigh station. There was another Other Guy. The meanest, nastiest, ugliest Other Guy around. More about him in a moment, but the mission was clear: take him down.

But the Party Elders were worried, because all the while, Joe was shrinking. By the minute. Some of this was planned in advance, by the Party Elders themselves, who didn’t want to draw overt attention to his impossible-to-miss ordinariness. But the feared that maybe they shrunk him too much, as, when Spring turned to Summer, there was nothing left of him at all. They still dressed him up in his fancy suits, and trotted him out from time to time. But for the most part they wouldn’t let him leave his house. Sent him to bed, sometimes at 9 A.M. It didn’t matter. Because he was not there. The bag of doughnuts disappeared, leaving only the holes. The six-pack remained in the fridge, un-imbibed.

And meantime, the final challenge remained. Absent though he was, he had to beat the other Other Guy. Who was one bad hombre. Uncouth, intemperate, petulant, etc., but whatever other pejoratives one may wish to apply, this much is also true:

He is not an Empty Suit.

It in fact would be more accurate to describe him as a Stuffed Suit. And I mean any suit. Insiders tell me that they keep letting out his trousers and coat, but he fills them up anyway. And then he goes about sucking the oxygen out of any room he occupies – even when he is outside.

So, there you have it: the looming, Beyond Thunderdome “two-men-enter-one-man-leaves” Death Match between the Empty Suit and the Stuffed Suit. If polls and the volume of the din can be believed, Empty holds a big lead.

All of which begs our rhetorical, titular question: How long are the coat tails of an Empty Suit?

If you’re like me, you’d like to think that they are neither longer, nor shorter, than they are when occupied by actual human flesh. I mean, given all we are currently forced to endure, I would rather not be compelled to allocate bandwidth to unpacking the concept of tailoring that shifts in length along with the dimensions of its occupant. But no dice. Gotta consider this, because if Joe wins and the Senate flies with him on his coat tails, well, then, in terms of market risks, all bets are off.

Loyal readers are perhaps well-acquainted with what I think rides on the left (coat) tail of the political/economic distribution. Higher taxes, more regulation, an all-out assault on three market sectors (Energy, Health Care, Financials) which account for nearly 30% of the capitalization of the equity complex. For this week at any rate, I’ll spare you my Casandra-like admonitions, but how the Senate breaks out will go a long way towards determining whether or not our (or at least my) worst fears are likely to materialize. It thus follows that if current trends hold, the length of Ordinary Joe’s coat tails are indeed a matter of great urgency.

In the meanwhile, investors don’t seem to be terribly troubled by rising coat tail risk. The soldiers that comprise the Gallant 500 host are indeed proximate to all-time highs but appear to be too weary to obtain higher elevation. There’s a pant-load of information coming at us (covid trends, earnings, coat tail prospects) and my own theory is that nobody is particularly eager to be the putz that top ticked the Spoos in advance of its unfolding.

With respect to concerns of contested outcomes on the first Tuesday (after the first Monday) in November, the hubbub appears to have died down. But I predict that even if Empty, clearly and unambiguously, knocks the stuffing out of Stuffed, there will be dozens of disputed results — across both houses of Congress, and even more at the state and local levels.

So, coat tails are important, and I’d ask everyone to consider the potential implications of them extending out like those of Rufus T. Firefly in “Duck Soup”.

Because this ain’t Duck Soup. We have pandemics, recession and other nasties with which to contend, and I just don’t think that now is a particularly opportune moment to change the world/atone for our sins through such initiatives as higher taxation, re-regulation and redistribution.

It wearies me to beat on this threadbare drum, but the problem (setting aside the hifalutin moralizing) is that we’re just too much in hock to even consider such actions (even if we are indeed considering them).

The truth, my dearest loves, is that the entire capital economy is burdened by breathtaking debt and only being held up by the strong (but perhaps not infinitely so) shoulders of the Fed.

And the burden is growing. There are too many grotesque ways to visualize in this family publication but one that happened to cross my desk just Friday caught my eye. It tracks the inventory of what are known as “Fallen Angels” – companies that issued debt with an Investment Grade Credit Rating which has since been downgraded by the all-knowing ratings agencies, to “junk”.

TRIGGER Warning: This picture ain’t pretty:

Anybody think that this chart has topped out for 2020? Didn’t think so. Unfortunately, a lot of folks with whom I reason be like “that’s their problem”. But The hard fact is that nearly everyone who lent to these new-fangled FAs lost money. And (news flash) when lenders lose money, they become less inclined to lend more.

Thus, it’s our problem. We’re already at about 150% of the debt we carried in 2009. When companies like Lehman went t!ts up, when AIG, Fannie and Freddie needed massive Fed bailouts. In case you didn’t know or can’t remember, the financial system almost collapsed, would have collapsed if not for some big hacks by our Central Bank.

Superimpose the current global pandemic, a worldwide recession, mad social unrest — upon all of this and consider the potential outcomes. Do we really want our financial system to collapse here?

Just let a few of these Fallen Angels default and see what happens. The Pavlovian reaction of banks — to call in all boats (loans), while otherwise hiding under their desks, structured securities unravelling like the thread of a badly made suit, will be breathtaking in its unfolding. No mortgages available for your dream house. No buyers for the one you need to unload in order to buy it. No hope for your favorite restaurant that cannot obtain the extended financing that it needs to survive.

So, now, anyone for a roll-back of the 2017 corporate tax cuts? A reinstating of the payroll tax (which hits both workers and their employers) at comp thresholds above $400K? How about pushing Capital Gains levies up to ordinary income levels? Forgive me, but I can’t see any outcome, particularly for the untold number of companies carrying crippling debt loads, other than their inability to source capital, retain top tier employees, or to invest in research, development, new plant/equipment and employee training. And they’re gonna cut jobs by the boatload. Many such companies won’t survive at all. This will be a problem. Of course, we can always just expand those weekly stipends to the unemployed, with funds we don’t have and must ask the Fed to create out of thin air. Under any 11/3 outcomes, we will probably do this anyway. It’s just a matter of timing and magnitude, baby.

But if Joe’s six pack contains enough tall boys to carry the Senate, we’ll be looking at immediate tax hikes. In the middle of a wicked recession. Markets may stay giddy for a bit, under the dubious hypothesis that an even bigger Washingtonian giveaway (which will be the first order of business) will: a) not come at enormous cost; and b) will actually be accretive in a sustained fashion to capital markets valuations.

But then will come the tax increases. And the regulation. Energy Companies, Health Services Enterprise and Wall Street will come under immediate attack. Many borrowers will default. All during a cold, cold winter, which may bring with it a resurgence in the Public Health crisis. And every bit of this sets up the next Thunderdome Death Match – between the Progressives and our monopolistic Tech Titans, who have made a Germany/Soviet Union-like bargain of expediency. They have achieved détente, but ultimately their respective agendas are on a collision course with one another, and the point of impact will not be pleasant to observe or endure.

Much, but not all, of this is unavoidable, but what we can avoid of this nature, we should seek to eliminate.

So, my mind remains fixated on coat tails. It’s true that I, like Joe, take up less space than before, and am told that it has upped my appearance game. But my wardrobe remains a weak point. Whatever I have accomplished I owe to you, and we have miles to go before we sleep in these realms.

After November 3rd, we may be able to lay the coat tail quagmire aside for a time and focus more directly on our joyful journey.

But in the meantime, when you stop at Brooks Brothers to examine the fare, please take a look at the lower, back portion of the jackets, and bear in mind that, as is often the case in this crazy world, and, with respect to both me and Ordinary Joe, less may indeed prove to be more.

TIMSHEL

By: K(en(neth Louis) G(rant)

“Yellow matter custard, dripping from a dead dog’s eye”

— John Lennon

I’m sorry; you just ain’t. Not The Walrus. NTW.

If it makes you feel any better, neither am I. None of us are.

One who aspired to, and nearly reached, this pinnacle, has just left us. And here of course I’m talking about Eddie. NGL: Van Halen wasn’t my cup of tea (great musicians but not a lot of great songs), but you gotta give it up to Eddie. Everything about him exuded magnificence (sh!t, even appearance-wise he was f@#king beautiful), and the tributes he’s receiving are well-earned.

For me, one factoid tells the tale. He played the signature lick on Michael Jackson’s “Beat It”. VH was just emerging at that point, while Michael was the undisputed King of Pop. Their convergence served, as much anything else that comes to mind, as the soundtrack for the times.

Smarmy rhetoric bores and disgust me, but this is what I love most about America. Eddie was a Dutch immigrant; MJ was a black man from a working-class family in Gary, IN. Each climbed from humble origins to unambiguous cultural royalty. Both played in ensembles with their brother(s). They came together for one divine moment – black meets white; rock meets soulful pop. This doesn’t happen in, say, France. Or even Sweden. And I think, as we seek to withstand this extended interval of wallowing in our flaws and sins, we could do a whole lot worse than take a moment to appreciate the magic that can happen – here and nowhere else — when we stop whining and start working. Together.

But this note is not dedicated to Eddie. Rather, it goes out to John. John Winston (Ono) Lennon. Who would’ve turned 80 this past Friday. Didn’t make it; was capped in front of his own home in 1980. Before anyone (including him) had ever heard of Eddie. Michael was a worldwide celebrity by then, but his transformative record: “Thriller” (featuring the hit single “Beat It”) was still years away.

Neither of them could touch Lennon, who sang “I Am the Walrus”, but didn’t mean it. Clearly, he was posing mere hypotheticals; asking hundreds of questions and purposefully answering none of them. Left it for us to figure it out, but the answers are elusive and varying. Old flat-top, for instance, had Feet. Down. Below, His knees. But about all he could tell us definitively was that 1+1+1=3.

You say you want a revolution? Well, you know, we’d all love to change the world. And I’ve good news for y’all. The world is changing. Whether we like it or not.

It’s difficult to determine whether for better or worse, but I have my own opinions on the subject. So, too, do investors, who have resumed the bidding up of risk assets into the stratosphere. Our intrepid skipper, Captain Naz, is rewarding those who boarded his ship on 12/31/19 with a 35% compounded return, across what even the most seasoned salts would describe as choppy waters. Meanwhile, our sultry sirens of risk mitigation – Madame X (U.S. 10 Year) and Vixen VIX, have left us at the altar, return-wise. But they are fickle creatures, so we’ll have to see how all of this plays out.

You say you got a real solution? Well, you know, I’d love to see the plan. But here, requests fall on deaf ears. Whose got a plan? Nobody that I can determine. Lots of probing diagnoses of problems. But solutions? Plans? Not so much.

You ask me for a contribution? Well, you know, we’re all doing what we can. Mad props must be given in this respect to our elected officials in Washington, who are trying like the dickens to slather the masses with more money that: 1) we don’t have; 2) might not actually need; 3) must borrow (presumably with new batches of printed money), and which 4) must ultimately be paid back (either by us or our progeny), through some combination of higher taxes, rampant inflation and a diluted dollar.

Meanwhile, there has been some reasonably encouraging economic news of late, which I fear that investors might be over-interpreting. Particularly with the re-energized pandemic lurking like a lizard on a windowpane, an insolvency tsunami visible on the horizon, as well as the depressive prospect of higher taxes, increased regulation, redistribution and other policies, I struggle to see much upside. Be that as it may, the Non-Manufacturing survey issuing from the Institute of Supply Management was a blowout (this is important because it cover such impaired industries as Restaurants, Leisure and Entertainment). And the Fed, as it whips out its knee-pads and begs Congress for more fiscal stimulus, is putting out Q3 GDP growth estimates that bring joyful tears to the eyes of even this crusty curmudgeon at the keyboard:

Now, unless I miss my guess, a ~35% bump would be a significant all-time record. The Wall Street consensus (blue line) is lower but is still growing, and in any event impressive.

The initial estimate drops on 10/29, and need I remind everyone that this is two days before Halloween? What promises to be the strangest Halloween in our lifetimes? The report comes out on a Thursday; All Hallows Eve is Saturday, followed by Monday’s All Saint’s Day, which ushers in the real week of terror. From an investment return perspective, I’m not overly optimistic, but then again, I’m a crusty curmudgeon.

One way or another, the Fed’s plea has indeed reached the ears of those who allocate our taxpayer dollars. and it looks like both sides are keen to get something done. Egg Man investors, by their actions, are egging them on. Of course, it’s all nothing more than a political battle in front of a high-stakes election, and who am I to quibble with this sort of thing (Not The Walrus, I can assure you)?

There is also a growing consensus that a Blue Wave (rising in probability if one chooses to believe the polls) might actually be accretive to valuations. To which I can only offer the following words of ambiguous wisdom issuing out from those Fabulous Fields of Strawberry:

Always know, sometimes I think it’s me, But you know I know when it’s a dream, I think a no will mean a yes but it’s all wrong, That is I think I disagree

Yes, I think I disagree, as Lennon might have. He wasn’t one to mince words, but he’s not here to tell us whether or not it applies to our current situation.

I reckon we’ll find out soon enough, but I just kind of have my doubts that the above-mentioned scenario, with its attendant promise of higher taxes/regulation and redistribution, to say nothing of the plans that some have in store for our Health Care System, the Energy Patch and Wall Street, is going to catalyze much of a boon for investors. And I just urge all within eye-shod to consider these contingencies as they navigate through these choppy, shape-shifting market waters.

You say you’ll change The Constitution? Well, you know, we’d all love to change your head. Well, at any rate, I would. Love to change your head, that is. Because Constitutional changes (and reasonable facsimiles thereof) have emerged as a highly plausible prospect. The Second Amendment is in play, and (as an anti-gun guy) the only negative observation I’ll make is to warn the anti-firearm contingent that it is going out tiger hunting WITHOUT its elephants and (of course) guns. Supporters of Â2 (including Tigers from Clemson, LSU, Mizoo, etc.) are not likely to have their tails pulled with equanimity.

So, in case of accidents, they should always take their mums. And I personally believe that the sacred First Amendment is also under attack, has been for quite some time, and that the threat is growing. If you doubt this, just ask the dwindling roster of conservative academics at institutions of higher learning – or, for that matter, anyone issuing formal rhetoric against the progressive orthodoxy.

And my worries extend beyond the introductory components of the Bill or Rights. Trends right now

clearly point to an end to the filibuster, a packing of the Supreme Court and (perhaps) the addition of a couple of blue stars to the Betsy Ross (now deemed a racist by cancel culturists and their corporate underwriters) flag. To the best of my knowledge, none of these requires a change in the constitution per se, but these are bold, paradigm shifting “if looks could kill, it would be us instead of them” moves.

So, when you tell me it’s the institution, all I can state is that institutions are on the verge of dramatic change, and I’m not feeling all that giddy about the new forms they are likely to take. But Lennon’s response was of course superior to mine. Better free your mind instead.

So, can we all do a little bit of that? Freeing our minds instead? For investors, this is aspirational: neither likely nor wise. In fact, in the short term, I encourage everyone to focus their minds on traversing the difficult path that lies ahead for all of us. Maybe afterwards we can do it. Free our minds, that is.

In the meanwhile, Happy Birthday, John (and to his son Sean too, who shares the date with him). We remember the tearful goodbye we said to you nearly forty years ago. We lost Michael (reputation tarnished but music enduring) in ’08 – another difficult year. Eddie bounced just this week. In 2020, which history may show to be a turning point. If so, I doubt it will be deemed to have been for the better.

Man, oh man do we need The Walrus now. But we don’t have him. And, in my darker moments, I’m not even sure we have the Egg Man. But know this: I want you. I want you so bad it’s driving me mad.

And now, with cellophane flowers of yellow and green, towering over my head, newspaper taxis are appearing on the shore, waiting to take me away. And there’s nothing left for me to do but climb in the back with my head in the clouds, and I’m gone.

In case there’s any doubt, I’m gonna look for the girl with the sun in her eyes.

And I hope I find her where JL left her — at the plasticine porter/looking glass tie train station turnstile. Because Walrus or no, that would do wonders to free my own (troubled) mind.

TIMSHEL

By: K(en(neth Louis) G(rant)

So, let’s set the scene. The year was 1983, and Spinal Tap North American Tour was winding down in utter disaster. Gigs had been cancelled due to lack of fan interest. The band got lost on the way to the stage in the bowels of a Cleveland auditorium. They played a Stonehenge-inspired set that featured replicas of the monument, which (due to a transcription error) were 12 inches, not 12 feet, high, and “in danger of being crushed by a dwarf”. The most recent of its endless roster of misanthropic drummers had died by choking on vomit (not his own). The lead guitarist and road manager had both quit. However, at the end-of-tour party, which almost no one bothered to attend, pipe-smoking optimist/bassist Derek Smalls found himself waxing on about great opportunities for the band to explore new horizons.

“We’re lucky” said Smalls “I mean, people should be envying us, you know”.

To which lead singer David St. Hubbins replied “I envy us”. And Smalls could only agree.

And it all kind of reminds me of the present moment. The US Tour of 2020 is winding down in what can reasonably be called a disaster. There’s a pandemic that we don’t understand and have no insight as to when it ends. Remediation measures have crippled the economy. Social unrest is at a multi-generational high. Cities on flame. Millions newly jobless. Mortgages and rents unpaid.

There’s a presidential election in a month, and the two sides are hating on each other more than at any time in anyone’s memory.

Yet, if nothing else, all of this presents us a once-in-a-lifetime opportunity to change our direction. We can re-imagine policing, criminal justice, health care, energy, race relations, education, the judicial process itself, electoral protocols, professional sports, all forms of entertainment, our very language.

People should envy us. I envy us.

And in fact, there are any number of justifications for us to be both the subject and the object of our own jealousy. For example, and with characteristic understatement, tomorrow, PBS celebrates its 50th Anniversary. For most of us the milestone will pass with little note, but the outcome was far from certain, as, in the wake of the last crash, there was a concerted effort to deep six it. What saved PBS? Well, I gotta believe that the following viral (circa 2008) meme was a major contributing factor:

Defund PBS? Sh!t Just Got Serious

Now, nobody in their right mind would dare mess with these mofos, right? And they didn’t. PBS survived, arguably thrived.

And fast forward to the crisis of 2020. Did anybody threaten Sesame Street or any of the PBS crew? Quite to the contrary, not only was their funding completely secure, but Congress even kicked in an extra $75 Large as part of April’s coronavirus relief package.

Taking another glance at the picture above, I count that as risk management in its most sublime rendering.

And a glance market (in which I ply my trade and where I am invested) paints me in emerald hues. There was a touching, green, tape painting rally into the end of the quarter, which was prophesied in these very pages. Our equity indices shrugged off that disaster of a debate and other nasties to close up ~1.5% on the week.

We woke up Friday morning to the news that Orange Man was feeling a little green around the gills, and in fact had gotten the covid hisself.

45’s medical condition kind of blotted out the impact of a pretty interesting September Jobs Report, the last before the election, which showed some solid gains, but at a decelerating rate – relative, at any rate, to the digits issuing from the BLS during the heat of the summer. The Gallant 500 took it all in relative stride and is currently throwing of a >3% ytd gain. Though you wouldn’t know it from recent days, Captain Naz is crushing it at ~+23% year-to-date.

And as Captain Naz goes, so goes all of us. Because we are Captain Naz. And I envy us.

Moreover, anyone accusing me of whistling past the capital markets graveyard should be made aware that America sports the only major market equity complex registering gains for the year. Other than China. But, what, I ask, do we have to do with China?

But just as in ’08, when Burt, Ernie, Cookie Monster and the rest showed us when they thought we were fixing to stiff them, sh!t is now getting serious. Not to harsh anyone’s mellow, but with the rules of electoral engagement changing by the day, with plausible outcomes that could permanently shift how we roll on all fronts, with the very real prospect of complete government control of (sorta) vital sectors such as Health Care, Energy and Financial Services, with a highly sketchy earnings season beckoning, with the Prez laid up in Walter Reed…

Well, it ain’t no time to be sleeping at the switch my lovelies. I’m not sure the true worth of stocks, bonds, foreign currencies, commodities, cryptocurrencies or cannabis (well, maybe I do have some idea of the value of cannabis), but it does strike me that the current equilibrium is shaky at best and unlikely to hold. It’s a fair bet that all of them asset classes will be on the move, soon, and materially.

And again, if one, for some irrational reason, wishes to search for potential valuation change catalysts, this little tidbit from Bloomberg might be as good a place as any to begin:

Careful observers will note that these trendlines apply to the European High Yield markets, and what, one may ask, do we have to do with Europe (Except Sweden. Because Sweden is cool)?

It can be hoped (but not necessarily confidently anticipated) that the stateside numbers may in fact be a whole lot better. If so, I envy us. But then again, I always do.

Envy us, that is.

Because we have the most righteous, all-knowing, omnipotent central bank in the galaxy: The Federal Reserve Bank of the United States. Originally founded by Alexander (m$^%ther f*@&king) Hamilton. Its pistols are trained, loaded and ready for action, and unlike its founder, we can be confident that the Fed won’t throw away its shot on some forlorn morning in Weehawken, New Jersey.

The Fedmeisters are on official record encouraging their pals on Capitol Hill to stroke in some additional stimulus of their own. They have implored Congress to harvest some fruit from their rich fiscal vineyards. There is ots lof speculation out there that with the President huffing down mad doses of Remdisevir and an election now just four weeks away, the twain of left and right might actually reach an accord here. My guess is that if so, investors will squeal with delight.

At least for a time.

It all should be fascinating in its unfolding: the irresistible force of our dubious re-imagining journey meeting the immovable object of the Fed’s need to prop up (inarguably elevated) asset valuations. Over the intermediate term, my money is on the Fed – under virtually every conceivable outcome. If the virus re-emerges in angry, menacing force, if Team Blue runs the table on 11/3, if, on 11/4, we have no idea the identity of our elected officials, they will be there to print money — to send to people not to work, for redistribution to atone for the sins of our forebears (whether the committed them or not) and for the above-mentioned full-scale takeover of the Health Care, Energy and Financial Sectors.

If, on the other hand, the pandemic withers with a whimper, if the electoral outcome is clear and balanced, if business continues – if not as usual then as “the new usual”, then the borrowing binge will continue, and the Magic Fed Money Machine will be rendered just as essential as ever.

There are morality tales aplenty across this entire narrative, but good luck unpacking them. I can’t. One day, we will look back in wonderment at it all (or, at minimum, our progeny will do so). We are in wonderment now, but it is of a more limited nature, because we don’t know how any of this will end.

But I envy us anyway. In no small part because of the (Spoiler Alert) happy ending associated with Spinal Tap. In sublime denouement, the original saga ends with the killer lead guitarist rejoining the band on stage, and ultimately as a permanent member. Even the road manager returned to the scene. The lads are older now, but still rocking, and occasionally even perform a live gig. They continue to shuffle drummers, who somehow always drop like flies shortly after joining the band.

At the present moment, they could do a whole lot worse than booking an engagement on the fabulous PBS Series: “Austin City Limits”. Maybe they could do some covers of Janis, who died 50 years ago today. Because I love Janis. As much as I love Jimi. Almost as much as I love you.

But there’s nothing I love more in a rock saga that ends with the band reuniting (except you; I love you most). Because really, that’s all we need. Us and the band. Jamming like there’s no tomorrow.

Because there may not be a tomorrow. And we should do everything in our power to avoid that outcome.

So please join me in envying us. I really don’t see any other way forward.

Trust me here brothers and sisters: it’ll do you no harm.

TIMSHEL

By: K(en(neth Louis) G(rant)

Yup, Gotta say a few words about Gale. Galloping Gale. Who galloped off and left us this past week.

But first a point of clarification. Gale Sayers was not the Galloping Ghost. That moniker belongs to a Chicago Bear of an even earlier vintage (back when they wore leather helmets, embraced, rather than avoided, concussions, and when the term “going both ways” referred exclusively to a footballer who played both offense and defense): Red Grange. Running Back and Defensive Back. The Original Galloping Ghost. Maybe the only one. That is, until Galloping Gale shed his mortal coil.

Perhaps now there are two Galloping Ghosts; maybe not. I don’t decide these things you know.

Never saw Red play but was a huge fan of Gale’s. The way I would describe him would be as follows: he was the Jimi Hendrix of the NFL – running with riffs that nobody could imagine, much less replicate – before or since. For me (and in retrospect), when he blew out his knee in ’69, it marked the beginning of the end of the Sixties. The Beatles announced their breakup that month. Sayers returned, a shell of himself, in 1970, which of course was the year Hendrix died.

Now he’s galloped away (this time for good), and America, Chicago in particular, shed many tears. It’s been a tough month in Chicago, kicked off by the shuttering of the iconic Palmer House Hotel, which had been hosting the hoity toity, dating back to a time when the hoity toity’s main residences were caves. Didn’t think it could be toe-tagged, but, these days, the unthinkable is exactly what goes down.

And it’s been a tough month all around. As is widely known, September is, historically, the worst lunar cycle for equity valuations. And this year (even if with respect to nothing else) has followed script. The Gallant 500 is down a decidedly ungallant 5.7% at the point of this correspondence, and this after Friday’s 160 basis point rally. Captain Naz, up >2% on Friday, was knocking on the door of a double digit, month-to-date drop the night before.

Still and all, Friday’s rally was heartening to observe – particularly as it transpired during the penultimate trading session to Yom Kippur – 5781 – which should feature a respectable amount of fasting, (hopefully) a passel of repentance, and (presumably) not much trading activity. It should also be noted that the sands of Q3/2020 (Julian Calendar) are running low, and, as such, ‘tis the season for some enthusiastic tape painting. If so, protocol suggests a bid through at least Tuesday 9/29 (decorum demands that one refrain from this unholy exercise on the final day of the period).

But because we’re talking football here, I’d say Friday surge, perhaps set to bleed into early next week, was an exercise of running up the score.

And, on the whole, I think, absent a further ignominious retreat over the remaining three sessions, the quarterly performance is one that should please us. The G500 gained ~6.4% of third quarter yardage, through some occasionally fierce pressure from the other side. The tape may feel heavy at the moment, but perhaps we should bear in mind the conditions that prevailed coming into the sequence on July 1. Covid was breaking out aggressively in geographic regions, where, based on climate alone, the defense was thought to have been the strongest. The country was, in near-full-scale lockdown, including in such improbable jurisdictions as Michigan’s Upper Peninsula and all of the Great State of Maine.

Social unrest was in full crescendo, barely five weeks after that cockroach cop cut off George Floyd’s carotid artery,

The smart money was proclaiming – heaven help us — that the NFL season itself would never transpire.

So, from that perspective, and looking forward from July 1st, would any investor not have rushed in to lock down a 6.4% index gain? I think not.

So why, in heaven’s name, does everything feel worse right now? Like our offensive line is failing to create even the miniscule amount of daylight required for Grange or Sayers to bust off a big one?

It requires little imagination or cognitive effort to understand the fear and gloom. All of our most dreaded risk factors are fully in play. No clarity on the trajectory of the Public Health crisis. Domestic politics are a complete sh!t show and likely to get worse. But let’s throw the Big Dog a bone here (Big Dog’s gotta eat, right?), and focus, for an instant, on credit.

The recent statistics are beyond terrifying – give off a feeling that must be akin to what the Citadel Bulldogs must have felt like coming out of the tunnel to face #1 Clemson. The final was 49-0 – a whupping that can only be characterized as merciful, considering that the latter pulled most of its starters in the beginning of the second quarter.

And, in terms of credit markets, the following two graphs tell the tale. First, last week, the Bank for International Settlements released its Q1 Debt to GDP estimates:

So, the world, as measured in GDP terms, is 30% more into The Man than it was heading into the ’08 crash. And here, it’s important to bear in mind that the series ends on March 31, 2020; we won’t know the tallies for Q2 for many weeks. Anyone want to take The Under on another surge? Didn’t think so.

Now we move to issues of solvency, and here, though it shames me to do so, I am forced to revert to a graphic I lifted from – of all places – this week’s Barron’s (via Bloomberg):

I know this ratio is a bit obtuse, even to me. To the best of my understanding, an interest rate coverage level of < 1 implies that the enterprise’s entire year’s earnings is less than its annual vig.

Let us hope that the lenders are more understanding here than, say, what is thought to be the attitude of the hard guys in Jersey City. And again, bear in mind that these statistics only take us through 3/31 – when lockdowns were said to be a fortnight’s operation; before we reached the definitive conclusion that the American economy was formed and continues to operate, principally, as a means to perpetuate racebased economic inequality. Neither metric, at any rate, is likely to improve over the near term.

But don’t you despair, my lovelies. Daddy’s indeed gonna buy you that diamond ring. The credit situation is so dire that the Central Banks will be forced to put their magic printing machines into overdrive. They’ve bailed us out thus far in 2020 (I don’t even want to think about where we’d be if they hadn’t) and must continue on, This here debt monetization thus ain’t over; in fact, it’s just beginning.

But we’re gonna have to be patient before these goodies come our way, and some of us may take a pounding in the interim. Hopefully, we won’t blow out a knee like Sayers, because we’re gonna need that knee to lean on during The National Anthem. Don’t ask me why; don’t know. But kneel we will. Kneeling won’t save us – not in this world or the next – but when did that ever stop us?

And now I fear it’s time for me to gallop away myself. Not like my hero Sayers, or even like the Old Gangster Sayre. But in my own way. At my own pace.

You may not recognize it as a gallop, but it’s the closest I can come. And I think we should be generous with one another as to what, in the first instance, constitutes a gallop, which I believe differs for each and every one of us. For some, it is more of a lumber; for others, it generates six touchdowns on twelve touches, playing for a team that finished the season 1-13.

So, gallop with me, won’t you? Even if you have to stifle your gait to do so.

And whatever else you do, please, please, please, don’t give up the ghost.

TIMSHEL