“Since I’ve become a central banker, I’ve learnt to mumble with great incoherence. If I seem unduly clear to you, you must have misunderstood what I said”.

Alan Greenspan

We are plainly operating on a rate-sensitive tape – perhaps as best exemplified by the market’s giddy reaction to Powell’s dovish tilt at J-Hole this past Friday. As I will further argue below — and particularly given the uber-politicized nature of the issue, I believe Chair Pow indeed spoke with undue clarity – for a Central Banker at any rate. Perhaps he should’ve taken a page out of predecessor Greenie’s book. On the other hand, he may not have had the luxury to do so.

But we’ll get to all that.

Meantime, I’ve been jonesing to give a shout out to my main man Gaius Plinius Secundus (AD 23/24 – 79) – known to us street cats as Pliny the Elder – Warrior, Man of Letters, Statesman. He was also the, er, spiritual guide of Gaius Plinius Caecilius Secundus (AD 61 – 113), — known by the same crew as Pliny the Younger and mostly famous for writing letters about the Elder.

Historical records indicate that the latter was the former’s nephew. But one look at them side by side gives rise to the hunch that perhaps the Uncle/Nephew link was nothing more than a ruse, employed throughout the ages, to mask a more – shall we say – in depth relationship:

The Plinys – Oncle et Neveu:

No matter. I’m not here to judge.

What is more to our purpose is that P the E (a prolific author if ever there was one, having penned, among other works, the 37 book/10 Volume “Naturalis Historia” – the first ever compendium on the History of the Natural World) is widely credited with having coined the phrase “cum grano salis” – “a grain of salt”. In modern-day vernacular, the inference is one that challenges the veracity of any claim or statement – as opposed to its original application: implying the powers of small amounts of sodium as an antidote to certain poisons.

In today’s world, there are probably better correctives than salt to menacing materials. But I still believe that much of that which our crania consume should indeed be so taken.

But perhaps not Chair Pow’s J-Hole remarks. He tells us that he’s now more worried about the Jobs picture and less so about Inflation. And we should believe, if not whether this truly reflects his mindset, then at least its implications for going forward monetary policy.

I believe there is undue clarity on the latter – not so much owing to a sober reading of macro trends, as of the political forces impelling the statement. Because politicians of every stripe are indisputably on the warpath for these and other policy objectives. Trump, for instance, has dispatched one Fed member, threatened the liberty of a second, flipped two others. Most importantly, he’s neutered the Chairman.

And he’s just getting started. You can bet your boots that he and his crew are working every single FOMC voting member – 24/7.

All of which has me thinking that: a) a 25 bp cut next month is in the bag, and b) if anything, the Fed might go big and cut 50.

But investors are taking it all with a grain of salt. Instead of shifting the futures market, which was ~90% 25 cut/ ~10% flat to some split between 25 and 50, they have instead reduced their expectation of any rate cut at all — down to a paltry 75%:

Last Week:                                                                                   This Week:
Maybe somebody knows something I don’t. But I stick to my guns here, not only in my conviction about the Fed’s next moves, but in my belief that the Treasury will manage, over the next several months, to slash rates across the entire curve.

One only need review the overall news flow to understand indisputably that it’s adult swim in macro land. The political sharks are circling and gobbling up everything within reach. Texas passed its gerrymander stunt this past week, and is being seen and raised by California, New York and Maryland. The FBI raided Bolton’s crib, and not just for yuks. Albeit with some justification, the Administration has co-opted the funding and/or mission of the Corporation for Public Broadcasting, The Kennedy Center and the Smithsonian Institution.

Finally, and as important as all the others, the Government has announced the finalization of its intent to purchase approximately 10% of chip-maker Intel. And this just weeks after practically accusing the Company’s Chair of being a Chinese spy.

All of which offer examples of an approach to governance which features acute long-term memory, and a penchant for score settling.

Impacted agents are taking notice. A judge threw out that (admittedly ridiculous) $0.5 Bil levy against the Big Guy. Epstein’s Girl Friday is now certain that, while Trump did indeed visit the former’s eponymous island multiple times, he apparently, on each occasion, acted with the utmost decorum.

And, under the circumstances, can anyone doubt that until the political winds shift (and they will), if Trump wants lower rates, he is, by God, gonna get ‘em?

So, the markets ended last week with a resounding rally, but between now and Labor Day, there’s not much on the scheduled tape to either extend or impede this trend. Except, of course, the most important data point of all – the Life and Death NVDA earnings drop on Wednesday. Not much else really matters in this world. Humanity, at this point, is little more than an NVDA derivative, a single-stock ETF, a wholly owned subsidy thereof. And there’s not much more to say on the subject.

It’s probably worth checking in on their latest tidings Wednesday after the close. After that, y’all have my permission to bounce, to focus on the long bittersweet weekend ahead, the one that marks the end of yet another summer season, gone forever and gone too fast.

We will return to greet the last trimester of what has been, to say the least, an interesting year. I don’t think we will enter the proceedings with an abundance of undue clarity.

Heck, the Fed doesn’t even weigh in until just before the Autumnal Equinox, and I do expect a frenzy of speculation in the lead up to this watershed announcement.

In extended closing, it should be noted that Pliny the Elder died saving people from a rather nasty eruption of Mt. Vesuvius — in AD 79. He was in his mid-50s. He left behind quite a legacy. Including the above-mentioned Naturalis Historia, which is the largest written work to have survived from the Roman Empire. In addition to the grain of salt bit, he is the author of record of the quote “nothing is certain but uncertainty”, and several other idioms we still use to this day.

He is also immortalized by a malted beverage, produced by a Northern California brewery:

I have never sampled this libation. But seeing as how it’s the end of summer and all, it might be worth choking down one or two of these bad boys.

You could probably do worse than by emulating my example.

And if you do, you might spare a thought for Gaius Plinius Secundus. Pliny the Elder.

He covered a lot of ground during his five and a half decades on this earth. He has a beer named after him. And he left behind a nephew to tell his story.

“Nothing is certain but uncertainty” he informed us, while, elsewhere, admonishing us to take things with “a grain of salt”. Both statements are applicable across the ages. Maybe no one understood this better than former Fed Chair Alan Greenspan. Who, with elegant purpose, mumbled a lot.

Greenspan is an economist/amateur musician, as am I. In his younger years, he jammed with the Great Woody Herman and Stan Getz. Whereas I have never jammed with no one famous, not once. We both attended Columbia University, but he completed his PhD, and I did not.

But neither of us are Warriors, never, unlike our hero Pliny, having saved a single soul from an erupting volcano.

Neither Greenie nor I, to the best of my knowledge have a beer named after us.

So, perhaps on this late summer day, it would be wisest to take what we say with a grain of salt.

And if I have been unduly clear in this note, then you have most certainly misunderstood me.

TIMSHEL

Now, before y’all get any ideas, this note has nothing to do with race – to me a wearying, abused topic if ever there was one. Instead, I revert to my singular obsession: The Beatles.

In 1968, they released a double album, with nothing but the band’s monochrome embossed name on the cover, against a snowy, virginal backdrop. It is referred to, for all time, as The White Album.

It was a tough interval for the lads. Arguably, the beginning of their end. Their indispensable manager – Brian Epstein, had just been murdered. Contemporaneously, and seeking spiritual direction, they debarked to the ashrams of India, whereupon they found that their would-be spiritual mentor – the Maharishi Mahesh Yogi – was little more than a horndog, sniffing after the Farrow sisters. Paul and Ringo quickly grew bored. And bounced.

They wrote some good music over there, but on the heels of the perhaps over-thematic “Sgt. Pepper’s”, it was by and large a hodgepodge of compositions, recorded more as a compendium of individual solo tunes than as a group effort.

One could hardly blame them, after Pepper, for hitting a thematic wall, and so it is with this column. Which lacks a coherent theme. Case and point: I am also inspired, in the lead-up to “Spinal Tap II”, by the sequence in the original where the suits decided to release their most recent album “Smell the Glove” not with its intended cover that featured a woman on all fours, with a man’s gloved hand in her face, but rather, and to the disappointment of the band, with a plain dusky cover. Which their misanthropic manage described as “simple, beautiful, classic” Choosing also to look on the sunny side, guitarist Nigel Tufnel adds: “it’s like, how much more black could it be? And the answer is none. None more black”.

The White Album. And None more black. Indeed. It is, from a thematic perspective, all I’ve got for you this week.

It’s not as though there isn’t content upon which to focus. Because there’s some. So maybe we’ll just get to it early.

The Alaska Summit. Nah… …nothing to say about that.

The Gerrymandering Wars? I can think of scant more solid evidence of the accelerated deterioration of our mode of governance than this nonsense. Two political parties cynically rigging electoral maps. Each claiming righteous cause while accusing their opposite number of the most odious hypocrisy. I could say more, but the topic only gives me a headache.

Which leaves two subjects that merit perhaps more a more sobering probing. The first is the prospect, socialized in viral rumor, that the Federal Government is contemplating the purchase of a portion of once- iconic chip manufacturer Intel.

What could possibly go wrong? Yes, there’s precedent here. A great deal of this sort of thing, for instance, went on during the Great Financial Crisis. Taxpayers took huge stakes in the Big 3 Auto firms, under the partially plausible justification that America needed an auto industry. But Ford, GM and Chrysler had at that time transformed themselves primarily into finance companies, getting their clocks cleaned when credit markets turned tits up.

But the government stepped in, the industry was saved, and we only lost $10 Billion in the effort.

The Federal Balance Sheet, at the time, also expanded to include AIG, Fannie and Freddie, but these companies were so enmeshed in the global derivatives/financial engineering morass that the collapse of any of them (particularly AIG) would’ve probably destroyed the banking system. And, speaking of the banks, they also were recipients of large public investment – funds that a couple of them – recognizing that once the government has a piece of the action, they control the whole show – tried to refuse. And their refusal was rejected.

Then there’s Amtrack. Which has always been majority owned by Washington, and which has streamlined operations with such breathtaking efficiency that it currently loses only $5B/year.

All of which begs the question: why do we need a chip company? Answer: we don’t.

Because we already have them. Most notably, NVDA, which: a) currently sports a market cap that exceeds that of the entire Russell 2000, and b) is, in many ways, an entire economy unto itself. There’s also AMD and a bunch of others. Collectively, they’ve been eating Intel’s lunch for the better part of a generation. If any combination of them want to pick up what is, after all, still a pretty spiffy portfolio of tech assets, I would have no objections.

But the government? Just no. More than anything else, it extends a disturbing pattern of increased incursion into what should be private affairs, which is only impeded by protocol and pushback by the proletariat. Otherwise, Goldman would have a new Chief Economist – one who presumably would limit his commentary to plaudits aimed at the current administration, we’d be inefficiently attempting to domestically manufacture all kinds of shit we’re better off importing. Companies would be paying through the nose for the privilege of selling their products abroad, and the top law firms in the country would either be disbanded or graced by new leadership.

OK; maybe the law firm thing would be a step in the right direction. But please.

And beyond this, the conflicts of interest are mind boggling. Like, who gets government contracts? Classified information? Advanced knowledge of corporate plans – upon which to trade? And where does it stop? Are taxpayer dollars to be allocated to the task of crafting a diversified portfolio of corporate assets? And if so, who runs the thing? I won’t say much about this but having worked for many years in the service of a former hedge fund manager who is currently Secretary of the Treasury, I’d say there are better choices. Maybe, for instance, the Commerce Secretary, whose Wall Street firm, while, unfortunately on the Sell Side, was a perpetual profit machine.

So, let’s just hope this doesn’t happen. And, moving on, we come to the heart of the matter, the one factor which, in my judgement, will drive valuations for the next year and beyond.

I am referring, of course, to the trajectory of interest rates. I am on record as being well-nigh convinced that they on their way down and this across the Curve. Well, this past week did my hypothesis no particular favors. There was a horrific PPI print, followed by a stronger-than expected showing in Retail Sales. Both of which argue against lower yields. But I stand by my hypothesis, nonetheless. Why? Because political forces impel the plunge. And, in the present day, after voting soundly for a removal of government interference in private affairs, we find ourselves, instead, in an environment where politicians determine all matters of import – according to their private whims and agendas.

The FOMC does not meet for another full month, but the action picks up this week, with the righteous ritual of the Jackson Hole Economic Symposium, held high in the Teton Mountains. It is sponsored by the Federal Reserve Bank of Kansas City, because somebody figured out that they needed to give the KC Fed something to do. Chair Pow speaks on Friday morning, and I continue to believe that his job is on the line – in result of his comments and his subsequent guidance of upcoming Fed decisions. I believe that if he fails to deliver the goods, Trump will fire him.

The pretext, as previously discussed, will be the $2.5B upgrade of the Bank’s HQ, which I must admit is something of a travesty. In a better world, he would’ve simply rebuilt the Kansas City Fed, a building that is elegant in its simplicity:

It’s a short jump from the point where the Kansas River flows into the Missouri, which of course merges with the Mississippi, and the out into the Gulf of Mexico (yes, Mexico). Allowing its members to make a quick, watery exit any time the need to do so arises.

The Washington Fed is similarly proximate to the Potomac, with its easier egress into Chesapeake Bay and the Atlantic Ocean. It perhaps has occurred to Powell and his crew that whether in KC or The District, it may be well-nigh time to aweigh anchor.

I doubt that DC’s newly installed National Guard troops will do much to impede their exit.

Of course, this geography lesson is mere sideshow, in a column that has been designated as themeless.

But as the Summer swiftly winds down, I think that investors can relax a bit. The economy is performing competently. Rates, as mentioned above, are coming down. I wouldn’t call these ideal risk conditions, but they’re pretty close, and, as they won’t last, I’d encourage all to enjoy them while they can.

The White Album ends with the rambling, incoherent Revolution #9, in my view a one-finger salute by Lennon, which stands in sharp contrast to the sublime, compact masterpiece Revolution #1.

I think we’re living more in a #9 world. The Revolution of the early part of this decade failed. As many such Revolutions do. As did the Revolution that Lennon ambiguously touted in #1. What replaced it is little more than noise.

But it’s our noise, and we must take it as we find it. The Beatles, after all, regained their footing, ending their fabulous innings with the highly underrated Let It Be, and the justifiably lauded Abbey Road. And as for us, I ask you to light on the best of it, because all our lives, we’ve been only waiting for this moment to arrive.

It is here. So, let’s set aside nonsensical Revolution, and Come Together, as it were.

In other words, let’s do it (in the road if necessary).

TIMSHEL

Perhaps, after all, there is hope yet for my home state of California. Maybe, this most beautifully diverse spot in these here parts, featuring, as it does, an endless oceanfront, mountains, lakes, rivers, breathtaking vistas, and other amenities too numerous to, well, enumerate, can somehow restore its grip on reality.

It is also a center, if not the center of artistic, technological and commercial innovation. And a goodly portion of the populous is comprised of stone-cold smoke shows. So, there’s that.

But in a tale as old as time, the state has long been a victim of its own hubris, with Beverly Hills and Pacific Heights overlords, shielded both economically and politically from experiencing any associated consequence, uttering diktats to the rest of us folks as to what we should do. Where droughts and wildfires occur in the middle of historic floods (a sin against humanity if there ever was one) due to criminal resource mismanagement. Where the big shots throw money at the poor (rendering them no better off), and at an ever-burgeoning bureaucracy – all at the expense of the hard-pressed, rapidly vanishing Middle Class.

Somebody ought to wake them up. I’m not gonna do it, and I don’t hold out much hope from indigenous policymakers, who benefit from the system as disproportionately as those other groups named above.

I was certainly pleased to learn that recently deposed Vice President Harris has decided to give the ’26 gubernatorial race a miss. But only mildly so. Because I’ve no doubt they’ll replace their term-limited, hair gelled Sacramento Skater Boy with someone just as bad. Perhaps even worse.

Nope. That ain’t my good news. Rather, I am delighted to report that the iconic journalistic enterprise known as the New York Post is expanding operations to the Golden State.

Those on the opposite side of myself on too many issues to name have often derided The Post, which lord knows has given them ample ammunition for so doing. It was founded at the beginning of the 19^th Century, by one Alexander Hamilton, whose handsome visage (though I doubt that he would approve of its current content) still graces the masthead. In the intervening 2 ¼ centuries, it has emerged as the epitome of what is pejoratively referred to as a rag, with those pointing such fingers taking great delight in such hardcore stories as that which engulfed the front cover on April 15, 1983, and from which we derive this week’s theme:

I bought this issue, hot off the presses, at a bodega in Morningside Heights, a few months after my arrival in this Metropolis. I also remember (but cannot locate) the headline proclaiming, after John Bobbitt’s, er, successful member re-attachment surgery and his testing of same, the paper’s simple leader:

“It Works”!

It’s hard to take this stuff seriously. But I didn’t laugh too hard. Or for too long.

Instead, I quickly discerned that The Post is perhaps the best daily periodical around. Set aside the hyperbole (and the depressingly bad crossword puzzle/scant comics section) and what’s left is a pesky news organization that breaks important stories all over the world, that puts out thoughtful (if somewhat slanted but who’s isn’t?), editorials, and (most important of all) boasts the best Sports Section in America.

They seldom pull punches, as evidenced by their in-your-face attitude toward 47, which stands in sharp contrast to their Trumpie-loving rep. Because the ties between them and Big Orange run deep. Contemporaneous to the gruesome discovery immortalized on those pages on 15 April, 1983 was the emergence of the Big Guy into the global awareness – in no small part owing to the generous coverage of him by the paper. He seemed to emerge from a sea of faceless NY developers into ubiquity, as catalyzed by the 1984 purchase of the ill-fated New Jersey Generals, local representatives in the long-defunct USFL. It was then that the whirlwind courtship between The Post and The Donald was fully consummated, and the latter has never had the grace to lay low ever since, even for a brief respite.

And as for The Post, say what you will of them, they call it like they see it, and nothing is more needed, or in shorter supply, in Cali, than this sort of attitude. Thus, in sending an expeditionary force there, I believe they are doing the Lord’s work.

I suspect that there will be considerable content overlap between the two broadsheets, much of it complaining about the current goings on. Maybe they’ll find more headless bodies in topless bars (of which the latter, so I am informed, exist in abundance out there). But that riff is sooooo New York. So, while I will not wish that a decapitated humanoid washes up on the Pacific, I will hope and expect that if this does transpire, The Post will know exactly how to capture these tidings in front page large print.

I also presume that the Cali Post won’t be any more of a tariff fan than is the flagship paper. Here, the action is fast and furious. We dictate terms and the other side signs. Then the two leaders shake hands. After which, the Administration crows about what a great trade they just pulled off. Next comes the gratuitous reading of the latest macro data, along with claims that the new deal came at zero cost.

Well, we’ll see. In part through this week’s CPI/PPI drops. Meantime, doomy predictions of economic cliff diving combined with rising inflation are scoffed at. This line of argument may be politically justifiable – unless and/or until the above-mentioned digits take a turn for the worse. But I’m not buying it as a reality. Consider, for instance, last week’s whimsical announcement of a 100% levy on imported microchips. This, of course, is a boon to those who produce those little buggers domestically, and many tech firms are indeed reshoring these critical components. But at what cost? A fancy gadget can perhaps run effectively on AMD circuits as on those manufactured by Taiwan Semi. But as efficiently? I rather doubt it; otherwise, these critical components would’ve never been offshored at all. More likely, rather than focus their R&D dollars on innovation, companies will be compelled to figure out how to build existing products using parts, which, absent government coercion, they would not be purchasing.

Slap me, but I think that this sort of thing – sooner or later – catches up with us. Especially because microchips are only one of the endless number of products that economic agents – so much Trump’s inferior in wisdom and understanding of all things – have made the foolish decision to purchase from venues beyond our borders. They stand corrected. And chastened.

But I will state this: if International Trade disrupts my efficient receipt of my Chinese-manufactured, mind-relaxing meds, well, I won’t be responsible for the outcomes.

Meantime, as sourced from Matthew 6:34 and purloined in this space: sufficient to the day is the evil thereof. On the sunnier side of the ledger, there is gathering momentum for rate cuts – so much so that the infallible futures market now rates the possibility of a September slash at nearly 90%:

Fed Vice Chair Michelle Bowman has joined the hacking chorus – one-upping her colleagues by calling for three such action in what remains of 2025.

OK; she’s Vice Chair for Supervision, not Monetary Policy. But I highly doubt that she would’ve stuck her nose in this extra-departmental business if the thing weren’t close to being in the bag.

This will be accretive to valuations, but the real action, which will take place over the next year, will be at the longer end of the curve. The very freedoms, not of ourselves but of our capo di tutti capi and his crew, are at stake in the midterms. They will do what is needed to suppress borrowing costs — at durations where voters actually borrow (e.g. mortgage rates).

All of which has me rather chipper about short-term market prospects, which will improve as the above- mentioned important election emerges onto the visible horizon. Because not the Fed, but the Treasury will ensure that this is the case.

I’d also add that the action on Gerrymandering King’s Highway between Austin and Chicago may further tilt the odds. But the King’s Highway runs in ALL directions. And us average wretches will be treated to the entertaining spectacle of Congressional Districts across the country being further carved up, to the extent that they are still in any way recognizable, beyond any recognition. But that, my friends, is a story for another day.

Meantime, I urge all to be of good cheer. The NFL season has, at long last, arrived. And, for me, not a moment too soon. The USFL shuttered decades ago.

Cat Stevens (aka Yusif Islam) is playing at the Beacon in a few weeks, and with all our troubles behind us by then, we’ll be there. Together. We’ll build our house, of barley rice, green pepper walls and water ice. With tables of paper wood, windows of light. And everything emptying into whi-hite.

And we’ll buy a subscription to the Cali Post. We will take it to the beach and do its sucky crossword puzzle. I don’t think they’ll find us headless on the sand, but if they do, let ‘em write about it. Because we won’t be able to read about it anyway.

And that, I reckon, is good enough for me.

TIMSHEL

Ten years ago today, my first grandson was born. It is a milestone upon which I don’t care to further comment. Other than this: Happy Birthday, Jamesy.

He came into this world on my brother’s 54^th birthday, which he shares, including the year, with Barrack Obama. It was the 105^th Anniversary of the arrival of Elizabeth Angela Marguerite Bowens-Lyon – Queen Consort of the United Kingdom and the British Dominions:

She’s old here, but let’s face it: she was never much of a smoke show – even in her best days. Unlike her daughter Elizabeth II, whose tenure on the throne extended, improbably, even long than that of Queen Victoria — not much of a looker herself. I will admit, though, to having carried a torch for Liz II, however, for most of my life.

Of note also is that one year to the day after the arrival of Queen Mum Bess, Louis Daniel Armstrong entered these earthly realms.

But all that is merely sideshow. Our theme, instead, is inspired by the final severing of ties between Bridgewater Associates — the still-iconic, and once, but no longer, largest hedge fund in the world, and its perpetually iconic founder: Ray Dalio. We link this, not to the Paul Simon song implied therein, but rather to the album of the same name, recorded with Paul’s longtime frenemy Art Garfunkel.

It’s hard to find much fault with the tune. Paul once called it his “Let It Be”. If I was gonna quibble, I’d mention that it probably could’ve been improved by omitting the throwaway third verse (sail on silver girl? Really?).

In 1971, The Recording Academy of the United States awarded “Bridge Over Troubled Water” two Grammys – one for the song, and Album of the Year for the LP of the same name. The latter award was not short of astonishing – particularly given its competition, which included “Led Zepplin IV”, “Sticky Fingers”, “Aqualung”, Joni Mitchel’s “Blue”, T-Rex’s “Electric Warrior”, “Who’s Next?”, and “L.A. Woman” – any one of which would’ve been, in my opinion, a better selection than BoTW.

Because BoTW, apart from the title song, isn’t a very good album. “Cecelia” – quoted above, is a nice little tune, and though a bit overwrought, it’s hard to entirely dismiss “The Boxer”. but then there’s a nonsensical piece about Frank Lloyd Wright. And a couple of banal covers – including The Everly Brothers’ “Bye Bye Love”, which was marginal at best as an original and certainly never needed a redo. And “El Condor Pasa” – an early 20^th Century instrumental, which Paul decided to use to inform us that he’d rather be a sparrow than a snail, a hammer than a nail, and a forest than a street.

Well, duh.

And it kinda occurred to me that Bridgewater Associates is the hedge fund equivalent of the album “Bridge Over Troubled Waters”. It had some good moments, but: a) its substance didn’t match its hype; and b) it hardly stands out, much less excels, the proximate competition.

A good deal if its success can be ascribed to world class branding, and, while not wishing to judge, I’d say that Ray Ray (or, at any rate his investors) would’ve done better had he maintained a lower profile. But that isn’t how he rolls. So impressed was he with himself and his accomplishments that > 15 years ago, he published an immodestly-titled book called “Principles” – not simply as a guide to sound investment, but indeed as a treatise on living authentically. Unsatisfied, he expanded this tome and re- released it in 2017, this time to much fanfare. The book was literally everywhere, particularly as, a couple of years after its publication, he began giving it away.

And as exemplary of shark jumping at its finest, consider the 8-episode animated version of the book’s content, the link to which I offer to my A.D.D. friends who eschew the written word:

https://www.youtube.com/playlist?list=PLykIL_1_MFWkWDDgvdZ6L7rsvKCKl-39j

When one grabs the spotlight in such avaricious fashion as did RD, backlash is inevitable. And a couple of years ago a former New York Times/Wall Street Journal writer published an expose’ called “The Fund”, chronicling the rise and “unravelling” of Ray Ray and his Bridge. It was an entertaining read for folks like me, who cannot get enough content about morality tales of professional hubris. But its big reveal was something we already knew – Bridgewater was a personality cult, an enterprise, which, first and foremost, existed to gratify Ray’s idiosyncrasies and enable his conceits. It was never wise, so the book tells us, to ever disagree with Ray, because if one did, one could not expect to hang around The Bridge for very long, as they would most certainly be shoved into The Water. Moreover, blame for any visible errors was always assigned in a direction far away from where Ray planted his feet.

There seems to be a lot of this going around. Especially lately and particularly in Washington. One might even state that just as Bridgewater Associates was the BoTW of hedge funds, the regime is the Bridgewater Associates of administrations.

If, for example, one runs a governmental department compelled to release less than politically flattering information, one can expect to feel big orange flames licking at one’s posterior. Chair Pow has been on the receiving end of this treatment all year but somehow has managed to survive (for now).

Not so fortunate is now-former Bureau of Labor Statistics (BLS) Chief Erika McEntarfer, who had a bad day on Friday. First, she released a July Job Creation figure well-below expectations, adding to our annoyance with big downward revisions to the preceding 2 months’ reports. By 3pm EDT, she was gone.

Because, you see, our economy is roaring, surging, the wonder of the current age and of all previous epochs. And cannot possibly be such a meager number of new gigs. This McEntafar person must’ve been cooking the books. For political reasons. So, she had to go.

It also makes me sad because she looks like a modern-day, unhair-washed young Queen Bess:

Queen Erika outlasted some marginally disappointing CPI/PPI drops, which, somewhat improbably, are also in the purview of the BLS. On more solid ground is Vipin Arora, Director of The Bureau of Economic Analysis (BEA). Who, in fulfilling his GDP calculation mission, managed to satisfy our draft dodging Caeser (and perhaps save his own hide after a dismal -0.5% Q1 print) by ginning up a 3% number for Q2. This must’ve taken some extra elbow grease over at BEA, particularly given (and as the report reveals) that the much-ballyhooed domestic manufacturing renaissance, has, thus far, failed to materialize. Moreover, the 3-print was aided substantially by a tariff-driven drop in imports.

Vipin is probably still somewhat outside his comfort zone though, as well he should be, because Big Daddy is not in a giving mood. Case and point, he chose Swiss National Day – Friday, August 1^st – to impose a 39% tariff upon the that ancient nation of cheese, watches and unwavering neutrality.

And the markets are beginning to take grim notice – not only domestically, but across the world. Friday’s circumnavigating puke capped off the worst 6-day rout in a couple of years:

Which is a shame – particularly because the earnings cycle, on balance has been a pleasing affair.

It featured, among other developments a MSFT report so strong that it did a drive-by into NVDA’s heretofore exclusive $4 Trillion neighborhood. Recently beleaguered AAPL surprised everyone by announcing a surge in phone sales – mostly emanating out of the perfidious Land of China.

Beats and upward guidance abound.

But most of the week’s action reinforced my growing hunch that the Fed will indeed take a dovish turn as Summer turns to Fall. In fact, with the help of widely read financial pundits, a clearer picture emerges. Much is riding on August Macro data, but the Jobs Market faces some headwinds.

All those Federal Employees that Trump and Musk bizounced will hit the unemployment lines in accelerated manner. Published reports suggest a visible, AI-driven slowdown in tech hiring. If these and other trends catalyze weak numbers, I suspect Powell will face a “cut or walk” conundrum. Trump will fill the two recently emerging vacancies with allies, and two voting FOMC members are already dissenting. Add the Chair and you have 5 doves. One more and cuts are in the bag.

For these reasons and others, I am on balance untroubled by the dourer tones of the market. I wouldn’t rush in here, but I believe that the market finds an end to the recent undignified behavior of investors.

Ray Ray – at least institutionally – won’t be one of the dip buyers. He’s bounced from Bridgewater, and one can only speculate on his plans. Perhaps he will follow in the tracks of his one-time Number Two – David McCormick – now the Junior Senator for the Commonwealth of Pennsylvania. With whom he fought bitterly for many of their innings together in the sun. Heaven help us if he does.

One way or another, his tenure is indeed Over at the (often-troubled) Bridgewater. But his musical opposite number – Paul Simon — is still kicking around on tour, and, if reviews can be believed, delighting audiences around the country.

No doubt he’s playing BoTW, but I doubt that such filler as “Baby Driver” are on the setlist.

My hunch is that he is featuring what in truth is his best song: “The Sounds of Silence”. And one can only wistfully lament that in forming his investment behemoth, he would have chosen, instead of BoTW, the motifs of this masterpiece as his core branding identity.

TIMSHEL

I can feel the teardrops, the pain, and the sorrow
Ever since you’ve been gone, they’ been comin’ on strong.

Little David Wilkins

Answer me this: what is it about The Hague that renders it the epicenter of all human thought and endeavor? It seems that nothing of import, nothing of worth which transcends time and space, that does not either originate there or pass through this divine Dutch port.

Is it its proximity to Rotterdam/adjacency to the North Sea?

I suspect that this may play a role, but perhaps not an essential one. London, after all, is a mere 500 kilometers away. Brussels is < 200 km but of course is landlocked.

I have a friend who was born there but went to high school in Racine. He married a girl from the latter-named Wisconsin metropolis, and they recently moved from West L.A to somewhere in South Florida.

All of which, if nothing else, goes to prove to even the most skeptical among you that reach of The Hague, if not, perhaps infinite, is, at any rate, global.

It is also the home city of Dutch King Willem-Alexander and his fetching bride, Queen Maxima, the latter being > 35 years His Royal Majesty’s junior:

The Royal Couple:
The Hague is, in addition, where the venerable (if oxymoronic) Court of International Justice resides. That Palace of Jurisprudence has recently made headlines by declaring failure to fight Climate Change a criminal offense. It indicted Benjamin Netanyahu for War Crimes. It is, in general a rather humorless, if toothless jurisdiction. Nobody ever seems to stand trial there, but if anyone ever did, they might not have all that pleasant a time of it.

But of course, all this is merely sideshow to the city’s main claim to fame: that of being the hometown to the fabulous Golden Earring. To whom we must pay tribute in consideration of the death of its front man – George Kooymans, who left us last week from a town across the border in Belgium, at age 77. His demise was of course subsumed in a news stream more inclined to feature the passage of Ozzy, Theo, Hulk and even Connie Francis. But the righteous among us know which forfeited treasure is to be most lamented.

I am pleased, at least, that GK lasted long enough to bask in the glory of this author’s having redesignated his signature hit to the top of the list of the Top 10 Songs to Trade to (20^th Anniversary Edition).

So, we revert, as always, to “Radar Love”. The song about a telepathic connection between a roadster and his lady fair. Though it never occurred to me, the interwebs are single-minded in the notion that the lyrical sequence ends with a fatal crash, which (natch) fails to destroy the cosmic romantic connection.

I’m not so sure the dude dies in the end, but no matter. Let’s instead transfer our attention to the tributes therein paid to “Coming on Strong”. Full attribution is given to Brenda Lee (with nary a mention of the song’s composer Little David Wilkins), who went on to even greater heights with her version of “Rockin’ Around the Christmas Tree” – a song that instead of being forgotten, refuses to die.

Not gonna lie: it gives me the squicks. And it ain’t Christmas. Not even if it is still July.

Meantime, Comin’ on Strong could be considered as appropriate an anthem for the risk asset market as any that recalls to mind. Because they are on something of a tear. All-time highs everywhere one meets the eye. What a difference a quarter makes. Three months ago, the Gallant 500 was in full retreat and Vixen Vix was on a hellcat rampage:

All is much cheerier now, and why not? It’s been a risky year, policy-wise, but this far everything – trade negotiations, fiscal considerations, geopolitics – has broken favorably for investors. They’ve responded by buying in an orderly, gentlemanly/ladylike fashion.

Thus far in the cycle, there is some debate about the quality of Earnings. A first glance suggests that they’ve been Comin on Strong. But FactSet is whining about the tepid nature of upside surprises and some other stuff that few of us understand.

One way or another, the technicals of the market are virtually indestructible, as, for many years, any time valuations retreat to certain support levels, they come bounding back impressively:

This here chart is hard to argue with. As long as the wheels keep turning, your gonna wanna buy the dips.

Unfortunately, however, dip-buying based on 200-week logarithmic Moving Averages doth not a sustainable investment strategy make.

Nope, we gotta trade through it. And the action remains worthy of our full attention. This week ought to be particularly pregnant — with the first glimpse of Q2 GDP, the FOMC announcement, and, by Friday, the July Jobs Report.

FWIW, I will go with the consensus in projecting a “hold steady” Fed meeting. However, I have a hunch – particularly given the recently observed lovey dovey cross-town rhetoric, that Trump and Powell have cut a deal that portends at least nominal reductions in September.

We’re also in the full-throated portion of the earnings season, with 3/7ths of the companies about which we care taking their turns at the podium this week.

I kinda think we’ll still be Comin on Strong when all this dust settles. Because we – you, me, Brenda Lee, Little David Wilkins, George Kooymans, The Global Capital Economy, and, indeed, All God’s Children, got a thing that’s called Radar Love. And it trumps nearly every ion of buzzkill out there in the nearby and Great Beyond.

Mostly You. And. Me. Stuck in Radar Love. But with our more authentic journey just around the corner.

But today, The Hague is draped in black. The King and Queen are in full mourning regalia. I do not know what either Little David or Brenda (both of whom are still blessedly with us) are up to, but I imagine they feel it – perhaps more than anyone else.

And somewhere in this world, that gnarly, sublime GK guitar riff is blasting away.

But now it’s half past four and I’m shifting gear, and in doing so, will bid you, yet again, a pleasant ride.

TIMSHEL

I begin by thanking everyone for their overwhelming outpourings to the 20^th Anniversary of the 10 Best Songs to Trade To. I particularly appreciate all the suggestions for incremental inclusion and want to assure my readers that I am taking them under consideration. But no, recent events notwithstanding, and tempting though it may be, I will not be adding anything from the Coldplay catalogue to the list.

However, we’ve other matters with which to tend. Some pleasing, some frustrating. Let’s begin with the former, shall we?

I’m delighted to learn that CBS has shitcanned The Late Show – once a crackling center of wit, creative energy and modern sensibility, the show should’ve died with the departure of its visionary creator: David Letterman. They instead replaced him with that petulant hack Steven Colbert, whose one joke seems to be to utter sardonic witticisms, in tortoise-like cadence (so that those deemed obtuse will understand what he’s saying), issued at the expense of anyone who fails to rise to his level of hip sensibility. He generally lets us in on the gag, inviting everyone who comprehends how things really are (i.e. those that agree with him) to be part of his exclusive circle, while rudely dismissing anyone who doesn’t.

I don’t really care that he’s a liberal from Central Casting. So is John Stewart, who at least manages to bring some joyful self-deprecation into his scoldings.

With fitting verisimilitude, and though the network denies any linkage, the decision comes on the heels of Colbert’s pithy criticism of parent Company Paramount’s $16M out-of-court settlement with Trumpy Bear – the reality that The Late Show loses ~$50M each year notwithstanding.

In an even happier (and predicted in this space) turn of events, the Banks have all reported blowout earnings, and this always brings the waterworks to mine eyes. Who, after all is more deserving of these riches than our friends on buttoned-down Wall Street? I was a bit worried about them, what, with all that market carnage in April and all. But wouldn’t you know it? April was the best month of the three.

And Goldman Sachs – a company for which anybody who fails to root can truly be said to possess neither heart nor soul – clocked in with record revenues.

Meantime, it’s on. The information is flowing in fast and furious. Inflation statistics? A mixed bag. Further consolidation in the Energy Patch. Epstein. Jumbotron Gotchas.

At least it’s quiet – on a relative basis – in the Middle East.

But what’s really on my mind is all this monkeyshine talk about the need for interest rate cuts. Drives me crazy. Trump thinks the Fed Funds Rate should be at 1% (its current lower bound is 4.25%), and, in his spare time, plays with the market like an overly sadistic cat, toying with a crippled mouse, about firing Chair Pow.

Early this past week, it looked like he might do just that; the infallible PolyMarket was displaying a jump to a 40% probability of same, before he issued a trademark “just kidding”, sending the chances back to just below 20:

These are bad, terrible, ideas. First the significant lowering of Fed Rates and second the premature dispatching of our beleaguered Fed Chair. Now, I’m not gonna holler much if the Fed decides to throw the wolves a bone and lob in a modest cut. But the material slashing of yields is plain bad economics.

Before I school y’all as to why, a couple of disclaimers are in order. First, I am firmly in the camp of those who prefer borrowing costs to reside at the upper end of appropriate ranges — so as to maintain as much dry powder as is possible for cuts when they are actually needed.

They are not. Needed, that is. Midway through Q3, the Fed is projecting real growth of ~2.5%. Risk assets are priced at an all-time high. We enjoy full employment.

Meantime, Interest Rates while above levels prevalent after the three significant crises we’ve endured this young century, are, particularly at the longer end of the curve, well within levels of familiarity and comfort:

If we were to obliterate them now, we would likely face the following annoyances:

Rising Inflation. Must I really bust out an IS/LM curve here to show you? Easier money means more borrowing, which, if you hadn’t noticed, is a major aphrodisiac for our unchecked consumption orgy. At lower rates, individuals and organizations will borrow more, and, having borrowed more, will spend more.

It is doubtful that increased supply can keep pace, so stuff will cost more.

Increased Indebtedness. Did I mention that economic agents will borrow more at lower rates? I hope so because they do. Institutions, Individuals, Corporations, Municipalities, States, Sovereign Nations – All God’s Children – beef up their liabilities. And this against a backdrop of global indebtedness many orders of magnitude greater than that which has ever prevailed – including the interval leading up to the 2008 crash. Many – including, arguably, the U.S. Government — owe amounts which they cannot hope to repay by conventional means.

I hardly think, under the circumstances, that new borrowing inducements are warranted. Indebtedness is likely to expand under all circumstances; we cannot resist gorging ourselves upon it. But someday it must either be paid back or otherwise disposed of. And that, my friends, is unlikely to be a pleasant affair. In the meanwhile, the concept of turbocharging it by jamming down rates strikes me as being a less-than-optimal selection among our alternatives.

It Crushes Savers. Answer me this: what on earth do policymakers have against us wretches that keep large portions of our wealth in liquid, interest-bearing accounts? I mean, first, we cram down rates at the slightest whiff of a pretext to do so, and then we tax the meager proceeds as ordinary income. And, after years of pre-tax returns in the 0% to 2% range, we were finally getting some relief. One could, and still can approach, the purchase of a CD that yields the princely sum of 5% (pre-tax). But if Trump gets his way, we’re back to zero.

The well-worn platitude (attributed to, but never uttered by, Benjamin Franklin): “a penny saved is a penny earned” is still around. But you wouldn’t know this from economic policy, and if the low-rate crowd gets its way, they just might toe-tag it altogether.

Misallocation of Capital. OK, pay attention, because this here is the big one. When rates are suppressed, economic agents make bad decisions: borrow too much and allocate proceeds in the wrong places. With unfortunate outcomes, sooner or later, ensuing.

Let’s begin by setting the stage. In textbook economics, there’s a tiresome but important concept known as real interest rates. It is defined as the nominal interest rate, less the rate of Inflation. For illustrative purposes (and though I think that the statistics understate the reality on the ground), let’s assume that the latter is 2.5%. Set the nominal rate at 1.0%, and it implies a negative real rate of 1.5%. Creating a construct under which borrowers are the actual recipients, rather than the burden bearers, of the cost of money.

Who wouldn’t borrow to beat The Band under these circumstances. Not borrowing means you’re losing money.

So, what happens? Companies issue credit and allocate to projects unworthy of underwriting. Enterprises that should be shut down refinance, or, if private, go public. Governments rejigger their financials to show lower interest repayment expense. And borrow more. Banks, which may or may not pass on the reductions to their borrowing clients, book wider spreads. And lend more. Many borrowers will default, causing untold upheaval. But bonuses will have been banked by then, and it will be someone else’s problem.

And the poor consumer? Well, we face the worst fate of all. You’d think we would have learned something about this during the Great Financial Crisis, but, apparently, we didn’t.

Credit card and other forms of Consumer Borrowing are at an all-time high:

Of course, the Lion’s Share of this is in the form of mortgages. And, while there were many contributors to the last crash, I believe mortgage debt was the Head of the Dragon. Bad behavior prevailed across the entire transactions chain. Aspiring homeowners reached too high, as empowered and enabled by unscrupulous mortgage brokers. Banks gobbled up this paper, knowing in advance that they could bundle it and sell it to greedy, ill-informed investors. It was great while it lasted, but then it all went kapoof, producing abandoned dwellings and empty offices everywhere one cared to look. And bankers pounding the pavement.

At present, the cost of home ownership is at record levels, and glib analysis places the blame on high mortgage rates. Fair enough. I get that folks refinanced when the refinancing was good and are thus kinda stuck in terms of mobility. But if we unleash the hounds of lower mortgage rates, it’s a sure bet that the same bad behavior witnessed 20 years ago will resurrect itself. Mortgage bucket shops will multiply like hobgoblins and sell their wares to unsuspecting homeownership aspirants. They will comfortably pay the first few installments, and, unable to meet balloon payments, will hand the keys back to the bank, walking away from all those swell new appliances that they purchased on their credit cards, which charge 16% rather than 18%.

The Party line suggests that this will simply catalyze a surge in building, thereby divinely increasing supply. But here, it pays to remember that we have recently implemented a tariff of 15% on the Canadian Lumber that comprises 30% of the cost involved in the construction of houses in Lower 48. And there’s talk of taking this level to 25%. At which point, the incremental homebuilding expense will rise comfortably into the double digits.

I could go on, but hopefully I need not. Meantime, Conservative rate policy, as I have demonstrated, holds Inflation in check, serves as a guardrail against the acceleration of already excessive borrowing, and offers a salve to misanthropic savers such as myself.

Most importantly, the cost of money at appropriately sober levels forces economic agents into sounder decision-making. Because the cost of being wrong becomes more acute.

There’s not much space left in this here column to protest the concept of firing Chair Pow. But we’ve covered this before. Suffice, meantime, to state that Jerome H. Powell is not Steven Colbert. And for this, at any rate, we can and should be thankful.

I’m not sure any of this means much for the markets. Until it does. At which point, it will mean a lot. Rates are probably going down, near-term, and this will help goose already-lofty risk asset valuations.

A reckoning may be coming, but whose to say when?

TIMSHEL

First, Happy Bastille Day to tout le monde. 236 years ago, a bunch of young, woke cats stormed the iconic 14^th Century Parisian Fortress. Finding it largely empty, they more or less walked in. A year later, having deposed the Imperial Government, they found themselves in charge, and then commenced to bitch things up about as badly and with as much blood as could be imagined. But the French and we Francophiles celebrate the former event, nonetheless.

I see troubling parallels in current affairs. But let’s focus on the present. We’ve mostly eased into Q3, but the real action begins this week and ensues for a rolling month. The banks report. CPI and PPI drop on Tuesday and Wednesday respectively. The insanely idiosyncratic tariff drama continues unabated. There’s renewed pressure on Powell to cut rates, and renewed rumors of his being whacked.

Equity Indices, BTC and Gold reside at proximate all-time highs. Whether these trends continue will be driven by macro statistics, earnings guidance and that Washingtonian madness. But if one is looking for a trouble spot, the following tidbit might suffice:

If I read this correctly, it implies that there is > ten times the amount of investment into risk assets with borrowed funds as was present in the lead up to the credit-driven Great Financial Crisis of 2008 and beyond.

Only a continued, sustained rally will eradicate this, but I suspect it would only lead to even more buying on margin. As would a downward move in interest rates.

And, if there’s an unwind under adverse conditions? God help us.

But we’ve plenty of time to wallow in all that buzz kill as the summer continues to unfold. Instead, I’d like to take this opportunity to celebrate another milestone: the 20^th anniversary of my column selecting the 10 best songs to listen to while trading.

It was published in the long discontinued, insufficiently lamented Trader Monthly magazine, which invariably featured a young, well-dressed baller, accompanied by some dishy blonde arm-candy, standing in front of a private jet. Its motto was “see it, earn it, spend it”.

For a time, I ran a column in it called The Lord of Discipline – an improbable nod to risk management as an essential tool to the securing of the Rolexes and Lambos that comprised the publications advertising base. FWIW, I enjoyed this for a while, but eventually had to quit because the editor, who was and is my friend, kept stepping on my punchlines.

But my piece on the 10 best trading songs remains etched in my memory. Or, anyway, about 7 of the 10. And I thought that during this respite before the volatility enhancing deluge that awaits us, it might be worth revisiting them — adding a few new ones to replace those I have forgotten. So, without further ado, here (in no particular order) goes:

(As a public service, as well as a nod to the technological advancements of the last two decades, I am including the associated Spotify links. My apologies in advance to those who for moral or other reasons eschew this astonishingly comprehensive streaming platform).

The Cannon in D Major (Johan Pachelbel). This perfectly symmetric piece was written in the late 17^th/early 18^th Century (nobody knows exactly when), in the Free Imperial City of Nurenburg. It loitered in obscurity for many decades and only rose to relevance when a few psychedelic rock bands ripped it off. I myself only became enamored of it as the theme song for the magnificent 1980 film Ordinary People. You’ve probably heard it many times. But give a listen and perhaps you’ll understand why I have selected it to lead off our list.

https://open.spotify.com/track/4jfwxTWvpEt7IvtsT3M7h6

Glad (Traffic). Another ubiquitous Instrumental, which opens the superb LP John Barleycorn Must Die. Upon which Steve Winwood played nearly every instrument. It is more upbeat than The Cannon but also contains slower interludes. It fits the rhythm of trading to a tee.

https://open.spotify.com/track/6gJhXogJiEETVQ0V4wyj79

Big Bottom (Spinal Tap). Talk about mud flaps, my girl’s got ‘em. By the immortal Spinal Tap, who, I’m delighted to learn are releasing a sequel to their 1984 magnum opus this fall.

This one is particularly applicable during selloffs, for those looking to catch falling knives.

https://open.spotify.com/track/3d04l3QbDlZvi8K6nqCm4N

C.R.E.A.M. Cash Rules Everything Around Me (Wu Tang Clan). I don’t believe that I have ever actually heard this song, but I include it, nonetheless.

https://open.spotify.com/track/119c93MHjrDLJTApCVGpvx

So What (Miles Davis). Well, we gotta throw a little jazz in there now, don’t we? This one is the opening track to MD’s groundbreaking album Kinda Blue. It features John Coltrane on Tenor Sax, and (I will acknowledge) it is always dangerous to introduce Trane to the uninitiated without expecting dire consequences.

But hey, we’re traders, aren’t we? And must be prepared at all times for the worst.

https://open.spotify.com/track/3mZ33QYHWylbabTz82rHwj?si=d515bcab2f0b4331

(I predicated the list by stating it is offered in no particular order, but I will cop to the reality that the next two are my faves):

Highway Star (Deep Purple). Rev up your engines and get on the road with this tribute to all things with four wheels driven by internal combustion engines. It will get your blood pumping, and hopefully, be accretive to your performance.

https://open.spotify.com/track/4gVTozEmzwAUXpwj3jEetX

Radar Love (Golden Earring). As long as we’re on an automotive kick, and the radio is playing that forgotten song (Brenda Lee’s Coming On Strong), we will pay homage to this masterpiece by our favorite Hague-based One Hit Wonders.

And I’ll I can add it this. If the musical thought of driving all night with your hands wet on the wheel doesn’t improve your trading, then nothing will.

https://open.spotify.com/track/4Zau4QvgyxWiWQ5KQrwL43

And that’s all I can remember from the ’05 list. So, we’ve three to add:

Baby’s On Fire (Eno). From his sublime (and sublimely titled) first solo album Here Come the Warm Jets. Eno once was quoted as stating that when he got stuck in the midst of writing a tune, he grabbed a set of index cards containing words and riffs and randomly selected from same.

Sounds like as sound an investment strategy as any that I can, for the moment, name.

https://open.spotify.com/track/2PV9sorI2h94qEPke7SlGI?si=ef3fa7c42c3d44c9

If You Want to Sing Out, Sing Out (Cat Stevens). This song, never released on an album, was recorded as the theme for the quirky cinematic gem Harold and Maude. It tells of an authentic love affair between a teenage boy and an octogenarian – played with panache by Ruth Gordon. The tune perfectly captures the idiosyncratic spirit of free living, and, I believe, of free trading.

https://open.spotify.com/track/340t55txxJWQmTFK7wARZh

La Marseillaise (Claude Joseph Rouget de Lisle). And finally, we come to the last entry on the list. Not gonna lie – I was in an associated selection quandary. There are many from which to choose, and none of them quite fit the bill.

So, in honor of Bastille Day, I offer the French National Anthem, which, among other redeeming qualities: a) is a much better tune than our ear-splitting, unsingable Star-Spangled Banner; and b) was actually written during the French Revolution. Twenty years from now – in honor of the columns 40^th (Ruby) Anniversary, I might choose differently. But, please, for now, accept this patriotic offering, as performed by the French National Orchestra:

https://open.spotify.com/track/3UcgFpeFrrebm1upPSYsy8?si=de1f41c91c9f4eb8

I should point out, in closing, that while I like each of these tunes, the above list is in no way reflective of my own personal faves. And the absence of love songs is in no way intended to imply that I don’t love you. Deeply. And forever. Because I DO.

Again, during this period of quietude, and in advance of some heavy-duty action, I simply wanted to offer something useful to all my investment warriors out there. Because it’s gonna be war. And, like those reluctant soldiers of late 18^th Century France came, tragically, to learn, winning the battle won’t be enough. We will be compelled to figure out whatever comes next. Whether 20 or 236 years ago, we might’ve been too young to know this. But we’re older now. And no longer have that excuse.

It is hoped, at minimum, that a little music will help guide our way.

TIMSHEL

Leave your steppingstones behind if something calls for you,
Forget the dead you left behind, they will not follow you,
The vagabond who’s rapping at your door,
Is standing in the clothes that you once wore,
Strike another match, go start anew,
And it’s all over now, Baby Blue

Bob

I hope everyone enjoyed the holiday. But as my man Bob famously warbled – it’s all over now (Baby Blue).

I hope, also, that you got some rest. Because, unless I am mistaken, we will have needed it.

Last week, in addition to having celebrated the ushering in the 250^th year of our severing of governance ties with England, several other milestones transpired. Of considerable but ill-defined, significance, we reached the halfway point of the half-century. As of Tuesday, we were closer to 2050 than we are to the Y2K Millennium. Now, my math degree notwithstanding, I’m a little sketchy on the arithmetic here. My envelope scratchings suggest that this threshold should transpire on New Year’s Eve. I mean, if we divide 50 years by 2, we one should land calendar-wise at the 25-year mark, right?

But those who, for reasons of their own, keep track of such matters, inform us that 9,131 axis rotations have passed since that day when, miraculously, our computers and technology driven equipment did not switch themselves off, and that after another 9,131 days, it will be 2050.

I’ll be pushing 90 then. But still can hardly wait. In a touch of irony, this mid-point precisely coincided with the 90^th anniversary of the birth of my Moms – known to the broader world as Grandma Phylsie. She didn’t make it. I honored her as best I could.

One way or another, this century’s glass is now a quarter full. Or three quarters empty if one prefers. 25 years down, 75 to go. What tidings said future will bring, though unknowable, and from a certain perspective, scintillating, I shudder to contemplate.

We normally take these happenstances in smaller doses, So, while that hourglass – containing as it does 876,000 doses of sand, surpassed an important volume marker (219,000 portions), as was mandated from On High, Congress passed, and the President signed – the Big Beautiful Bill (BBB).

Well, as they say, two out of three ain’t bad. It is indeed a Bill. And it’s certainly Big. But Beautiful? Please. It looks to me like the same pile of deficit-increasing giveaways as has marked our appropriations since Time Immemorial. This one, for political reasons, features particularly touching largesse towards our 49^th and coldest state – Alaska. Indeed, if published reports can be taken as true, in order to secure the approval of Senator Lisa Murkowski (in a process that required Vancey Boy to break a 50/50 tie), we can fairly transmogrify Trump’s vision of Canada as the 51^st State into one under which the Lower 48 (plus Hawaii) are to be redubbed the United States of Alaska.

It also stipulates, in the fine print, a $5T increase in the Debt Ceiling.

But such is the process by which we settle these affairs. And this one, while not – per se – beautiful, was – at any rate essential. Because, as I have pointed out many times, we were otherwise staring in the face of a reversion to pre-2017 tax regime, featuring, most prominently, a turbocharging of Corporate Tax from its current (still uncompetitive) 21% to a crippling 35%.

Wanna kill this rally? Simply jack Corporate Taxes up by 2/3rds.

But all that, as with the first quarter of this rockin’ century, is behind us now. And we thus enter the back half (I’m pretty sure the math here is correct) of ’25 with something of a tailwind to the markets. Equity indices begin the sequence at all-time highs. Commodities are showing minimal signs of inflation – particularly in the Energy Complex, which is, improbably, trading lower in the wake of some pretty nasty stuff in those Middle Eastern Production and Distribution centers than it did when the bombing began.

We also enjoy a respectable yield curve configuration, with rates at what seems to be reasonable levels — and Inversion – save at the shortest end of the matrix – having been obliterated.

Unfortunately, though, all is not well in Rate-land. Because Papa Bear is not happy. Recent tirades include ones that call for Fed cuts all the way down to 1%. I understand the concern here, as the Treasury, already spending more on debt service than we shell out for the Department of Defense, is most certainly about to issue a passel of new, interest-bearing paper.

But we all have a stake here. Particularly in the Real Estate Complex – Commercial and Residential.

For those who prefer words to pictures, the graph on the left shows that Housing Prices are at a significant all-time high. On the right we see an alarming elevation of the percentage of Office Buildings whose owners are failing to keep up with their mortgage payments. And this as the post-covid/low-rate refinancing cycle lurches towards maturity, with a cool tril due for principal repayment over the next couple of years.

It only gets worse from there – particularly in big cities willing to place their fortunes in the hands of the Zos of the world. Vacancy rates have never recovered from the lockdowns, taxes are rising and businesses, if anything, are moving out. Even (or maybe especially) if rates come down, are banks really fixing to roll this paper?

Rates may indeed decline but likely at neither a pace or magnitude that will be particularly to Trump’s liking. Because, aside from a mulish attitude, the High Command at the Fed is otherwise distracted by the glittery redevelopment of their headquarters on Capitol Mall:

I’m not sure what the 7 in the lower left-hand corner is about, but I’m hoping that it is neither part of the building design, nor (even worse) a signal as to the future glidepath of the Fed Funds Rate.

At any rate, we’ll have to wait a spell before we receive updates on either Physical Plant construction or Monetary Policy. The next meeting of the Federal Open Market Committee does not take place until July 30^th.

We’ve much wood to chop between now and then. Earnings, Inflation, GDP. Trade Policy, etc. are all on the docket.

I reckon we’re poised for a good start here, anyway. While we are all running out of superlatives to describe the BBB, it at least removes a major risk from the market mindset.

Objectively, the Administration is on a roll. Optically favorable trade deals are likely to follow.

So, I’m pretty OK with where we are right now. But I am a little more unsure about the back half of ’25, though.

And as for the next three generations – taking us to the dawn of the 22^nd Century, I know how I want to spend them, and with whom.

But this highway, as all others and as Bob reminds us, is for gamblers, and we better use our sense. We should also certainly take what we have gathered from coincidence. But it may not be enough. And, were that not enough on our plates, I do worry that the dead we left behind will follow us.

However, that’s as may be. So, let’s strike another match, go start anew.

And forget, for a time, that it’s all over now Baby Blue.

TIMSHEL

Today of course is the last day of June – the lunar cycle most prominently associated with the ritual of uttering marital vows. One might believe we’ve moved past this pre-Victorian gobbledygook, that our elevated intelligence, awareness and sophistication have migrated us beyond the need to ritualize our couplings. But one would be wrong. Flying in the face of our new age sensibilities are data that indicate a nuptialistic uptick, along with, even more improbably, a slight decline in the severing of associated bonds:

We can perhaps all be pleased that not only are people tying the knot at a rate last seen before lockdowns, but more of them are living up to these commitments. For better or for worse.

Contemporaneously, and across this evaporated month, one cannot fail to notice an incremental spring in that spongy Trumpian step. June ’25 has been by all accounts, by far the best month of this rockier than expected term.

Perversely, it perhaps began – if not with a divorce – then at least with a rude decoupling of one of the greatest bromances in American political history: that (for the incurably obtuse) between our 47^th President and The Richest Guy in the World. The liaison, always star-crossed, was most assuredly doomed from the start. So be it. But it’s unravelling was instructive. The scorned latter immediately began taking pot shots at the former, who issued him a swift beatdown with quickness. Musk is now (mostly) minding his own beeswax, and that, at any rate, makes one of them.

We’d barely time to process this intelligence when Israel, deciding that enough was, indeed, enough, took out major chunks of the Iranian nuclear complex. The United States followed up with, if not a knockout blow, then at least the delivery of a standing 8-count – and the guys on the receiving end seeing nothing but butterflies dancing in front of their eyes.

The victory was thorough and unambiguous – creating by all accounts a significant tailwind for the Administration’s agenda. Of a sudden, our partners in NATO are increasing their defense budgets by orders of magnitude (or, at any rate, offering such lip service). Published reports, quoting our Big Orange Rabbi’s favorite Cantor (aka Commerce Secretary Howard Lutnick), inform us that the U.S. has inked (though details remain elusive) one swell trade deal with China. I suspect that other such arrangements will now also be struck more favorably and with greater expedition (among other incentives, none of our trade partners are presumably eager to see those B-2s dropping their payloads down from their airspace).

Meantime, somehow, we’re happily collecting 10% tariffs from all exporters (50% from China) – with nary a dent in economic activity nor a blip of incremental inflation. For now.

It’s also generating some positive momentum for The Big Beautiful Bill (BBB).

Our hero also not only won a big fat orange Supreme Court victory respecting limitations on the power of Federal Judges to strike down Executive Orders, but, in addition, causing a very public, non-decorative girl fight between Justices Brown and Barrett in the process.

However, returning to our theme, it does beg the question as to whether all this is for better or for worse.

Because perhaps our Fearless Leader’s single most prominent trait is a combination of running up the score and rubbing his opponents’ faces in their own defeats.

Troubling examples of this personality feature (one calls it a bug at one’s own hazard) are popping up in multiple quarters. He ordered the reversal of Israeli jets in mid-flight. Closer to home, by diktat, he instructed Congress not to go home until they finished their work and handed him his BBB.

He walked away from critical trade negotiations with Canada, implicitly telling them “No Digital Services for you. One Year (or until I decide otherwise)”.

Then, on Thursday, he floated the concept of naming his choice to replace Chair Pow by +/- the End of the Summer – fully nine months before this individual (if confirmed by the Senate) would take office.

The implications of this are clear. It is the establishment of a Shadow Fed, with no powers other than to criticize the Bank’s custodians any time they fail to do his bidding.

This. Is. A. Bad. Idea. Though purely Trumpian in its formation, it is likely to have minimal impact – other than to further antagonize Fed Management and to add confusion to those seeking, albeit in quixotic fashion, to deconstruct the glidepath of pending Monetary Policy. As mentioned in earlier installments, there are twelve seats on the Fed Open Market Committee, and the Chair is only one of them. Some dude (or fair damsel) in Washington taking routine pot shots at their consensus decisions, promising big changes when they take the top spot, is not likely to alter the trajectory of their actions.

And I fear (without certainty) the more victories the Big Guy runs up, the more blustery, dictatorial policy we will experience.

I believe that The Electorate has finite patience for such shenanigans. And, of course, in ominous blowback, a glib, affable 33-year-old Upper Middle-Class Millennial Antisemitic Socialist – a former Hip Hop artist who was born in frickin’ Uganda, ran away with the New York Mayoral Democratic Primary, in the process humiliating a two-term deposed former governor who himself is the scion of a two-term governor with a bridge named after him.

It is a sign of our troubled times that entering this voting sequence, many of us were praying that the arrogant, sleezy, dissembling Andrew Cuomo could somehow squeeze out a victory. And that now, anyone committed to stopping this train is throwing their full weight behind unpopular Incumbent Eric Adams, who is running as an Independent because he didn’t have a prayer of making a respectable showing in his own party’s primary.

Even, the once-respectable Chicago Tribune, the self-proclaimed World’s Greatest Newspaper but one that long ago sold its soul for elusive profits associated with the spewing of progressive gospel, published an editorial begging New York not to make the same mistake that Chicago had by electing Teachers Union flunky Brandon Johnson.

The Trib’s got this one right. Because if this Mamdani person gets elected — and bearing in mind that the Democrats hold a Supermajority in the City Council, it will render existence in New York City, a challenge even in the best of times, all that much more difficult. And, counterintuitively, the further down the socioeconomic scale one is positioned, the worse off one will be. Higher taxes, elevated Minimum Wage and similar policies will accelerate the already-rapid Exodus of businesses (and associated jobs) from the City. Rent Control will increase the housing shortage. Government grocery stores will crush bodegas and crowd out the price-efficient delivery of staples for both operators and their customers.

Free busses? Don’t even get me started.

I reckon we’ll see how far Zo gets with all this nonsense, or even if he is elected at all. There is a school of thought that argues his ascendence is a boon for Conservative Principles, as it stands to toe-tag Progressive Thought once and for all. I’ll take The Under on that one. And will hope for an outcome that fosters any attainable measure of rationality in the governance of this crazy city.

Again, I’ll also take it as a warning to Trump to slow his roll, as I have wished he would do all along.

I’m not hopeful, though. And investors aren’t helping. By the end of the week, our Equity Indices had captured new high ground. Crude Oil had settled gently between 50, 100 and 200-day Moving Averages (as though an historic attack on a critical center for the production and distribution had never happened), and Treasury yields had backed off pleasantly. By all accounts, The Fed is helping this along – by if not frantically buying its own paper at least backing off on its asset shedding ways.

The USD has seen better months, but you can’t have everything.

In any event, we have somehow wound down the first half of the year and can anticipate some quietude as we enter July. No critical scheduled data releases are on the calendar. Our B-2s are in dry dock. Friday, is of course, a holiday (perhaps not rising to the dignity of Juneteenth, but sufficiently important to at least shutter the markets), and mass early escapes from the madness will certainly transpire.

We return to a full docket of vexing challenges and enticing opportunities. Then we will be compelled to process all that earnings and macro data. Budget legislation must either advance or stall. And I believe that it would be unwise to bank much on the current quietude in the Middle East.

There’s ample reason to be encouraged. But as is the key message of this note, the more matters break favorably, the more we must allow ourselves room to worry about administrative overreach.

It’s like marriage – for better or for worse – only with a fixed sell-by date (21 January 2029). Weddings are always nice. Or should be. Then, hopefully, there’s a honeymoon. Maybe that’s what’s happening now, albeit on a delayed basis.

But then we must hunker down to the realities of daily living. The echoes of bells diminish to silence; the scattered rice has been removed from the premises. We find out who our true partners are – be they authentic helpmates or despotic tyrants.

For better or for worse. We’ll find out.

It’s the only way.

TIMSHEL

Forgive me if my cadence is off a bit; my main excuse is a Juneteenth hangover. Rendered more unpleasant by the reality that the holiday, in addition to transpiring, as always, on the pen-penultimate day before the Summer Solstice (longest day of the year and hopefully ushering in a sizzling summer that we’ve all richly earned), but also occurring this year on a Thursday, setting the table for a 4-day weekend extravaganza. Which, of course, was disordered by – what else – the latest Trumpian disruptions (alas, more about this below).

Anyway, Juneteenth does not frame itself as an over-joyous blowout celebration, honoring, as it does, now, what was it? Oh yeah. The freeing of some slaves in Texas on June 19, 1865. But it was neither the beginning (Emancipation Proclamation – Effective Date January 1, 1863), nor the conclusion (13^th Amendment – Enacted December 18, 1865) of the elimination of Indentured Servitude in this country. Rather, it was a weigh station near the end of the process.

But hey, why not throw a party anyway? And while we’re at it, shut down the government, the financial system and other elements of the economy to further enable the buzz? To me, it is somewhat similar to such calendar dates as National Penguin Day (January 20^th), National Fried Rice Day (August 20^th), and my favorite (perhaps because it happens on my birthday) National Chicken Lady Day (November 4^th).

By my count, and according to the oracle on the subject – calendarr.com – there are no fewer than one thousand of these ritualistic honoraria, or, approximately, 3 per spin on the earthly axis.

Some of these, of course, are more important than others, and on those we pause most of our activities in associated tribute. There is, of course, Christmas, Thanksgiving, New Years Day, MLK Day, as well as Memorial, Labor, Veterans and Columbus Day. Time was, the birthdays of both Washington and Lincoln were designated as separate holidays, but at some point (and seeing as how both were born in February), we combined them into a single, tidy, Presidents Day.

As of 2021, Juneteenth has joined these august ranks. So be it.

I don’t want to piss anyone off, but this sort of thing rankles me, as I feel it exemplifies American hypocrisy at its worst. On Thursday, we issued and listened to endless platitudes about past evils, and pledges of better goodwill in the present/future. We then filled our coolers and went to the beach.

Meantime, black women still earn only $2 for every $3 paid to white men. The poverty rate among black Americans remains double that of Caucasians. The former’s likelihood of earning a college degree is barely half of that of the latter.

As the divine, recently departed Sly Stone would say “and so on and so on and shoobie doobie doo”.

And I feel that there are so many better ways to address these inequities. For example, rather than shutting down the (admittedly variable) engines of productivity, why not keep them churning and allocate whatever they yield to the creation of opportunities for those who (and I freely admit this) are still suffering from that barbaric practice that ended a mere 16 decades ago?

The means to do so, by harnessing the awesome power of our economy are abundant.

As one example, both pertinent and clean, is the prospect of re-allocating the Thursday’s foregone profits from Wall Street trading desks. As illustrated in the following graphic, it’s fat times in these realms:

Just 3 trading desks, in other words, generated ~$12B of profits in Q1/’25. As measured against the 60 trading days in a quarter, had they been open and performed up to average, instead of $0 they were compelled, by GAAP to record, their P/L would have been ~$200M. Which would build any number of schools, improve dilapidated housing and transportation facilities, and probably still leave some extra cash to invest in training, the care of the indigent, the provision of shelter for battered women…

Consider, if you’re still with me, the expansion of the concept to the broader economy. The Mag 7 daily Q1 profit approaches $3B. And, if government wanted to get into the act, the Federal Payroll:
~$300B/year could toss in > $1B itself.

My company is willing to participate as well and can perhaps add enough to toss a few cases of Red Bull into the till.

Instead, we throw a party. And congratulate ourselves for so doing.

But as with sands in the hourglass, Juneteenth ’25 has passed into history. And it was on to more important dates. There is, for instance, June 20^th, which I have rebranded Junetieth. When the above- mentioned engines began running again. And will do so for the next two weeks, ere they shut down anew – in honor of Independence Day.

And I submit that while it is vital from time to time to reflect, and yes, celebrate, it is the resurrection of our active selves upon which our destinies depend. In this sense, Junetieth joins a pantheon of calendar dates that include January 2^nd, Black Friday, July 5^th, and yes even Seis de Mayo (May 6^th).

This year’s Junetieth – particularly for the markets — was a fairly bland affair. And it’s not hard to understand why. All year, we have migrated from one self-imposed crisis to another. Tariffs dominated our awareness all Winter. Then there was Immigration and Deportation. This, of course, was followed by mass protests and associated government response.

All of which recently got blown out of the headlines the bombing war between Iran, Israel and now, the U.S.

So, no one knows exactly where we stand. And we’re not likely to be enlightened much over the next three weeks. This coming one is data-light, with not much on the docket other than a few PMIs and some (potentially dismal) Housing metrics. The week that follows is barely more than a runup to Independence Day, which, this year, transpires on a Friday.

All of which is obliterated by Saturday night’s bombing expedition. Not gonna lie – this is a tough one. Given my pre-dispositions, I am inclined to support it. Them mullahs mean us no good, and, left to their own devices, come what may, will do their darndest to wreak havoc. Their first target, of course, would be Israel – a country to for which, due to ties of blood and sentiment, I retain a soft spot.

But let’s not kid ourselves. We’ve just bought ourselves a passel of trouble. Increased threat of Domestic Terrorism, the mining of the Strait of Hormuz (already in place), and, perhaps most importantly, the uncertain reaction of countries such as China and Russia is all now in wretched play.

And I don’t believe that we will attain any clarity – for weeks, if not months or longer. In terms of market risks, the main one which comes to mind is obviously the impact on the Energy Complex. The scenario I find most troubling is that the mullahs react with defiance (likely) and respond aggressively against American targets (highly possible). If so, it’s pretty clear to me that the Administration will up the ante, most likely by disabling Iranian Oil production capacity. Which the markets won’t like. Nor will the Chinese. Moreover, the timing of this next descending piece of footwear is unknowable. All could unfold quickly, or, perhaps, on a delayed timer.

It’s very difficult to form a cogent investment strategy in the wake of these crosswinds.

But whatever happens in the vaunted Equity Complex, I’d keep a close eye on ALL Commodities as well. If trouble indeed is headed our way, they – particularly (aside from Oil) Metals, Softs, Shipping Costs, and (importantly) Fertilizer could all leap heavenward. And if you doubt the impact of the last of these, consider the recent price action (prior to the Saturday night action) in the Potash markets:

All of which, among other matters, could goose Inflation and obliterate those dewy dreams of Fed Rate cuts – this summer or maybe for eons beyond its fading to autumn.

All of which gives me pause respecting our weekly theme. Maybe instead of fewer Juneteenths and more Juntieths, the reverse is the preferable construct. Them Texas slaves only got themselves freed once, but today is a new day, June Twentithirdieth, which the calendar shows also to be (I kid you not) National Pink Day, National Hydration Day, International Women in Engineering Day, National Typewriter Day, and, most importantly, National Let It Go Day.

With respect to the last of these, if only we could…

TIMSHEL