Or shall we say praise? Truly, I can’t decide. I do know that nepotism has a long history – arguably dating back to the Stone Age, or at least back to when Van Halen booted founding bassist Michael Anthony and wedged his zaftig son (Wolfgang, whose mother is the eternally fetching Valerie Bertinelli) into the slot.

Heck, I’m pretty sure that even the papacy was handed down from father to son for several generations during the Iron Age. Caesar’s grandnephew Augustus was arguably the better Emperor of the two, and like his Uncle J, earned himself an eponymous month. Richard M. Daley held the office of Mayor of Chicago for a longer period than his more famous father (Richard J.). And, the British Monarchy has passed down within the same line since the ascension of the fabulous Queen Victoria in 1820, all the way to the smarmy King Charles III. During which time they won two world wars, completed the final pillaging of India, and raised rock and roll to perhaps the highest art form under heaven.

200 years. One family. Lording over an empire upon which the sun never sets. God Oh Mighty.

All of this is rendered timely, of course, by the divine tidings that the Los Angeles Lakers used their second-round draft pick to select one LeBron (Bronny) James, Jr., son of the team’s (and the league’s) most famous player. Strong arguments can be made that this was an authentically meritorious decision; Bronny did manage to average an astonishing 4.8 points/3 rebounds a game (a skinny 27 ppg below Caitlin Clark’s output but placing him just ahead of Grambling’s Mikale Stevenson as 2,236^th greatest scoring machine in last year’s college competition) during his single season with the (Hoop)men of Troy.

True, his efforts were annoyingly interrupted by having suffered full cardiac arrest in the early portions of the season. But what scouting department in any sport would take that trifle into consideration?

On the other hand, it’s just possible that LeBron engineered this whole thing for his own nepotistic gratification. If so, it wouldn’t be the first time. For instance, when he “took his talents to Miami” and stacked a team that won a couple of titles. He then bounced back to his home turf of Cleveland, where he (laudably) led them to a championship. But after that, being a billionaire businessman and all, and wanting to base his operations in Tinsel Town, he engineered a move out there. No, they haven’t won any titles with him in purple and gold, but he has made a pant load of money. And now, he can suit up in a locker next to his anointed heir.

And I say more power to him. In fact, in this simmering-to-a-boil political season, there’s a perfect opportunity for the aspiring leaders of the free world to emulate him and designate one of their progeny as their chosen successors. The obvious question is which one(s)? Trump, who has yet to announce his running mate, has five offspring from which to select, and Biden (stuck with an unpopular shrew as his number two) has two that remain alive. But more about that below.

Because I find it impossible to eschew comments about Thursday’s deba(cle)te. Normally, I am I get so annoyed that I cannot endure more than 5 minutes of these spectacles, but I watched the whole show on Thursday night, and am in no way ashamed to state that I thoroughly enjoyed myself.

As I predicted last week, the mission of both combatants was to make his opposite number lose his cool. This, in fact was the materialized strategy of both sides, but what I most relished was that in executing this tactic, both candidates showed themselves in their unadorned essence. Trump, as was written in the stars, was pompous, routinely inaccurate, and unfiltered in his remarks. He deflected the toughest questions by evading them. But. He. Did. Not. Lose. His. Composure.

Biden, on the other hand, well, y’all saw what happened. My own opinion is that his worst moments were those when his opponent was speaking, where he either stood mouth agape (call it his Resting 25^th Amendment Face), or doing the Saint Vitus Dance.

If one wants to embrace the dark side, it was the wind up of the proceedings that were perhaps the most brutal element of the episode, when the argument between the two flawed nominees (both of whom, it must be remembered, have operated for several years with their fingers on the nuke button) devolved into the trading of insults about handicaps and golf scores. Then, after the official event concluded, we were treated to the sorry spectacle of Dr. Jill telling her husband, in her best “addressing a 5-year-old” voice: “Oh Joe, you did so good. You answered every question”.

So, my view isn’t so much that Trump won, but that Biden lost. Badly. And I couldn’t help thinking that a different opponent (say, even the odious Hillary) would have cleaned his Big Orange Clock.

We thus find ourselves in a position where the nominees’ wing men/women loom larger than is normally the case. Because mostly no one cares about the VP. Washington, for instance, seemed indifferent to the selection of his deputy, and, when John Adams (whose son John Quincy ultimately copped the top job) got the nod, he ignored him for 8 years. After Booth did Lincoln, the latter’s successor, Andrew Johnson, finished out the term with the VP seat empty.

But, in 2025, we’re looking at an entirely different construct; this time, the choice might matter. Presumably, Biden is stuck with Harris, lest “the fury that Hell hath not” be unleashed. This is a shame. Because, from what I can tell, Hunter is available, as is a daughter named Ashley, who charmingly and wisely keeps to herself.

Trump, as in other realms, has an embarrassment of riches in this regard. There’s Don Jr. And Eric. And Ivanka. And this says nothing about the disqualified Tiffany (too unhinged) and Barron (too young).

The response of those paid to care about the debate was near-unanimous. Biden not only lost, but unilaterally proved the widely distributed hypothesis that he is unfit to run and should withdraw. You know that the amps are turned up to 11 on this one when the long-in-the-Dem-tank New York Times Editorial Board put it in writing on Friday.

I’ll take the under on these dynamics. In trademark contrarian fashion, I predict that: 1) Biden will stay in the race, which 2) will be a close contest come what may. Trump has a lotta wood to chop to return to 1.6K Penn, and it won’t be from a cherry tree.

Meantime, we’re precisely halfway through the investment proceedings of 2024, and what a time we’ve had thus far! Our equity indices are at all-time highs, non-avocado commodities are stable, rates are range-bound. Stocks and bonds backed off on Friday, but I ascribe that to quarter end window dressing.

Today commences Q3, and part of me wishes we were off and running. But no, we’ve a holiday to interrupt us.

Upon return, it promises to be volatile. And we’re not off to a great start, what, with sell side royalty from both Goldman Sachs and JP Morgan predicting dire outcomes and recommending the lightening of portfolio loads.

I must admit that I don’t see it. Sure, the market could sell off materially this summer, particularly if external conditions deteriorate from their current pristine state. But if they do, and the world hasn’t blown apart, any selloff will be a buying opportunity sufficiently compelling, in a world still drowning in excess liquidity, that it will be difficult for any down draft to gather steam.

We’ll no doubt confront problems down the road. A world awash in excess liquidity is also drowning in debt. The economic slowdown everyone has been predicting for longer than I can remember could manifest. I don’t think that it will anytime soon, but ya never know.

The June Jobs number will drop shortly after the fireworks embers fade to black. I doubt anyone will pay attention. We’ll all continue our patriotic party through the weekend, as is entirely fitting and proper.

But July 8^th is looming. And then the action ignites. An interesting earnings season will be upon us, as will the prospect of newly rendered Inflation and GDP statistics.

By that Thursday, an unblinded judge will hand down a sentence on 45… ….for 34 convictions tied to a personal payoff of a paramour that, somehow, long past the expiring statute of limitations, have been deemed campaign finance violations. The following Monday, in the great city of Milwaukee, the joyful ritual of the Republican National Convention will commence.

By then, I suspect, that a steroid imbibed, oxygen pumped Biden will be growling behind his aviator glasses and spoiling for a rumble. His krew will have also recovered, accusing anyone who interpreted last Thursday’s knockdown as a sign to throw in the towel of being a fascist.

Still and all, with DJT potentially being remanded to a federal prison by then, and with the prospect of forlorn butterfly nets, at long last, coming to take Joe away to a happy house, it behooves them, and us, to think about the second slot. I considered Bronny, but, apparently, he has other career plans.

This country has, in addition to the John/John Quincy Adams sequence, endured two cycles of progenic White House occupancy. William Henry (Tippecanoe) Harrison’s grandson took office 58 years after his all-too-brief tenure. Then there’s Poppy Bush and W, whose terms were 18 years apart.

It shows that this country can survive nearly any trial, so, if you found Thursday night more depressing than entertaining, I suggest you take heart.

Because, this, too, shall pass.

TIMSHEL

One for Paul, One for Silas, One for to make, my heart rejoice,
Can’t you hear, my lambs a calling? Oh, Good Shepherd, feed my sheep

Traditional American Hymn

I select my theme from a piece so important to me that I consider it among a chosen few (Cat Stevens’ “Longer Boats” and the Dead’s “Uncle John’s Band” come to mind) that are not so much songs, but prayers.

Though “Good Shephard” has materialized, musically, in many forms, dating back to the early 19^th Century, for most of us (me included), only one comes to mind – Jorma Kaukonen’s now-copyrighted arrangement on the Jefferson Airplane’s “Volunteers” LP, which Jorma has continued to perform, night in and night out, long past the Airplane’s consignment to the junk metal heap, through his continued Hot Tuna work, and as a solo artist.

It is rendered timely because, as I read this past week, Jorma has shuttered his iconic Fur Peace Ranch, nestled as it is in Northeast Ohio, has sold off the property, and is fixin’ for another round of truckin’ his blues away.

But more about Fur Peace in a bit.

Because they’s droppin’ like flies. Again. Last week featured the passage of two of our irreplaceable cultural icons: Willie Mays and Donald Sutherland. Both shared a common characteristic: everyone loved and respected them. Everyone.

I will keep my tributes brief. Mays was almost indisputably the outstanding player of his era, and maybe the best of all time. In terms of the latter, I might shade towards Babe, if for no other reason than that he was on his way to a Hall of Fame career as a pitcher before he ever entered a daily starting lineup. But, in comparing the two, it bears remembering that Mays ended his career a skinny 55 dingers short of breaking Ruth’s long held record of 714, notwithstanding that his early career was interrupted by a two- year military stint during the Korean War. Might he have gone yard at least 55 times in those two forsaken seasons and thereby broken maybe the most iconic record in sports? Sure seems possible.

Then there’s Sutherland. So. Much. Magic. But I will always think about him – first and foremost – as Oddball in the magnificent “Kelly’s Heroes”: a leather-helmeted, anachronistic hippie, temporally teleported into the front lines of WWII Europe, fully twenty years before being a hippie was even a thing.

But now, back to Fur Peace. Which, until this past week, was a Jorma-managed guitar instruction camp for old geezer hackers such as myself. There, for a very modest fee, one could spend a long weekend sleeping in bunkbeds, showering communally, choking down mac and cheese, and joining in multi-dozen hacker jams of songs such as “Death Don’t Have No Mercy”.

All taught by Jorma. And, occasionally by other luminaries such as his running mate Jack Casady, Larry Carlton, and other top tier shredders.

I always wanted to go, but my family never let me. And now, of course, it’s too late.

But Jorma is 84, and, as far as I’m concerned, he can (and should) do what he wants. The good shepherd is thus shifting pastures, and here’s hoping they are greener ones.

Investors are routinely forced to do the same, to find new fertile grounds for their ovine financial flock. But the question is: whither, across the financial landscape, should they roam? Short-term, the answer is unclear. We’re in the doldrums of the last week of Q2. School’s out. The 4^th is just ahead of us. Market data flows have slowed to barely a trickle.

All of which has made for thin gruel in terms of investment opportunity. Case and point: Friday marked the once-vaunted options “Triple Witch” (or, if you will “Quadruple Witch”) wherein a quaint $5.5 Trillion of puts and calls linked to American equity indices expired into oblivion. Time was that such action would, at minimum, draw the attention of the investment community. But not this year. It was a complete snoozer. The sound that you heard, if any at all, resembled nothing so much as 39 acoustic guitars slamming their way through some incoherent 12-bar blues (set of course in the key of A), somewhere in Northeast Ohio.

Not that I wish to complain. The Gallant 500 is up something like 38% over the last 8 months, and if it does nothing but continue this trend, we’ll all have cause for celebration.

But I ask again, in the short term, whither should we point our hooves? To NVDA, which for a brief time last week, sported a greater capitalization than either the French or the British equity complexes? Yawn. So does AAPL and MSFT. And they been around quite a while.

NVDA backed off a bit on Friday and is now worth less than not only AAPL and MSFT, but also than the equity complexes of the Brits and the frogs. Its losses on Friday were greater than the market capitalization of all but thirty publicly traded companies.

Such are the wages and humiliations of life at the top.

Trump debates Biden this coming Thursday, and that should be quite a show. I doubt, however, it will move markets in any sustained manner. First principals suggest that the former’s drawing of a second three-card inside straight in November is the more bullish scenario. But allow me to offer some premature risk management advice: if this indeed comes to pass, I’d think twice of loading the boat and expecting similar outcomes to those of late 2016.

In any event, I anticipate that the next couple of weeks will be an authentic slumber-fest. However, I do believe the action picks up in the third quarter. The data flows should be interesting to say the least. The Fed may tip its hand, and, in foreshadow of this dynamic, consider that while the futures market has upped the probability of a late July rate cut to 10%, the Atlanta Fed’s Q2 GDP predictions are a Milton Friedman, slow growth wet dream:

However this plays out, undoubtedly, some Gloomy Gus types will, shoulder to the wheel, and try to test this extended rally. And they might succeed in breaking it. Or not.

Domestic politics, including our two quadrennial conventions, should be interesting. Geopolitics, with Bibi possibly addressing Congress, should be interesting. There’s earnings, Inflation, GDP, the FOMC, AND the Olympics, to anticipate.

And who knows? Markets may, for nonce, be bi-directional.

But, for now, the tape ain’t got no mercy in this land. It remains a tough go for market hackers, and even for those with pretensions to trading competence. And the associated timing is unfortunate, with Friday being the cutoff date against which we must measure first half performance.

Seeing as how there’s not much doing in the markets and given my anticipated pickup in the action post- Independence Day, there might be worse times to take a little breather.

But if you simply can’t forsake the action, you may want to take a glimpse at the Mexican Avocado market: which has gone parabolic this month, and quadrupled this year:

Not gonna lie: 850 Pesos is a big nut to pay for 9 kilos of that admittedly luscious fleshy fruit. And as your risk manager, I can’t authorize you to trade these bad boys. The market is controlled by cartels, they routinely burn down the fields. U.S. inspectors often find it easier to examine Iranian nuclear facilities than they do the agricultural fields of Michoacan.

To top it all off, Mexico has a new left leaning government, of which I am skeptical, even if it is overseen, somehow, by a newly elected Jewish woman (which I applaud).

So, if you must dive in here, you’re on our own. As for my part, I’ll stick to consumption, perhaps cutting back for budgetary reasons, and reminding myself to be thankful that at least it’s not Super Bowl season.

Thus, in winding up, we’re looking at zombie conditions across the non-avocado portion of the capital markets. And I’d like nothing better than to pack y’all off to the Fur Peace ranch, for some 12-bar, communal shower sonic dissonance. But it’s closed.

It saddens me indeed that I never got there. But I did get to meet Jorma once, and have the following visual evidence to verify this outrageous brag:

For those keeping score, that’s me on the left, placing Jorma on the starboard side of this image.

It was a long time ago. In a far away place, and I will go so far as to offer the opinion that we have both have aged magnificently.

And we both keep playing. And I advise you to do the same.

And though death don’t have no mercy in this land, we can keep the faith that somewhere in the great beyond, Willie is lording over the pastures of a heavenly Center Field, and Oddball is drinkin’ some wine, eatin’ some cheese and catching some rays in the rubble of a village in occupied France.

And that the Good Shephard can indeed hear our lambs a’calling, and will, as always in the past, feed our sheep.

TIMSHEL

East is East and West is West (well, you know the rest)

An o’er-used passage to be sure, but how many of you knew that it draws from Rudyard Kipling’s poem “The Battle of East and West”?

Glad to enlighten you.

I got to thinking about this, of course, upon learning of the passage of Jerry West: League Logo, Zeke from Cabin Creek, last week. ‘Tis indeed a sad milestone, but Mr. Clutch was the bane of my existence back in the early ‘70s, wherein, year in and year out, he and his annoying Lakers would dispatch what was a pretty good Chicago Bulls squad in the Conference Finals.

West being West, he crushed us. We’d go on a tear, claw our way to a 4^th Quarter lead, and bam! JW would hit three impossible corner shots with Jerry Sloan in his face. And, in so doing, break our hearts.

So, when I think of West, it is Jerry, who played at both West Virginia, and, professionally, in the West Coast Mecca of Los Angeles, that comes to mind. I don’t give a thought to Yeezy. Or the dude that played Batman on TV. Or James: the main character from the Wild, Wild West franchise.

But who is East? Not a lot of chappies with that surname. Eastman (Paul McCartney’s Father-In-Law)? Yes. Eastwood? (Blondie in The Good, The Bad and The Ugly)? Uh huh. But Google “East” as a handle. and all you come up with is a few footballers, cellists and businessmen (all of whom seem, for some reason, to hail from the U.K.).

So, we must improvise, and I note with interest that Zeke died only a couple of days after the demise of Chet (the Jet) Walker – perhaps the most prominent of that era’s also-ran Bulls. But Chicago isn’t really East. In fact, at the time, it resided in the NBA’s Western Conference. So, we move further from the direction of the sun’s trajectory, and find ourselves in Boston, whose NBA team (the Celtics, Naismith Trophy winners yet again) routinely beat up on West’s Lakers in the finals. And I’m not sure if this counts, but Boston is, by a considerable distance, the eastern-most locus of any NBA franchise.

The twain thus met innumerable times on the hardwood of the NBA finals, with Cowens/White/Havlicek squaring off against Kareem and any handy mirror-foggers that the Lakers threw out there in the latter part of the ‘70s, and then, of course, those classic Bird/Magic showdowns a decade hence.

Wither and how, though, shall the twain meet in the present day? The Celtics remain the Celtics, but the Lakers are stuck in the early stages of creating a post-LeBron identity, and LeBron ain’t even left the building (Staples Center) yet.

We thus must look beyond the realms of ironed rims and hooped twine.

Tupac and Biggie? Only as an object lesson. Them cats were never going to get together, and, as history shows, their eternal fissure didn’t end well for either.

We do have the example of the B1G, which now spans the continent – from L.A./Seattle/Eugene to New Brunswick/College Park. But – NGL – the subject annoys me.

And maybe the meeting of the twain ain’t such a good idea after all. I’m on the East Coast, and this Cali stuff drives me crazier by the day. The geniuses there have destroyed ten thousand fast food jobs this quarter alone – due to the imposition of that $20/hour minimum wage. Meantime, median prices at these culinary establishments (which, whatever one might think of the fare, are a major source of foodstuffs for the disadvantaged masses they purport to assist) are up ~8%.

Now I read, in this weekend’s Wall Street Journal, that Central Valley farmers – hard pressed for so long due to drought conditions – are, post-draught – only receiving 40% of their promised water allocations, though the needed water is both proximate and available in abundance. Their viability is thus rendered dubious. The reason? Normalized water flows are still deemed to interfere with the migratory habits of the region’s smelt population. The latter is protected under typically loony Golden State regulations, so, farmers and those that consume their products (All God’s Children) be damned.

It’ll only get worse from here. CA faces a 10% (and growing) housing deficiency. Within at most a decade, the state will have rid itself – again by regulation — of large diesel trucks, allowing only zero-emission rigs on its roads by that time. That there aren’t (and won’t be) anywhere near enough charging stations to accommodate the preferred battery powered jobs, and the weight (~2.5x diesel rigs) of the latter is certain to produce a strain on already over-taxed roads. But this has not impeded progress towards this righteous end.

Taking my concerns to the extreme, we’re looking at a locus with sinfully fallow farms, an alarming shortage of residential dwellings, sub-optimal logistics to move vital commodities, a dearth of Pizza Huts and Taco Bells, and a populous that is unable to pay the tab at those establishments which survive.

The smelt, though? They’ll be OK.

If we point our shoes north-facing, then East is on the right and West is on the left. And, as I gaze rightward from this orientation, I note that across the mighty Atlantic, the governments of both France and the U.K. are hanging by a thread, causing a selloff in the sovereign obligations of both ancient and proud nations. France is East of Britain, but replacement electoral outcomes push the twain farther apart, with France poised to take menacing steps to the right and England lurching back into the arms of the lefty Labor Party.

Over on these shores, we don’t seem to care. Our stocks and bonds are on the bid. Inflation, as reported this week, remains subdued, placing rate cuts back into play.

And the twain of the handful of mega cap stocks and the rest of the crowd continues to diverge, as is illustrated in the following year-to-date performance comparison between the Gallant 500, and the same group of names, calculated without rank (weight).

And even among those chosen few, the divergence between Supreme Leader NVDA and the rest is striking, with the former having well more than doubled in 2024 and the others mostly just chugging along.

While we might all benefit from certain forms which a twain-meeting of the few equity haves and the many have nots, I fear that were this to come to pass, it is more likely to take the form of a selloff of a former than the resurgence of the latter.

And that we don’t want, right?

Meantime, all this has put the hurt on hedge fund managers, many of whom are worth more sympathy than even the laid off grill jockeys from Cali Mikey D’s. Trust me. I’ve seen the numbers. They ain’t pretty lately.

But markets, are battles between men (and women), and are derisively indifferent to participant positioning on the map. Thus, like the battle between Afghan warrior and the Colonel’s son over the fetching mare that is the subject of the dispute in our thematic poem, the following can be said:

“But there is neither East nor West, Border, nor Breed, nor Birth,
When two strong men stand face to face though they come from the ends of the earth!”

We could do worse as investors, and, indeed, as members of the human colony, to remember this adage. And, as for these and other twain meetings, ‘tis perhaps best to leave these matters in the hands of Providence.

TIMSHEL

Her name was Aphrodite, and she rides the crimson shell,
And you know you cannot meet her, for you’ve touched the distant sands,
With tales of Brave Ulysses, how his naked ears were tortured, By the sirens sweetly singing

Clapton/Sharp

On June 4, 1904, Leopold Bloom wakes up in his non-descript Dublin apartment. He fries himself up a joint of pork. He plays with his cat. He makes his wife tea, wherein she reminds him of a rendezvous she had arranged with a man (aptly named Blazes Boylan) that afternoon, demanding his absence from the premises at the appointed hour. He runs a couple of business errands, goes to a funeral. Wanders around Dublin doing nothing much.

He finds himself, at one point, on the banks of the Irish Sea, whereupon he espies a young girl, who evokes a (possibly two-way) fantasy. She departs, and he realizes she is lame. So, he moves on. Checks in at some pubs in the Temple Bar, where he is, as is commonly the case, disrespected. Gets drunk that night. Goes home and makes up with his wife.

This, in essence, is the storyline of James Joyce’s iconic novel “Ulysses” – considered improbably both one of the greatest works of modern literary fiction and among the most unreadable (though — take my word for this — it’s a walk in the park compared with “Finnegan’s Wake”, a book about which it can only be said that anyone claiming to have actually read it is almost certainly lying).

I am proud to state that I did manage to get through Ulysses, though not without the help of the usually reliable SparkNotes study guide. I believe that, interpreted correctly, the novel challenges the reader with a single question: what was the point of it all?

Well, to me the unifying message, though obtuse, is rather profound. That the single day in the life of even the most ordinary, least interesting, most mundanely flawed among us, can be viewed as an epic, Homeric journey, with activities such as the ordering of one’s lunch or the riding on a trolley car worthy of chapter titles such as Proteus, Cyclops and Penelope.

I find this concept inspirational. Our lives are little more, after all, than a series of moments, which we can choose to either trivialize or enshrine. At least in my better moods, I have chosen the latter, and have thus privately celebrated “Bloomsday” every year. But this past Tuesday being a milestone — the 120^th Bloomsday — I took the extreme (for me) step of posting an acknowledgment on Facebook. It read as follows:

“Bloomsday 120. ReJoyce”.

Note the pun of the last word, which I’d like to claim but as my own, but was instead lifted from Grace Slick, who wrote it as the title of a Ulysses-honoring song that was included within one of my favorite albums of all time: “After Bathing at Baxter’s”.

At any rate, I expected my post to go viral, or at minimum, that a goodly number of my erudite friends and followers would respond to/acknowledge my homage.

What did I get? Bubkis. No comments. No likes. No emojis of any kind. Not gonna lie. My feelings were hurt, but I’m a big enough person to look past this outrageous insult of omission. More than that, I feel sorry for those teeming millions of non-responding keyboards. Or, as Cream put it:

Tiny purple fishes, run laughing through your fingers.

Because I fear that they fail to realize that there’s a good deal of Leopold Bloom in each of us. Tragically average, indistinguishable from the masses, we spend our days wandering around, insulted, cuckolded, ignored, but not oblivious, and thus wondering what the devil it all means.

Market participants are exemplary of this, as, for many of them, they awake each morning to Bloom’s world as it existed on June 4, 1904. They traverse their screens, interact with other schnooks, read unimaginative, consensus-based research, check support and resistance, and make their trades. Their peers are laughing at them, and, for an unfortunate, indeterminate subset, their wives are at home getting smashed by their singing coaches.

That, often, they make money is beside the point. It is, remember, a Bull Market. So, for many of us, we wander through a latter-day, delusional, dollarized (digitized?) Dublin, circa June 1904. And here, I’m reminded of my experience in 2021, when I could hardly leave my house without someone, often of faint acquaintance, buttonholing me to inform me that: a) they were making a fortune in the markets; b) it was only the beginning, because c) (so they believed) they had “cracked the code”.

Almost all were singing a different tune in ’22, but that’s precisely the point.

And this June, which not only features Bloomsday 120, but also the 80^th anniversary of D-Day, seems no different than the rest. Equity markets are enjoying a bang-up year, but alpha has been hard won (if, indeed, won at all) over the last rolling quarter. Earnings and guidance have been stable to strong, Inflation is in tolerable ranges. NVDA has sucked all the oxygen out of the room, having a) crossed the quaint $3T valuation threshold, in doing so; b) reached a capitalization of >$100M per employee; and c) generated, on a single day last week, more volume than the next twenty most active stocks combined.

Meantime, the most recent point on which our wandering wits have focused was Friday’s Jobs Report. Which was a superficial blowout, but, as has routinely been the case, contains much ambiguity in its detail. Because (among other matters) in America, we are not content with a single Employment measure, but rather rely upon two. And the less respected, more Bloom-like of these (Household Survey) showed not a large expansion in payrolls, but rather a significant reduction.

Not sure how they measured these things in early 20^th Century Ireland, but, for the record, Bloom was a print advert salesman, and probably did pretty well. Until Radio/TV. Then the Web. And now, AI/NVDA.

The market was flat-to-down on the news, as it was, in Blooms-world at any rate, expected. Because everyone was kinda hoping for some Employment weakness, not a bona fide pull-back, you understand, but a softening sufficient to keep hope alive that the Fed fairies would float down for some dainty rate cutting. Which we all could sorely use. Particularly consumers who borrow – a group that is now throwing off record-level delinquencies.

So, part of me still feels we’re being played. That Blazes Boylan is romping with the missus in our marital bed, that our friends with whom we exchange bon mots are deriding us – often behind our backs but episodically in our faces.

Like Bloom, we soldier on. The FOMC is on the docket this week, nestled in immediately after the PPI and CPI drop. It all is destined to follow script, with the Fed standing pat, while issuing vague language so as not to entirely discourage market participants into entirely cooling their rate-cut-expecting jets, and with Inflation figures providing scant illumination.

So, likely, we will spend the remainder of June wandering the backstreets to little purpose — other than to allow sufficient time for our cucking sequence to have ended, so that we may return home in a state short of abject humiliation. After that, it sure ought to be quiet. What creates the most dramatic tension in the back half of the month is the pending Biden/Trump debate. I won’t plunge into any depths here, but it should be worth watching as a piece of performance art if nothing else.

Investors aren’t seeming to care. And, on a happy note, I believe they remain oblivious, and that the market will continue its docile upward trajectory.

And, as we belatedly celebrate Bloomsday, it is entirely fitting that it be so. Because >700 pages of pathos and bathos notwithstanding, Ulysses is an uplifting tale of love and redemption. Molly (Mrs. B.) is left unfulfilled by her afternoon adventure, and (spoiler alert), in the end, remembers the authenticity of her marital bond. Bloom lovingly takes her back:

“He kissed the plump mellow yellow smellow melons of her rump, on each plump melonous hemisphere, in their mellow yellow furrow, with obscure prolonged provocative melonsmellonous osculation.”

All of which may be a bit too graphic for those, like me, who have tender sensibilities. But, somehow, it reminds me of our mellow, yellow, smellow markets, which vex and worry us. But at the end, like Molly, offer us the following siren song, rendered all the more painful because we have lashed ourselves to the mast to preclude following it. And thus, it tortures our naked ears all the more.

“I said yes I will. Yes”.

TIMSHEL

Well, friends, we managed to make it through May, which strikes me as having been, from many perspectives, a difficult month. I won’t inventory all the vexing aggravations we endured; suffice to state that it was a challenging period in which to generate returns – new record highs in the Naz, and Gen. Dow’s temporary breaching of the 40K threshold notwithstanding.

And now we roll to June, which, as the magnificent Oscar Hammerstein once lyrically observed, is designed for the sublime mission of “bustin’ out all over”.

But in terms of the markets and other realms of human hyper-focus, this year, I’ll take the under.

Please understand me. I am not predicting a major market correction here, much less a crash. While these outcomes are possible, they would, should they to come to pass, surprise me greatly. But, by the same token, bustin’ out (to the upside) all over? I kinda doubt it and will take the under.

Over the course of my longevity-defying career, I have always found June a particularly difficult month to model. First, as the third lunar cycle of a quarter, all the data we are instructed to care about is in, and, as such, not many catalysts tend to identify or manifest in these final quarterly stanzas. But June, the last of the Q2 triad, is often particularly opaque. In March, we begin to see patterns as to the unfolding of the coming year. September is always a big month for matters ranging from public policy to forward-looking corporate plans, and, after Labor Day, action emerges from traders champing at the bit to book their year. December, even with its narrowly rendered, holiday-distracted investment windows, is often chock full of deals and other niceties.

But June? The last month before the always attention divided summer – a typically quiet interval that ushers in a quiet season.

And this particular June, while fitting into many of these constructs, strikes me as being especially translucent. Because I have a hunch it’s gonna be a more rolickin’ summer than any we’ve seen since at least ’20 — with its lock downs, political knavery, wholesale urban rioting (given a pass by civic authorities otherwise ready to bring the hammer down on anyone daring to go to church or undertake similar virus spending activities) and other shenanigans.

Oh yeah, and with the Fed ginning up ~$3T (and not yet halfway done) of new funny money and using it to buy up every asset upon which it could get its grubby hands.

Why do I believe we are in something of a redux (absent the Fed buying spree)? Though I wearies me to go this route: a) much of it is political; and b) I can’t set it down without also laying a rant on y’all.

So, here goes. With respect to a), we may be lurching into the most dysfunctional, disruptive election cycle since at least 1860, and perhaps going back all the way to 1800, in which it took 36 votes by the House to break an Electoral College tie between Jefferson and Burr. Running a dismal third was incumbent John Adams, who arguably got smoked because the electorate had grown tired of witnessing the criminal prosecution of his political enemies.

Sound familiar?

It should, because we have some of this shady behavior transpiring now, before our eyes..

All of which takes us to b). My rant. Please skip if you wish. You may not agree with me, and I have nothing particular to add to the, er, erudition on a topic that is swarming the ionosphere at incalculable magnitude and rapidity. I have only, instead, my partially informed opinion.

First there’s this. I do not like Trump. Never have. Always thought him a huckster. It’s true that I supported him in 2016 — for one simple reason. I despise Hillary Clinton, thinking her to be the embodiment of all that is detestable about the self-aggrandizing elite.

He exceeded my expectations for most of his time in office. Ran, I think, a pretty tight ship. Though I was on the losing end of this, he (very productively) cut taxes. He reduced nonsensical regulation, installed judges who follow the Constitution. He put our geopolitical ill-wishers on their heels.

The virus came, the lock downs came. And very few things piss me off more than the gross fiction that he botched the pharma-based response. He was the one that put together the public/private coalition that created what appears to be an effective vaccine program – in about 10% of the time it normally takes to get these things out. Ordered, at considerable risk (since the development work was not yet complete) some 100 million doses. By the end of his term, 1 million folks had been vaccinated. When his successor came in, he acted like nothing had been done.

But he lost the election. Yes, there was a lot of monkey business involved, but there always is, and, as I wrote at the time, if it was stolen from him, it was stolen fair and square.

Then, within the ten weeks between vote count and inauguration, he acted as shamefully as any president in history. Refused to concede the outcome. Cajoled his minions to obstruct the certification process. Encouraged the folks in GA not to vote in 2 Senate runoffs – both winnable races, which his party lost, ceding the Senate to the likes of Schumer, Whitehouse, Warren, Blumenthal, Durbin, Bernie and the rest of them clowns, to do what damage they might.

All before January 6^th.

I personally do not think he conspired to overthrow the government on that wretched day, but what he did was bad enough, and boils down in my judgment to nothing less than failing, as he had sworn to do, to uphold the Constitution.

They’ve been after him since ’15 – nearly a decade, and, in the lead up to this year’s contest, one that I hope and prayed he would sit out, they indicted him over 100 times. And now, as of last week, he stands a convicted felon.

But objectively, if such an adverb is in any way applicable, the whole thing was a travesty of justice, even if, indeed, he is among the least sympathetic victims one could imagine. The judge (selected not by random process, as is the norm, but hand-picked by the Justice Department) is an unabashed Dem operative. They found an end around on the Statute of Limitations, accusing him of Election Interference for paying, with his own funds, a stripper who he smashed, like, 15 years ago.

Election Interference? For paying off a stripper? Seriously? If we’re gonna apply equal justice here, we’re gonna need to dig up a lotta guys: FDR, Ike, Poppy Bush (does anyone really believe that these guys contented themselves with Eleanor, Mamie or Bar?), not mention JFK and LBJ, and, of course, Bubba (still among the quick) for similar offenses.

The jury pool was jurisdictionally biased. The Prosecution, presumably for no other reason than to humiliate the defendant, queried the alleged victim about the gory details of the dalliance. The Court disallowed expert defense witnesses. Worst of all, in final instructions to the jury, the latter were informed that they did not, somehow, need to agree as to the specific crime committed, only that some offense had transpired.

It was like shooting fish in a barrel. Guilty on all 34 counts. Horrible legal precedent, putrid political precedent.

Though early days, it does not appear that any of this has weakened Trump’s political standing.

But we’re entering the pre-election summer faced with the prospect of a convicted felon squaring off against an Octogenarian of indisputably fading mental and physical faculties, who has probably paid off his own paramours and, whose family has indisputably banked tens of millions of dollars off his power and persona.

I’m thinking that Putin, Zhi, the Mullahs, L’il Kim and others are having a laugh riot.

And these realities might just hit the markets this summer, and if so, there will be few places to hide. Stocks and bonds, which run in opposite directions under risk-off conditions, are extending an historic streak of positive correlation:

USDJPY has soared to levels not witnessed in a decade, taking the NK225 along for the ride:

Of late, the BOJ has paid lip service to strengthening the unit of account in the Land of the Rising Sun, but one wonders what their game truly is. Rates over there remain near zero, as they have for a generation. This has kept the yen carry trade in play (under which investors borrow in yen and deploy capital in more lucrative jurisdictions). But God Oh Mighty, if the BOJ ever gets religion and ends this nonsense, well, I don’t want to think about it.

Finally, and having gone over my limit already I won’t say much about this, I read with interest that Dr. Pepper has surpassed Pepsi as the Number 2 carbonated beverage, and Dr. Pepper is undrinkable.

Back in the days of the Adams Admin, tea was the beverage of choice. While it remains popular to this day, the Alien and Sedition Acts have long since passed into the history of infamy.

Their spirit seems to have arisen of late, though, and I fear for the consequences. But I’ll not say more, because, who knows? I may run for office some of these days and would prefer not to have my historical expenditures scrutinized as potential evidence of Election Interference.

TIMSHEL

This week, we descend into the depths (dregs?), of the ills of upper echelon academia. Ah, my friends, the well is deep. Shall we deem it bottomless? It would often seem so.

The topic is, of course, timely, with the world’s attentions still fixed upon the sacrifices made by many thousands of tuition over-payers, across dozens of leafy campus settings, in eschewing their focus on secondary matters such as finals and graduation, to unite in outrage in protest of the “war crimes” committed by the lone representative democracy within 1,500 kilometers of the Mediterranean. Abandoning their luxury dorms, plush libraries and world class workout facilities, and ensconcing themselves in tents on the quad, they wile away the hours chanting sing song rhymes, which charmingly call for the elimination of the country in question.

In retrospect, this should surprise no one. It’s all part of a highly marketed, deeply branded experience, under which the privileged pay outrageous sums to send their progeny off for three objectives: 1) to get them laid; 2) to school them in the evils of their underwriting antecedents; and 3) to get them laid.

I will, however, strive to cut this rant short – not because I don’t have an endless source of fodder, but instead in to devote our limited space to our primary subject matter of financial risk management.

To wit, I read with interest that the Power 5 Conference Consortium (including, somehow, the Pac-12, whose membership roll, by my last accounting, had dwindled down to two forlorn universities) intends to convert their athletically gifted scholars into employees. The execution plan, was, inevitably, indecipherable, and is beyond the paygrade of this observer to articulate. Suffice to state that it involves back pay of ~$3B (with the lawyers grabbing their gargantuan but entirely earned share), and a payroll budget of $20M/year per alma mater.

This, of course, begs several questions. Like, how quickly will $20M morph into >$200M? How will the compensation be distributed? And how will all this impact recruiting?

All remains to be seen, but, meantime, there are certain realities we can discern, most important for our purposes, is that university sports departments are now deployers of capital, must operate their programs as portfolios, and as such, must now perform portfolio risk management.

Among the most vexing challenge will be to identify an appropriate Objective Function, which I anticipate will vary from institution to institution. The Domers, with their proud tradition dating back to Rockne and the backing of the Holy See, will almost certainly seek maximum returns, taking the form of gridiron glory – and irrespective, with The Lord on their Side – of associated risk. Other, secular institutions with perpetual eyes on the bottom line and little rational hope of athletic conquest (think University of Chicago) may wish to deploy their capital in more prudent, judicious fashion.

There may also be a crew with sufficient computing chops (think Cal Tech or MIT) to create low-cost arbitrages and thereby lap the completion.

Meantime, we can begin to identify the certain constraints. The initial allocation, as mentioned above, is $20M/year, so we can start there. Presumably, though not yet specified, the NCAA will enforce some diversification – by limiting max payouts to individual athletes and demanding large chunks be allocated to pain-in-the-ass Title IX programs such as Field Hockey.

From there, we can impute some emerging portfolio construction contours. A baller power forward or mauler offensive tackle may justifiably command a premium, but we should bear in mind that in terms of the latter, that two are required to operate an offense.

At any rate, one thing is certain: ‘tis out of elegantly engineered Objective Functions and Constraint identification that effective risk reporting doth emerge. But here’s where our true problems begin to materialize, for, how on earth are we to measure performance?

It’s easy enough to calculate the in-action results of a Jaydon Daniels or a Caitlan Clark, and, with a micro-dose of imagination, we can even impute the associated impacts on the competitive fortunes of their teams. Daniels won the Heisman, but got injured at the end of the season, and his Bayou Bengals finished 12^th in the final AP Coaches Poll. Clark led her team all the way to the final game of the Big Sadie Hawkins Dance, enchanting the world throughout, but her Cyclones got bested by the Lady Gamecocks in the Championship Game.

More pertinent fort our purposes is the Sisyphean challenge of measuring financial impacts and attendant appropriate compensation.

For someone like Caitlan, and with a $20M aggregate cap, we can perhaps approximate the former. As of 2022, the Iowa State Endowment clocked in at just over $1B, or 2% of that of Harvard. My guess is that we’re looking at a double or more, simply in tribute to Ms. Clark. Incremental TV ratings and revenues were also a rocket ride.

So, let’s assume that this lady hoops machine negotiated, say, a $2M payout from Iowa State University – about the max, due to internal political constraints, which I can envision any single player receiving. My guess is that the return on this 2 Large is well into the nine figures, which would surpass that of even early-stage Uber. Or Alphabet.

But if we’re gonna do risk analysis here, we must find a way to incorporate such metrics as volatility, drawdown, and, of course, Factor Sensitivities. Good luck with that, but ultimately, the Board of Trustees is going to demand a Sharpe Ratio on your 5 Star QB or McDonald’s All-American point guard, and price him accordingly. The Mr. Hyde of my risk management persona is giddy at the notion.

Moreover, the challenge will broaden out when the $20M payout constraint is obliterated. If nothing else, the lawyers will successfully demand this, arguing that athletic powerhouse institutions garner hundreds of millions of dollars a year from the toiling of the vassals that represent them in intercollegiate competition, and that in the name fairness (along with, say, a 30% cut) this outrage must be eradicated.

At that point, effective risk analysis as a decision support tool will be rendered even more essential.

The good news here is that I have adapted my models to these first world challenges. However, I am not prepared to share them. But if the provost of the (new BIG Member) University of Oregon (selected here because their athletic program is generously underwritten by Nike Founder Phil Knight) is reading this, he or she should call me. Perhaps we can do a little biz.

Remember in future times that you read it here first: the perennial winners of future NCAA competitions will be those institutions that practice financial risk management with the greatest rigor.

The same can be said about old school portfolio management. You know, the kind involving the holding of positions in financial instruments? I encourage my readership to view this as good news, because simply by virtue of having paid close attention to this space, you have acquired a significant edge over the masses.

And my best advice for the moment is to continue to do what you do. For what it’s worth, I think it pays to stay long here, as, not only will you thus place your rooting interest on a powerful momentum force, but you will avail yourselves of the alarming excess liquidity that continues to slosh around the financial ecosystem. There’s not much doing, data-wise, between now and the end of the Quarter, but if you’re looking for catalysts, it may behoove you to consider the following catalysts. The Treasury Department, for the first time in a generation, is fixing, starting this Wednesday, to buy back some of its wonkiest, most illiquid securities, and their besties at the Fed will, starting next month, reduce their Balance Sheet taper – from $60B to a beggarly $25B per month.

All of which should act to render the rich holders of securities even richer. I think it’s a good bet – kinda like taking UConn in the most recent March Madness series. Or betting on the SEC champ to win it all in the FBS.

The former would’ve worked like clockwork a few weeks back. The latter? Not so much, as, for the first time in a decade, the honors of College Football devolved to my home conference, the BIG, now expanded to 18 teams – including Phil Knight’s Oregon Ducks.

The reigning champs, though it pains me to write this, are the Michigan Wolverines, who I dislike out of pure jealousy. I’d like to call this a one-off, but I fear they will retain an advantage under the new paid paradigm.

Among other matters, their subterranean football stadium – The Big House – accommodates 115,000 ticket buyers, which is a great deal of working capital to redeploy in the payment of their athletic squads. Their alumni rolls also include a host of annoying Wall Street types, who, while many not among my favorite people, are at minimum, capable of calculating Sharpe Ratios and Factor Sensitivities.

As such, and one way or another, though, I am forced to cry uncle and enter the new world with an unenthusiastic “Go Blue”. Like so much else in our evolving world, my heart is not in this. But my choices are depressingly limited, so I preserve and suggest you do the same.

TIMSHEL

“Vices are sometimes only virtues carried to excess”

Charles Dickens – Dombey and Sons

“A little Dickens is good for the soul”

Greg Baker

“It appears to be a lo-on-g. Ti-ime. Such a long, long time, before the dawn”

David Crosby

This one goes out to our second quotation source – Greg Baker. My high school English teacher. The guy who exposed me not only to Dickens but also to Joseph Heller. And Dostoyevsky. And Albert Camus.

Greg died shortly after the dawn of the new millennium, and it took me about that long to realize the wallop he’d given me. He was part of a wave of educators, hired by our free-thinking, free-loving principal, who gave no guidance to his eclectic assortment of instructors other than to shake us up a bit. Some of them (though not Greg) had no education credentials of any kind.

And shake us up they did, especially Greg. But there is a dash of extra pathos/panache in his story. He was a championship swimmer, of such stature that he qualified for the 1968 U.S. Olympic Team, destined to compete in Mexico City. In the lead up to this epic event, he was involved in a horrific automobile accident, the details of which I am unacquainted, save for the unmistakable reality that it rendered him a quadriplegic.

One could still observe the sinewy swimmer’s physique even in ossified forms of withered legs and stiffened, curled up fingers. But he carried on regardless. And left his mark. He even coached a damned competitive swim team. He and I weren’t close (I wasn’t much of a swimmer back in them days), but in the ensuing years it hit me that I owed him something, and even if the only way I can make good on this debt is to honor him in these pages, I think he’d, nonetheless, be pleased.

“A little Dickens is good for the soul” he’d remark to us. And force us to accept this dose of spiritual remediation – even as, to the extent we read at all, we were more interested in the scribblings of William S. Burroughs, Richard Brautigan and Hunter S. Thompson.

Over time, I reckon I’ve waded through about half of the Dickens Cannon, but it had been a long time – coming and gone. Nobody can deny the singular brilliance of “A Tale of Two Cities”, “Great Expectations”, and any number of his other novels, but I have occasionally found him tedious. Some of this is owing, or so I tell myself, to the fact that he published most of his works in serialized periodicals, wherein he was paid by the word. He was thus financially incentivized, for lack of a better way to describe it, to be a bit “wordy”.

I have recently rediscovered him, though, focusing, this time on secondary works such as “Martin Chuzzlewit”, and, of course, “Dombey and Sons”, the latter from which I have sourced this week’s title and quote.

“Vices are sometimes only virtues carried to excess” sayeth Dickens in Dombey, and if this isn’t true, it certainly ought to be.

But is it? True that is?

A review of history episodically supports the claim. Caesar was ambitions, for his people, who repaid this virtuous vice by doing him on the steps of the Forum.

Robespierre wanted a just constitution but took matters so far that as to cause the heads of tens of thousands to be severed, including, in the end, that of he and all his compatriots.

More recently, when at Harvard, Zuck put together a little computer dashboard, designed with the virtuous objective of placing as many of Cambridge’s nubile young co-eds within his reach as would be possible. Now, a generation later, we are compelled to contend with a monstrosity wherein two billion users assault our senses with pictures of their cats and soon-to-be-consumed vegan omelets.

Perhaps more ambiguously, George W. Bush sent forces into Iraq and Afghanistan, for the virtuous purpose of avenging both the 9/11 attacks and the mean things that Saddam said about his Poppy. More than twenty years later, we departed the latter jurisdiction, leaving our own citizens behind as well as billions of dollars of treasure, and enabling the Taliban to assume fulsome control of that forlorn nation. It made our exit from Vietnam look like the conquering strut of the Hannibal’s Carthaginians across the Alps in the Second Punic War.

In terms of the markets, about 15 years ago, our Central Bank began printing funny money and bailing out banks — in virtuous effort to save our financial system – a stunt that had never been tried in the post WWII era.

One may justifiably question whether said financial system merited this salvation, and I have no quibble with those whose viewpoint shades negative. My own view, though, is that while I hold no brief for the bankers and other shady characters who caused that mess, I think the collateral damage of having not so acted would’ve been brutal, and that the feel-good retribution juice we would’ve rained on the perps would in no way have offset the squeeze we would’ve all felt when our bank deposits were frozen, our loans called in, and our property foreclosed upon.

But then, when we got into that viral trouble a few years, back we redoubled this virtuous strategy. The markets recovered. The economy recovered. Inflation surged but then stabilized at an elevated but far from alarming level. Stock and property holders got fat on excess. Consumers paid more for essentials, and, while jobs were plentiful throughout, many were of dubious quality.

Will this vice come back to bite us? I guess we’ll find out.

A few years ago, some rambunctious cats, led by a bad hombre with the handle Roaring Kitty, took to Reddit to see if they could seek to take down some hedge fund dudes by buying up worthless stocks such as Gamestop (GME) and AMC. They succeeded, so much so that they compelled a heretofore wildly successful fund manager to abandon his enterprise in favor of the lowly and humiliating vocation of NBA team ownership.

Well, now, Roaring Kitty is back. GME is on fire again. Redditt is now a publicly traded company. The hedge fund hoop squad ended the ’24 season with a record of 21-61.

Is this vice born of excessive virtue? Tough to say.

And now, on the threshold of Memorial Day, ushering in, as it does, the summer season, and with most important earnings and macro data in the bag, is as good a time as any to take stock of where we are on the virtue/vice contagium, and to ponder whether it will lead us as the months fly by.

Our equity indices are at or near record levels, having absorbed an extended period of higher interest rates and other annoyances. Long-in-the-tooth General Dow, as one example, closed, for the first time in its storied existence, above 40,000 on Friday. Most of the developed world is in the same configuration.

There’s approximately $6T in money market funds available to pounce on the stock market, and will almost certainly do so if the long anticipated but frustratingly lamented cycle of rate cuts finally commences.

Technological advancement ensues at a breathtaking pace, and not simply in the realms of TMT (though it should be noted that the exalted NVDA has doubled from its ’23 close and accounts for a full quarter of the Gallant 500’s >11% gains thus far this year).

Commodity markets? A mixed bag if ever there was one of late. Consider the acute contrast between the recent paths taken by Copper and Cocoa:

Heavenly Penny Element:                                        Active Ingredient in Cocoa Puffs:

We need ‘em both, but excess consumption of the latter is most certainly a vice, so I’ll take this as good news.

To be sure, and if one cares to look, there are many matters to vex us. The looming presidential election appears to be the most depressing of these affairs as ever we’ve experienced, or, at minimum, since 1856, when the inept James Buchanan defeated the ineffectual Millard Filmore and the unhinged John Freemont, causing, among other effects, the elevation to Vice President one John C. Breckenridge, who went on to become Secretary of War for the Confederates.

The two electoral combatants are scheduled to debate one another next month, the earliest point for such a contest in American History. It should make for compelling theater, but anyone expecting an exchange rising to that of Lincoln/Douglas is likely to be disappointed.

A virtuous act of retributive self-defense on the part of the Israelis morphed, at least in the eyes of much of the world, into a sequence of vicious genocide – so much so, that millions of bystanders have taken to the streets to disrupt the routine of billions who are not thus engaged. Here’s hoping that those moved, somehow to action here do not find themselves to be latter-day Robespierres.

I guess the lesson in all this is that we should embrace our passions, but only to a degree.

I expect the markets to remain strong here, but caution investment enthusiasts to act with a degree of temperance. And this includes you, Roaring Kitty. At some point you’re gonna have to slow your roar, lest you be mauled by an angry bear. Neither GME nor AMC have any business to speak of, and certainly no business rallying energetically – even on this tape. You’ll probably step aside before they crash, but what about all those jabronis that follow you? I fear for their portfolios.

But this note is about Greg. And one more anecdote comes to mind. I hated high school, and on Graduation Night, my last act before exiting the premises for all time was to climb to the science lab at the top of the building and blow a joint there with my buds.

Upon egress, I encountered Greg in the parking lot and garbled out to him “it’s been a long time”. Whereupon, and in sequence, he said, “and a long time gone”. Perhaps thanks to him, I uttered the appropriate response:

“And a long time before the dawn”.

He smiled with satisfaction and rolled away into the night, knowing in his heart that I’d learned something from him after all.

TIMSHEL

“Ashes to ashes, funk to funky, we know Major Tom’s a junkie,
Strung out on heaven’s high reaching an All. Time. Low”

Bowie

Let us acknowledge up front that this is a stupid lyric. I do like the song, but c’mon, Dave. Ashes to ashes, funk to funky? Seriously?

I will give him his propers for writing a sequel to “Space Oddity”, the song that launched him into the Stardust Stratosphere. And I have no real issue with him re-imagining Major T as a smack addict, as, when previously encountered, he was floating round a tin can, and – let’s face it – any condition, from that vantage, has gotta be an uptick. One may also say, in fact, that Bowie was ahead of his time, what, with all that re-imagining that was going on a few years back (not that the latter worked out so well).

So, the purloined quote is mere device, a lead-in, if you will, to the main topic at hand, which, unfortunately and tediously, pays homage to the end of yet another era.

I read with unmixed sadness that Sam Ash, that iconic purveyor of six string razors, is closing its doors — all godforsaken 42 of them, after a hundred frickin’ years. In touching verisimilitude, the announcement was made by one Derek Ash – great grandson of the franchise’s eponymous founder.

It was a good run. But it’s finished.

I must cop to not having helped their cause over-much across the decades. I did buy one ax there – at the flagship 48^th Street location. It was a Brian Moore i2000f – with a lovely Maplewood finish, double humbuckers, and a switch that could alternate the pickup settings between single and double coil (don’t ask me what the significance of this feature is, because I have no idea):

But I broke it, and not, I’m ashamed to say, in Pete Townsend fashion.

It fell 90 degrees — from perpendicular to horizontal, causing a fatal fissure just at the point where the neck meets the machine head. This is known (or should be) among us shredders as the Humpty Dumpty crack, one which all the king’s horses and all the king’s men…

And now Sam Ash is gone. Along with the Village Voice. And the Minnesota North Stars, who shamefully moved to Big D and became the Dallas Stars. For reasons I am unable to explain even to myself, I was outraged by the move, and this notwithstanding the reality that: a) I’m not much of a hockey fan; b) I certainly never pulled for the North Stars; and c) the NHL replaced the 10K-Lake representative with an outfit called The Wild.

But there was something about a hockey team called the Minnesota North Stars morphing into the Dallas Stars that outraged all I hold as holy in this forlorn world.

One is tempted here to derive no lesson other than the old “ashes to ashes” bit, which, paraphrasing Genesis 3:19, is never explicitly included in biblical text. Instead, it is prominently featured in the Anglican Book of Common Prayer, which, in turn, dates its origin back to the 16^th Century – during my old sandlot pal Edward VI’s time. So, let’s give a shout out to Eddie the 6^th, who: a) replaced his Pops: Henry VIII; b) at the age of 9; but c) died at 15. Say what you will: The Book of Common Prayer is an impressive legacy for the boy king.

So, yes, ashes are said to revert to ashes – in life as well as the investment game. Consider, if you will, the example of Bernie, who built a Potemkin-like trading colossus, out of the financial equivalent of ash and dust, which, inexorably returned to dust when market conditions precluded its ability to present itself as anything else.

But sometimes, ashes reconfigure themselves not into ashes, but rather into something spectacular. Consider, if you will, a recent announcement by the FTX Bankruptcy Trustees indicating that claimants are now likely to receive as much as $1.50 for every dollar invested. One way of looking at this is that being stiffed by FTX turned out to be one of the most lucrative investments of the emerging decade.

Much of this miracle is owing, in circular fashion, to the remarkable rally in Bitcoin, which rallied 4x from its contemporaneous-to-FTX-collapse, before rudely pulling back again. Coincidence? I think not.

Still undetermined is the fate of Renaissance Capital, founded by a physicist named Jim Simons, who left us this week, and whom we would be remiss not to honor. He was as important a figure in hedge fund history as any you could name, having built Renaissance out of the dusty ash of an idea – that market prices were not always random and could, with some regularity, be anticipated by quantitative models — into perhaps the most successful alternative investment platform of all time. He formed it in such a way, using legions of quant geniuses building quant models before anyone had an idea that such a thing was possible, that his platform is likely to continue to thrive. But the jury’s still out.

More broadly, it falls to our lot to discern what in our path will assume the Sam Ash/Village Voice/Minnesota North Star configuration and revert, for all time, to the ashes from which it derives, and what will re-emerge, Phoenix-like. I wanted to understand the latter a bit better, so as to more effectively report it back to you. So, for those who don’t know this, the avian form of the term (from which all other forms derive) originates around 8^th Century, BC, in the region of Mycenaean Greece, and tells of a creature rising from the ashes of a predecessor, a recently toe-tagged bird of the same feather.

The good news here is that risk assets are showing aquiline symptoms, with equity indices, fixed income securities and sundry other speculative instruments encouragingly bouncing off recent bottoms, and, in doing so, demonstrating admirable staying power.

Dare I say momentum?

We’ll be better able to answer this question by mid next week, after the big, ritualistic CPI/PPI drop. A blip upwards will equate to the closeout sale on 48^th street, while a downtick will extend the Phoenix trajectory. I think these numbers, assuming that they come in within reasonable ranges of expectation, are of less import than the feel of the tape would suggest, but I reckon we’ll see.

And, somehow, now, we are in the Middle of May, which ushers in the back half of Q2, wherein the information flow slows to a bare trickle.

So, I really don’t know. I suspect the current low-vol conditions will ensue for a few weeks. Any downward draft will likely be met with significant buying pressure, but there’s hardly context for a surge at this point. My best guess is that we’ll end the quarter at proximate valuations to those we currently observe.

Still and all, I can’t help but lament and worry about all the changes – observable and otherwise – that are transpiring all around us. Maybe the fanciest office I ever had – one that embarrassingly transcended both my professional station and my associated comp – overlooked the Sam Ash HQ. At that time, 47^th Street featured about a dozen guitar galleries. Now, there’s nary a one. Much earlier in my career, I had a brief, improbable stint working for CBS, which at the time owned the Fender Corporation. They had a merch store on the 20^th floor, next to the cafeteria, where in addition to buying Walter Cronkite coffee mugs, they had a full suite of Strats, Teles, and Mustangs. At the noon hour, one would always find innumerable suited geeks hacking away ineptly at some basic blues.

As a guilty pleasure, I occasionally joined this throng. Perhaps it was my embarrassingly superior chops that got me fired from that gig.

Ashes to ashes, though. Cronkite is dead, and Fender is now owned, you guessed it, by a private equity concern.

And, one might add, considering the shuttering of Sam Ash and my careless mistreatment of my BM i2000f, axes to ashes. I have replaced it with a hot pink Paul Reid Smith job. But I think I’ll hold on to the former. Because you never know: the Book of Common Prayer could be wrong, and the Greeks right: ashes may not always revert to ashes, but instead, rise-Phoenix-like, into new, stronger versions of their former selves.

TIMSHEL

“Start off slow. Don’t add nothin’ extra. And stop when I tell ya”.

Archie Bunker

I borrow the above quote from the iconic 1970s sitcom “All in the Family”, which ruled the ratings roost for the better part of the decade, and as accompanied by the following contextualization.

The plot of the episode featured is an inability of son-in-law Mike to, for lack of a better way to put it, get his mojo working. His Johnson, in other words, quit on him. This naturally disconcerts his wife Gloria, who confides the intelligence to her delightful but entirely sheltered mother Edith.

Not knowing what else to do, and after much consideration, Edith determines to consult with Archie, who, after all, might have a better understanding of the intricate workings of the offending appendage than would his missus. But this is uncharted conversation territory for the Bunkers — Pere and Mere, Archie for all his Dubya Dubya Two macho, is a stone-cold prude, and Edith knows she must introduce the subject with all the delicate aplomb she is able to muster. So, she tells him that she’s got something private and somewhat embarrassing to discuss with him. She tries the side door, but Archie isn’t answering it. So, she plows ahead:

“Awchie, it’s sex-u-al”, she cringingly informs him.

After grimacing, Archie offers up our thematic quote.

Edith tries to slide into the topic, begins by mentioning an army buddy of Archie’s, who, injured in the war, was “wasn’t able to…”

Whereupon Archie tells her to stop. Other than verifying that she is referring to their offspring and her lord, he needs hear no more.

He tries his best to counsel his lump-headed son-in-law – of course to no avail.

But the point is this: I highly empathize with Arch on this one. Don’t wanna hear much about sex these days; still less about sexual problems. Thus, if you wish to consult me about same, I ask you to: 1) start slow; 2) avoid adding unnecessary detail; and 3) stop when I give the command.

More broadly, and as time goes by, I find myself in deeper sympatico with this man, who, for several seasons, was the world’s caricature of narrowmindedness. Archie was the quintessential L7. But if one digs, deeper, there’s more there. A working-class guy who proudly fought for his country. Came home, married, got a job, bought a house, had a daughter, and generally minded his own business.

He sees the world changing rapidly around him and tries to make sense of it all. More often than not, he fails. He is confused and frustrated and doesn’t try to hide it. He is baffled by the unrest, the dissatisfaction of youth with the global state of affairs. While he is not, per se, against racial equality, its details are too many for him.

The “free love” sexual revolution espoused by the young bloods is entirely above his paygrade.

But he works hard, loves his family, and, against his better judgment, takes his unemployed, annoyingly overeducated son-in-law into his hearth and home. The latter, a quintessential know-it-all, routinely belittles and disdains him. But never truly gets the best of him.

And all I can state, to tie together this digression, is that if I had the choice to interact with either of them in nearly any construct, I’d pick Archie every time.

And here I sit, as confused about the doings, as confused about next gen sensibilities, as Archie was on his worst day. And, fabulous though I continue to look, having on Saturday reached the age of 64 ½, I am now ten years older than Caroll O’Connor was when the original series ended. Archie’s book learnin’ ended with high school, whereas I hold three degrees from accredited universities. Arch busted his hump on the loading docks to earn his bread. I sit on my ass and think great thoughts.

But my world, like his, is changing in ways that confuse and frustrate me. I try to keep up but can’t.

And this (like Archie) across virtually all realms of existence. I have no idea what The Sphere is. I neither Tweet nor X. Tick nor Tock. I have not kept up with the Kardashians (though Lord knows I’ve tried).

I influence not a soul.

I worry perhaps less than I should about Greenhouse Gas Emissions. I tend to identify those I encounter as belonging to one of the two genders which I can recognize sensorially.

I root, nay, pray, for the prosperity, or, at minimum, the continued viability, of the State of Israel.

I favor low taxes, limited regulation, and a strong national defense.

In my spare hours, I watch the Hallmark Channel. And, during commercial breaks often cry.

I think, to summarize, I am deeply at odds with the core of the newfangled orthodoxy, and being so, have fully embraced a Bunker Mentality.

In my non-spare time, I watch the markets, think great thoughts about them, and share them with investors. For a fee. Frequently, they puzzle me, but I don’t let that interfere with my professional activities. I simply pretend that I know something, fake it till I make it. The strategy works surprisingly often.

And, while we’re on the subject of the markets, not much, according to my predictive models, is relevant before the commencement of 2023, when the equity complex, fresh off a deeply disappointing year, embarked on a 5-quarter rally which caused Col Naz to nearly double in girth. Other indices in arms similarly swelled, but then, as Q1/24 concluded, they all apparently decided that maybe it was time to go on a little diet. The party’s died down a bit since then. Not only are equities considerably off their highs but yields across the board are substantially elevated.

Economic trends have caused Fed Watchers to, in an Archie Bunker sense, “stifle themselves” with respect to their giddy shilling for rate cuts. Until, that is, last week. When first Chair Pow offered them soothing rhetoric, and then the April Jobs Report came in very meagerly – particularly when one backs out the hiring done by government agencies and the like. Now, hope for reduced rates is renewed.

This added some welcoming mojo to the equity tape, as further, er, goosed by a strong finish to the Mag 7 reporting cycle. So, the week ended on a strong note, as investors entered the weekend with visions of rate cuts and earnings surges dancing in their heads.

But at least some market participants are failing to pick up what’s being laid down:

If I read this correctly, nearly all God’s Children are short interest rate instruments and are this expecting higher yields in the near term.

I’m OK with this viewpoint. More than that, I believe a bit of rate discipline may yield tasty dividends down the road. Unless they skyrocket, while they may dampen investor exuberance a bit, they are not likely to cause much undue market damage. So, my best guess is that we drift around here a bit – if not much better, than not much worse – for the experience.

And I can’t take my leave without addressing the greatest issue of the day: the protests and the implied antisemitism implied therein. All of which recalls another great moment in the career of my idol, Archie Bunker.

When Archie’s longtime bestie Stretch Cunningham dies suddenly, and Arch is called upon to make the eulogy, he finds out, much to his surprise, that Stretch was Jewish. It was a moment of supreme irony, because the two buddies often bonded based on their racist and xenophobic sensibilities. Those around him offer various explanations as to how this could be true. Among these is the possibility that the surname Cunningham could indeed have an Hebraic origin. Archie considers this, but rejects it using the following argument:

“There ain’t supposed to be no ham in there”.

He’s not wrong on that score.

A yarmulke-wearing Archie delivers a moving farewell address to Stretch, furnishing one more reason for placing him in the pantheon of my hero worship objects.

So, I reckon I’ll continue giving this man mad respect, and emulating him – by remaining puzzled and frustrated, but retaining my determination to carry on regardless.

And all I ask of those around. me is that if they want to discuss market matters, social issues of the day, or (heaven forbid) sex, they start off slow, don’t add nothing extra, and stop when I tell them to.

TIMSHEL

Then we heard the Sermon on the Mount, but I knew it was too complex,
It didn’t amount to anything more than what the broken glass reflects.

Bob (who else?)

Mind if I lay a little of the Gospel on y’all? Didn’t think so. Having, after all, just laid to rest Bagan, Gabe and Dickie, it would seem the proper occasion for doing so.

Our title comes from that all-time-great biblical passage known as the Sermon on the Mount. Those looking for the specific citation need search no further than Matthew 6:34.

I would view the Sermon as the biblical equivalent of something like “Abbey Road”. Some clunkers in there, but also some, well, divine moments. Such as the “blessed are the meek” bit. The totality of the piece has rendered it timeless. Just like “Abbey Road”.

I also learned, only by researching this note, that it is the SotM that contains The Lord’s Prayer.

So, mad props to Matthew, who, as an apostle, kept a fairly low profile – certainly more so than, say, Peter or John. Perhaps this is because, apart from being an apostle and all, his side gig was as a tax collector — a profession which, presumably back in them days, demanded its practitioners to keep it on the DL.

Shame, though, because he takes a nice snapshot:

Eventually (or so I read), he dropped his tax collecting ways and took to apostling full-time – a job which, among other obligations, featured an extensive travel schedule.

Unfortunately, on a trip to Ethiopia, he got into a beef with a local king – named Hirtacus – of course over a chick. Seems the king wished to wed an indigenous beauty who Matthew had previously consigned to a nunnery. King H asked for dispensation, and when Apostle A refused this accommodation, the latter got his-self martyred.

Meantime, we have his Gospel to remember him by, including the singular Sermon on the Mount.

Sufficient to the day is the evil thereof, sayeth Jesus. And he had reason to know, because his evil hour was, at that point, not far off in the offing.

But I digress.

Still and all, I am somewhat puzzled by this theme, as it runs in direct contrast — if not to the word of Christ, then at minimum to its application over the past > 20 centuries – much of which involves eating one’s vegetables, abstaining from the pleasures of the flesh, and awaiting one’s reward in the hereafter.

It devolves to me to report that humanity has only imperfectly adhered to these interpreted teachings of Jesus of Nazareth. Often as not, it has adopted the more direct construction of the “sufficient to the day….” vibe – letting it all hang out and deferring any thought of attendant consequence.

This, of course, as much as anywhere else in these earthly realms, applies to the Capital Economy. Particularly since the pseudo-biblical Plague of ’20, we been printin’ and spendin’ and taxin’ and regulatin’ and redistributin’ and otherwise transgressin’ to beat the band. And bidding up risk assets like bargain hunters at the Temple of Jerusalem. Nowhere in the text of either testament, to the best of my knowledge, does it suggest that that this is the way to prosperity. But as Saint Matt tells us Jesus said: “sufficient to the day”.

And, after a rollicking time of it over the past several quarters, one wonders if “the day” might not be hard upon us. GDP slowing. Inflation on the rise. Treasury Department issuing astonishing amounts of paper. To a lukewarm reception, causing interest rates to continue their biblical ascent.

It is of course, impossible to determine what all this portends. The economy has, in an Old Testament sense, been asking for a bout of stagnation for God knows how long, and last week’s data trended in that direction. The high priests (and rabbis) of economic orthodoxy are wagging a figurative finger in our faces, admonishing us to repent. But all may be rendered moot, because either we have entered a phase of where the wages of such sin are nil, or we have already brought the economic flames of hell down upon ourselves sufficiently to obviate any benefit of correcting the error of our ways.

I suspect that we’re still in a state of financial grace. We can certainly absorb an economic slowing and/or a gentle upward drift in pricing trajectories. Elevated interest rates have not thus far, and are not likely in the immediate future, to do much more than annoy us.

We’ve an election coming up, with every likelihood that the prevailing powers will goose the energy and treasury markets — so as to create better optics entering into the final autumn stretch. We probably pay for such manipulation down the road, but (everyone say it with me) sufficient to the day…

Other pandering political bennies include the unilateral negation, by unelected bureaucrats at the FTC, of Non-Compete Agreements embedded in certain employment agreements. Not gonna lie – this one hacks me off. Nobody likes to sign Non-Competes, but they are nothing more than a clause in a private contract between employer and employee, within which the Government has no standing. No one is impelled to sign on to them. I am hardly a corporate shill, but it strikes me that even The Man is entitled to protect himself from mercenary employees seeking to absorb proprietary information and then sell it to the highest bidder. Moreover, and perhaps more importantly, absent such protection, there is every likelihood that The Man will hire fewer innovators, and, hiring fewer innovators, will innovate less.

What is this? Russia?

Additional sops take the form of proposals for an impressive 44.6% federal tax on Capital Gains, up from the current threshold of less than half of this amount. All done in the righteous name of “ensuring the rich pay their “fair share” (precisely what this amounts to never specified). If y’all want an example of Big Government and Big Biz colluding to our detriment, here it is. The Fed prints ~$10T in the wake of the covid plague. Most of this finds its way to the market, which is a 2-3 bagger since the lockdowns.
Now’s time for the kickback to the folks in Washington. It’s a square deal for the swamp and the titans of Silicon Valley, but the shame of it all is this. It will now become that much harder for anyone with a new idea to risk their capital and substance to grab for the brass ring of commercial success, knowing, as they will, that if it somehow comes, and after those avaricious state revenuers grab their share, less than half of the spoils will remain to these visionaries. Seems like a dirty deal to me…

Aside from all this aggravation, I have been forced to set aside time to knock heads together at my second alma mater: Columbia University. Located a short mile north of my Manhattan digs. I do not wish to enter into a debate as to who is the sponsor of the evil thereof in these here proceedings.
Further, I have no doubt that those forced to contend with the IDF often have a bad time of it. But FFS! When one considers the genocidal brutality that traverses the globe – From Cuba to the Congo, from (Omar’s beloved) Somalia to the Sudan, it both frightens and astonishes me that it is Israel’s behavior that causes the world to unite in outrage.

Probably, this all peters out eventually, and certainly will when the cameras and other gear are sent away from 116th and Broadway. But the bad feeling will remain, the lingering odor of a world that will pick and choose its outrage based upon what will sustain the attention of the tele-connected world. And let me state one final beef. Let’s say all those righteous freedom fighters in Morningside Heights manage to eliminate Israel from “the river to the sea”. What happens then? Well, it’s my guess that this is the moment when the REAL violence in the Middle East commences. Sunni v. Shia v Houthis.

Meantime, one of the world’s leading centers of capitalist democracy, with all its culture, technological innovation and history, will become a minimally lamented memory.

Sufficient to the day…

But in the end, who cares? We’re in the middle of an Earnings Calendar which has brought more delight than despair. We’re off our highs; Bitcoin is halving. There is, in short, every piece of the puzzle required to abide by the literal musings of the Sermon on the Mount — and buy risk assets ere someone else hoovers ‘em up.

However, if we simply follow the train of our time-honored Dylan quote, the next lines are as follows:

“When you bit off more than you can chew, you gotta pay the penalty. Someone’s gonna have to tell the tale, I guess it’s up to me”.

This I have tried my best to do. I may indeed have bitten off more than I can chew and have cause to regret it down the road. But, returning to our titular theme “sufficient to the day…”.

TIMSHEL