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

Apologies in advance, kids. Though I have rarely seen such a frenzy of opinion-slinging as has been produced about the recent dust-up between you know who and you know whom, the topic is virtually irresistible — including for yours truly, and I find that I simply must weigh in.

So, it had to happen sooner or later, and, like many, I’m surprised that it took this long.

It’s all reminiscent of that brief fling between star-crossed lovers: 45 and The Mooch. But in many ways even more compelling. Our irresistible Musk and our Immovable Orange Man’s relationship seemed more authentic, ran deeper, and just may have more dramatic consequences than that earlier ONS.

But after +/- a year of slobbering over one another, the rupture has occurred. Thus far, it has been, on balance, a civilized decoupling. Much like the one between Gwynnie and that dude from Coldplay. The latter just ended an 8-year relationship with the fetching daughter of Melanie Griffith//granddaughter of Hitchcock siren Tippi Hedren, while the former has commercialized her most womanly essence in the form of scented candles. The two remain friends. Perhaps the same will become true for our fearless, titular warriors. But it could get truly nasty, devolve into utter madness – with collateral damage flying in every direction, including towards us.

Because, as everyone is aware, you don’t cross Big Daddy without paying an enormous cost for doing so.

I am on record as being what might, in less polite society, be referred to as a Musk Sniffer. But it didn’t start out that way. When Tesla first burst into ubiquity, I was full-on nauseated by the self-congratulatory way the Company – on the backs of obscene taxpayer subsidies – cashed in while celebrated its own brilliance. To me, Musk was just another dude anointed into the enshrined circle of the uber-privileged, eager to look down on us proles with empathetic derision.

He kept his eyes open, though, and his hands anything but idle. Tried, with mixed success, to build better batteries. Launched a space exploration company that pioneered reusable spacecrafts, helped rescue our stranded space station astronauts, and created a satellite network that is already providing telecommunications to broad swaths of heretofore underserved (if indeed served at all) constituencies. He took over Twitter and rebranded it X. Some folks say he ruined it; others view him as its savior. I lean towards the latter.

At some point, he became a Free Enterprise zealot, moved his companies out of California (good job there), and joined the Conservative Caucus. This led to a partnership with Trump and a mandate to reduce government spending which accomplished little but was certainly worth a try.

He is, to summarize, an Irresistible Force, fueled by a compelling combination of intellect, energy and curiosity, and I believe that we are significantly better off for his arrival on the scene. But in breaching into political realms, he was destined to collide with that Big Immovable Orange Object in Washington. And implode.

And I find the timing and nature of the throwdown to be unfortunate. Elon is right. That Big Beautiful Bill is a pile of garbage. Full of enough cynical, slimy payoffs to please even them most unconstrained Machine operative in the Tammany Hall universe.

And this is to mention nothing of its failure to address our most intractable problem – an amount of global indebtedness that is beyond the means of repayment by several orders of magnitude.

It is important to note, by way of context, that GLOBAL GDP currently hovers around a quaint $100T. Thus, in result, if ALL worldwide economic activity were to be mapped exclusively to squaring matters with The Man, it would take three full years to get even – and that’s setting aside nothing in the way of still-accruing interest payments.

At ~$37T, our Federal Government Debt represents ~15% of this astonishing total, but even wiping this away would leave us at 10x the levels prevalent a mere 20 years ago.

I struggle to arrive at a scenario under which this problem can be addressed without catastrophic economic, political and (likely) military consequences. But that is a story for another day.

Meantime, Elon’s wrong here. This horrible bill simply MUST pass. Otherwise, we’re in real trouble. For the bazillionth time, failure to extend the 2017 tax cuts will, I believe, send us into a spiraling Depression. Contemporaneously, the Republican-led Coalition in the House CANNOT possibly survive such failure. In terms of the 2026 mid-terms, they are already paddling historically upstream — as the Party in Power loses on average, 25 seats. Which, according to my mathematical models and given their current 2-3 seat majority, would clearly cost them control.

At which point both of our heroes can plan on pitching tents in the Capitol Building, where Elected Officials will grill them into the next world. This will be political payback at minimum, and perhaps serve as a weigh station to the hoosgow.

So, while I applaud Elon’s decision to get out of Washington while the getting was good, I think he should’ve kept his big mouth shut about political affairs that are no longer his primary concern.

There are enough within the Republican Senatorial Caucus to call out the Bill’s Bull Snipe. Good on them, I say, but I’m confident that when the smoke clears, they’ll knuckle down and pass something. Because their cushy careers are riding on them so doing, and they thus can be counted upon to come through. So, again, Musk’s musings, while justifiable, are unhelpful – at least when expressed in public forums. And they add to the potential hazard of a rhetorical breakdown that could be (already is) at minimum annoying and, extrapolated, could cause significant harm.

As I type this out, equity markets don’t seem to give a care about these risks. The rally, for now, is on, and our indices are now visibly, if marginally, in the black. Yes, there is continued pressure on the Treasury Complex, and the dollar remains depressingly below 100. But in general, matters are perkier than they were a month ago.

As the Quarter winds down, all that remains in terms of information flow are items in the realm of macro- land. This past week, the May Jobs Report dropped, with superficially strong content but troubling questions in the details. Downward revisions for the preceding two months. A visible decline in the Labor Force Participation Rate. A loss of Manufacturing gigs.

Our Immovable Orange Man – in trademark dialectic fashion – took a victory lap, while contemporaneously calling for – get this – a 100 cut bp by the Fed.

We still want a fortnight before the next FOMC meeting, but when it comes, they ain’t cutting 100. Nor 75. Nor 50. Nor even 25. The markets confirm this. And the markets, as we all know, are never wrong:

We can anticipate, in the interim, a couple of potentially impactful Inflation metrics. I doubt that we’ll see much movement in this data, but if they veer from expectation, the markets will move with them. Particularly if the numbers go up, which will be unpleasant from a valuation perspective.

Much more likely the reports will be as expected and we’ll remain, valuation-wise, within the same narrow ranges that have prevailed since mid-May.

That is, unless our two protagonists go all Lorena Bobbit on our asses. Which I don’t believe will happen but might.

I’m inclined to anticipate that the better angels of their natures will prevail here, as both sides are greatly incentivized towards this outcome. Elon should spend his time trying to recoup the ~$300B he has lost for daring to bring his talents and energies to Washington.

Trump’s efforts would be better expended addressing such legacy foes as Putin, Xi, Schumer, etc.

In short, I urge the Irresistible to become, well resistible. I have less hope for moving the Immovable; he’s not likely to budge.

But as we are stuck with him for another 3 2/3rds years, it will be on us to ensure that our mobility is in its upper ranges and put to good purpose.

TIMSHEL

In keeping our tradition of honoring the recently departed, we turn our attention to the more obscure. Last weekend, at the ripe old age of 96, Harrison Ruffin Tyler gathered to the dust of his forbears. One of whom was Pocahontas. He lived, by all accounts, a rich and interesting life. Survived – barely – the Great Depression. Pulled himself up, built a thriving business, and turned, in later life, towards philanthropy.

But perhaps what sets him most apart was his non-Native American lineage. He was, somehow, the grandson of our 10^th President: John Tyler – he of our modified, titular phrase.

Tyler, along with other Historical Giants including Andrew Johnson, Chester A. Arthur, Millard Filmore and Gerald R. Ford, are the only dudes to gain the top spot without ever having been elected to that high office. He ascended to the political summit in 1840, when, as Vice President to William Henry (Tippecanoe) Harrison – at the time the oldest person ever so elected (a record obviously shattered more than once of late) – he caught pneumonia and died — 31 days into his term.

Enter Tyler, the swearing in of whom was so shocking that he earned the nickname “His Accidency”, and whose presidency bears eerie similarities to the one currently in progress. He came into office as successor to a larger-than-life two-termer (in his case Andy Jackson), whose VP (Van Buren) served a single cycle before being rudely bizounced by the electorate. The biggest issue confronting him (though he took the opposite tack from Trump by trying to limit them) was tariffs.

Though never formalized by Congress, he was the first president ever to face an impeachment inquiry.

His presidency was a mixed bag, but he was nothing if not prolific – having sired an impressive 15 offspring, carried and brought into this world by two wives. His last child arrived in his 63^rd year. Tyler only made it to 71, but his progeny displayed more vigorous longevity, along with a consistent propensity for delivering children late in life.

And not even his youngest, but the 12^th out of 15: Lyon Gardiner Tyler, fathered our subject in 1928. At the age of 75.

I marvel at this. The dude’s grandfather was born in Seventeen frickin Ninety. During the early days of Washington’s first term, with the French Revolution barely under way. George III (aka John Bull) was on the throne at Westminster. He was a teenager when the first ever train rolled down the first ever track.

He took the Oath of Office three years into the reign of Queen Victoria, and died (presumably encouraged, as he was a Virginian and a Southern Sympathizer) when Bobby Lee and Stonewall Jackson were wreaking havoc in the Shenandoah Valley.

And, on Memorial Day Weekend, 2025, his last surviving grandson joined him in the hereafter.

It is, of course, the end of an era. And the rest of us must carry on as best we can.

In doing so, we face, as always, a combination of challenges and opportunities. As of Saturday, the government is Musk-less. EM has peaced from Washington, having accomplished perhaps significant symbolic victories but little of substance while in town, and leaving the premises with a depleted balance sheet and a passel of derision and aggravation.

I am glad he’s gone. But for reasons that I suspect differ from the masses that have deplored him. I believe he worked miracles in the Private Sector to which he returns. As a member of the latter, I welcome him home. This is where he belongs and where his vision and diligence can be put to best use.

Besides, it’s kinda lonely at the top of these realms, where NVDA dwells, apparently, alone. As all are aware, they reported remarkable results in their earnings call – particularly given that our wandering Trade Policy cost them a cool $8 Bil in China this quarter alone. The stock reached an all-time high in result, and one can only marvel at the resiliency of a company catapulted by crypto, launched into the stratosphere by AI — and all against a withering backdrop of accelerating competitive forces and a Washingtonian policy regime seemingly bent on bring them back to terra firma. This caps off what can only be described as a gratifying reporting season, with Gallant 500 growth clocking in at a spiffy ~13%.

The GDP folks in Atlanta are also doing their best to make amends for their dismal Q1 performance:

All of which sets the stage fairly encouragingly. But then there’s that pesky Washington problem. Roughly contemporaneous to the NVDA earnings drop came the news that a judicial panel had put a temporary block on Trump’s “liberation day” tariffs. So, we entered Thursday’s proceedings with the tailwind of the most widely focused upon company in the world surprising to the upside, and a legal delay for those nasty, dilutive tariffs.

But the energy quickly faded. Because, you see, Trump has a way – in fact many ways – around the annoyance of judicial directives. And this brings up a pet peeve of mine. If you have been paying any attention, you notice the trend under which to an increasing extent, our governance is driven by Presidential Executive Orders. Both sides are guilty, as ignited by Obama, accelerated by Trump 1, boosted by Biden, and exploded parabolically during the early days of Trump 2.

The tiresome sequence is always the same: 1) The Big Guy signs an EO; 2) the other side howls with outrage; 3) the latter finds a judge to block it; 4) the other other side cries foul; and 5) finds a loophole. So, whether it’s Biden using his pen to eliminate outstanding student debt or Trump sending unprocessed foreign nationals back home, what it amounts to is an unproductive sequence of Kabuki Theater.

And this is true no matter what your stance is on Executive Orders in general — against which (I don’t mind stating) my tastes run. I vastly prefer, you know, that whole thing about Congress writing laws, the President executing them and the Judiciary interpreting them. Those days are pretty much gone now, and in my books, that’s a shame. But if we’re to be stuck with Government by Executive Order, then please. Whatever side you’re on, please stop this nonsense about how this tactic is fair game when issued by your side, but an outrage when it’s the other guy which does it.

Meantime, our trade policy is so muddled that nobody can possibly keep track of it. I have no idea where we are, but it doesn’t seem like a particularly good spot. Trump will lay down his law by the coffee spoon if necessary. Aluminum/Steel get whacked by 50%, starting in 2 days. The throwdown with China is on.

And one wonders how Trump will strike back at us for daring to live in a country where a panel of judges (the Court of International Trade) – many of whom he himself appointed — unanimously struck down his tariff diktats. With guys like that (AND Obama and Biden) you don’t cross certain lines with impunity.

But the news isn’t ALL bad. I applaud the furtherance of Nippon Steel’s initiative to acquire its U.S. counterpart, which, if executed without impediments, should do wonders for our ability to pump out this heavy metal, and for those in the field tasked with doing it. OPEC+ just announced another > 400k bbl/day production increase, and this as the peak driving season arrives in earnest.

As has been widely reported, the now-expired Month of May featured the best equity performance in a year and a half, taking our key indices to the hallowed threshold of +/- flat on the year. That stated, we’ve some catching up to do vis a vis the rest of the world, which, thus far in ’25, is outpacing us by amounts last witnessed when Harrison Ruffin Tyler was a spry 65:

It’s probably best to think long term here. More myopically, I doubt risk assets will break out in either direction. Too much liquidity/strong fundamentals for a rout; too much uncertainty for a rocket ride. June is, historically, a rough month for investing. We can anticipate some action based upon macro data flows, budget negotiations in Congress (which I hear still exists) and, of course, the Trade Psychodrama.

I don’t see much edge in any of this, though. But you’re good names should still be good. Someday. So I’d hold them, and maybe even buy more if they crumble/trim some if they rally too energetically. It’s the best means for surviving, I think, as, apparently did the Tyler Clan — in a war of attrition where they prevailed by slaughter rule.

Tippecanoe earned his handle fighting Native Americans aggressively. It catalyzed his ascent to the White House. But he caught a bug giving a 3-hour inauguration speech in the freezing rain. 31 days later he was dead. His successor, Tyler, seemed to place more of a priority on keeping the home fires burning. This spawned 15 children and a grandchild who died 235 years after he was born.

I myself am a grandfather, but, sadly, have little hope that I can match our 10^th President’s threshold of progeny survival. To do so would require one of my grandsons to make to the year 2195. One can certainly hope, but reality and gravity are likely to prevail here. I will proceed accordingly, and suggest you do the same.

TIMSHEL

Perhaps like the rest of you, I read with mixed emotions that the U.S. Mint has issued a final order. For those blank sheets of the metallic alloy of zinc (97.5%) and copper coating (2.5%) that is used in the production of our most granular unit of legal tender – the penny. Once these are stamped in to discs with Abe on one side and his memorial on the other, no more pennies will be produced. Like, ever.

On balance, I’m OK with this. Because – let’s face it — pennies are a pain in the ass. When at my home away from home – Dunkin’ Donuts — I prefer to leave them in the tip jar. With respect to those “take a penny, leave a penny” trays at bodegas, you can invariably place me with the latter contingent.

Pennies, nonetheless, continue to accumulate for me. And I don’t know what to do with them. And don’t suggest I toss them in jars, which, upon reaching capacity, I swap out for more usefully rendered currency. Because the thought depresses me.

Still and all, it’s hard to imagine a penniless world without feeling a bit of nostalgia for the blasted things. Once upon a time, they could at least buy you a gumball. You could stick them in college dorm room doors to hilariously lock the occupant in. You could place ‘em on a rail track and watch ‘em flatten.

Nonetheless, discontinuing them is probably the right move – particularly as associated published production costs for these diminutive, soon-to-be-discontinued metallic frisbees is $0.037. And swapping same for $0.01 is, I can assure you as a risk manager, a less-than-scalable investment strategy. Plus, it’s not like they’re disappearing anytime soon; there are ~114 billion of the little buggers in circulation.

And if all else fails, there’s always this guy:

For the uninitiated, the name of the character on the left is Pennywise – arch villain of the Stephen King horror novel “It”.

I haven’t read the book or seen any associated film adaptations, but apparently, this rather unpleasant fellow emerges every 27 years to prey on children and other innocents.

He was last portrayed in 1990 (by the fabulous Tim Curry), so his absence has now extended 8 solar cycles beyond his scheduled reappearance. However, we assume only at our hazard that Pennywise will never return.

But Pennywise or otherwise, from a production perspective, the penny is out. And one might ask, in perverse modification of our titular 17^th Century British idiom, is the pound(ing) in?

Signs of the latter are emerging ominously. Foreign students at the Holy H have been given the boot. This matter, of course, is now ensconced in the courts, but I wonder what the point of the whole exercise is. Newly minted Columbia grads, rather than tossing their Royal Blue caps in the air, are burning their costly diplomas. They’re killing mixed-religion Israeli couples at the Jewish Museum in Washington.

Gwynnie is getting pounded (perhaps in more ways than one) for a highly enterprising project, under which, for the nominal fee of $75, one can purchase a candle that will fill the room with hints of her most feminine, fetching and intimate bouquet. The Who – in advance of what is being billed as a Farewell Tour (and this time they might really mean it) – fired longtime drummer Zak Starkey (yes, son of you-know- who). Twice. And got pounded each time.

I just read the most recent in a seemingly never-ending stream of post-mortems on the 2024 election. This one — from CNN’s Jake Tapper and some dude from Axios, focuses exclusively on Biden’s cognitive decline. The ironies here are rich indeed, as Tap was at the center of a journalistic cabal determined to convince the electorate against believing its lying eyes — as Joe mumbled, stumbled and bumbled his way to his premature if unavoidable exit. I give these guys credit. They told the story with fair authenticity. But the pounding – from those outside the Progressive Orthodoxy – focusing on the hypocrisy of it all, was as delicious as it was inevitable.

And, of course, the Administration pounds away in every direction. This week featured them busting out their oldest Greatest Hit – the policy equivalent of The Who’s “Can’t Explain” — by upping the tariff pressure on key elements of the International Trade complex – most notably the European Union and the Apple Corporation of Cupertino, CA. The Pounder in Chief is demanding that more products issuing from these organizations be made in America. Or else.

To me, the specious nature of the approach moves continuously to crescendo, like the pounding of the waves on an ocean beach before a storm. Better trade deals, yes. But with some consistency of approach, if you please. And maybe some adherence to published deadlines. Just over this past week, Trump thundered away with his plans to hit the EU with 50% tariffs. Immediately. Only to push back their imposition to July 9^th. My head is pounding.

And to the extent that the of the production of key goods and services is the goal, I feel that it is a misguided objective. Because we’ve got the game rigged in our favor as is, and I don’t believe the meeting of our demands will be an improvement.

To wit, Apple, a company that designs and distributes (but does not manufacture) Consumer Electronics, does so at a 30-40% profit margin. Assemblers such as Foxconn? 3-4%. Whoever makes the parts that Foxconn assembles probably does even worse. And this is to say nothing of the reality that even these skinny returns would be impossible absent their ability/willingness to source Labor at below-subsistence- level pay scales and under work environments designed for anything but employee satisfaction.

Another example comes from one of my distribution networks –ZeroHedge, illustrating the economic breakdown of a t-shirt manufactured in Bangladesh and sold in the European Union:

So, I ask, who do you wanna be in this cycle? The Brand Manager copping >20% profit for the sale? The factory whose take is single-digit? Certainly not the worker, receiving > 1%

Well, I’m here to tell you that right now, we’re the Brand Manager, bearing the minimal load of marketing and selling, but copping the lion’s share of the profit. Pretty good, right?

But Trump wants these sucky jobs, offered by struggling companies, repatriated to these here shores? Why? I don’t think Americans want those gigs, unless at MUCH higher wage levels/improved working conditions. Domestic Labor Forces will demand and receive these concessions, the costs of these products will increase accordingly, and profit margins will decline.

Nay, my friends, our ends are much better served through our current practice of outsourcing the scut work and associated unsightly implications for social justice – even if it means operating at a trade deficit.

Those my age and older may remember that most of their toys, electronics and small sundries carried as stamp that said “Made in Japan” – so much so that it became a running joke.

But this ended a long time ago. Nothing, at present, is made in Japan. Why? Because the Japanese wised up. Realized that there were better uses of their human and financial resources than sending workers into factories to earn a pittance in companies struggling to make a skinny profit. So, now, all them tchotchkes is now made in places like Vietnam, Malaysia, and (yes) China. This suits the Japanese just fine, and we should take the lesson from them.

Thus, unless we are willing to consume less, pay more, work harder for reduced wages that generate for our bosses a lower profit, I say viva la trade deficit!

The other force embedded here is our irrational, insatiable consumption addictions. We want what we want. And we get it.

Phones, game station consoles, meds, designer shoe brands, etc. They are rendered affordable because countries without this feasting ethic are willing to supply them to us at a price we are willing to pay.

So, we buy more from them than we sell to them, or, in other words, run a trade deficit.

I’m willing to concede the possibility that we can extract better deals from our trading partners, from which premise I can discern the contours of a strategy that relies chiefly on negotiating acumen.

Perhaps, even, we emerge from this whacky cycle in a stronger position than that we held when we entered it.

But the unpredictability of it all is killing us – particularly in the markets. Investors simply don’t know what to expect next.

And again, this applies not only to those who allocate capital in the liquid securities markets, but more broadly to everyone responsible for primary deployment of resources into the real economy. If, as a CEO of a product or service enterprise, one is reluctant to move forward with new initiatives (or to proceed with existing ones), well, one comes by such reluctance honestly.

But we’re here to focus on the liquid securities markets, which are once again wobbling. It hasn’t been a disaster in the Equity Complex (yet), but other asset classes are showing material trauma. Consider, as Exhibit A, the USD, which, for the 2^nd time since “liberation day” has broken the key threshold of 100:

Perhaps more problematic is the carnage evident at the long end of Global Treasury Curves, with 30 year yields around the world experiencing extremely tepid auction action, and throwing off yields not seen since before the Global Financial Crisis:

Not gonna lie: this second one troubles me, as it can only be taken as a sign that investors are beyond nervous about the impact of the current machinations on the trajectory of the global economy.

But an absolute pounding is not yet a foregone conclusion. The House has passed a critical budget bill, and, if the Senate manages not to bitch it up in Reconciliation, we at any rate can move forward without the prospect of a reversion to the crippling tax rates in place before a holier version of Big Orange put his hand on the bible for the first time.

We can also joyfully anticipate the long-awaited NVDA earnings drop. The stock is noticeably perkier lately, and a strong presentation will go a long way towards reinvigorating this yoyo of a market.

So, perhaps the poundings will cease. Like pennies. But as the latter are indeed departing, let’s take, in conclusion, another stroll down Penny Lane, where barbers show photographs, bankers carry hourglasses, and gearhead firemen’s pockets contain portraits of the Queen.

Where pretty nurses carry poppies on trays.

If you’re like me, it’s in your ears and in your eyes.

And, from all of this, perhaps we can agree that it’s all…

…very strange.

TIMSHEL

We take our title, in modified form, from a 1967 book called “You Can’t Steal First Base”. It was co- authored by baseball lifer Jimmy Dykes, who played and managed for > 40 years, and someone named Charles O. Dexter, a vicarious baseball junkie whose main claim to fame is apparently to have authored 73 books on America’s (erstewhile) National Pastime.

I do not know what angle Jim and Chucky O. took here, can’t recommend the book because I never read it and don’t intend to.

Quite frankly, baseball bores the daylights out of me.

But the title makes a good point. According to the rules of baseball at any rate, you can’t steal first. And I got to thinking about this upon reading that the guys at the Head Office, in their measured benevolence, have re-instated Shoeless Joe Jackson and Pete Rose. As both are dead, the sole motivation for this action is to pave the way for their long overdue induction into the Hall of Fame.

Until last week, both were banned — for engaging in behavior deemed to have been detrimental to the, er, integrity of the game: Jackson (on scant proof) for allegedly throwing the 1919 World Series, Rose for betting on games in which he had a vested interest. FWIW, the former, in a ban-shortened career of 12 years, maintained a batting average that remains in the All Time Top 5. It also bears mention that in the fall classic episode in question, he had a Major League Record 12 hits – including a home run in the series finale which has the distinction of being the first round tripper ever recorded in a World Series.

As to Rose, his threshold of 4,256 hits is one of those records which may never be broken (the leader among active players – Freddie Freeman — has, over 17 seasons, amassed just over half this total). He played on 3 championship teams, during which he switch hit, and played 1^st Base, 2^nd Base, 3^rd Base, and both of the flanking outfield positions.

That he wasn’t a great guy is a point conceded (for instance, he ruined the career of a pretty good catcher named Ray Fosse — by pulling a Jack Tatum on him during an All Star game), and maybe neither was Jackson. But if off the field qualities/character were truly a pre-requisite: a) the Hall of Fame might be pretty windy and cavernous; and b) I’m not sure any franchise could even put a team on the field.

Moreover, the league may wish to consider it’s own sketchy history. In 1994, for instance, a labor dispute between owners and players (both of whom, of course, care about nothing other than the fans) that negated the season, costing the organizations ome goodwill and cash for the next couple of seasons. But towards the end of that decade, something truly magical happened. Balls began sailing out of stadiums at a previously unimaginable clip. In 1998 alone, not one but two players shattered the all-time-single- season home run record, held by Roger Maris for 34 years — between 1927 and 1961, when he somewhat blasphemously eclipsed the 60-mark set by The Babe. Nobody then topped Roger till ’98.

Maris got 61 in ’61 (albeit over a season by which then was 7 games longer). In the many decades between Babe and him, only a dozen guys went yard more than 50 times. None did so again until ’97, when Mark McGwire took 58 trips downtown. McGwire set the record the following year with 70, shattering the previous thresholds by nearly 20%. Sammy Sosa cranked out 69 in that same campaign. And, in the fateful year of 2001, Barry Bonds topped them all — with 73. At present the top 6 slots on this list are held by Bonds, McGwire and Sosa (who holds, in different seasons, the 3^rd, 5^th and 6^th slots).

As a statistician, I can assure you that the probabilities associated with half a dozen guys slamming > 60 dingers — after 7 decades during which there are only 15 instances of > 50, are so minute that they render the purchase of a winning Powerball ticket, by comparison, a sure bet.

Even at the tine I knew the fix was in, and wouldn’t you know it? A few years later, the steroid scandal broke open. Lots of guys were on the juice, but the headliners were Bonds, McGwire and Sosa.

So, I say let’s allot Cooperstown slots on the basis of merit alone, and welcome in both Pete and Joe. No, they couldn’t steal 1^st, but may they at long last find their way into the shrine to which admittance they are justifiably entitled. And maybe, MLB should do a little moral housekeeping of its own.

It is closer to our main subjects of interests – the markets – where we find perhaps the exception to our titular truism. Due to a longstanding antitrust exemption, owners of professional sports teams are entitled to write off their entire investments – effectively cutting the costs of their venture outlays in half.

This, to my way of thinking, is as close to stealing first base as any protocol under heaven. However, in Washington, where settling on a viable tax strategy is vital to all our interests, there’s talk of cutting this gift in half — or eliminating it altogether. I’m sorta neutral on this one. But I won’t cry any tears for them fat cats if they get whacked here. And I don’t expect that much of the public will either.

And there’s not a great deal to celebrate from the broader fields of such public policy. The latest news trickle suggests that the tax deal is stuck in committee, and, on Friday, we received word that the Moody’s Rating Agency has, at long last, cut the credit rating of our sovereign paper below the heretofore pristine level of Aaa. We are now down to Aa1, perhaps enough to cop us a spiffy contract, but insufficient credentials for Cooperstown.

Moody’s main competitor: Standard and Poors, had dinged us long ago, in the (for me) tragic year of 2011 and catalyzing, in my opinion perhaps the biggest Inside Trade in modern market history. The date was August 5^th. A Friday. I smelled a rate from the “play ball” outset, as both equities and Treasuries were in free fall from open to close. We later learned that the brain trust at Standard and Poors, having decided to downgrade our govies, queried the major banks as to, if they theoretically wanted to make the change, when would be the best time to do it. All the banking heads agreed that the ideal approach was a Clintonian Friday afternoon news dump,, and then immediately instructed to their trading desks to sell everything.

Aside from the afore-mentioned antitrust exemption, this is about as close as one can get to stealing 1^st base in the liquid markets.

More broadly, the United States has been stealing first for 80 years, since exiting WWII as the world’s only viable global economic jurisdiction. Among other bennies this has brung is our status as the Reserve Currency and a virtually unlimited demand for our national paper. The associated advantages we have gained are almost incalculable.

Smart folks have been warning of the demise of this regime since I’ve been in this business. Which is a long time. And, fact is, I truly don’t understand how we retain it. But retain it we do. Maybe the Moodys canary is lying sideways in our coal mine, but we’ve thought and said that before.

The markets have attempted a first base theft from January on, and have come up empty. Only this past week have they regained the ground yielded by fears caused by the Trumpian scorched earth approach to economic policy. No, we haven’t toughed out a walk, and to say we got a hit is perhaps a stretch as well. As of now, though, we’re at any rate back in the Batter’s Box, which is a good thing.

Especially seeing as how we’re now in the back half of Q2, with other than (yet again) NVDA on the docket, there’s little of economic import in the upcoming data flows. Meantime, nobody can complain too much about what was reported in the earnings cycle, but guidance? Another matter entirely:

I’m not sure how anyone could’ve expected anything different. The trade policy alone offered an irresistible temptation to temper expectation, and, of course, CEOs like nothing better than to beat their earlier estimates, so as to exceed them during the portion of the calendar where they get paid.

Many, if not most, took the opportunity, and thus far by and large with impunity insofar as the associated impact upon stock prices is considered.

Particularly for those interested in the pipe dream of rate cuts, last week was a good inning. Inflation numbers – especially PPI – came in light. U Mich Consumer Sentiment was second lowest on record. Advanced indication on home sales is rather ominous. We’ll know more next week.

So, with Inflation on the down, Q1 GDP a modest negative, pressure on the housing market and such, calls for a mid-year rate cut are likely to grow louder.

Won’t happen. The last thing Chair Pow likely to do is to award a base to a President that has shown nothing but disdain for him. And, unless the latter plans to steal first by co-opting our Central Bank, there’s not much he can do about it.

This won’t sit well with the big guy, accustomed as he is to stealing first. In addition to wielding arguably extra-constitutional powers, his crew is operating 5 publicly traded companies, 2 cryptocurrency units, his own for-profit media outlet, and, of course, a brand new, tricked out 747-8 – courtesy of the Qataris. He’s over there in the Middle East on a trade and diplomatic mission, but he has managed to find the time to cut a few hotel development deals along the way.

Quite a feat for the Leader of the Free World, but perhaps somewhat short of the standards set by Madison, Hamilton and Jay, as set forth in the Federalist Papers.

For now at any rate, the markets couldn’t seem to give a care.

Yes, it’s tough out there. But nobody said it would be easy. The Bambino had to go up against Walter Johnson; Maris against Warren Spahn. Pete Rose battled Koufax and Gibson (among others).Our above- mentioned PED-filled trio went to bat in an era that featured Randy Johnson, Greg Maddux and Roger Clemens. We know for certain that at least one of these guys was on the juice. But none of them. Not one. Ever stole first base. Not one time. Because it can’t be done.

Nope, we’re gonna have to earn what we get, and here’s hoping it’s worth it. Currently, there is both opportunity and hazard. Only judgment, prudence and discipline will carry us through. We can do this, and that’s the good news.

Let’s just hope we won’t need, like Jackson and Rose, to have been planted in the ground ere we receive our reward.

TIMSHEL

King Arthur: It is I, Arthur, son of Uther Pendragon, from the castle of Camelot. King of the Britons, defeater of the Saxons, Sovereign of all England! We have ridden the length and breadth of the land in search of knights who will join me in my court at Camelot. I must speak with your lord and master.
Guard: What? Ridden on a horse?
King Arthur: Yes!
Guard: You’re using coconuts!
King Arthur: What?
Guard: You’ve got two empty halves of coconut and you’re bangin’ ’em together!
King Arthur: So? We have ridden since the snows of winter covered this land, through the kingdom of Mercia, through…
Guard: Where’d you get the coconuts?
King Arthur: We found them.
Guard: Found them? In Mercia?! The coconut’s tropical!
King Arthur: What do you mean?
Guard: Well, this is a temperate zone.
King Arthur: The swallow may fly south with the sun or the house martin or the plover may seek warmer climes in winter, yet these are not strangers to our land?
Guard: Are you suggesting that coconuts migrate?
King Arthur: Not at all. They could be carried.
Guard: What? A swallow carrying a coconut?
King Arthur: It could grip it by the husk!
Guard: It’s not a question of where he grips it! It’s a simple question of weight ratios! A five ounce bird could not carry a one pound coconut. Listen. In order to maintain air-speed velocity, a swallow needs to beat its wings forty-three times every second, right?
King Arthur: Please!
Guard: Am I right?
King Arthur: I’m not interested!

Monty Python and the Holy Grail

First off, happy birthday to my grandson and namesake – GHF – who turns 5 — on this 5^th day of the 5^th month – in the 5² year of the Millennium. And yes, to the rest of you Happy Cinco de Mayo.

For anyone out there – if indeed any exist – who does not follow these notes with fervent religiosity –a bit of context is in order. Last week, we covered the proposition that Washingtonian policy has adhered to the time-honored ritual of The Slap/Suck: aggressive assaults on our sensibilities followed by delicious, rewarding retreats. At the end, we introduced the prospect of migration to The Suck/Swallow, raising, but not resolving, whether the former is transforming itself, tidily, into the latter.

The question remains open, but meantime, that slurping sound you hear is the abiding suck of market participants, lapping up those continued good vibes that improbably emerged a couple of fortnights ago, and which somehow have persisted as April has melted into May.

But will it end in a swallow? I don’t rightly know, which is why I turned to the wisdom of Monty Python’s magnificent Holy Grail for some clarity. And, doing so, I learn that swallows must beat their wings approximately 2,500 times per minute in order to keep themselves afloat. And this to say nothing of what it would take to transmit a coconut – indigenous to tropical regions and indisputably non- migratory – across a large body of water such as an ocean.

And no, gripping it by the husk will not solve the problem.

All of which causes me to remain skeptical about The Swallow. It follows, therefore, that the coconuts, back in them days of the Round Table, would’ve been difficult to source, and, presumably, expensive.

So, having checked the appropriate sources, I’m delighted to report that the price of this most delectable issuance from the palm trees of temperate regions has remained stable at ~$800/Metric Ton, for the last several years:

Coconut Prices – Remaining Non-Migratory Across the Ages:

Presumably, if coconut-bearing swallows were ascendent, the supply of the former would increase, and the price would drop. But they aren’t and it hasn’t.

Perhaps perversely in the broader market, the coconuts are multiplying, but prices are rising, causing observers and opiners to marvel at its resiliency.

There are multiple catalysts at play here. Earnings thus far and with about 3/4ths of the precincts having reported in, are stronger than expected, or, at any rate, feared:

Tariffs? We don’t need no stinkin’ tariffs

GDP did blip down a titch, but not so dramatically as had been projected (or feared). The April Jobs Report, painted, by any reasonable measure, a pleasing picture.

Though not yet priced into the markets, on Saturday, those episodically accommodating folks at OPEC+ announced a >400K bbl/day production increase, and this against a backdrop of domestic energy companies committed to run their drills and refineries at full stop, notwithstanding. So, if one’s tastebuds run in that oily direction, there’ll be sucking aplenty out of the grounds and sands — from Alberta to Texas to Riyadh. And this as the warm weather driving season is hard upon us.

We also detect a pulse in Congress, raising the prospect of them passing a budget bill, bearing critical tax components, and The President signing it.

Finally, I’m excited (to the extent that anyone can be) about the advancement of that Ukey minerals deal. I’m sure there’s some Easter Eggs in the fine print, but I know this: we really need the stuff we just contracted to source, mine, purchase and deploy.

But to me, all this is secondary to the divine blessings of The Suck, which, at least for now, has completely obliterated The Slap. The tariffing hand across the importing face has tempered its velocity. The somewhat dubious sources in and around the White House continue to sound the coming glories of fantastic trade deals on the horizon. The reckless rhetoric about removing Chair Pow has diminished.

As long as this continues, we’re probably OK. But my instinct is to remain leery here. Because The Big Slap is, in my judgment, not dead, perhaps not even hibernating, but only napping. It could re-emerge at any time. And soon. Case and point – the FOMC meets this week and should they displease Our Dear Leader – newly energized by a market swooning with delight over his recent sucking efforts – could pull out that big orange palm and do some slapping.

Another example: who the fuck – particularly a POTUS – publishes a picture of himself in full papal vestments?

However, if he keeps his chill on, this here market could do some open field running, re-invigorated as it has been by the delights of The Suck. And there are so many tailwinds, as described above, easing his way, I’m inclined to issue a temporary “all clear” for risk taking.

And as to the swallow, well, it’s premature to proclaim its emergence yet, because, as everyone who has been either sucker or suckee is aware, the swallow can only emerge when the sucking has reached its logical conclusion.

And as those husky slaps are counter-productive, it is my hope that we let go the husk and allow the coconuts to drop noiselessly into the ocean.

Because swallows will be swallows. And the same applies to coconuts. They cannot be flown by little birds from the tropics to the English forest. And even if they could, clicking them together is a poor substitute for the sound of horse hooves.

Ambiguous though they be, these are our realities. So, stay tuned.

TIMSHEL