And you’re a prima ballerina on a spring afternoon…

David Johansen

I am positively crushed by the news that David Johansen has Stage 4 Brain Cancer. While not particularly well-versed in malignancy protocols, I will assume that as little anyone wants to hear the term Brain Cancer, the experienced is rendered worse by the affixing of Stage 4 at the beginning of the phrase.

Accompanying his daughter’s announcement of same (and adding salt to the proverbial wound) was the disclosure that the family is broke and needs external help to finance his care.

But let’s back up a bit. I’ve a good deal to share about my man David Jo, and, seeing as how I am finding the current landscape of the Capital Economy virtually indiscernible, I’m gonna go ahead and share it.

For the uninitiated, David is the founding lead singer/principal songwriter for the divine New York Dolls, who exploded on the scene in the early ‘70s and paved the way for virtually every glam/punk outfit that came after. They were local boys who dressed up in stilettos and makeup yet attacked with such massive masculine energy as to astonish everyone who encountered them.

The story of The Dolls is one that has been repeated many times throughout history. A quick rise to fame. An inability to sustain the surge. Years of obscurity for most of the players, albeit with flashes of brilliance along the way. And, of course, it is a tale rife with bitter tragedy.

To wit — just as they were conducting their first studio sessions for their magnificent self-titled album, their original drummer: Billy Murcia, stuffed to the gills with barbiturates and alcohol, drowned, Jim Morrison style, in a bathtub at age 21. He is forever immortalized in a Bowie classic (“Tim in quaaludes and red wine, demanding Billy Dolls, and other friends of mine”). They replaced him with Jerry Nolan, who made it to 45. Their other frontman – Johnny Thunders – perished from a heroin overdose in 1991. He as Fellow guitarist/Syrian Jew Sylvain Sylvain nearly lived out his natural 3-Score/10, and would’ve celebrated his 74^th birthday on Valentines Day. But then there’s bassist Arthur (Killer) Kane, who like Sid Vicious after him, could barely play a note, but who, at > 6.5 feet tall (and this without his platform boots) was perhaps the most visibly outrageous member of a visually outrageous band.

The Dolls: Syl, Johnny, Killer, Nolan and David:

When The Dolls split up, he bounced around the scene a bit, and then disappeared. In 2004, leading Dollsoligist Morrisey undertook to find him, and eventually located him in a Los Angeles Mormon mission, where he lived/served as Assistant Librarian. He roused him to play a reunion gig at the at that year’s Meltdown Festival – held in late June at London’s Royal Festival Hall.

Having done so, Killer Kane returned to the Latter-Day stacks of his L.A. library. And died 22 days later.

Which leaves only Johansen. He put out a couple of great post-Dolls solo records, and then, improbably, completely revamped his image, rocked a pompadour, and assumed the handle of Buster Poindexter, under which he scored a series modest hits out of old Louis Prima covers like “Hot, Hot, Hot”. He even briefly served in this new persona as the leader of the Saturday Night Live Band.

I saw him early in his Poindexting days, at a gig at Columbia University. I wasn’t digging his new image and so I was the guy who kept yelling “Vietnamese Baby” and “Personality Crisis” from the crowd, which I don’t think he appreciated. But ultimately he took my advice – ditched BP and became DJ once again.

And now he lays dying of Brain Cancer at his Tribeca home. And looking for financial support to ease his last days. I took the lead and stroked him a few bucks. And you can do the same, at:

https://www.sweetrelief.org/davidjohansenfund.html

What on earth we will do without him is another question, but as Napoleon once said: “the graveyards are full of indispensable men”. It is my fear that few will note, or even notice, his demise. No matter I reckon, there are those of us who will feel the full extent of this loss and continue to honor him — as long as the band plays on.

How transient our existence, how quickly that which we hold most dear crumbles to dust, paves the way for something new! I was further reminded of this when contemplating the reality that the #1 and #2 rated NCAA hoops squads faced off this Saturday. Duke vs. Kentucky? Kansas against Connecticut?

Nay – Alabama matched up against Auburn – not simply for roundball bragging rights in their shared eponymous state, but for the top spot on the whole Coaches Poll. Of course, this would make all the sense in the world if we were talking football. But we’re not. The hated gridiron rivals who match up annually in the Iron Bowl have fallen on hard, hundred-yard times. The Tigers finished dead last in the reconstituted SEC, and while the Tide were competitive, they defied downward expectations by failing to make the expanded tourney.

However, on Saturday, in the parallel universe which we currently occupy, the #1-Ranked Auburn Basketball Tigers defeated the #2-Ranked Alabama Crimson Basketball Tide by a score of 94 to 95.

So, the denizens of the Sweet Home State are rim-ward ascendent — as the finest hoopsters from historical hotbeds such as Carolina and Indiana (the latter another basketball haven which somehow sent its long- suffering football team to the above-mentioned championship round) are relegated to the 2nd tier.

But the Tide rolls on. The old replaced by the new. Barring some miracle, David Doll is close to breathing his last, leaving me wondering how he ended up broke. Clearly, he failed to invest the royalties dolled out with parsimony by Mercury Records back in ’73, because the generic broad basket of stocks he might’ve owned has delivered a 60-bagger in the two generations since these records dropped.

And, as the final bell rang on Friday’s session, it tolled in a new all-time high for Col. Naz, with the Gallant 500 coming within a whisper (1 skinny index point) of achieving the same feat. I am partially surprised by these tidings, but then I remember my long-standing mantra that the investing world is laden down with too much cash, chasing an insufficient inventory of available securities to satiate its appetites. Under these circumstances, it is no wonder that participants are tending to shrug off the bad and embrace the good.

Macro data was mixed this week, with both CPI and PPI clocking in above expectations, to the disappointment of those hoping for improbable incremental relief from the Fed. Then, on Friday, and to the apparent delight of at least a few, the Labor Department offered, as promised, a glimpse at January Retail Sales. It was a train wreck. So, naturally, investors decided it was time to buy.

And now the data flow trails off. Nothing is scheduled on the tape until Wednesday week, when NVDA will breathlessly report its results. Probably, the market moves on these utterings, but a) they’re a fortnight off, and b) after that it’s bubkes – probably for the rest of the quarter.

Which of course will train all avaricious eyes on Washington, where the action remains hot and heavy. I can’t even keep track of doings issuing from that quarter, but it seems as though, from a foreign policy perspective, those with whom we have beefs large and small have taken notice of our less-effete attitudes, and are, for now, responding in ways which we hoped they would.

Closer to home, there is a frenzied race on both sides of the spectrum to outflank one another in hysteria as to the appropriateness (or lack thereof) of the World’s Richest Man being granted access to the closely held books of key agencies. For my part, I doubt this will do much harm (though how much good it will do is an open question), but I will cop to being troubled by what appears to me to be a thus-far successful effort by Musk, his boss and his boss’s family to monetize their positions of power. My gut tells me that there will be a price to pay for these actions, and I reckon that it will be the electorate (including sympathetic but non-partaking outsiders such as myself) who will bear the brunt of it.

All of which leaves my mindset more or less where it’s been all along. I don’t foresee a sustainable rally on the cards for us, but I am as certain as I can be that barring some unforeseen disaster, any selloff will be short-lived and of minor magnitude.

Outside of a Trumpian tape bomb, it’s likely to be boring. I think you can buy in safely here, and if nothing else moves you, do it for David.

The Dolls once did a cover of a great Bo Didley track called “Pill”, wherein the hook line goes “I was lying in a hospital bed, a rock and roll nurse went to my head”.

And now David not only needs a nurse but must find a way to pay her. You can help.

A rock and roll nurse absolutely, but she probably need not be a Prima Ballerina, and only heaven knows if he’ll make it to enjoy another spring afternoon.

If he did it would be a Godsend, and, failing all else, I will spare a prayer for same.

TIMSHEL

I wanna tell you, now’s the time, I wanna tell you that you’re goin’ to be mine,
I can’t tell you how I feel, my heart is like a wheel,
Let me roll it, let me roll it, let me roll it, to you

Paul McCartney

Finding the thematic cupboards a bit bare this week, I am forced to resort to the trudging over ancient, over-travelled ground, from both an allegorical and substantive perspective.

First the allegorical. Our title owes itself to Paul, from a Wings work called “Band on the Run”.

I didn’t want to like this album, released in 1973 as, somehow, in less that 3 years, his 5^th post-Beatles LP. It was overplayed to be sure. Paul, by that time had not only swapped the mercenary Linda in and John out but he and his wife were dubiously rocking twin Bowie-esque (Aladdin Sane vintage) mullets, and it seemed as all we held dear was rapidly crumbling before our eyes.

But I’ll be switched if this is not a solid record — one that has admirably stood the test of time. The Title Song, “Jet”, “Hellen Wheels”, and of course the above-purloined number (which may be the best track of all) reinforce the point.

I could say more but won’t, and instead will force myself to move to the substantive.

At present, in a trend that shows no signs of decelerating, almost all relevant news issues forth from Washington. Blink over the Beltway these days, and you’re likely to have missed something important. And as is axiomatic from a market perspective, the more that the pertinent the information flow derives from our national capital, the worse off investors are likely to find themselves.

Plus, I hate writing about Washington, have a desire to channel neither Woodward, nor Bernstein. But the tidal wave of action emanating from that quarter renders me, for the most part, choiceless.

Even last week, in my probing analysis of the DeepSeek phenomenon, I was forced to dedicate a couple of paragraphs to Public Policy, wherein I expressed the wish that the Big Guy would slow his roll.

He has instead taken the opposite tack, and – not gonna lie – it’s making me a bit nervous.

In three weeks since removing his hand from that bible, he has moved towards the firing of tens if not hundreds of thousands of government workers, has adopted territorially acquisitive rhetoric towards a half dozen currently sovereign jurisdictions, laid the foundation for trade wars with > 75% of our global commercial partners, rounded up untold numbers of undocumented migrants designated for deportment, glibly hinted at an extra-Constitutional 3^rd term, and, most menacing in my judgement, made the following dubious forays into the Private Capital Markets.

I’ve already begun my tirade about $TRUMP – a new crypto unit owned and controlled by the Leader of the Free World. A president with his own currency. What could be better? What could go wrong? Not enough space here to express my outrage here — but remember – you heard it here first: this will end badly for all of us.

And now, we’re floating the idea of a Sovereign Wealth Fund: a private investment pool controlled by the government, like they have in the Emirates and Scandinavia, where they are drowning in the revenues generated by fossil fuel production. Our own Balance Sheet, sadly, tells a different story, approaching $40 trillion in unfunded liabilities and expanding that tally at a pace of ~$2 trillion/year.

OMG: where to start? Aside from the mundane but holier alternative of using these funds to pay down, or at least impede the increase, of our mind-boggling indebtedness, there is the question of size. Papa Bear will surely want to go bigly. There are currently about a half-dozen Sovereign Wealth Fund with assets > $1 trillion. The largest of these is Norwegian (~$1.7T), followed by Chinese vintages: two such pools that combine to a tidy $2.5T.

So, anything less than $3T or, better, $4T, would be a stone-cold embarrassment.

Who invests this hoard and how it is deployed is another cause for worry. Consider, by way of example, an incisive analyst who (after extensive research) determines that the best asset in the whole damned universe is $TRUMP. And wouldn’t that be nice for those with the foresight to adhere to the President’s agenda? Heck, he could walk away from his 2^nd (certain to be final no matter what he says) term as the world’s first trillionaire. He is also able to either light up his bestie Elon, or, if the latter displeases him, to render him, from a financial perspective at any rate, sorry he was ever born.

More likely is a diversified hodgepodge of assets – with or without Tiktok – at sizes which cannot help but move markets (not a good thing). And that’s before it gets political. Which it will. No matter what anyone says. Big Guy: a word to the risk management wise – maybe give this a miss.

There’s also talk of a T-branded ETF investment platform which… No. I. Just. Can’t.

All the above has one other thing in common – the absence of engagement with the Legislative Branch of Government. Nothing undertaken or contemplated thus far and to the best of my knowledge, involves the bothersome protocol of Checks and Balances.

Presumably, the administration will eventually be compelled to map at least some of his agenda through those Marble Halls of Capitol Hill, and I fear that all this other activity will, at minimum, be distracting, if not outright dilutive, to his objectives.

All of which has virtually obliterated the non-Oval Office news cycle, which, under more normal conditions, would have been meaty enough on its own.

The Fed has taken a modestly hawkish turn, GDP remains robust, the dubious, confusing jobs report showed continued energetic demand for Labor.

The earnings season has moved past its peak, and the results were, at best mixed. 6 of the 7 now-MAGA Mags have weighed in, and only NVDA remains for us to absorb.

Several trading sessions after the DeepSeek puke, it appears to me that our omnipotent chip maker will be just fine, as all signs point towards, if anything, accelerated GPU demand. To wit: 1) two of the big barking dogs (MSFT and AMZN) experienced selloffs due to admitting that their computing capacity is failing to keep up with expanding demand, and 2) ALL of these titans are doubling down on their AI investments, DeepSeek be damned:

It’s hard for me to view this as being anything but accretive to NVDA.

And the indexes, while bouncing around modestly all week, ended on a low note, absorbing, as they did, a triple-whammy of bad news, including a sucky AMZN earnings report, a set of Employment statistics that gave the lie to anyone in a parallel universe still clinging to irrational hope of additional imminent rate cuts, and, (not to be outdone) some additional Trumpian Tariff saber rattling.

In result, the markets are deeply underperforming the wild MAGA optimism of a few weeks hence. Our indices are barely registering a positive pulse, with Col. Naz showing a vapit 1.1% ytd gain. And if you want to understand how bad that is, consider that the IBEX 35 is up ~9.5%:

Spain is Kicking our Asses:

Like the late, great Hoyt Axton once wrote, I never been to Spain, but I kinda like the music. I hope someday to get there.

But of this much, I am sure. We didn’t elect these clowns to witness those lazy Spaniards beating us by a factor of nearly 9.

At some point, while not necessarily abuse it, we’re gonna have to use it, because we can’t refuse it.

And my unifying theory is that investors are partially rejecting the rapidity of Trump’s roll.

Which is a shame because this here market is dying to go up, and, I feel, only the chaos emanating from 47’s frenzied flurry of activity is impeding it from doing so.

He did indeed tell us that now’s the time, that we were going to be his. So, we let him roll it to us. And now we must take the consequences, whatever they may be.

TIMSHEL

So long Marianne, it’s time we began,
To laugh and cry, to laugh and cry, about it all again

Leonard Cohen

A quick farewell to Marianne Faithful: musician, artist, actress. Mick’s Muse, Lady Jane, Ruby Tuesday, the girl, who, once had him down. She was (I just learned) also the inspiration for the Hollies’ Carrie Anne, and she left us this past Thursday.

****

Not that I had any intention of doing so, but the week’s headline market news is impossible to ignore. In the early hours of Monday morning, a near-panic emerged based on a heretofore unknown Chinese startup called DeepSeek’s having replicated, or bested, on a corroborated basis, some of the industry’s most fully rendered Artificial Intelligence models. Producing similar, if not superior results to its largest competitors — at a (purported) fraction of the cost in terms of time and investment, relative to the outlays issuing from the behemoths that were destined to lead us into the AI promised land.

The primary victim was NVDA, who, of a sudden, may see the up-till-now insatiable demand for its most expensive Graphics Processing Units (GPUs), driven as they have been lately by the needs of AI model developers, diminish materially. Contemporaneously, Monday’s selloff caused the largest one-day valuation loss — +/- $1 trillion, in market history, with over half of it being borne by NVDA itself.

Friends, we are, to the best of my knowledge, in uncharted territory here. Never in my long experience had any previously anonymous enterprise dropped news of a paradigm-shifting productivity advancement, seemingly out of nowhere, and causing such a dramatic rethink of the investment models driving the current Global Capital Markets risk allocation assumptions. There were other puzzling aspects as well, notably that the news of the new model was a week old ere the market reacted, and that the entire project was nothing more than a side gig for an energetic quant whose main job is to run an $8B hedge fund.

So, my first reaction was one of significant skepticism, because this here development, extravagantly extrapolated, is the equivalent of announcing, say, in the late 19^th Century, that not only had someone developed a flying machine, but had put in place a framework that would, in the veritable blink of an eye, substantially replace the commuter rail system as the preferred means of long-distance travel. Plus, not to be xenophobic or anything, but the breakthrough originated in China, where it pays to allot some suspicion in anything to do with investment, causing me to look at the whole thing with a jaundiced eye.

But by all accounts, these dudes are on to something, and thus, while part of me would really like to run with our titular antithetical nomenclature of ShallowHide (which an internet search indicates belongs to me), I must also disclaim that this may be anything but applicable to the current tidings.

It is important to home in with precision on what caused the big Monday puke. Nobody is legitimately concerned that DeepSeek, which is not a chip manufacturer but rather a crafty user of same, is destined to displace the likes of GOOOOOOG, META, AAPL or AMZN as premium purveyors of the Artificial Intelligence services to the masses. Rather, the notion that instead of spending hundreds of millions or billions thought to be required to create said services, they can instead be developed for a paltry few million – an amount of capital to which virtually any schmuck on the street can access – is one that suggests maybe our chip foundries are not worth the lofty valuations with which the wisdom of the markets has honored them.

Longer term, the closer Monday’s tape bomb is to the truth, the better off we’ll all be. If one believes in even 1/4^th of the promise that AI acolytes insist awaits us, then we’re, by my judgment, less than 5% of the way to our destiny of Artificial Nirvana (Nirvartificial?). And if so: a) we’re gonna need all the GPUs upon which we can lay our hands, and b) the cheaper this input becomes, the quicker and more comprehensive the transformation will be. Though the DS models are Open Source, I don’t expect the Chinese to simply gift us this bounty. But our own engineers are bound to figure out what they did – perhaps sooner than we can imagine — and will act accordingly.

All of which has caused the Financial Press to dust off one of the more obscure (but nonetheless essential) tidbits from the economic textbooks – called Jevon’s Paradox, which posits that tech advancements which add efficiency to the use of finite supply input cause the overall demand to increase:

I was never sure why this was ever considered a Paradox. It strikes me that in a competitive market, reduced production costs catalyze lower prices, which, of course, goose demand.

I reckon, though, that’s beside the point. That we consume more at lower prices is a rule on the first tablet of the 10 Economic Commandments. But are the producers better off as a result? Only if the area defined by the length of Lines B and D is greater of that of A*C. And in the case of those powerful GPUs, we just don’t know. Yet.

So, these things were bound to take an annoying bite out of the price of NVDA and its lesser peers – under the plausible hypothesis that it may take some time before Area BD exceeds that of AC. Jevon suggests we’ll get there, and I believe we will. But I am observing many portfolios, including my own, which, having feasted so long on this name, may now have to go on an NVDA diet.

But the way this all unfolded – seemingly out of nowhere — makes me wonder, and, perhaps unsurprisingly, by mid-week, the markets had regained, if not their vigor, then at least their equanimity. The informed consensus, including that of NVDA management, is that this breakthrough is a joyful event. Do they believe this? Are they just talking their books? Is the whole thing real? Tough to say.

Meantime, the Fed held steady. Powell was kinda mean. Q4 GDP came in a titch light. MSFT, AAPL (and others) reported, and the former got smacked – ironically because of a dilutive shortage of the storage capacity it sells. The earnings season is in mid-crescendo, and does not appear as though, when finished, it will have moved the needle over-much in either direction.

I have not been made aware of any direct focus on DeepSeek in CEO podium star-turns, which is probably a good thing. One pending implication that puzzles me though is the potential impact on crypto. As I write this out, the asset class is down a few percent from its lofty highs. And I wonder: is it susceptible to the AI-driven Jevon’s Paradox? After all, BTC coins are created through algorithms, which might very well be incrementally empowered by uber-efficient applications of GPUs, in that case causing an increase in supply that won’t be accretive to those buying in at 6-digits. Same with other tokens – new or existing. No clue here, but thought I’d share….

Beyond all the above, the Washingtonian psychodrama is in high gear. The new administration is in whirling dervish mode, and as time marches forward, the key Trumpian question emerges with greater clarity. Having won a second astonishing victory, he could then adopt one of two subsequent attitudes. Channeling Dr. Jekyll, he could find some serenity in the realization that he had nothing left to prove, and proceed, lessons learnt, with his agenda in wisdom and probity. In Hydeian Converse, he could go off halfcocked, determined to perpetually remind everyone concerned just who’s in charge of this here joint.

This past week was, from this perspective, far from encouraging, as, rather than slowing his Big Orange Roll, he, chose to quicken it. Examples abound, including his clumsy Executive Order blocking about $3T of Federal Grants, which, as was perhaps inevitable, a judge suspended in Usain Bolt speed, forcing our Leader to rescind it. Lots of what he blocked deserved said blocking, but doing so in one fell swoop, less than a fortnight into his tenure, was about as effective as it ought to be. He’s making menacing gestures towards Panama, blaming that unfortunate DC air crash on DEI.

Capping off the week was his make-good of his tariff threat, slapping 25% on our neighbors north and south and 10% on China. In trademark, statesmanlike fashion, he informed us that we don’t need the stuff that we buy from Mexico and Canada anyway. But I suspect we’re still gonna buy that Canadian Bacon and those Mexican Tamales, paying an extra two bits to the dollar for the privilege of doing so.

No doubt he feels empowered by his successful saber-rattling at Columbia, from whom we import 20% of our Coffee. Yes, they backed down, but Java/Joe is nonetheless nearly a double over the last rolling year, and up > 10% since our Diet-Coke-preferring Leader took office.

I can probably afford the incremental levies on these imported dainties, which I consume with moderation at any rate (except Coffee, which I chug by the gallon). And the market will probably roll on as well. But I say that 47 is giving aid and comfort to his political enemies, who will extract a price, not from him but rather from us.

And I encourage anyone believing that the world was taking a turn to the authentic should bear in mind that this past weekend, the LA Lakers traded their oft-injured, 31-year-old Power Forward Anthony Davis for the NBA Scoring Champ, 5-time 1^st Team All Pro Luka Doncic, who, at 25 years, carried his Dallas team to last year’s finals. This smacks of the doofuses in the NBA Home Office, engineering yet another one-sided transaction, in the hopes of boosting their ossifying product with yet another cycle of putrid Lakers-Celtics finals, replete with LeBron swansong motifs. They always pull this shit, but this ain’t Wilt vs. Russ, and the NBA, save for providing yet another reason to root against the Lakers, just, somehow became even more unwatchable. If it doesn’t work, they can always increase the number of steps allowed before a travelling whistle is contemplated from 8 to, say, 10.

Or eliminate the dribbling requirement altogether.

All of which proves both how shallow everything sometimes is, and how few places there are to hide from the madness.

Maybe the answer resides in those newfangled DeepSeek AI models. But you won’t find me looking there. Because, sometimes, the greatest comfort I take in this world is to operate under my well-earned status as a curmudgeon.

TIMSHEL

Acadian driftwood, Gypsy tailwind
They call my home, The land of snow
Canadian cold front, Movin’ in
What a way to ride, Oh what a way to go

Jaime Royal “Robbie” Robertson

Friends, another monument has indeed toppled. Garth Hudson, oldest but nonetheless last surviving member of that iconic ensemble known as The Band, has gathered to his dust. He died in Woodstock — appropriately, as that was the locus of some of the group’s most legendary innings.

Garth hailed from just across the Canadian border: Windsor, ONT, which is basically a suburb of Detroit. He was rigidly brought up and classically trained – by parents who themselves were musicians. As described in the magnificent “Last Waltz” documentary of their farewell performance, being afraid to tell his parents that he was joining a rock and roll outfit, he signed on as the group’s “music teacher” – at a compensation rate of $10/week. This was more than pretense; he actually charged his mates these rates for these services, through a point well beyond when their musical exploits were minting them millions.

But I have always been puzzled by The Band. They made their bones in Toronto’s sizzling 1960s music scene (as lively as that of jurisdictions such as London or San Francisco). Established incremental bona fides by backing up Dylan in his at-the-time-deemed -treacherous migration to electric music. Lived communally in a house they called Big Pink, in the above-named township of Woodstock, NY.

Throughout, they carried a reputation of epitomizing the best of what rock and roll had to offer — both musically and in lifestyle. In addition to Dylan (who spent 18 months with them at Big Pink, recording 100 songs now immortalized as “The Basement Tapes”), all the elite of the genre wanted to in.

Big Pink: West Saugerties New York (not much to look at but History inside):

Thus, during a Beatles Hiatus, George hung out with them and was so impressed with their demeanor and musical comportment that upon his return to London, he (temporarily) told John and Paul to sot off.

But there are, to my way of thinking, some chinks in their armor. They had some fine, arguably spectacular moments, but how many of their songs are truly memorable? A half dozen? A dozen? I struggle to get past this threshold.

Perhaps more importantly, after their Last-Waltz-documented swansong, the brotherly feeling which everyone else strove to emulate descended into vitriol and acrimony. Robbie Robertson – principal though non-exclusive songwriter, took the money and ran. The other guys resented this. Particularly their divine drummer Levon Helm. They reformed without Robbie but couldn’t make much of a go of it. Their haunted, underappreciated other keyboard genius: Richard Manuel, hung himself after a performance in 1986. Bassist Rick Danko died of cancer a few years later. Levon set up his own thing, back in Woodstock, where the greatest of the great sojourned to join his quaint, intimate, collaborative performances. But he never forgave Robbie — until, perhaps, on his deathbed, when the latter made a pilgrimage of apology. And, of course, we lost Robbie himself a year or two ago.

How a musical partnership, with enough audacious authenticity to call itself The Band — the crew which All God’s Children wished to emulate, ossified into the depths of acrimony, leaving behind so few memorable records, is something I’ll never understand.

But one prevailing, timely lesson we can derive from the saga is its illustration of the triumphs and tragedies of International Trade. They formed in Toronto as a backup to transplanted Arkansas homeboy Ronnie Hawkins, who brought fellow razorback Helm along for the ride. Having outgrown The Hawk, signed on with Dylan, and then went out on their own. Thus, arguably, Hawk imported them (or they imported him), and included American export Helm, and then Dylan ended up re-importing them.

And while it was in many ways a great run for all concerned, it ended in tragedy.

With shameless transition I note that The United States and Canada are now going nose to nose in a simmering trade battle. There’s a deadline this coming Saturday (Feb 1) by which time, if the latter has not toed the line, the former will impose a 25% tariff on goods they send down south. This amounts to >$100B/year. Approximately 30% of this is Lumber – including our titular driftwood.

The Canadians, not ones known to simply roll over and get stiffed, will, of course, respond. The two-way trade is roughly balanced and aggregates to >$900B. If this goes through, the two governments will thus be the recipients of more than $200B/year of incremental transfers from the Private Sector.

Call this what you will; I call it a tax. And I think that taken to its extreme, it continues to represent the largest threat out there to the continuance of the present market rally we are all enjoying.

I reckon that the good news here is that Trump, his frenzy of first week activity notwithstanding, did not go all gangbusters with tariffs – yet. Much of what he has socialized is already priced into valuations. Thus, unless he pulls a fast one (which, of course, he is entirely capable of pulling), the market can probably absorb this assault on free trade without much annoyance.

The early returns are indeed encouraging. Investors bought enthusiastically all week, before initiating a modest pause on Friday. In doing so, they shrugged off that wretched, annual Gathering-o-the-Hypocrites circus in Davos. On the other hand, published reports suggest that the forum splayed a much different vibe this year than in events past. In trademark self-interest, they ditched the green/woke (GWOKE?) rhetoric in favor of full-throated endorsements of the spirit of free enterprise. But then again, no one ever accused that crew of original thinking.

Thus far, though still in its early innings, what threatened to be a tetchy earnings season has been, on balance, encouraging. The battle unfolds in greater earnest this coming week, with Titans MSFT, META and AAPL all on the docket. Alphabet follows on 2/4, then AMZN (2/6) and, of course, we’ll have to wait until the end of February ere we hear howls from the biggest dog in the manger Mag Manger: NVDA.

The unmentioned member of the Mag 7: TSLA, which reports this Wednesday, is an interesting case. My own belief is that it is resting on a slippery soap bubble. Marshal Musk continues to suck all oxygen out of the joint, posting up a string of wins and losses that are breathtaking in their scope. On the plus side, he managed to two-tap his hedge fund partner at DOGE, which was perhaps inevitable. Not so good was an inadvertent gesture of his, captured on film, which the unhinged have likened to a Nazi salute. Please. A Nazi he may be, but my guess is that he’s smart enough to reserve his “sieg heils” — in favor of more opportune times.

But that he is making legions of enemies is undeniable. And, meantime, his baby TSLA is trading us up > 200% over the last rolling year, boasts an arguably optimistic Market Cap of $1.3 Trillion (> 10x that of Ford and General Motors combined, notwithstanding that the former sells more than more than twice the cares, and the latter more than three thrice, that of TSLA) and a less-than-shabby P/E of 193.

Presumably, investors are staking a great deal on his relationship with his Big Daddy, and perhaps this will bear fruit for his electric-powered auto outfit and other enterprises. But he may want to have a word with the Mooch respecting the latter’s experience during Trump 1, because (as one of my favorite clients points out), if that relationship turns sour, then TSLA is in serious trouble and may be the biggest short opportunity in recent memory.

But in my world, all eyes are trained on Miami and its annual Hedge Fund Week ritual. ’24 was a good for all concerned, and one can feel the frenzy – even from rigid climes of the Northeast. Fund Managers are swarming the place, waiving their most recent returns and expecting to unending rings of the allocation bell. Allocators are similarly giddy, particularly as they are, more than ever, Belles of the Ball.

This may work out great for all concerned. But I will state that I’ve seen this movie before, and its ending is always uncertain. Funds may depart the premises with their subscription tchotchke bags less than full, and allocators, believing that they have indeed found their next “can’t miss” revenue generators, may live to find disappointed hopes in future return cycles.

I don’t wish to be a Gloomy Gus here, but the current vibe reminds me a bit of the crossover from ’21 (Gallant 500 up ~27%) to ’22. When the former year ended, I was, I kid you not, perpetually buttonholed by investors of every stripe – professional and avocation-based – rushing to inform me that not only had they crushed it in the just-ended year, but had cracked the code in such a way as to ensure that the profits would keep rolling in.

By the end of ’22 (G5 down ~20%), they were singing an entirely different, much sadder, tune.

But I don’t wish to kill anyone’s buzz here. I do believe that the arrows are pointing up. Our resilient economy is gathering juice. Tax relief (which BETTER more than offset the tariff tolls) and regulatory relaxation should be accretive. And, short term, I believe that investors are apt to test the hypothesis that the good times are here and here to stay.

Problems, from that point, will, inevitably, ensue. They always do.

Before I take my leave, though, I offer the following rant which I believe to be exemplary of the types of problems we are bound to face in the visible future. In the days leading up to the Inauguration, the organization surrounding The President-elect saw fit to issue its own digital currency. In many ways, this is understandable – a matched set with his social media SPAC, both of which every Leader of the Free World needs. Adopting the clever handle $TRUMP, this new, most patriotic cryptocurrency sports a lofty valuation of ~$30B, 80% of which is controlled by insiders who are locked up until 3/4ths of Papa Bear’s term is in the rear-view mirror.

As someone who is sympathetic to the Trump project, who very much wants to see him succeed in his current endeavors, I am nonetheless shaking with anger at this. His holdings in this, er, asset, are worth an amount orders of magnitude greater than anything he’s ever sniffed in his Real Estate-manipulating, Reality TV show-hosting, SPAC-issuing life. The potential conflicts and attendant optics, too numerous to inventory in this space, are breathtaking in their scope. This little stunt drew scant coverage – even from hostile media actors. But God help us if something goes wrong here.

But to conclude on a more uplifting note, $TRUMP has leveled off after a few giddy, Inaugural- coincident sessions since its release.

$TRUMP:

Thus, the tide rolls, the driftwood floats, some to be harvested; some not. It all recalls for me images of Upstate NY, where, in the late ‘60s, in a non-descript pink house, some of the most legendary moments of rock and roll transpired.

It was great while it lasted, but like everything else, it ran its course, leaving, in this case, a legacy of bitterness that lasted for decades.

Maybe we’ll do better this time.

But now we’ll have to do it without Garth or any of his mates, and as such, it’s an open question.

TIMSHEL

It’s just a jump to the left. And then a step to the right.

O’Brien/Hartley

Frank: Well, Brad, Janet, what do you think of my creation?
Janet: Well, I don’t like men with too many muscles.
Frank: Well, I didn’t make him for you!

Rocky Horror Picture Show

The time has come to celebrate the magnificent 1975 film “The Rocky Horror Picture Show”. Yes, this young year encompasses its Golden Anniversary, but that date is either April (U.K. Release) or September (US Release).

Meantime, the “Time Warp” motif should be obvious to all but the terminally obtuse, and we’ll get to it anon. But a word, first, about Rocky Horror – a low budget effort with a wandering, convoluted plot that somehow captured the imagination of my entire generation. As most are perhaps aware, its weekly midnight showings, complete with audience counter-script and props, originated/perpetuated at the Waverly in Greenwich Village, became a matter of longstanding ritual. I wasn’t a regular there, but went a couple of times, and it was, indeed, a hoot.

But audience participation aside, I believe the delights of the film derive principally from its wicked but well-meaning lampooning of many of the hangups of the time – our vanities, our fears, our fantastic delusions. Rather than analyzing, attacking and obliterating, the film seeks to celebrate them. And succeeds with decadent, inelegant flourish.

Meantime, in shameless setup, I now traverse to the Time Warp theme. We’ve managed to wind the clock back precisely eight years, where, on a windy platform in the Nation’s Capital, an overblown, overbearing Real Estate mogul will place his hand on the Bible and then assume occupancy of the same Oval Office he departed, amid multi-pronged chaos, exactly four years ago.

He brings with him a new cast of characters – hopefully less demented than “Rocky’s” Dr. Frank N Furter’s crew of Riff Raff, Magenta, and Columbia, but I reckon we’ll see. The only return performance from Trump 1 is assigned to Linda McMahon – co-founder of WWE, in the elevated from running the Small Business Administration to role of Education Secretary. Everyone else is new, except, of course, The Master of Ceremonies.

But in a very real sense, we’re entering, today, an 8-year Time Warp, with the country having just completed another jump to the left, is now preparing a repeat of its step to the right.

So, I thought it might be useful to refresh our memories as to what was going down exactly 8 years ago.

The markets, with valuations ~1/3^rd of their present levels, continued their giddy upswing, begun in the pre-dawn hours after the ’16 election, when a world shocked by Trump’s drawing the political equivalent of an inside straight, first sold off hard and then ginned up a rally that took the markets from one high to the next, for the ensuing 20 months.

Crypto was all the rage, with Ferraris and Lambos endlessly buzzing 6^th Avenue in what seemed like an infinite sequence of investor conferences. On Inauguration Day, BTC closed at a titch under $900. It enters the current festivities at approximately $105,000.

In 2017, the Best Performing Dow Stock was Boeing (up 89%), and if that doesn’t make you feel the change, I reckon nothing will. It closed on Trump’s swearing in at $160, and is now, endless sequence of disasters notwithstanding, trading at $170.

A little-known chip maker called NVDIA also made that year’s 10 list – entering 2017 at ~$2.50 and closing it at a near-double of ~$4.80. Back then, its rise was driven by the role its chips played in crypto mining. It has since deftly trained its sights on AI, and concluded Friday’s session at $137 and change, outpacing the performance of even BTC during our Time Warp interlude.

A passel of politicians boycotted the 2017 festivities, and up the road in Manhattan, Madonna was threatening to blow up the White House. But you know who was there?

OK, I know. That wasn’t the Trump 1 shindig, it was Biden’s 2021 swearing in. Still and all, I give Bernie credit for being there. It was cold, after all.

And this is to say nothing of the reality that the Party Bigs flat out stole the nomination from him and handed it to Blundering Joe Biden. We know what happened after that.

God Bless him, I say. There he was this past week, larger than life, grilling cabinet nominees, and looking, if anything, younger and more vigorous than he did in this famous image.

For the record, a maskless, mitten-less Bernie did attend the Trump 1 ceremony. But then again, like Biden in 2020, Hillary had robbed him of the nomination that time as well.

In March of that year, the Big Guy delivered his first State of the Union address, and Pelosi, consigned to the House minority, was not on the podium. However, two years later, having recaptured the Speaker’s post, she could be seen towards end session making dainty little tears in the transcript, before, upon conclusion of the speech, ostentatiously ripping it into shreds.

Also that month, the United States Budget Deficit – somehow – reached its Statutory Limit. After months of fenagling, our betters in Washington raised it, for the first time, to the now-quaint threshold of $20 Trillion. It currently is 80% above that mark (~$36T), and – oopsies – is poised for another breach on Tuesday, January 21^st – eight years less one day ago.

Outgoing Treasury Secretary Yellen has written to inform Congress of same, referencing extraordinary measures that must be taken if legislators fail raise it yet again. I will cop to being puzzled by this language, because, by Tuesday, Sec Yell will be out of office, and presumably back in the leafy hills of Berkeley – up North and thus untouched by the fires – with her Nobel Laureate husband. It will thus be my boy Bessent’s problem by then. And Trump’s.

Finally for our purposes, that month featured a low ebb of Crude Oil prices, at an even $40/bbl. One must revert to the immediate aftermath of the 9/11 attacks to observe a lower price, and, winding forward, to the early days of the lockdown, when the bubbling sticky Black Gold, improbably, though only for a few hours, traded in negative territory:

At just under $78/bbl, the commodity is nearly twice as expensive as it was at that point. This, in part, is owing to some sanctioning and offshore drill banning in which Ol’ Joe (along with some other shady stuff he pulled) engaged in the waning days of his dying administration.

That he is departing in anything other than a blaze of glory is obvious to all. But I can’t resist the temptation to reference one final, exemplary moment, when late last week, he unilaterally declared The Equal Rights Amendment to be officially ratified and demanded that it be affixed to the Constitution as #28. This, of course, notwithstanding that it failed to meet a couple of minor bureaucratic details – such as passage by 2/3rds majority in both Congressional Houses, and formal ratification by 3/4ths of the States.

It’s moments like these which will make me, from time to time, miss the old cuss.

Time, however, and whether warped or not, marches on. And now, as back in ’17, we can anticipate some heavy incremental action emanating from the Oil Patch, and with it, lower prices.

So, considering all the above, the main question remains is this. Are we indeed in an 8-Year Time Warp, complete with the jumps to the left, steps to the right, pelvic thrusts and the like?

I’d say the answer is yes, albeit with some caveats. And if so, from my controversial perspective, we could do a good deal worse than how we fared during the ensuing four years (until, that is, them covid buggers showed up and took over the joint).

There are many out there who are no doubt horrified by this sentiment, hating the guy barreling into the Oval Office and throwing major shade at those who put him there.

But to paraphrase Frank’s response to Janet when he asked her to rate his creation, they didn’t make him for you.

In partial spoiler space, I will inform my readers that things didn’t work out too well for Frank. Or Rocky. Or, presumably, for Brad and Janet.

But somewhere across this great land, some dark theater is running a midnight showing this magnificent film. And the audience is screaming “asshole” at Brad and “slut” at Janet. And throwing toast at the screen. They’re jumping to the left, stepping to the right, placing their hands on their hips and thrusting their pelvic bones. And, I hope, thoroughly enjoying themselves in so doing.

I’m not here to tell you what to do, but if you did decide to join them, answering the call of our title song and doing the time warp again, you have, from a risk management and aesthetic perspective, my unmixed blessing.

TIMSHEL