…she’d be your Zadie

Old Yiddish Proverb

Yes, we’ve travelled this road together in the past.

Some choose to complain; I prefer to celebrate.

Because, sometimes what has come before offers not only warm remembrance but also, in updated context, new meaning.

So it goes with our titular phrase, the essence of which is an admonishment against the follies of rationalizations to which we all, fall, from time, to time, victim. Typically, it takes the form of telling ourselves that if this one thing had been different, an outcome would have been more to our liking. But –so the saying tells us, that one thing wasn’t different, and, as such, the result was what it was.

However, there’s some special elements of this week’s idiom, the first of which is how well its transliterated Yiddish version trips off one’s tongue. If you doubt this, simply recite the phrase a few times. Particularly if you’re Jewish, I defy you to inform me that it doesn’t make you feel better.

When I find myself in times of trouble, this is my affirmation.

And, blessedly, if you’re not a Jew, there are equally pleasing-to-the-lips versions of the same truism. I am particularly predisposed, in a positive way, towards the manner it is uttered by those New Yorkers of Irish and/or Italian descent, who, using hard-edged tones for their consonants, bark out “if your grandma had balls, she’d be your grandpa”.

I am further fond of the expression due to its sublime illogic. Because, of course, even if your Bubbie did have beytsim, she’d be unlikely to be your Zadie, as a) it would likely have dampened your actual Zadie’s romantic ardor for her; and b) even if this wasn’t the case, present-day biological constraints would’ve rendered it problematic for the couple to have spawned either of your parents.

All of which brings us to our grand moment of recontextualization, because, in modern times, it has become fashionable to define one’s gender, one’s reproductive capabilities, if you will, as one sees fit. And, this means, taking this concept to its logical extreme, your Bubbie can become your Zadie simply by deciding to be so.

But here’s the good news. I have no interest in using this space to debate the veracity of the preceding statement. I’ll leave that to others of superior wisdom. Instead, I will focus on the broader themes here – the ones that feature the human foible of laying blame for misfortune and missed opportunity on factually disputable dispositives.

Meantime, what looked like a slow news week, threw off some heat before it shut itself down. Our armies are filling the Persian Gulf with hardware, and I’ve got a small hunch that this in and of itself bears watching.

GDP came in weaker than expected, and, in Pavlovian fashion, The Big Dog blamed The Shutdown Dems (it was, of course, entirely their fault) and, inevitably The Fed, for messing up an economy that he has repeatedly described as “perfect”. If Congress had only done his bidding and The Fed had only aggressively slashed rates…

…if your Bubbie had beytsim…

Then, in what falls unambiguously under the heading of being a shock but not a surprise, on Friday, SCOTUS shot down Papa Bear’s bestowal upon himself the right to set tariffs as he sees fit.

God Bless SCOTUS,

But I have no more interest in lecturing the masses about the absurdity of placing the decisions as to levies relating to this country’s >$5T International Trade business in one man’s hands, about how tariffs are a tax, control over which the Constitution plainly places in the hands not of the Executive but rather of the Legislative Branch, etc. But let’s just be thankful that the keys have been taken away from a guy who, by all appearance, has had one too many.

And this is to say nothing of the lead-up, which, among other things, included a report issued by the New York Fed which suggested, contrary to the solemn, holy proclamations emanating from Truth Social, that American consumers are footing ~90% of the tariff bill.

The logical inference here is that Trump, famous throughout his life for, when it suits him, attempting to sew baytsim on his Bubbie, will pull a fast one. In fact, it took about 10 minutes post SCOTUS decision for him to slap another 10% on global trade, as the world’s punishment for daring to defy him.

Strike that. Make it 15%. Just in case anyone failed to get the message the first time.

All of which was accompanied by his accusing certain “nay” voters of The Nine as being disloyal and others of being traitors.

And I fear this is the mere beginning of his Revenge Tour. Expect more fire and brimstone of this nature in the immediate future.

A new idea just popped into my head, which, if it comes to pass, remember you read it here first. The entire rational world has been/still is living in terror at the prospect of a Progressive takeover that achieves what even FDR couldn’t pull off 90 years ago – the packing of the Supreme Court.

I now have a hunch that our misanthropic Attorney General – Pam Bondi – may have received orders to research this very topic, with the opposite ideological outcome in mind.

And why not? There are rumors that Alito is considering retirement, and Clarence Thomas – nearing 100 (he’s actually only 78) – cannot be far behind. The political winds are blowing ill for Papa Bear, he’s hopping mad at SCOTUS and, as he has showed that he is capable of nearly anything – including, perhaps, adding a half dozen seats – all to be filled by Big Orange acolytes.

I will say this about the dude: he’s got beytsim.

But here’s the thing – the markets barely reacted to any of this. Which surprised me. Because I think the entire scene spells potential trouble for investors.

You wouldn’t know it from the tape, though. Noticeably tepid GDP barely budged the bond market. Or the dollar. True, pending hostilities in the Persian Gulf have boosted the Energy Complex, but not as much as one might think. Equities gathered themselves into an afternoon rally in the wake of the co-equal judiciary branch’s defiance of the Chief Executive. And that always unpredictable Vixen VIX rendered herself ever so slightly more sublime.

But there are no beytsim under heaven that will convert Vixen VIX from your Bubbie into your Zaydie.

On balance, therefore, it looks like a tricky situation, and one where no beytsim-enhanced Bubbies or beytsim-bereft Zadies are likely to offer much aid or comfort. Taken to its most dismal extreme, we could, in a short period of time, find ourselves at war in the Persian Gulf, facing global, bi-lateral trade embargoes, a Department of Homeland Security catalyzed Federal Government shutdown – all against a backdrop of an economy, which, if the current data can be believed, appears to be slowing down.

And, to top it all, the East Coast is under a full-on assault from Mother Nature, which began on Sunday and carried forward into this week. Which has deeply messed with my flow in terms of parking on the Upper West Side.

But you don’t wanna read about my problems.

NVDA reports this week, but even that shouldn’t matter much, because that great engine of equity wealth creation is currently stuck in neutral:

On the other hand, sew some beytsim on your Bubbie and all sorts of miracles are not only possible, but likely.

But in the real world, one rarely, if ever, encounters this condition. And for this, I think we can be grateful. Best instead to deal with the realities as we experience them. And, from this perspective, I believe that on balance, caution is called for. Let’s not try to manufacture things that don’t exist, but rather, deal with the realities as they unfold.

Who knows? Things may work out better than we even imagined. And if not, we’ll deal with it as best we can.

TIMSHEL

There is a young cowboy, he lives on the range, His horse and his cattle are his only companions,
He works in the saddle and sleeps in the canyons, Waiting for Summer, his pastures to change,

And as the moon rises, he waits by his fire, thinking about women and glasses of beer,
And closing his eyes as his dogies retire, he sings out a song which is soft but it’s clear,
As if maybe someone could hear,

He sings good night you moonlight ladies, rockabye Sweet Baby James,
Deep greens and blues are the colors I choose, won’t you let me go down in my dreams?
And rockabye Sweet Baby James

James Taylor

This goes out to Jo –the original moonlight lady. who left us two years ago. With love and respect.

Meantime, today, we begin the back half of Q1/26 (the year is now, improbably, ~12.5% in the books), and I have long believed that the trailing 50% of any calendar quarter is much more difficult to trade than its immediate predecessor, being largely bereft, as it is, of actionable dataflows. And this here quarter feels no different. Earnings, for example, and save the potentially world changing NVDA print next week, are substantially in the books.

There’s a GDP drop on Friday, but by now I am confused as to what period it covers and whether it is a preliminary estimate or a revision. We’ll get some macro data in March, to which I offer an unenthusiastic whooptie doo.

Ands to top it all off, the markets are closed today. For President’s Day. Soon to be renamed Trump Day. Until, that is, gravitational forces cause his humorless hubris to collapse on top of him.

Meantime, for market participants, it’s a tough read out there, and one against which we must be highly selective in allotting our wandering, finite attention spans. However, the following “stop the presses” item did catch my eye this past weekend, and I’d caution against you’re sleeping on it:

Now, being myself a young cowboy, and coming, as I do, from a family of Chicago Kosher meat producers (David Berg, Inc, whose claim to fame – long before my tsar-fleeing antecedents purchased it from its eponymous owner — was the production of the hot dogs that fed the 1860 Republican National Convention, which, after several ballots, nominated one Abraham Lincoln), I have been watching meat prices with great interest for quite a while.

But what I didn’t realize was that the supply problem was so acute. And, upon instructing the propellor heads at the General Risk Advisors Jet Propulsion Laboratory to conduct further research, I have learned the reason. The flesh of the nubile young XX cattle is so much more valuable than that of more mature bovine damsels, that they’s slaughtering ‘em young, and, most importantly, before they have a chance to reproduce at a pace sufficient for full population replenishment.

All of which reminds me of three anecdotes, the first of which is a quote from the Grapes of Wrath:

“When I was a kid my ol’ man give me a haltered heifer an’ says take her down an git her serviced. An’ the fella says, I done it, an’ ever’ time since then when I hear a business man talkin’ about service, I wonder who’s gettin’ screwed.”

I believe we have always known the answer to that question.

Unfortunately, though, if the charts above can be relied upon, then there is neither enough servicing, nor screwing, to repopulate the country’s Holstein populations to levels adequate to match those which prevailed when Gary Cooper played opposite Grace Kelly in the Cowboy Classic High Noon.

But hey, not all of us are cowboys, or even carnivores. So, far from everyone is getting screwed, or, if you prefer, serviced.

And don’t even get me started on those beef substitutes that were all the rage 5 years ago:

Now, I will cop to having choked down at least one of these Beyond Meat Burger Buggers, and to have lived to tell the tale.

But a share of its stock, once commanding a princely ~$180, can now be had for seventy cents. Meaning that it takes about eight of these to secure a Big Mac, and up to ten or more for a Happy Meal.

As reported last week, Mickey D’s stock is flying, its post- covid sales surging. All of which suggests that we may have achieved peak design – for hamburgers and fast-food franchise finance.

So, how you gonna trade ‘em, cowboy? If you figure it out, let me know. Because it sure beats the hell outta me.

But I’d keep my eyes and ears open by that roaring fire that you built under that big open sky. Because certain market movements remain puzzling. Last week was a rather frustrating one for the Equity Complex, for instance, and no doubt coincidently, the Big Dog didn’t choose to weigh in about it.

He was probably just busy, hopefully occupied, at least in part, with facilitating the incremental production of calves that become heifers which are impregnated by bulls, give birth, and start the cycle anew. Because he just doesn’t seem like a Beyond Meat kinda guy.

Such a project requires patience, though. And the marshalling of physical strength. Which brings us to our second anecdote, lifted from The Sopranos (and used before in this space).

A father and son bull look down from a hill where they spot a ravine full of the loveliest set of same-species females they, or at least the younger of them, had ever encountered.
“Hey dad” says Junior “let’s run down and f_ck one of them cows”.
To which the elder replies “I have a better idea, son. Let’s walk down and f_ck em all”.

Never have I heard such sound risk management advice – from biped or quadruped. And I kind of think that there’s rarely been a better time to bust it out.

My above supplied math suggests that 87.5% of 2026 remains to be, er, endured. The year, as all years do, will travel its own path, live a life of its own. But right now, it is still a nearly newborn calf, unsteadily testing its own legs and sucking its nourishments through its mama’s teats. And it behooves us, as investors and observers, to allow it to further develop before determining directly how we wish to comport ourselves with respect to it.

Its financial and economic vitals are, thus far, encouraging – GDP and Earnings Growth, pesky but finite inflation, etc. Yet so many of us have a churning in our guts about its prospects. And, by my perspective, justifiably so.

The latest bit of headline-grabbing agita is no new revelation; rather, it derives from a long-socialized fear that the pace of technology development is now so rapid that it threatens our ability to control it.

Perhaps, and I reckon we’ll see. But as AI morphs into the version of 2001’s HAL before Dave dismantled it, there’s a passel of money to be made by mere mortals in the transition.

But none of this is to help us with our more pressing problems – how to pump out more beef cattle, and what to do with our investment portfolios. Borrowing from our two anecdotes (in reverse order), I’d suggest we walk/not run into risk, such that we get serviced/not screwed.

However, seeing as how this note is dedicated to Jo, I offer a belated Goodnight, moonlight lady. Your life-giving essence flows across the ages, as does those of your offspring. And their offspring.

And though you all human, one final cow reference – our third anecdote – comes to mind (with a grateful nod to Ken Kesey):

A dumb-ass thing keepin a cow. But God O Mighty, ain’t they warm to lean against?

Well, yes, you were. And now I am told that you are headed to the place you best belong. To your home in the sky. Where deep greens and blues are the colors we choose.

And rockabye Sweet Mama Jo.

TIMSHEL

From the park I hear rhythms, Marley’s hot on the box,
Tonight there’s gonna be a party, on the corner at the end of the block,

Didn’t know you, would be jammin’ until the break of dawn
Nobody ever told you, that you would be jammin’ until the break of dawn
Be jammin’ and jammin’ and jammin’

Stevie Wonder

Bob Marley, had he lived, would’ve turned 80 last Friday. And this, to me, is something.

Marley didn’t make it, probably, like the rest of them dudes, never had a chance. But God o Mighty, when he was here…

I had the great fortune of encountering him early and seeing him live – all of which I attribute to my head banging adolescence in the Chicago of the 1970s.

For true rockers, there was arguably, at the time, no better place to be than the Midwest, where we had our own versions of Haight Street and Cheyne Walk. Many, with I believe some justification, attribute this to the absence of other means to amuse, divert, and otherwise absorb ourselves, in the Heartland. We had no mountains or ocean beaches, but we did have rock and roll (and blues and jazz and REGGAE). There were tons of clubs, many more than in cities such as New York, because the rent was cheap and it didn’t take much to build a stage at one end of a tavern and start booking bands (and this is still true today). Major label acts loved us because we bought all their records and frenzily attended all their shows.

It was also, I believe, cheaper to run a radio station there, and Chicago in particular, had several amazing underground stations, including Triad Radio and the now-mainstream WXRT.

It was through the latter that I discovered Marley. The year was 1976, and he was only beginning to cultivate the global following he ultimately achieved and (perhaps more importantly) retains. XRT played a lot of his tunes, and, when I learned that he was doing a couple of nights at the Auditorium Theater (the City’s answer to Carnegie Hall), I copped tickets, grabbed a couple of my buddies, and headed down. I was not disappointed. He had this grand but staid venue, built for the likes of The Chicago Symphony and Lyric Opera Company, shaking from sub-basement to 4^th balcony.

Before long, he was filling much bigger venues and selling records by the bushel basket, getting boosts from luminaries such as Eric Clapton (who recorded a passable cover of the expendable Marley song I Shot the Sheriff, and made it into a hit). And Stevie Wonder. Who booked his band as an opening act for his 1977 tour – the one that supported his own elevation into the commercial stratosphere with the release of Songs in the Key of Life.

Marley and his mates in the Wailers had just released what I consider to be their best album: Exodus, the first song of the second side of which is a fantastic tune called Jammin’. So apparently impressed was Stevie with Bob (and perhaps the song) that he wrote the tribute tune which I have purloined for this week’s title. In the autumn of 1980, crushed the Billboard 100 charts and all associated sub-categories.

In May of the following year, Marley left us, succumbing to a cancer, which, in part due to religious considerations, he refused to properly treat. Instead, post-diagnosis, he went on a two-year world tour. He came back little more than a corpse, but went out, as Stevie had prophesied he would — jammin’ until the break of dawn.

His music, his legend, and, of course, his brand, remains. I’m not sure that any but the first of these would have pleased him. But I can’t think of a single musical artist who so thoroughly dominates awareness in their sub-genre – not classical, not jazz, not country, not folk, not classic rock, or heavy metal, or punk, or new wave, as much as Marley does with reggae. Mark it as yet another sign of our ADD. And our ignorance.

But winding the clock forward to the present day, it is an open question whether we are jammin’ until the break of dawn, and if so, if anybody bothered to tell us.

I will, as a risk manager, cop to being confused as hell about what’s goin’ on. I hear rhythms of factor movement all across the heatmap and cannot make heads or tails of them. The tape felt heavy all week, until Friday’s session, when the cavalry came charging in, causing the Dow Jones Industrial Average to close above 50,000 for the first time in its long and storied history. When I got into this here biz, General Dow, still wet behind the ears, was trading at quaint all-time highs of under 3,000. So, I have lived through many round number milestones.

But I cannot remember one that felt as tepid and uninspiring as DJIA50K.

As indicated, not everyone views the achievement as the yawner I described. But then again, not every would use the modifier GREAT to describe our wandering, idiosyncratic tariff constructs.

The Big Dog is now predicting a double — to 100K by the end of his tiresome-already second term. And we know this to be a certainty, because, as he himself points out, he is right about everything.

Still and all, and again as a risk manager, I am predisposed to warn my politician clients about taking credit for market gains, lest they be held accountable for the reversals which must come, sooner or later.

But The Dog didn’t ask me. And probably wouldn’t listen if I told him. Because I might also advise him to ease back on his Truth Social Imaging, which, based upon this picture, is nothing short of Orwellian.

Meantime, we’re stuck, in many ways, in Market Limbo Land. We’re more than halfway through earnings, and of the results we’ve on balance little to complain. Of course, NVDA’s drop – the only thing that matters in these realms – is still two weeks away. But historically acknowledged field marshals of our equity hosts, the likes of Gooooog, MSFT, AMZN, etc. all did just fine. And expressed enough confidence in their futures to up their capital spendings, causing their stocks to sell off based upon decisions, which, had they not made them were likely to draw the ire of investors in the opposite directions.

Meantime, there’s new sheriffs in town. But so help me, I can’t work up much enthusiasm for a tape within which the likes of Mickey D’s, Proctor and Johnny John are designated to be the new leadership.

Results will continue to roll in, along with the January Jobs Report (on a delayed basis), CPI, and Retail Sales. I salute any of you who believe that these tidings will bring more clarity to the proceedings.

I don’t.

And, furthermore, the news flow is making me cranky. Particularly as we endure yet another arctic onslaught, all we have to divert us (post Super Bowl that is) is the for me unwatchable Winter Olympics, the saga of the kidnapping of the news lady’s poor mother, and, of course, Epstein, Epstein and Epstein.

With respect to the last of this, it sounds like an impressive law firm, but I’d caution against going to them for legal advice – particularly given that not only Epstein, but Epstein AND Epstein are all nearly six years dead.

I reckon the good news is that Winter is more than half over, and, for me, its successor season cannot come too soon. So eager am I for spring that I am almost gleeful about Pitchers and Catchers reporting this week – even though I can barely watch an inning of baseball without yearning to stick a pair of tweezers in my eye.

With the warmer weather also will come a heating of the political season, a prospect which I anticipate with a combination of nausea and dread. It’s gonna be ugly out there, and there’s no Marley out there to stage a One Love Peace Concert, as he did in 1978 in an effort to bring the warring factions together:

On the other hand, the episode didn’t work out too well – for Marley, or Jamaica in general. The opposing parties remained at odds, with the Conservatives, with whom he was not aligned, running the table, as did Ronald Reagan in 1980.

The violence continued in the streets, and six months after the election, Marley was dead.

They still run political concerts these days, but only one side shows up. Which is probably a good thing, because the sides disagree not only on policy but on music as well.

Jammin though? That’s something we all can do. Come fair market winds or foul. Till the break of dawn. One option is to roll with Stevie’s tune, then Bobs. And, by doing so, you might just come to understand.

So says the Master Risk Blaster. And on this one matter, you should take me at my word.

TIMSHEL

Rejoice brothers and sisters, we managed to survive January. It was, however, touch and go. The weather sucked throughout, worsening across the cycle. On the plus side, and even though the blizzards of snowflakes whined about it, we managed to capture that cockroach Maduro, who is now cooling his heels at Rikers. But tens of thousands of protesters died in Iran, and here, right in our own heartland, inside one of the most vanilla-flavored cities the gods could, with all their awesome powers, create, federal agents managed to kill not one but two civilian types.

NYC swore in Zo, and I reckon we’ll see about all that.

Bob Weir exited, stage left, and though his contributions to a great band were finite, the world nearly lost its mind over this – expressing its grief by playing, of course, Jerry songs. Then we lost Catherine O’Hara, and that one really hurt.

We also, though barely, endured Davos. Lately, I measure the limits of my mortality by my ability to survive this annual Gathering ‘O the Hypocrites, and I’m not sure how many more of them I can endure. This year’s jumble, full of Greenlandic sound and fury, signified nothing but nearly did me in anyway.

Throughout, Trump was, well, Trump. He dropped a $5B lawsuit on JPM from that fabulous Alpine perch, and, upon his return, this past Friday, announced a $10B action against a division of his own Treasury Department – the Internal Revenue Service. This one blows my mind, because: a) if he wins, it is the taxpayers of America that will foot the bill; and b) as he oversees the Executive Branch (of which the IRS is plainly a part), he is responsible for the defense of a suit where he himself is the plaintiff. Let’s hope at least that in this legal action, serving as plaintiff, defendant, prosecutor and defense counsel will soothe his galactic ambitions

And wherever else we may differ, upon this much we can perhaps agree. As illustrated by the following graphic, Trump II has been very good for, well, Trump:

If this doesn’t encourage the young and ambitious to consider a career in Public Service, I fear nothing will. And even these figures are both dated and understated. Most recent estimates suggest that he’s added a cool $1B since the Senior Senator from Vermont (yes, you know who) published this chart.

And all this prior to the successful adjudication of the above-mentioned lawsuits (which we know will go his way because he always wins). At which point the combined $15B of judiciary awards will place his wealth at levels over $20B – a ten-bagger since they ran him out of town in the magical year of 2020. And he’s only just finished Year 1 of this term. The amounts he might coin before booking it back to Mar a Lago are almost too delicious to contemplate.

I have mixed feelings about the presidencies of Jefferson, Grant and Truman, but at least they had the decency to depart the Oval Office in rank destitution.

Indisputably, though, biggest news of the week, and perhaps, the month, was Friday’s announcement of Trump’s designated successor to the Chairmanship of the Fed – Kevin Warsh.

If approved by Congress, Warsh would take office in May, giving the lie to my prediction that Papa Bear would dispatch the current holder of the position prematurely. I was wrong and I apologize for this.

But perhaps retribution is on its way – taking the form of compelling me to derive yet another nickname for the new sheriff at the Central Bank. Across my adult life, this process has been relatively easy. I was too young to be forced into a nomenclature dilemma with respect to William McChesney Martin (1951 – 1970), Arthur Burns (1970 – 1978), or G. William Miller (1978 – 1979). Volcker (1979 – 1987) was, well, Volcker, and, similarly, Greenie (1987 – 2006) was Greenie.

Though embarrassingly obvious, I designated Ben Bernanke (2006 – 2014) Chair Bernie – in large part because he presided during the Madoff scandal. His successor, Janet Yellen (2014 – 2018) was, naturally and organically, Chair Yell, and her replacement/current man-with-the-plan Jerome Powell (2018 – 2026), became Chair Pow.

But what to do with Warsh? Well, the best I can conjure for now is a removal of the R from the center of his Christian name (even though he is Jewish). Thus, in anticipation of his conformation, I proclaim Pow’s successor to be Chair Wash. And, in doing so, I feel some literary pride. Wash is a synonym for launder, as in money laundering — a practice in which our Central Bank has been known, from time to time, to dabble. In addition, and with lyrical flourish, it should be noted that Mrs. Wash is the former Jane Lauder (granddaughter of Estee; daughter of Ron), and if we add an N to the middle of her Maiden Name (in part to compensate for the confiscation of her husband’s R), we arrive just there. At Launder.

Chair-designate Wash is said to be the preferred choice of the Wall. Street community (particularly Druck, who is his business partner and my investment hero), which 47 has not recently bent over backwards to please. So, the choice is little confusing from that perspective. However, it may be that he figures anyone would be a political uptick from Chair Pow, whose group outrageously held rates steady just this past week – instead of patriotically cutting them to do Trump’s political bidding.

And I have a word of further risk management advice for Chair Wash, which is: don’t stick around too long, lest you end up like your predecessor, who appears to have aged about 3 decades in the years since accepted the job:

There he is on the left, back in 2017. A somewhat anonymous member of the Federal Reserve Board of Governors, swarthy brown eyes giving us all a near-irresistible “come hither” glance. Which stands in sharp contrast to the just taken image of him on the right, less than eight years later, looking like an exhumed executive from Alexander Hamilton’s First Bank of the United States.

Still and all, and at minimum, Wall Street didn’t hate the pick, and that, by God ought to be, and is, good enough for me. In fact, and in “buy the rumor/sell the fact” fashion, the leaked Wash news took the Gallant 500 past 7,000 for the first time on Thursday, only to indecorously sell off as he was officially welcomed in during the following session.

Perhaps, now, we can get down to ordinary business, of which there is plenty to attend. We are in the first phases of the 4,967^th government shutdown of the millennium but are so benumbed by the spectacle that we can barely take notice. The earnings engine revs up, and is purring, save for MSFT, punished and pummeled by investors not for not minting profits (they did mint them), but rather for announcing a big AI spend that investors would have torched them for not undertaking.

It was the second worst capitalization slaughter in market history (~$357B), surpassed only by the NVDA rout of exactly one year earlier — as catalyzed by the certainty that DeepSeek (remember them?) would render them obsolete.

But it didn’t stop, as indicated above, the G5 from scaling previously un-breached heights.

Matters were less rosy in anti-currency land, with Gold, Silver and BTC all being waxed. I am compelled, at least for the time being, to advise investors to avoid these casino-like rat traps.

Instead, direct your focus to the earnings calendar, which this week features Gooooooog, AMZN, Palantir and AMD among others. Also, there’s the January Jobs Report, which, for anyone who cares, drops on Friday.

My best guess is that we are in for a blessedly less overwrought February. And I don’t see much edge in the world of factor migration. I wouldn’t want to be short this market, but contemporaneously, I cannot work up much enthusiasm for incremental buying. Sometimes, this is as it ought to be.

After all Peter (Chapter 5, Verse 2, King James Bible) warns us to shun the “filthy lucre”. And he’s right. But as a last word of risk management advice, if you find yourself with a stash of the latter, hold on to it.

Chair Wash and his bride Mrs. Launder will soon arrive on the scene to take us all to the cleaners. Because it’s my guess that they have no less elegant office appointment tastes than Mr. Powell.

And that, my friends, has been a tad problematic for the latter.

TIMSHEL

Exit, pursued by a bear

William Shakespeare, A Winter’s Tale (Stage Direction: Act III, Scene 3)

Our ritualistic purloining of Willie Shake is not in this case of a quote, but rather of perhaps the most well-known stage direction in the history of theater.

And I will be the first to acknowledge that it is over-indexed, particularly in the highfalutin intersections between literature and finance – where I am best known to vibe. Among me and my peeps, one must take great care to avoid excessive usage of such cliches – or risk the worst designation that can be applied in these realms – that of being trite.

Here, though, the set-up is so delicious that I feel I must take up the cudgel. First, because it’s Winter. And not only Winter, but a particularly harsh one – with vicious storms attacking and disrupting folks in the last weekend of January sufficient to ensure that no one in these parts could possibly mistake the season. And this winter, just as was true in our titular work, there are confusing tales to tell.

Because A Winter’s Tale is a very perplexing play, so much so that the plot cannot even be described. And the above-mentioned stage direction fits the chaos with precision — accompanying — as it does, a principal character’s efforts, at his king’s command, to desert a baby girl, experiencing associated guilt, finding his ship destroyed by a storm, and, finally, executing his ursine-induced departure. The Bard offers no context here. The boat is destroyed, he thinks better of abandoning the child, and then, somehow, a big ol’ Grizzly chases him off stage.

All of which kind of reminds me of the present condition of both the Capital Economy and the markets.

And adding neither clarity nor uplift to the ambiance is that this past week, the main center of action was the annual Gathering O’ the Hypocrites, otherwise known as the World Economic Forum of Davos Switzerland.

In a touch of verisimilitude, the main topic, of course, was ownership and control of the icy arctic mass known as Greenland. On this matter, silliness abounds, but, for our purposes, we can gratifyingly tie it to our main theme, through the device of an 1850s folk song – Farewell to Tarwathie, recorded by (Suite) Judy (Blue Eyes) Collins on her “Colors of the Day’ Album:

The cold coast of Greenland, Is barren and bare
No seed time nor harvest, is ever known there
And the birds here sing sweetly, In mountain and dale
But there’s no bird in Greenland, to sing to the whale
There is no habitation, for a man to live there
And the king of that country, Is the fierce Greenland bear

And here we was, thinkin’ our main problems in Greenland would be with Denmark, which, after all, is the home turf of one of Shakespeare’s most notable protagonists – Hamlet, who is also known as The Mad Dane. When riled, The Mad Dane was known to raise quite a ruckus.

But no, what we really need to worry about is them bears. There’s only a few thousand of them, but the locals tell me that they’s a fierce bunch, not likely to simply roll over and get stiffed.

Proving, though, that even at an assembly of preachy, entitled billionaires can generate pockets of rationality, somewhere between ski runs and apres festivities, the Trumpian/Greenlandian diktat evaporated. Exit plans for a military strike, combined with yet another round of tariff coercion to anyone who objects; enter a kumbaya announcement that a negotiated settlement was in the offing. All followed by claims that this was the objective from the start, and, of course, by declarations of glorious victory.

We were also treated to a stone-cold bitch fight, with California Governor Newsom on one side, and Treasury Secretary Bessent, acting as a proxy for Big Orange, on the other. It featured ad hominem tonsorial insults and even rather unfortunate props such as knee pads. I’m pretty sure that no such exchange had ever before transpired between Golden State Guv and Treas Sec — not between Leland Stanford and Salmon P. Chase during the Civil War, or Friend Richardson and Andrew Mellon in the lead up to the Great Depression. And certainly not when George P. Schultz ran Treasury and Ronald Reagan oversaw matters in Sacramento. In fact, so enamored were these two that the former served as Secretary of State for the three quarters of the latter’s two magnificent Presidential terms.

But hey, that’s Davos for you, a shindig where our betters hop on their private jets to convene, amid unimaginable luxury, to scold us about our over-consumption of energy and our greed/reluctance to completely subsidize the underclass. It makes, moreover, for some good sound bites and photo ops, and this year didn’t disappoint on either account. Pissing contests were ascendent, with the targets scanning the globe – from the Fertile Crescent to Caracas to the Twin Cities.

But perhaps my favorite moments came when 47/45 announced that he is suing JP Morgan — to the tune of $5B — for allegedly debanking him a half decade ago. And my first reaction was, bearing in mind that I have maintained the same account with them since opening it at the Chemical Bank branch at Broadway and 113^th Street in 1982, that I wish they’d debank me. Heck, I wouldn’t even charge them the full $5 Bil; half that amount would, for me, more than suffice.

However, more broadly, I am forced to marvel at the notion that the President of the United States/Leader of the Free World is suing the world’s largest privately held depository institution¹, as well as being the largest in this here country. It kinda seems to me that hauling this outfit into court on a personal matter is outside what The Founders had in mind when they set forth the duties and responsibilities of the Chief Executive. Because, among other matters and though I hesitate to mention it to this polite society, such a move creates at least the temptation to use awesome executive powers for personal gain.

And, as exacerbated by the Alpine altitudes, these doings appear to have sucked the oxygen out of the atmosphere of the Global and Domestic Capital Economies.

Which is a shame, because there’s stuff going on that merits our more righteous market attention. GDP dropped with a 4 handle on Wednesday, with associated measures of Inflation clocking in at ~2.7%. The earnings reporting engine is slowly cranking up, with MSFT, META and TSLA on the docket for Wednesday, and AAPL, Visa and Mastercard due up on Thursday.

Meantime, investors have thus far been expressing some petulance at these podium turns, with, in “exit, pursued by a bear” fashion, neither upside nor downside surprisers being spared the brunt of their derision:

The FOMC meets next week, with their standing pat coming in as a virtual lock. Fed watchers will then be reduced to following the actions taken by the Justice Department against voting members. At the point of this scribbling, SCOTUS is reviewing the case that Governor Lisa Cook brought against Papa Bear, for seeking, unjustly she believes, to fire her, and it does not look good at the moment for the latter. Powell was at the hearing, and presumably, is preparing for his pending Star Chamber turn with the same division of the executive branch, which, approximately a fortnight ago, subpoenaed his ass.

What impact these measures will ultimately have on Interest Rates is unknown. However, recent innings have not been encouraging. The Fed is likely on hold. Longer term yields on these here shores are on a moderate upswing, and rates Japan, as has been widely discussed, are at multi-decade highs. Which has failed to facilitate, as presumably they hoped it might, in the recovery of their currency against ours:

Normally, this graph is presented in the inverse – as the number of JPY required to purchase a dollar (~158), which is the way the market is quoted. Because, for eons – and I am not making this up – the Foreign Exchange trading system operates by a protocol under which the member of the pair with the larger unit is always on top.

But just as I did last week when I showed Captain Sully’s Hudson River-grounded airplane, sometimes, it’s simply better to review things upside down.

But mostly, I blame Davos. Because they have made it so easy for me to do so.

The confab is over, though, but winter persists, cold and harsh – never more so that this past weekend. And you’d think that it’s been too cold in MN for either ICE or its detractors to stir up much nonsense. But they were out there, freezing their asses off, and the federales even managed to complete the murderous trifecta of Minny martyrs, featuring George Floyd, Renee Good, and now Alex Pretti.

And, for all we endured – Arctic Blasts, bloviated geopolitics, pissing contests between the Executive Branches of Washington and Sacramento, the markets, while pressed, finished the week flat.

So, in taking my exit, I do so not directly pursued by a bear. But I worry that he’s out there. And if he is, he’s not likely to be in a particularly pleasant mood. Perhaps this is because this is hibernation season, and he should be sleeping. However, in this frigid winter cycle, full of tales too strange to tell, as the Mad Dane famously observed, to sleep, and, perhaps, to dream, appears to beyond our aspiration. So, let’s stay awake, eyes wide open, and prepare to react to whatever next this wacky Winter’s Tale may bring.

TIMSHEL

¹ Standard and Poors ranks JPM number 5, immediately behind 4 state-owned Chinese banks.

I read the news today, oh boy, 4000 holes in Blackburn Lancashire,
And though the holes were rather small, they had to count them all,
Now they know how many holes it takes to fill the Albert Hall

John Lennon

Of course, here, I purloin the lyrics of what is widely (though not universally) considered the finest song in The Beatles cannon. And almost never out of the Top 5.

With a couple of caveats, I do not share in this viewpoint: 1) such matters are entirely questions of individual taste; and 2) I do like the song, but would not, personally, place it in the Fab Top 20.

It is, however, classic Lennon, with majestic musical hook(s) (interspersed by an entirely forgettable Macca bridge), and elegant but glibly clever lyrics, designed, as Lennon’s often did, to pose more questions than they answer.

We still, for example, cannot confidently confirm the true identity of The Walrus.

Meantime, ADitL begins by describing the death of Tara Browne – key member of the Carnaby Street scene, heir, on his mother’s side to the Guiness beer empire, and, destined, on his father’s, to become the Fifth Baron Oranmore – as described in an iconic British tabloid known as The Daily Mail¹.

He, who blew his mind out in a car, is also said to be the bloke that introduced The Lads – or at least the reluctant Paul, to LSD.

In the same January 19, 1967 edition of the above-mentioned newspaper, there was a brief article about the identification of 4,000 potholes in the (presumably otherwise) pleasant British township of Blackburn – located a short distance northeast of the port of Liverpool, in the County of Lancashire. Given its prevailing population of slightly more than 100,000, this implied, at the time, a pothole for every 26 denizens of the above-mentioned village.

However, with trademark verisimilitude, Lennon somehow conflates this with the revelation of the capacity of the Royal Albert Hall (known, even prior to this, to be just under 6,000):

Blackburn Clocktower (Left) and Royal Albert Hall (Right)

Full disclosure: I’ve never been to Blackburn, but did attend the Cream 2005 Cream reunion at Albert Hall. It was a helluva show.

That, however, is a different story.

I got to thinking about all this 00 in contemplation, not of the day, but rather of the week, that just passed, which began with the touching but in my judgment disproportionate reaction to the demise of Bob Weir. Even I was thrown for a loop, being compelled to execute a near-complete rewrite of last week’s note after I read the news (oh boy) late last weekend.

Monday came and went. But then, on Tuesday, an old friend of mine had his leg amputated. I awoke Wednesday morning to reports that our entire navy was streaming towards the Persian Gulf, with menacing intent to rid the world of the mullahs once and for all. The market didn’t like this, and my clients were losing money.

By that afternoon, of course, the entire nationwide Verizon network went down, causing untold aggravation, as well as some investment reversals due to the inability of selected market participants to execute trades. The Company, of course, is known by its ubiquitous slogan “can you hear me now?”.

Well, no, as it happens, we can’t.

Worse than that was the Company’s unfortunate decision to downplay the incident during those critical early hours. The network failed around 12:30 Eastern and it wasn’t until after 4 that their website acknowledged that “some users were having service problems”, which, if just by a titch, was an inadequate description of what went down.

At the point of this correspondence, no explanation for the extended outage has been forthcoming, and – not gonna lie – the response – tantamount to “networks go down; here’s $20” – left me and I suspect others – somewhat cold. Plus, as a grassy knoll kind of guy, I can’t help but wonder if the episode and the incrementally escalated tensions in the Middle East aren’t somehow, you know, connected.

Fortunately, the week improved after that. We backed off our aircraft carriers. The markets, if not recovering, at least held the lion’s share of their ground.

Thursday was particularly memorable. For one thing, it was the 97^th anniversary of the birth of one of the greatest Americans/figures of the 20^th Century – Dr. Martin Luther King Junior. It was also the 17^th solar cycle since the heroic actions of Captain Sully, who, in 2009, managed to save everyone on board a commercial airplane, which, due to a bird strike, was forced to land in the Hudson River:

Captain Sully’s Plane (Flipped Upside Down for Dramatic Effect):

Furthermore, Thursday was the 25^th anniversary of the launch of the much-maligned Wikipedia. Of which I am a big fan. Maybe their biggest. So much so that when I caved, as I do every year, and stroked them fifty bucks last month, they asked me to kick in another ten and I happily complied.

There was, in addition, a very special event/milestone which transpired for me on Thursday. It is sufficiently personal that I won’t share the specifics. But to those who know, I will state that it went well enough to have rescued my entire year, and, perhaps more importantly, my week.

By Friday, I was spent. And such, for better or worse, is a Week in the Life.

But here is the thing about weeks. When one ends another begins. So, I reckon we’ll have to do this all over again. It is unlikely to mimic the one just passed. Bobby isn’t likely to die again, and my buddy has only one more leg that can potentially be removed. My guess is that Verizon will be on its toes.

But Trump could literally decide to seek to take over any country in the world and obviously intends to begin with Greenland. As everyone knows, he has announced new tariffs on any country that dares to oppose this bloodless conquest, and it’s hard not to conjure up memories of the Anschluss or annexation of the Sudetenland. We need this for our security, of course, because without full control of Greenland, we may face the same terrors that the Germans confronted when their tanks were forced to contend with the menacing Polish Cavalry.

None of which, at this point, is helping the markets

More mundanely, today is a holiday, and the earnings season is still in its early innings, with not much on the calendar about which to wring one’s hands. We do get a first glimpse at Q4 GDP on Wednesday, and it looks like a banger.

So, it may very well be that we will be compelled to focus upon and endure yet another cycle of over-reporting out of Minneapolis: a city which, in a better world, rather than being THE lightening rod for insurrection, revolution and the misappropriation of taxpayer dollars, would be enjoying a well-earned hibernation.

And I have no idea where any of this leaves the markets. Lots of crosswinds at play, and, as I like to remind all you young bloods, each year tells a story of its own, and it’s unwise, in my judgment, to anticipate the narrative this early in its chronology. My best risk advice is thus to wait and see.

Read the news today, oh boy. And tomorrow. And the day after that. What you find may surprise you. The English Army may win the war. A friend may blow his mind out in a car. NATO could collapse.

But, come what may, then you must find your coat and grab your hat. Or else you might miss the bus – by seconds flat.

However, there’s one thing about which we can perhaps all agree. And that is this:

I’d love to turn. You. On.

Upon my honor I would.

TIMSHEL

¹  The publication first found its way – as a direct reference — into Fab 4 lyrics within the 1966 single “Paperback Writer”.

You imagine me sippin’ champagne from your boot
For a taste of your elegant pride
I may be goin’ to hell in a bucket, babe
But at least I’m enjoyin’ the ride

Weir, Mydland and Barlow (all now dead)

I am obliged, of course, to write a few words about Bobby. On balance, I wish to praise him, but I do so with some ambivalence. Yes, he was a driving force of a band that changed my life and arguably the world. He also, while by no means being among my pantheon of shredders, deeply influenced my guitar playing — mostly by making me aware of the barred C chord, which, if played correctly, rings so brightly up and down the fretboard.

Now, before y’all get in my grill, let me acknowledge that this chart does not precisely depict a bar chord. It is the Cmaj shape slid up to the 7^th fret to form a Gmaj, with the flat tip of the index finger applied for the objective of modulation.

Thanks to Bobby, I use this form too. But also lay, as taught by him, my entire index finger across the fretboard for an even richer sound.

He wrote some excellent songs (for instance Sugar Magnolia, The Music Never Stopped, Weather Report Suite, Jack Straw, our title song), along with some annoying ones (as in Playing in the Band, One More Saturday Night, The Other One).

But he was one of the luckiest sumbitches in the rock pantheon. He walked into a Palo Alto music store one New Year’s Eve and met with greatness – in the form of Jerry Garcia, and the rest is history. Weir, in my judgment, road Jerry’s coat tails to untold riches of fame and fortune. There was a lot of talk about the Dead being a Democracy, with balanced contributions across the ensemble. Yeah, right. Kinda like the Bulls of the 1990s were a collective of equally shared responsibility.

To anyone paying attention. It was Jerry’s band. Full stop.

And I have one final beef to register here, having to do with the decade long cash grab in which he, at minimum, participated. Beginning with the Fare Thee Well shows in Chicago in 2015, which, due to representations that these would be the last ever performances of the surviving ensemble, caused ticket prices to eclipse $100K in some cases, all the way through, by my count at least a half dozen tours and Sphere residencies tied to the same representations, by my estimation, Bobby and the boys made more in a single active month in the last few years than they did during their entire thirty year original run.

I’m a capitalist and applaud them, genuinely, for cashing in. As was their right. But particularly with respect to that unending last show/Fare Thee Well spiel, they kind of killed the buzz. And what’s more, I don’t think Jerry would’ve approved.

Meantime, I am absolutely gob smacked by the outpouring of tributes that have flooded the ionosphere since his demise this past weekend. Everybody has weighed in. And that’s something.

Maybe a ticket to heaven. In a bucket. If so, I hope that he paid less than a few schlubs with more money than brains shelled out for those Soldier Field seats, 10 summers ago.

One might also have expected us to have learned something from these experiences, but similar madness appears to abound in every quarter – particularly in the realms of government.

Setting aside those magnificent Reagan years, the government seems to be poking its big fat nose into more places than its business justifiably takes it. Since the Grateful Dead formed in 1965, but particularly of late.

This past fortnight has been a especially active, witnessing the take over of Venezuela and its oil fields, the threatened subsuming of other jurisdictions, the purchase of $200B of Mortgage Bonds and the proposal to cap credit card interest rates at 10%.

All share the common characteristic of manipulation of key markets for political purposes in an election year.

The assault on interest rates, embedded in the credit card and mortgage moves, are particularly instructive – for both their wrong-headedness and their cynicism. If you can read the associated petulant, self-congratulatory announcements, published by the President on his own for-profit media outlet without retching, well, you’re a better person than me.

With respect to the former, I will stop short of going into the tank for the credit card companies, who make obscene (> 50%) profit margins and probably do charge excessive vig on their plastic. But if the Federal Government caps interest rates, it will most certainly diminish the amount of credit that these enterprises will make available to the unwashed.

Moreover, to propose a time frame of one year on this nonsense exposes the unmixed political motivations at play here, screaming, as it does, “vote for me. I cut your credit card rates in half”. And I must ask: do we really want to allocate scarce credit capacity based on manipulation of the electorate?

The answer is no. And I believe that folks are beginning catch on. Most notably as manifested by a surge in the demand for Old School Gold. I probably don’t need to inform you that the shiny yellow metal is up by 2/3rds since Big Orange took over the controls (but I will):

Bob, of course, knew how precious Gold was, as captured in his version of the Papa John Philips-written “Me and My Uncle”, which describes two subsequent thefts of gilded nuggets, the second of which involves the subsequent murder of the above-mentioned uncle:

Now I love those cowboys, I love their gold
Love my uncle, God rest his soul
Taught me good, Lord, taught me all I know
Taught me so well, that I grabbed that gold
And I left his dead ass there by the side of the road

I read somewhere that Philips wrote the song in a tequila stupor and completely forgot having done so. But Suite Judy (Blue Eyes) Collins managed to capture it on tape and record it on an album. Papa John did not realize he was the composer until the royalty checks started coming in.

It don’t know if this story is true. But if it’s not, it should be.

It certainly evokes truisms reflecting the state of latter-day living, where we all must contend with the conflicting forces of faddish hipness, morality and crude self-interest – a battle we appear to be losing on every front.

The story of Bob Weir and the Dead – in its various incarnations is a compelling object lesson for all the above. Across his astonishingly long career, he embodied each component – as the young hipsters’ flavor of the month, as a purveyor of rough but holy justice, and, finally, as an engaged economic agent, successfully monetizing, while contemporaneously maintaining his more ethereal brand.

But his time came, any day, and we won’t worry about him.

Because he asked us not to.

I suspect he would advise us, instead, to worry about ourselves.

We may be going to heaven or hell. With or without a bucket.

And we may, or may not, enjoy the ride.

TIMSHEL

I was tempted to welcome y’all to 2026, but is it really my place to do so? Because who am I? Georgie Jessel¹? Besides, it’s not as though I arrived here before you; we all entered MMXXVI more or less together – beginning with those on the tip of the eastern side of the International Dateline, and ending, 24 hours hence, in the vicinity of its adjacent western neighbors.

I feel we don’t talk enough about the International Dateline – maybe because it’s mostly on the water. But in terms of ushering in a new year, the process, as illustrated below, begins, unmistakably, at the IDL.

Nobody, and to the best of my knowledge, has ever explained the Dateline’s eastward wiggle north of Tonga/Samoa – resembling nothing so much as the logo of the United States Postal Service facing the opposite direction.

Maybe also, if you’re like me, you confuse it with the Continental Divide, a hydrological separation, the northernmost point of which, like the International Dateline itself, is proximate to the Bering Strait which separates Russia from Alaska, but which then takes a turn thousands of miles east, concluding in the South at the Strait of Magellan.

If you’re confused at this point, you’re not alone. Because we enter ’26 in perplexing configuration.

About all I can state with certainty is that the year marks the Platinum (20^th) Anniversary of this here publication. For the math-challenged, it did indeed begin at the end of 2005 and has been in continuous weekly production ever since.

Extending the arithmetical elaboration here, I have produced ~1140 of these masterworks, which tend to run roughly 3.5 pages. Using a handy approximation of 500 words/page, we arrive at the tidy word count of 2 Millions (or thereabouts).

‘Tis indeed cause for celebration. And perhaps a bit of historical context is also in order. It all began not long after I foolishly decided to create my first risk solutions business, with the notion that sending a weekend note to each of my clients might be a sound strategy for, at minimum, maintaining their fond remembrance. Because it’s nerve-wracking, as a service provider during slower intervals, to have no interaction with the latter other than the issuance of monthly invoices. My weekly notes, in other words, were there to remind them that they remained in my thoughts.

Some of the content logically concerned market conditions, which thus allowed me to genericize portions therein, while customizing the idiosyncratic elements within separate sections of each communication.

But the generic components took on a life of their own and soon required institutionalization. All of which was crowned, somewhere around ’07, by my decision to add a pithy title and associated thematic cadence to each publication.

Media content distribution channels then came clamoring to get in on the action, most notably my own LinkedIn page and the Contributors Section of ZeroHedge. And, before I knew it, the thing had reached the improbable zenith of between 300 and 500 readers in an average week.

To place this in context, it has somehow attained the reach of ~0.000005% of the number of bibles (~6B) currently in distribution.

And nobody can legitimately dispute its market impact. In the years since launch, The Gallant 500, two crashes notwithstanding, is a 6-bagger; Cornel Naz – busted to the ranks twice over this period due to poor performance — has risen 8-fold. BTC, now at $90K, was nothing more than a Satoshi pipe dream back then, but I hesitate to take full credit for its subsequent upward explosion.

In terms of the broader world, it was the year of Hurricane Katrina, where, for a couple of terrifying days, we feared the loss of Fats Domino.

Pope John Paul II died in April of that year. I’m not sure the folks in Rome ever replaced him.

YouTube launched in February. And Facebook, still a private company back then, made the financially lucrative but stylishly dubious decision to allow membership beyond college campuses, fostering the birth of billions of cat pictures and other horrors too plentiful to enumerate.

I’m not sure if this is related, but to the good, Charles and Camilla married at (where else?) Windsor Castle, and, to the better, the original members of Pink Floyd joined together for one last time on stage at Wembley.

The Bears won the NFC title that year and began the Super Bowl with GOAT return man Devin Hester taking the opening kickoff to The House. It was, in retrospect, a generational high-water moment. They lost that game to the Indy Mannings, and it’s been all downhill for my team ever since.

But back to the markets, where I wish I could, but cannot, claim to have created unmixed blessings. When I first took finger to keyboard, the National Debt, having recently surpassed $38T, stood at a quaint by comparison $8T.

And total indebtedness? All I can do is show you the chart. And weep:

There are eerie parallels between then and now. We are, again, a year into the second White House term of a nepo baby with a rich daddy, both of whom, heroically and at great financial cost, managed to avoid action in the Vietnam War (though W, to his credit, did spend time as a National Guard Fighter Interceptor – stationed, albeit, in a place where no hostile fighter planes were likely to be found).

Meantime, both president faced or are facing “you broke it/you bought it” conundrums in multiple foreign jurisdictions – then it was Iraq and Afghanistan; now it’s Gaza and Venezuela. It should be noted here that our track record for taking over countries whose leadership we dispatched militarily is less than stellar. The blowback — from Caracas to Berkeley and the Upper West Side — has already begun and is likely to increase in volume from here.

It’s a year of a Midterm election, with every indication being that the pendulum may very well swing back leftward. In 2006, the Dems picked up 31 House and 6 Senate seats, regaining, in the process, control of both august chambers. God help us if there’s a repeat in ’26.

Back in ’05, my city and state were, improbably, controlled by Republicans: Bloomberg running things at Gracie Mansion and the unforgettable (?) George Pataki holding down the fort in Albany. Here, the tables have turned. As of Midnight last Thursday, just as the last $50 pair of Depends sold near Times Square was performing its righteous, elegant duties, NYC swore in a new mayor, who, if he hasn’t ruined the town in less than a week, it’s not for lack of trying.

Twenty years ago, we found ourselves on the threshold of a Housing Bubble which ultimately came just short of bringing the capital market down on its ears. Matters in those realms are much calmer today, but it will be instructive to observe the triumphs and tragedies of Housing this year, and, while not particularly relevant, I can’t resist pointing out that Mortgage Rates are almost precisely where they were when I hit the send button on my first note, two decades ago:

For so early in the year, we’ve put FRED – Federal Reserve Economic Data — to substantial use, and I hope it’s not to our detriment. Or his. Or that of the good folks at the St. Louis Fed he reps. They may after all be tired. As am I. Two million words is a lot two write. No matter how long one has to concoct them.

I’m not sure I have another two million in me. But I reckon that’s in the Good Lord’s hands.

I can, however, wish you the best of fortune in ’26. And I do. Wish you the best of fortune in ’26 that is. And my fondest hope is embodied by my time-honored salutation, supplied below. It is the best risk management advice I can offer. So, if you don’t know what I’m talking about, I suggest you look it up. Before it’s too late.

TIMSHEL

¹ George Albert “Georgie” Jessel (April 3, 1898 – May 23, 1981) was an American actor, singer, songwriter, and film producer. He was famous in his lifetime as a multitalented comedic entertainer, achieving a level of recognition that transcended his limited roles in movies. He was widely known as the “Toastmaster General of the United States,” for his frequent role as the master of ceremonies at political and entertainment gatherings.

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

Bryan Ferry

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Across the board and to beat the band.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL