I remember about the rabbits, George

Lenny

The reference to the rabbits from Steinbeck’s “Of Mice and Men” is one of the most overused idioms in the pantheon of the written word.

So, I don’t wanna write much about the rabbits. I am more interested in the mouse. The transition from the leporine to the murine is catalyzed by a milestone event that took placed on New Year’s Day, when Disney’s 100-year copyright of Mickey Mouse partially expired, and certain images entered the Public Domain. However, and owing to the unsurpassed creativity of the Disney legal team, it should be recognized that not all Mickey images have been liberated; only those from the seminal Steamboat Willie series, first released in 1923:

Yup. This little guy is now free to consort with us all, and there ain’t nothing the Disney suits can do about it. And so delighted am I about this that I am going to display the image again:

I struggle to resist the temptation to ascribe a larger meaning to all this – the eternal struggle between Man and Mouse, that sort of thing. But I fail. And I come up short, as the best I can do is refer to that Disney All-Time Master Work: “Mary Poppins”, and words of “Sister Suffragettes”, sung by the magnificent Glynis Johns (Winifred Banks), who shed her century old mortal coil only last week:

“Although we adore men individually, we agree that as a group they’re rather… …stupid”

Yes, rather stupid, that’s about the size of it. All of which begs the question: what stupidity awaits us on the immediate horizon?

Here, of course, we face an embarrassment of riches. Somehow, the Iowa Caucuses have arrived at our doorstep, and won’t that be a brain-bereft exercise? While I’m quite fond of our quirky election protocols, they are, as a group, rather stupid. We commence matters in the Hawkeye State, where no contender has ever dared speak in other than glowing terms about the Corn Bill and Ethanol without departing tits up.

So, we’re perpetually stuck with an inefficient transfer payment to the commodity producers of Middle America, simply for the privilege of enabling well-positioned politicians to emerge unmarred from that idiosyncratic caucus proceeding.

Small wonder that entering into the final week, the Crude Oil chart looks like a John Belushi EKG:

Corn, by contrast, closed Friday at a stone cold 5-year low, and that on record Open Interest:

I will thus cop to being a bit puzzled as to what is going on in Commodity Land (more about this below), which seems to be the main locus of early ’24 action. Maybe it’s this whole Iowa thing. But after Iowa comes New Hampshire and then South Carolina, where further stupidity will certainly prevail.

Meantime, financial assets are off to a bit of a mousy start in ’24, with stocks and bonds both down a titch. Heck, even the BTC rally has suspended itself, and how stupid is that?

But the action picks up from here, with morsels of data cheese aplenty for whiskered, twitching mouths to gobble. We began on Friday, with a surging Employment Report that nominally obscured some nits. Such as a shrinkage of full-time gigs, the diminishing quality of the jobs created, the artificial boost derived from the strike-settled auto industry bringing production back on line, the alarming percentage of the workforce now under the grip of multiple paymasters, and a puzzling trend under which for ten out of the past eleven months, the revisions from previous months pointed downward.

We can all take comfort, however, that the mice in the factory are fully engaged. And next week, in addition to the commencement of the earnings season, we can feast ourselves on the monthly Inflation Numbers. The trends here are encouraging, and, in the battle between mice and men, it should be noted that the cost of cheese, like that of corn, is residing at its dead lows on record Open Interest:

But the battle rages on. And us bipeds with opposable thumbs can perhaps rejoice in the upward sloping characteristics of the Cheese Forward Curve:

Thus, the most important risk management information I can currently convey to you is that Cheese is in Contango – which may be the deciding factor in the battle between newly liberated Mouse, and Man. Lenny, of course, didn’t care. He was more interested in the rabbits.

But without laying a full-fledged spoiler on everyone this early in January, it did not end well for Lenny. Our fates may be more favorable, but we must exercise prudence and caution, lest (dare I say it?) the cheese stands alone.

TIMSHEL

Forgive me for having taken last week off, but heck, contrary to wide perception, even us Sabbatarians are subject to the Christmas Spirit.

But now it’s New Years. The ball has dropped. 23 is taillights, having reasserted, yet again, GOAT status.

There is from time to time some debate around this. In roundball, one hears arguments for a couple of 33s (Abdul Jabbar and Bird), a 32 (Magic), a 13 (Wilt), and a few for LeBron (who has rotated between 23 and 6 – plausible candidate Bill Russell’s number — over the course of his long career).

But the overwhelming consensus tilts, justifiably I believe, towards His Airness.

And, while still too early to officially declare, I think, in terms of market years, ’23 has staked its own claim to GOAT immortality. Certainly, it beats ’33, a year which, among other things, featured the ascendancy of Hitler to the Chancellorship of Germany. FDR was elected in ’32, which I view as a mixed blessing. But I doubt too many active at that time would wish to relive the experience. ‘6 sewed the seeds for the Great Financial Crash and ’13, while certainly a favorably memorable year, in which both the Dow and the 500 outperformed 2023, we should remember that a) the Naz underperformed; and b) the rally was strongly abetted by massive QE at the long end of the curve and ZIRP at the short portion.

Both, at least according to textbook economics, were/are unsustainable.

Fed Balance Sheet:                                                 Fed Funds Rate:

Some consideration is also owing to 99/’99, which, from a hoops perspective is owned by that gentle, bespectacled giant — George Mikan, who dominated the largely unnoticed NBA in the ‘50s. In the markets, our equity indices were enjoying the final morsels of the dot.com bubble. Gen Dow and the G- 500 both rose 20%, while Col Naz (at that point a lowly Lieutenant) surged 32%.

Well, wouldn’t you know it, but while the Dow trailed ’13 nominally (+13.3%), the Gallant 500 excelled it — putting up ~24%, while Col Naz posterized the field at ~43% (for the snobby among you, the more exclusive NASDAQ 100 gained 54%).

Raise your hand if it had occurred to you that this past year’s Naz had achieved a buying threshold that is fully 1/3rd greater than the acknowledged speculative frenzy that characterized ’99.

So, ’23 stands out even among the greatest of its peers, particularly in the fourth quarter, where his Airness was known to perform his most spectacular feats. The Dow was down up until late October; the SPX up modest single digits. Both have crushed it since. And, migrating beyond the Equity Complex,Treasuries have surged an astonishing (for them) 6% over this time frame, with Madame X contemporaneously lowering her yield skirts an amazing 1.2%. Investment Grade and High Yield Credit both manifested double-digit rallies. Crude Oil dropped by low teens percentage points, and USDJPYshed an improbable 12 handles.

Thus, if one held a (admittedly reverse engineered) portfolio of 50% Madame X and 50% Col Naz, returns of 25% or greater were there for the taking. If, in addition, this portfolio was short Crude Oil and USDJPY, well… …let’s not get carried away here.

It also bears mention that these cross-asset-class miracles came against the backdrop of aggressive (though now-suspended) rate hikes, and a Fed Balance Sheet reduction exceeding $1T. Going into the year, these contingencies were thought to be problematic, but, as the autumn of ’23 emerged and faded away, nothing could stop the mighty cross asset class buying machine.

One final point. ‘23 was also a magic number within the hedge fund realms within which I dwell. As recently as Labor Day, the funds I track were throwing off median returns in the negative mid-single digits, and many were facing business risk which, try as they might, they could not ignore. The Airy 4th Quarter bailed them out – big time. Forget the summer gloom; ’23 became a year to celebrate, and even now, many fundsters are pounding on their administrators to issue final return numbers, to be prominently featured in the slew of self-congratulatory “Year in Review” investor letters which will assault our inboxes before we know it.

Thus, whatever ’23 lacked in sheer pricing oomph, it more than made up for with high-drama, late year flourish.

But now it’s on to 24/’24, a hoops number worn by Mamba in the second half of his career, as well as by Spenser Haywood and a couple of my Chi-town faves: the underappreciated Mark Aguirre and Bill Cartwright. None of these dudes were Michael, but a Michael rows his boat ashore maybe once a generation, and each of the others had a successful and storied career.

In the markets, though I can’t be bothered to look up the actual numbers, a year like ’23 is typically followed by a strong, if perhaps less astonishing performance. Sort of like Mamba inheriting the mantle from Michael, and coming close, but neither reaching nor exceeding the exploits of his mentor.

We enter the proceedings with a couple of nits to trouble us. The Fed’s Reverse Repo machine was rattling and smoking in the waning days of last year, suggesting the merest hint of a liquidity problem on the horizon. Around Friday’s European close, somebody was buying the sh!t out of Vixen VIX, but it only lasted about an hour, and she closed the day at proximate 5-year lows. I read in yesterday’s Journal that56% of the 2.8M jobs created in ’23 were in the government/service sector. Which is OK I guess, but not likely to offer much of an assist in our efforts to fend off global economic hegemony threats from China.

The momentum is certainly on the side of risk assets, but as I have urged more than once, I think it pays to proceed with caution as the just born solar cycle unfolds.

More than any other factor, I believe that politics will drive the ’24 action, and if so, there are confusing crosswinds to consider. On the plus side, the odds are that the key drivers of policy, will, at minimum, do all in their considerable powers to insure against an undignified market collapse. They’ll continue manipulate the energy markets to benign ranges, particularly during the summer, so as not to annoy voters who have yet to shed their gas-powered jalopies in favor of bicycles and EVs. The Fed has now telegraphed, at minimum, a willingness to actually cut rates. These and other tools in their arsenal deeply reduce (but do not eliminate) the probability of an all-out rout.

Conversely, we’re entering an election cycle featuring two deeply unpopular presumptive nominees, one of which is under Rodman-like 91 indictments and has (extra-constitutionally, I believe) been removed from the ballots of two states and counting. The other is fading mentally and physically before our eyes. His son is also facing criminal charges, with plausible filial links apparent to anyone who cares to look. This has been downplayed, but I think it’s serious. Though I hate to play the “what about” game, try to objectively imagine a scenario where Trump Jr. had demonstrably failed to pay taxes, where he freely and lucratively interacted with foreign leaders and corporate titans, with uncles and siblings cashing in, and with visual evidence that his father had been present at some of these sessions. His political opposite numbers would lose their minds and throw the whole legal system into the mix.

So, Biden could very well be impeached. Which won’t be good. They won’t convict him, but I shudder to think of what emerges from the process.

And, under the heading of Wishful Thinking, I believe there is every possibility that either Biden or Trump (or, Ideally, both) departs from the scene ere the big ballot mail-in orgy commences. This willadd an extra dose volatility into a market environment that should be plenty volatile come what may.

Meantime, lest old acquaintance be forgot, allow me to bid one last farewell to ’23, a market year the likes of which we may not experience again for quite a spell.

Because even the great ones fade to black eventually. Jordan “retired” after his first three-peat, though I am convinced he was forced to do so by league officials as a penalty for gambling transgressions.

The Good News? He returned for a second three-peat. The not-so-good? When he laced ‘em up again,he wore the number 45 on his back.

And I don’t think I can wait another 22 years for the type of market performance that blessed us in the year, just completed.

TIMSHEL

Ooh, see the fire is sweepin’, our very streets today,
Burns like a red coal carpet, Mad Bull, lost your way,

Mick and Keith

As the ’23 wind-down continues, we’ve some last-minute milestone business with which to attend.

First, today, this very day, is Keith’s 80th, and if there’s any among you who doesn’t want to celebrate this watershed, well, all I can say is that you are a horrible person whom I don’t wish to know.

Beyond having contributed immensely to the creation of what I believe to be one of humanity’s most important art forms, Keith has been confounding, surprising and delighting us, in myriad ways, since 18 December 1943. The stories about him are endless, and some of them are even true. Perhaps among his greatest accomplishments is that after being at the top of everyone’s croak list for decades, the world has now conceded that he will outlive us all.

I will only share one tale about him, heard indirectly from two different sources, describing separate but otherwise identical occurrences. Though I’ve never met him, he has a house not far from mine — in Fairfield County, CT. He has, over the years, been known to routinely and enthusiastically patronize many local watering holes, always with his crew in tow. Two friends of mine told me of episodes wherein unknown strangers (members of the Keef Krew) approached them at these establishments, tapped them on the shoulder, and said “see my friend over there? He really likes your shirt and was wondering if he could have it.”

Each time, the interlocuter in question happily surrendered the desired garment. Because, let’s face it, we owe Keith that shirt, and, arguably, so much more.

I can imagine the glee with which Keith pulled this stunt, and it delights me greatly. Yes, we’ve done well by Keith. So well.

Also, last week marked the 200th Anniversary of the Monroe Doctrine. You know, the one which staked this country’s exclusive claim on the Americas, while pledging, contemporaneously, to leave Europe to tend to its own affairs?

How has this worked out for us? I’d say, on balance, pretty well. It has been far from perfect. Canada has played a stolid To(or)nto to our Lone Ranger, Mexico, from whom we were able, for better or for worse, to steal both California and Texas, has given us relatively few problems, and South America has for the most part behaved itself (and made many of us rich).

There is, on the other hand that annoying case of Cuba. From whom we still cannot buy cigars. Whose leaders tore down those fabulous casinos Meyer Lansky built in the fifties. Which almost caused us to exchange big blasts with the Soviet Union in ’62.

There’s also all them pesky immigrants pouring across our southern border, a problem, which, under MD protocols, is ours to solve on our own. But too much ink and too many pixels have been spilt on this topic for me to add erudition to the debate.

It also must be acknowledged that we’ve been unable, from time to time, to refrain from meddling in (European) Continental incidents (two world wars come to mind). But, on balance, we have indeed left them to their own devices, and have found ourselves none-the-worse-off for adopting this strategy.

So, I’m inclined to endorse the success of our titular doctrine.

But that’s one thing that separates the Monroe Doctrine, from, say, Keith. Because if Keith were to (God Forbid) defy all the combined knowledge of medical science and shed his mortal coil, his contributions to art, culture and society would still pay dividends for, I believe, centuries to come.

Not so with the Monroe Doctrine, which must, across all eternity, continue to justify its existence.

And the world has changed a bit since 1823, continues to change even now. A generation ago, for instance, Europe succeeded in creating the world’s most mind-numbing bureaucracy – otherwise known as the European Union. Though not widely monitored, it has its own three-branch government, but it’s a toothless sort of affair, focusing mostly on weighty matters such as the maximum allowable curvature of bananas, while still-sovereign member nations such as Germany and France go about their governance business as if the EU never existed.

The enterprise does, however, feature its own currency and Central Bank, responsible for the monetary policy of the whole region Monroe promised we would let alone. While not wishing to minimize the importance of setting monkey food convexity limits, this renders ECB Chair Christine LaGarde arguably the bull goose of the whole conflagration.

The ECB, unlike its opposite numbers in Washington, has been on a rate hiking tear of latter days, because, somehow, it manages to remain at least one step behind our own monetary chieftains. The gap is perhaps as wide as ever, given that both rhetoric and consensus now suggest that the Fed, presumably having tired of all those hikes, is a’fixin to cut rates multiple times next year.

NGL — I’m a little iffy on this. The Fed, it will be remembered, only explicitly controls borrowing costs at the short end of the curve, through the setting of the notorious Fed Funds Rate. In doing so last Wednesday, it delighted investors with its dulcet, dovish tones.

But the yield curve is still mad inverted, with thirty-year rates a gaudy 1.2% below those associated with borrowings just two years out.

The pictured glidepath, according to the textbooks, suggests the likelihood of a recession, a condition which the Gloomy Gus(es) among us have been warning against since before I can remember. But thus far, it hasn’t materialized, and I am beginning to doubt whether it will ever do so. Always-infallible economic projections suggest a significant slowdown next year, but I reckon even these reliable sooth– sayings can be wrong now and again. It has, after all, happened before.

So, I find the projection of three rate cuts next year to be a sketchy proposition. It certainly is possible, but I tell you fairly that if it happens, political considerations will have loomed large in the associated calculus.

Because despite all the bleating about independence, the Fed is, in my judgment, an entirely political enterprise. Though a controversial viewpoint, I believe that it giftwrapped a second term to Obama – by announcing QE3 (which I rechristened QE¥) at Jackson Hole, just six weeks prior to the (closer than widely remembered) 2012 election.

My guess is that they especially wish to do their part to preclude a Big Orange redux, and, if the economy is flagging, say, around mid-year, will certainly offer succor and assistance.

I would prefer that they stand pat until needed. The way things are going, the possibility of a serious economic downturn, a surge in Inflation, the combination of both, or anything in between, is ascendant.

So, why not load up on the dry powder?

But they didn’t ask me.

Meantime, ’24 investment conditions look like a jump ball to me, and, from a market risk perspective, I continue to counsel for a reactive approach to the early innings of the contest.

Meantime, the holiday season is upon us. It’s one week to Christmas, and all that jazz.

It’s therefore time to celebrate, as bleeding edge investors have been doing for weeks. General Dow reached new, previously un-breached ground last week, and the Gallant 5 and Col. Naz aren’t far behind.

If it’s in you to do so, maybe hoist one for James Monroe. Revolutionary War hero who crossed the Delaware with Washington. Who, as Ambassador to France, was instrumental to the completion of that diplomatic heist otherwise known as the Louisiana Purchase. Who authored the Monroe Doctrine. Who died, like Adams and Jefferson, on the 4th of July, 5 years after his predecessors and 55 after the signing of the Declaration of Independence.

And by all means, let’s celebrate Keith’s 80th. The markets certainly are, even if as is evident, mad bulls have yet to lose their way. The Stones are touring in ’24, as led by a couple of octogenarians one of which, according to the smart money, was never to have reached thirty.

And, in closing, I wish you a very Merry Christmas. I’m not yet sure whether I’ll weigh in next week or not.

So, one last piece of advice. If your festive wanderings – particularly today — take you to a tavern in far-Western Connecticut, and if, in so doing, a burly guy asks for your shirt, by all means give it to him.

It’s for Keith, and, as indicated above. You owe him that much.

TIMSHEL

I’m going to catch that horse if I can. And when I do, I’ll give her my brand,
And we’ll be friends for life, she’ll be just like a wife, I’m going to catch that horse if I can,

“Chestnut Mare” by Roger McGuinn and Jacques Levey

I draw your attention to this fine composition by The Byrds, without further comment.

Save this. I got to thinking about the elusive Chestnut Mare recently, because, in my eternal quest for that nutbrown equine beauty, it occurred to me that I need an upgrade of my brand.

Because branding is everything these days.

And what’s the point of catching the horse, if I can’t give her my brand? Or, perhaps worse, branding her in a manner that falls short of her majestic stateliness?

Or, most mindboggling to contemplate, what, if, in my case, horse and brand are one and the same?

So, I been trying to enhance my brand. I begin with the logo, recognizing that branding extends well beyond symbology. But one must start somewhere, mustn’t one? And that if I do manage to catch that horse, and she turns out to be non-branded, it’s surely my logo I would affix to her lovely hindquarters.

And here, I’ll be asking for your assistance.

Our current logo was kind of an afterthought, dating back to our launch in 2017:

It’s not like it’s bad or anything. My guys did the best they could. If you care to deconstruct it, the concept of a magnifying glass revealing an upward sloping bar graph (with a trend arrow added lest any of the obtuse miss the meaning), it is certainly uplifting and nothing in my judgment to be ashamed of.

But let’s face it. The image is tres 1.0 – even for 2017. More than six years later, the generous might call it 0.5.

Finally, and perhaps most importantly, my family just this weekend mistook it for the AARP logo.

And speaking of AARP/branding, I noted with interest that the Rolling Stones, having just announced their 2024 performance dates, contemporaneously disclosed that the tour sponsor is – you guessed it – the American Association of Retired Persons. One can look at this as be being a refreshing dose of candor from the lads, now octogenarians, who have buried two original members, and chased away their founding bass player, but continue to rock on.

On the other hand, it stands in sharp contrast to, say, the 1969 Altamont concert, which had no sponsors but enlisted the Hell’s Angels for security, a move which didn’t work out particularly well.

I will resist the temptation to take it as a sign that maybe I’ve lived too long, but the news from the tape renders this more difficult by the day. I read this week, for instance, that Hall is suing 0ates, and that restraining orders are involved.

But back to this branding thing. My guys have been busy working up new logos, and again I salute their efforts. A couple of the more eye-catching ones are presented below:

I could live with either one. But if the teaming millions that comprise my readership wish to weigh in, I’d be more than obliged.

I am aware that my gratitude is not the favored currency of the realms we occupy. So, to sweeten the pot, I offer a free month of service to anyone submitting a winning entry, and a gratis consultation to interested parties who constructively opine upon this, most vital of issues my enterprise must confront.

Because branding is everything – a reality that has perhaps never prevailed as much as it has during the current decade. Which began with a virus and associated mitigants. Those of certain predispositions were aggressively disdainful of vaccines and therapeutics until the political power balance shifted, after which, not only did they embrace them, but cast aspersions of treason at anyone who disagreed with their narrative. Thus, even in a burgeoning pandemic, branding of response trumped substance.

We also received branding assaults from Swiftie, Barbie, BLM, LGBTQ+, Bud Lite, TikTok, Twitter/X, Meta, Marvel Comix, Disney and dozens of others.

In the markets, we’ve been besieged by SPACs, NFTs, Defi, DEI, ESG, 0-day options, Quantitative Easing, Quantitative Tightening, factor parity, risk parity and heaven knows what else.

What have all these in common? Say it with me – BRANDING.

Yes, everyone is trying to catch that horse if they can. But it doesn’t appear to be a Chestnut Mare.

But whether dominated by branding or driven by other forces, at least for now, the external factors being brought to bear on the capital economy are bring forth nothing but miracles.. Security prices are riding a one-way-ticket to the heavens. Energy prices are gratifyingly docile.

And, in result, Vixen VIX has lowered herself to levels last observed prior to the lockdowns:

Though off-brand, I might suggest that now is as good a time as you are likely to find to purchase portfolio insurance. But instead, I reckon y’all will wait until it morphs from cheap to unaffordable.

Yes, I would’ve bet against this giddy construct at virtually any point this year, but then again, I have already demonstrated that my branding chops leave a good deal to be desired.

I reckon there are some risks with which to contend that remain to us. Q3 GDP revisions drop this week, along with associated inflation measures derived from this metric. There’s all of December in front of us, and who knows what happens then?

I suspect that it’ll be a quiet week, as the nation recovers from its seasonal coma. Further, I reckon that the first action in December will feature an attempt to extend the rally. Because, well, why not?

After that, it gets a bit more real. And then it’ll be 2024. With political action likely to reach new heights of hysteria. With two wars still going on, either of which could expand in nasty ways.

But as for me, I’m gonna catch that horse if I can. And, with your help, I’ll give her my brand. Unless, that is, the horse is the brand and vice versa. Which would be OK by me.

So, how ‘bout it? Can y’all pitch in? A month of risk solutions services will likely not do you any, or much, harm. Maybe, together, we’ll catch that Chestnut Mare. We won’t be able to hold her for long, but we will have made a friend for life.

And if all fails, you can do what everyone else does. Blame me. Which, for many of you, is about as onbrand as it gets.

TIMSHEL

Sixty years on (this Wednesday) and they’re still handing us the same old line.

I retain my doubts about the prevailing narrative. And I suspect I’m not alone. A marginalized nut-bag who defects to/un-defects from the Soviet Union and spends his other free time advocating for Castro, takes a menial job located on the 6th floor of a building where he can draw a direct bead on a presidential motorcade, and he nails two kill shots, at an open, moving car, over 100 meters away.

He then strolls out of the building — unnoticed amid the chaos, hops a city bus, murders a misanthropic Dallas beat walker (the insufficiently lamented J.D. Tippit), saunters into a matinee at a downtown movie theater, and is promptly arrested for the Crime of the Century.

Two days later, perhaps the most prominent suspect in American criminal history, held in custody by the notoriously ferocious Dallas Police Department, along with swarms of units from the FBI, CIA, U.S. Postal Service and God knows who else, is plugged in the stomach on national live television by a local putz, known around town for his meshugana tendencies, and dies on the way to the hospital.

A week after, the newly installed president forms an investigatory committee, chaired by the sitting Chief Justice of the Supreme Court and featuring a future U.S. President (Gerald Ford), a former CIA Chief (Allen Dulles) and a few other dignitaries, which, ten months later, releases a report that adds nothing to what everyone saw with their own eyes. Oswald killed JFK and acted alone.

Nothing to see here folks, sayeth the Warren Commission.

But it certainly was an unsavory conclusion to one of the saddest sagas in our collective awareness.

In result, ever since that horrible week sixty years ago, the world has poured untold resources into calling bullshit. Theories, too numerous to recount, have abounded, among the most prominent of which is the existence of a second shooter from a spot forever enshrined as the “Grassy Knoll”:

I have several reactions to this, the first of which is that the Grassy Knoll is not much of a knoll, and that it is largely bereft of grass. Beyond that, the guy in the lower right looks highly sus, and nobody has ever explained the presence of the heat-packing green avatar in the center/right of the image.

However, while I am willing to accept the hypothesis that Oswald was the lone shooter, I refuse to believe he acted alone. The Kennedy Assassination has the stubborn look and feel of a mob hit, as most prominently evidenced by the shooter himself being taken out before he could sing like a canary.

The Syndicate certainly had its beefs with the Kennedy clan, dating back to unsettled scores from their Prohibition-era bootlegging partnership with Papa Joe. They worked hard to elect Jack, who placed his whacko brother Bobby in the AG’s slot, whereupon he pursued the Mob with a vengeance. And all of this is to say nothing of the problems that arose from the presence of multiple shared side pieces.

So, I reject the Grassy Knoll but not the Conspiracy, and I reckon that it’s all exemplary of much of what we experience in this life: conspiracies abound, but not the ones we envisage.

And all this makes me wonder about the possibility of a great conspiracy being perpetrated in the Capital Economy. Which is showing astonishing signs of health and resiliency entirely inconsistent with the economic transgressions it has committed. We over-borrowed. Overspent. Printed new wealth out of thin air. We idled the workforce for several quarters and made up the difference by awarding various forms of handouts – generous subsidies for the empowered, direct cash giveaways to everyone else.

Two nasty wars ensued that do not present encouraging prospects for tidy resolution. In the latest, the world erupted into victim-blaming protest. The populace is restlessly unsatisfied – all with an election pending that features two of the most disfavored frontrunners in the history of national politics.

Against this backdrop, the capital economy is surging. Equity indices on a double digit run over less than a month. 10 year yields down more than 0.5% over roughly the same time period. Inflation statistics were nothing if not encouraging.

The long-anticipated Recession is nowhere on the horizon, with Q4 GDP estimates now exceeding 2%. Earnings and guidance have been encouraging. The Feds can now miraculously fund themselves into ‘24.

Crude Oil is trading in a range last observed prior to the start of Russian/Ukrainian war.

So, maybe we should just lock everybody down again, print more money, and give it away.

Not gonna lie – it all makes me very nervous – perhaps in part because it goes against all my graduate school training, funded as it was by student loans that it took me a decade to repay.

Perhaps I should ask for a tuition refund.

I also must admit that I wrongly proclaimed the early-4Q relief rally should have run its course by now.

But there’s some statistic, the specific details of which escape me, that when the Gallant 500 is up (I think) > 5% on November 15th, it has always closed out the year at incrementally higher levels, so my latest call is looking iffier by the minute.

And, in perhaps the most telling sign of the times, Jim Chanos, arguably the most prominent short seller around, and the guy who catapulted to fame by taking out those d-bags at Enron, is shuttering his iconic Kynikos (the Greek word for cynic) Asset Management Fund at the end of the year.

I would therefore very much like to jump on the current bandwagon. But. I. Just. Can’t.

Because I think there’s a conspiracy afoot. I can’t quite put my finger on the details, but this all just seems too good to be true.

So, it all boils down to what you want to believe: me or your lying eyes. Harbaugh caved to the B1G suspension, and I would’ve bet against that as well. But then again, I didn’t think that the country that suffered the slaughter of 1,200 innocents and which drops leaflets in advance of retaliatory action would be the one accused of genocide.

Or that Bin Laden propaganda would lead the trending TikTok streaming parade.

But, then, what are the chances of a poor local cop getting plugged one sunny afternoon by a guy who had, not an hour earlier, had successfully, and allegedly without help, murdered the Leader of the Free World? Or that the shooter could be murdered while in custody with the cameras rolling.

Or that a grassy knoll can take its place in history despite having not much grass and barely rising to the dignity of a knoll.

But hey, that’s where we are, and I continue to urge caution in your risk deployment.

Today, though, on the threshold of Thanksgiving week, my thoughts turn to Tippit. Helluva a shame that Oswald (and of this we can be pretty sure) did him. He survived as a paratrooper in the wake of the Battle of the Bulge, was injured and awarded the Bronze Star. He had longevity in his genes. His father Edgar died at age 104, and his mother May Bug (not kidding) reached 85.

J.D. only made it to 39. His widow died a couple of years ago, at 92. He left three children.

Kennedy – also a decorated WWII hero, and Oswald, who received a hardship muster out of the Marines, have been consigned to their places at the opposite ends of history, and my own theory is that the country was saved from abject depression from the assassination of the former in large part by the contemporaneous emergence of the Beatles.

The Grassy Knoll remains at its post adjacent to Dealey Plaza – apparently neither grassier nor more knolly that it was sixty years ago.

Somewhere, somehow, somebody knows something about what happened that day. But they ain’t sayin’. So, I’ll reckon we’ll keep askin’.

If I hear anything, I’ll be sure to let you know.

TIMSHEL

I must cop to having something of an inferiority complex with regards to the University of Michigan. Having taken my degree from the flagship institution of the state immediately to its left (and one that has the more legit claim to the Upper Peninsula, but that’s another story), I’ve had to live with the following realities.

It consistently ranks higher on the endless string of academic surveys that plague us, but which we cannot ignore. It has the more illustrious alumni (one former president, Madonna, the founder of the SDS). It sends many more graduates to Wall Street.

Heck, even in terms of team nomenclature, I am repeatedly compelled to remind myself that badgers are members of the wolverine family within in the short-legged omnivore sub-genus Mustelidae.

In the signature sport of football, they have cleaned our clocks – 18 B1G titles to our 14; Four Heisman winners to our two. Head-to-head record 17 to 52.

And, if I’m being completely honest, they have a better fight song than we do.

So, naturally, I shed no tears that the B1G has taken the baller step of suspending slightly unhinged Michigan coach Jim Harbaugh for the final three games of the regular season.

At issue is a convoluted sequence where a staff level coach booked himself tickets to upcoming opponent’s games, busted out his cell phone, and stole hand signals issuing from the sideline. Is this even illegal? Or immoral? Heck, I think that not doing so would represent a grievous failure of due diligence.

The suits at B1G HQ felt otherwise and banned Harbs from the sidelines for the final three games of the conference schedule.

Perhaps this is a message to incoming institutions UCLA and USC (which are certainly capable of various forms of espionage in their quests for glory for the Bruins and the Men of Troy) not to pull any fast ones.

But Harbs is not happy (not that he ever is), and is taking his case to the courts, where, presumably, his argument will take the form of reminding the judge that stealing signals is the American Way. For 2.5 centuries, our boys have died face down in the mud to protect the ritual, which, if not codified in the Bill of Rights, certainly ought to be.

So, there’s a lot riding on the pending ruling here. Perhaps even the very existence of society as we know it.

Meantime, taking a quick glimpse at the calendar – which I do from time to time – I note that there are a mere 6 weeks left to 2023.

At the risk of stating the obvious, it seems like it has barely begun, or, at minimum, should be no more than half over.

But here we are – two weeks left in November and four in December. That adds up to six.

Translated into trading days, we’re looking at ~30. But if you factor in holidays such as Christmas, Thanksgiving, as well as the market irrelevant Black Friday, the Christmas Eve midday close, and, of course, the 10th of Tevet (12/22), which consigns me and my observant Mishpocha to fasting, the number of sessions in which to authentically chop some wood dwindles to 25.

That’s 25 out of 250 each year, or, in other words, somehow, we’re 90% completed with this trip around the investment sun. It’s thus now or never in terms of generating a respectable full-year result.

Time is therefore running out to use signal stealing as a means of posting a constructive ’23 return.

This week’s action suggests that investors are taking notice and are striving mightily to create accretive market scenarios. Our equity indices have all rallied +/-10% over the last fortnight, and Col. Naz closed Friday a skinny 20 index points from its year-to-date highs. 10-year yields are off 40 bp. USDJPY hit record levels during Friday’s session.

Crude Oil, the raging of wars in geographic proximity to two important production centers notwithstanding, has settled in at benign levels. The VIX is at a subdued 14. Bitcoin is up by >30% over the past rolling quarter.

Outperforming all contestants, though, are two tasty edibles – Sugar and Cocoa – both of which are surging from one all-time high to the next:

But unless your bag is quirky commodities, there have been few signals to steal, and the signal supply for the remainder of 2023 is dwindling down to imperceptible levels.

I reckon that this week’s CPI and PPI readings will give us some indication of Inflation trajectories (else why calculate these figures at all?), but nearly all of us will receive these data points contemporaneously, and anyone seeking a purloined early read should probably think again. The enforcement crew at the Bureau of Labor Statistics are meaner than rattlesnakes, and I would counsel one and all against locking horns with them.

Both measures are projected to be benign, suggesting further progress in our battles against price demons. But this comes at the expense of dilutive economic activity. On Thursday, we get a look at October Retail Sales, projected to have declined 0.7%.

It also bears mention that Wednesday marks the close of the always-dreaded 45-day hedge fund redemption window, which, alas, is unlikely to offer much insight.

Moody’s – that Uber patriotic organization that is the only major credit rating agency to steadfastly maintain its top rating on Treasury debt – has now put this paper on ominous “Negative Watch”. A signal? A portent of things to come? The answer will require our patience.

Other than that, not much. For the rest of the year.

Of course, there are less data-driven stimuli on the horizon, including the progression of the latest scuffle in the Middle East, the approach of the increasingly depressing presidential election cycle, another debt ceiling showdown, etc.

But I suspect that all this is thin gruel for signal stealers. For those deriving signals from reading charts, they all look great, but I suspect that the good vibe feel of this tape will soon run its course. And we will be left where we began. In a valuation limbo where the signal to noise ratio is alarmingly low.

Which is another reason why the expected return to signal stealing is probably not worth the attendant risk.

Whine about it if you will. The Wolves, when not singing their punchy fight song “The Victors”, were crying rivers all weekend.

But to The Victors go the spoils. Michigan, with Harby reportedly attending a Wolve hockey game in Ann Arbor, scored a victory on Saturday on Mount Nittany against the 10th ranked Penn State Lions.

And, to add insult to injury, one of the key plays featured a TD saving tackle by a 340-pound Michigan DT, whose name I couldn’t help but notice.

There he is. Number 78. In Maize and Blue. But he ain’t me. While the Mich KG was motoring, I was in NY, fixin’ to watch my Badgers suffer perhaps their most ignominious loss in decades, getting crushed at Camp Randall by lowly Northwestern. The score was 24-10, but the game was an absolute slaughter; perhaps the most humiliating loss by them that I have ever witnessed.

My eligibility ran out in the early ‘80s, and these days I am rockin it sub-200. But in these troubled times, if they need me to line up over Center, all they need to do is give me a call.

Score another one, meanwhile, for the Wolves, who don’t even have a real or anthropomorphic mascot, while Bucky the Mighty Badger licks his noble wounds.

Alas, some things never change. But I’m not gonna cry about it, because I am not a whiny wolverine.

TIMSHEL

I pledge to you that some of these days, I will desist from using this column as a running obituary. I would have liked even now to have desisted, but God Oh Mighty, they keep droppin’ like flies.

So, today’s note goes out to one Robert Montgomery Knight, the iconic college hoops coach who, while at Indiana University, made laughingstock of my Badgers year after year. Perhaps owing to his having launched his coaching career at the helm the U.S. Military Academy, as well as to his martial bearing, he was widely referred to as The General.

As am I. Ever since I took on the CRO post at an iconic, eponymous hedge fund whose founder was reared in Tennessee and got his advanced book learnin’ in Charlotteville, VA. The CEO and COO also hailed from the Old Dominion, and the place sometimes resembled a latter-day Confederate Encampment. Noting, on my first day, that I shared a sir-name with the Commander in Chief of the opposing force in the War of Northern Aggression, the guy whose name was on the door hung the handle of The General on me.

In that environment, it was hardly a compliment, but it stuck. I even used it as the corporate moniker of my current outfit.

And one thing that you should know about us Generals: when one of our number falls, whether they be friend or foe, we weep for them. I myself, my status as leader of the enemy army notwithstanding, have still not recovered fully from the loss of Albert Sidney Johnston at Shiloh, or the friendly fire demise of that rascally Stonewall Jackson at Chancellorsville.

And now we bid farewell to General Knight. He was so tough as a coach that he ran Larry Bird, maybe the coldest assassin ever to lace ‘em up, out of Bloomington in a single month. His practices were pure torture. He forced his guys to go to class. Almost all graduated, which is more than can be said about Coach K: his protégé that somehow eclipsed him. Nobody on his squad took payouts or gifts. It was a tight outfit, one that even my nemesis, R.E. Lee, could appreciate.

He could not always control the fire inside him, however, and, after incidents of public misbehavior too numerous to recount, they chased him out of Indiana. He re-emerged in Lubbock, TX, at Texas Tech, which just last month celebrated its Centennial. There, in the heart of football country, where roundball is barely an afterthought, he created a perennial contender.

In 2008, he ran outta gas. And not long ago, Indiana University welcomed him back into the fold. Ran him a big party. From what I can tell, he then resettled in Bloomington, and passed away in that town of his greatest glories – mid-last week.

I doubt he left with many regrets. Like Butkus, and maybe even Byron, the world had arguably passed him by. Life these days is about, shortcuts, hacks – the very antithesis of what Coach Knight was all about. It’s a world of Participation Trophies, which clearly were not Coach Knight’s jar of jam.

I wouldn’t even have a problem with any of this if it were even remotely sustainable. But it ain’t. Sustainable, that is.

So, it’s a mixed bag for us generals. Since we’re covering buckets, consider the Washington Generals, a squad created to serve as foppish foils to the fabulous Harlem Globetrotters.

As of 2015 when they folded (they reformed in 2017), their record against the Trotters was 6-16,000.

On Thursday, Guns and Roses dropped a forgettable tune called, yes, The General. It was written during the oxymoronically named Chinese Democracy sessions. That recording session began in 1994, but CD wasn’t released until ’08. The General came out in November 2023.

Which is all I have to say about Chinese Democracy Generals.

But there are other generals to consider. On the losing side of recent battles is, for instance, General Motors, our country’s largest auto maker, and a host once so mighty that was said of them that as they went, so went the nation. Well, they and their competing battalions just got their clocks cleaned by the United Auto Workers, which gained nearly everything they sought in their recent job action, with enemy funded Combat Pay thrown in for added humiliation.

In fairness, though, they were locking horns with that modern-day Napoleon – UAW President Shawn Fain, pictured below:

There he is on the immediate left, dressed in fatigues and looking like no one so much as George S. Patton relieving another Montgomery (U.K. Field Marshal Bernard) in the Battle of the Bulge.

His image evokes memories of ancient martial glories, including those of, say, Alexander the Great, of whom it is said that he wept when there were no more worlds to conquer.

Fortunately for General Fain, though, new contests are on the immediate horizon, including those against Tesla, Toyota and Nissan.

May he follow in the footsteps of other great labor leaders – including James Hoffa, James Hoffa, Jr., Jackie Presser, and of course Fran Drescher. But how well he fares is a matter of broad interest to us all. The new contract places the Big Three at an approximate 60% labor cost disadvantage to upcoming strike targets (Tesla, Toyota, Nissan, etc.) – which will certainly impact everything from auto purchasing pricing patterns to the geographic distribution of manufacturing labor forces.

All of which comes against the backdrop of a Jobs Market that may be losing steam. Friday’s BLS report not only showed tepid job creation, a downward revision of numbers for the last two months, and an unexpected jump in the base rate, but also a disproportionate contribution from the Public Sector.

Investors, however, took all in stride, bidding up stocks, bonds and even Bitcoin. Ten Year Yields are down ~50 bp from Mid-October highs. Here, the contribution of the flanking civilian army led by Fed Chair Powell, bears mention. He and his compadres are, somewhat surprisingly, speaking openly about declaring victory in the Inflation Wars, and sending his battle-weary rate hikers into muster-out configuration.

And thus, we can offer warm congratulations to one of our favorite generals: General Dow, who surged back into positive ytd territory this past week. This pleases me immeasurably, because – not gonna lie – he was facing a threat of being busted down to the ranks and being superseded by Col. Naz (promoted only earlier this year from Captain), up >28% in ’23.

The big question that emerges is whether recent victories on the investment battlefield are signs of a surge towards victory, or, simply the back and forth of the fortunes of war, as perhaps best exemplified in the WWI trenches of France.

I wish I had a better read on it for y’all, but if forced to commit, I opt for the latter. The tides are bound to reverse themselves again ‘ere long, and I believe we are best served by to gird our loins for future bloody contest.

So it goes in the generalship game, which I am sad to inform you is more than just putting stars on your shoulders and receiving salutes. As mentioned above, when I first achieved the rank, it was anything but a compliment, though I do believe it was well-intentioned.

I was thus compelled to repeatedly remind my colleagues over there just who won the War of Northern Aggression. Because it was 16 decades ago, our memories are short, and the world has continued to battle ever since.

In closing, your still-alive general thus urges you to stand alert and prepare for further orders, which should be forthcoming shortly.

TIMSHEL

Continuing with our mortality theme, and having already paid homage to departed rats, cats and bears, I mark with interest the passing of Wall Street icon Byron Wein. In offering up the following, I mean no disrespect to the man. I only knew him as everyone else did — from his annual list of 10 surprises for the upcoming year. True, he was wrong on most of these, but that’s precisely the point. I like the gamma associated with the strategy, because, when you miss, you fare no worse than having met expectations, while, on those occasions where your improbable predictions come true, you are entitled to an ostentatious victory lap.

I did have one personal encounter with By, though, which, in the telling, does not reflect particularly flatteringly on him. For all I know, he was a nice enough fellow, and I am idiosyncratically leery of disrespecting the dead. But I enjoyed the episode so thoroughly, particularly as a tale of the human foible of hypocrisy (mine and his), that I cannot resist the temptation of sharing with y’all.

Though, for a variety of reasons, I now shun these affairs, back in the deuce, I routinely participate in conference panels. And one time in 2005, I was invited to join a hoity toity confab — for which Byron acted as moderator, and which featured, among others, the former CIO of Soros Fund Management. It was one of my higher profile gigs, and I wanted to be at my best. So, I paid particularly close attention on the prep call and even (highly uncharacteristically for me) took some presentation notes.

Then the big day arrived. About 500 attendees – including my mom who drove down from Schenectady and my Aunt: New Mexico Mitzie, took their places in one of the larger presenting rooms at Chelsea Piers. I was ready. Or so I thought.

Byron took to the mic and immediately went off script from what we had previously discussed. One by one, he threw softballs at the other panelists, and then, with about 10 minutes left in the session, he turned to me, announcing:

“Folks, we have with us a gen-u-wine hedge fund risk manager, and I want to ask him a question. So, Mr. Gen-u-wine Hedge Fund Risk Manager, I don’t think guys like you have any clue about risk management. Convince me that I am wrong”.

More in amusement than in sorrow or anger, I did my best. I admitted my own fallibility and that of my peers. Spoke briefly of our methods and of our humble desire to little other than add modest value to our organizations. I saw encouraging looks on the faces of family and friends (though Aunt Mitzie had murder in her eyes), and felt that, at minimum, I had not failed.

Byron apparently thought otherwise, ending the session with the following comment:

“Thank you everyone for attending. This concludes the panel. I am now going back to my office to redeem out of all my hedge fund investments”.

I don’t know what I did to piss Byron off, but this much is certain: whatever I was laying down, he wasn’t picking up.

I’m not sure from which funds, and in what amounts he withdrew his capital, or, indeed if he withdrew any capital at all. But now, 18 years later, I apologize to those impacted — for abetting the loss of this most coveted investor allocation.

However (and on my immortal soul), I learned later that week that Byron had resigned from his post as Morgan Stanley’s Chief Investment Strategist — to assume the position of Vice Chairman of Peaquot Capital – a “first generation” hedge fund straight out of Central Casting. It had a storied run, including significant regulatory trauma, during the last round of which, in 2010, the Federales forced it to close its doors, extracted a substantial fine, and imposed a lifetime ban on founder Art Samberg – from the Investment Management Industry.

Peaquot was always a bit sketchy, but I was forever willing to give them a pass for having a cool name. I always thought that its moniker was a tribute to the ship in the novel “Moby Dick”, and that the concept of an investment vehicle dedicated to hunt Big White Whales was highly clever. But I was wrong. Captain Ahab’s revenge-seeking vessel name was Pequod, while Peaquot is simply the appellation assigned to a rather obscure Native American tribe, located in the Northeast, whose main claim to fame is its ownership of the Foxwoods Resort and Casino in Ledyard, CT. In other words, hardly the Apaches, Comanches or Seminoles.

So, I withdraw the mad props I previously awarded to the late Mr. Samberg, and, by connection, to the recently departed Mr. Wein.

Byron’s actions were, in my judgment, highly hypocritical, but I stop short of calling him a hypocrite. Because we’re all hypocrites. Take me, for example. Though I vibed humility in response to Byron’s 2005 grilling, it was all a ruse. I know for certain (as do you) that my risk management riffs are pure gold, that choosing to work with me will virtually ensure your safe passage to fame and fortune. So, I lied through my teeth on that panel, moderated by a recently departed Wall Street legend, 18 years ago.

But what in God’s name does any of that have to do with the probing market analysis that is the hallmark of this publication? I’m glad you asked. Because, whether due to hypocrisy or irrationality, investors are acting in ways that plainly contradict associated messaging.

For the moment, of course, market participants are taking their cues from geopolitical events transpiring in the Middle East, and here, beyond doubt, the hypocrisy well runs deep and wide. Outrage tilts towards the victims, rather than the perpetrators, of the worst terrorist attack in at least two decades. World leaders spit mad warnings at Israel, while giving a pass to the Ayatollahs that cooked up this mess.

Take the Turks, for example, and their polecat leader Erdogan. Sunday marked the 100th anniversary of their existence as a democratic republic, having been formed out of the WWI ruins of the Ottoman Empire, the latter of which, since the 16th Century, included Palestine. Not sure how well the Palestinians did under the four centuries of Ottoman rule, but I suspect it was a rough go for them.

It is thus rather dubious for the Turkish leader to label Israel a war criminal, and to call for its outright destruction. Is it hypocritical as well? I reckon that’s for each of us to decide on our own.

But the markets are reacting in odd ways to these tidings. Crude Oil continues to trade in yawningly narrow ranges, military action notwithstanding. And, increasingly, investors are tired of owning it:

I call this strange, believe that the risk/reward for a long Crude position is materially favorable, and encourage you to act accordingly.

Meantime, the equity markets are positively anemic, so much so that General Dow has faded into negative territory, having, in aggregate, yielded ground from its positioning when the Comeback Year of ’23 began. What gives? The economy is booming. The Fed, set to weigh in again on All Saints Day (Wednesday), is, according to the market indicators, 99.9% certain to stand pat.

Earnings are humping along, stronger than they have been in several quarters. But investors are punishing the reporters – no matter what tidings they bring to the podium:

In terms of doings in Washington, there’s a new Speaker in town, which, first principles, looks like a win for us all. But it does appear to me like the whole sequence was under Trump’s control, which – not gonna lie – scares the bejesus out of me.

At any rate, if we make it past Tuesday, we will have survived another October, leaving, improbably, less than forty trading days in this once joyous/increasingly bitter investing year. The final eight weeks will not be easy, and the best advice I can offer is that the more honesty and the less hypocrisy with which you operate, the better off you’ll be.

So, it’s time for me to own up to a few things. My mother lived in Chicago, not Schenectady. She did not attend the above-mentioned conference or panel discussion.

I have no Aunt Mitzie, in New Mexico or anywhere else.

But what I related about the infallibility of my risk management magic is the stone-cold truth. And I invite you to ride with me to untold riches. You may choose to challenge me on that, but there’s only one way to find out.

So, give me a call.

TIMSHEL

He was someone, who to know was to drink with, and to drink with, was, unfortunately, to pay for.

Thomas Hardy

If we’re so happy, why do I flinch, if our feet should accidently touch?
And why, when we undress, do I blush?
If we’re so happy, why are we drinking so much?

Dave Rotheray — Homespun

Well, why the hell not? Drink so much, that is. And, for what it’s worth, the same answer applies when we’re not happy. Which we’re not.

And why the hell aren’t we? Happy that is.

Well, why the hell not?

Doesn’t much matter, but I got to thinking about liquor as the cure to our dour condition when reviewing an article in Friday’s WSJ – about the joys and hardships associated with the bending of the elbow.

First, the good news: wine is now more a more potent potable than ever before. Bordeaux grapes, after hovering for eons at ~12%, are now > 13% alcohol content.

But now the bad. Apparently, as indicated in the following chart, booze not good for us:

So, according to the American College of Cardiology, I should have died 18 years ago. Thanks, guys. For nothing. A piddling 50 drinks a week – by my booze-impaired math a mere 7 drinks a day, and you’re half again as likely to turn tits up?

Somebody should’ve told me about this around, say, 1982.

Timelier tidings are also of concern. Recent housing data indicates a continued downturn — not just in existing home sales, but now even in home construction. And, while Big Paulie’s pad remains on the market, a hedge fund whale has announced the construction of a residential compound for which he has budgeted a big fat $1B (that’s $1B with a B). As this guy is something of a protégé’ of mine, being: a) a few years younger than me; and b) another Kenny G, I advised him that for an equivalent sum, he could purchase the equivalent of more than 40 of Big Paulie’s White Houses (maybe including the one on Pennsylvania Ave), or, like 700 of Don Carlo’s digs. But youth must be served; he will have his own way.

He and his ilk, when not gorging themselves on Real Estate and professional sports franchises, are busy cutting off funding to the endowments of the universities that launched them. Including The University of Pennsylvania, founded by Benjamin Franklin, and whose alma mater: “Drink a Highball at Nightfall” may be the greatest musical composition this side of Bach’s Brandenburg Concertos.

And the market is having none of it. The equity tape stays quite weighty. Madame X (Ten-year Treasuries) is knocking, ever so demurely, on the door of 5% and her wilding younger sister – Vixen VIX – is apparently throwing ‘em back like it’s Purim or something:

Energy traders appear to have finally gotten the memo about the potential impact of recent geopolitical events on the price of their flagship products and have bid them up energetically. The other commodity significantly on the rise, perhaps due to its well-understood benefits in relieving the after-effects of our excess imbibing, is Coffee:

Not gonna lie: I could use a cup right now.

Meantime, we’re more than a fortnight since the 10/7 attacks, but the elite (as well as the unhinged) of this nation are divided as to who they should direct their ire against. Angry protests about Israeli reprisals began many days before any such action even transpired. I don’t seem to recall any such outrage associated with the Russia/Ukrainian dustup – the civilian casualty totals of about 20x those in the Gaza throwdown notwithstanding.

And what does the world – the market in particular – expect Israel to do? Roll over and get stiffed? Though they have taken their sweet time, they will go into Gaza. Hard. And then there will be a retaliatory strike. The West might even gather the liquid courage to go after Iran’s second biggest cash cow (behind, of course, U.S. monetary giveaways) – their flow of Crude Oil exports. Yet Crude continues to trade at levels below where it resided a month ago, around the time when Netanyahu assured the U.N. General Assembly that all was quiet on the Gaza Front.

And, if this here thing spins out of control, which it very well might, what’s gonna happen to Madame X? The Russian invasion offer a clue. Traders, at that time, bid down yields by ~30 bp. Now, in the wake of these attacks, yields are up by an equivalent amount.

So, I kinda reckon that Madame X is more of a long than a short at this moment.

We should at any rate hope that I’m right. Recent publish reports suggest that the amount of junk debt that is scheduled to roll over the next couple of years now exceeds 2007 levels and stands at a gaudy 19%. These outfits, due to their impaired financial state, were compelled to borrow at junk rates when the benchmark (none other than Madame X herself) was fixed at much lower yields than today. When they approach their bankers, hats in hand for another round, it will thus presumably be priced, if at all, at much higher rates. Some may fail to complete the trade; bankers may get scared away altogether.

I don’t even want to think about it.

The slim-majority-holding Republican Congressional Caucus is no closer, is indeed further, from electing a leader than it was when a few Jumoke’s decided to shitcan their last Speaker. The third attempt to put Jim Jordan in the top job received fewer votes than the second round, which received fewer votes than the first.

Nice job, guys and gals. It’s a great time for an intraparty squabble, what, with the debt ceiling deadline looming, a burgeoning, escalating war, and a presidential election just a year away. As I type this out, Minority Leader Jefferies is the top vote-getter, which tells you all you need to know about the GOP Caucus.

And unless something changes across the political landscape, we’ll have ample cause to drown our sorrows come January of 2025. The only three visible feasible outcomes are: 1) Biden beats Trump one on one – with the Dems gaining seats and retaking the House in the process; 2) Trump takes Biden down, mano a mano, and God help us then; or 3) Trump loses the nomination but runs as a Third-Party Candidate, utterly gutting the Republican Party in the process.

Not a lot to give hope in terms of an investor-friendly policy environment.

But hey, the market keeps trading, the bartenders keep pouring, and we stumble on. This coming week, we can anticipate with brain-impaired glee, the first Q3 GDP estimates, and the beginning of the big kid earnings cycle, as ushered in by Meta and Amazon.

Meantime, the war in the Middle East will continue to boil. There is chaos in Washington. I don’t believe a crash is imminent, but I cannot fathom a justification for any sustained rally.

I’d retire to an adjacent watering hole, but truth is, contrary to what’s written above, I don’t drink. At all. I am so bereft of alcohol intake that I fail to capture even the below zero dip, in the above-supplied graph, associated with a pissant 3 drinks a week.

I kinda wish I did drink, because it often seems like I’m missing the party. But my body simply doesn’t take to the hair of the dog.

It’s not that I’m happy, and often wonder if excessive sobriety is to blame. Meantime, I can only rephrase our titular rhetorical question and ask why, if I’m so unhappy, I’m NOT drinking at all.

Maybe it’s because I don’t know you. Because if I did, it would mean drinking together.

Which doesn’t sound like a bad idea.

So long as you pick up the tab.

TIMSHEL