As a former math major who earned a math degree but does not actually know much math (or, at any rate a good deal less than is generally assumed by the traders to whom I act as risk management cop), I feel particularly qualified to riff on our titular subject.

Further burnishing my credentials is my participation in that great but long-forgotten band – The Math Pistols – for whom I had the privilege of holding down the rhythm guitar spot some 45 years ago, and who delighted Madison audiences for several months with punk-inspired renditions of songs like Cat Stevens’ “Wild World” and Carol King’s “Will You Still Love Me Tomorrow?”.

After which, by popular demand, we broke up. But we did play the 1982 Mifflin Street Block Party on the roof of the Mifflin Street Co-op. And how many of y’all can claim as much?

If that doesn’t impress you, nothing will.

So, I may as well proceed by informing you that, routinely, I find math doing anything but mathing. If you’re a math major, you deal with this routinely. You can’t divide anything by zero. Negative numbers have no square root.

And even in word problems. The unresolved chronological emergence of the chicken and egg. The barber’s paradox: if a barber shaves everyone in town who doesn’t shave himself, and only those who don’t shave themselves, does he shave himself? The Monty Hall problem: should a Let’s Make a Deal contestant, after having made a door selection and having one of the other doors revealed to be worthless, change his pick (somehow, the answer is yes)?

One can look at non-mathing math in one of two ways – with frustration or with joyous acceptance. I choose the latter. And it has helped.

Because the parallels in the real world are striking. Take, for instance, the production of pennies, discontinued this past Wednesday after 238 years of fruitful multiplication. The math here simply wasn’t mathing (or, if you prefer, the economics were not economizing) – particularly insofar as producing a each one — the worth of which had been fixed for all time at $0.01 – costs $0.036.

OK; fair enough. But maybe we could do one more minted printing. Just another 3.8 quadrillion of them – to be used as a one-time payoff of our ~$38T debt. Of course, there are practical problems here – most notably the storage/transport of these new metallic Lincolns, the weight of which, at 2.5 grams/coin, would exceed 100 million tons.

Then again, the math of entire $38T and growing deficit ain’t, by any stretch, mathing. Reasonably reliable ratios (~125% of GDP, > $105K per capita, etc.) and the certainty of continued expansion tell a tale of unsustainability.

We ain’t gonna pay this back – at least by conventional means.

One would hope this was the motivation behind Chicago Treasurer/2026 Congressional Candidate Melissa Conyears-Ervin’s move to boycott the purchase of United States Treasury Securities, of which the lion’s share of the above-mentioned 38 Tril national hole is comprised. She does, after all, hold an MBA — from the conveniently located but heretofore unranked Graduate School of Business at Roosevelt University where she presumably received thorough preparation for managing the city’s $10B investment portfolio.

However, one would be wrong on that score as well; the move is instead a self-proclaimed one finger salute to 45/47. Indisputably, she has her reasons. But managing the financial affairs of a city which: a) now owes three times the value of its investment portfolio ($30B), b) takes in taxes about $2B and c) runs its own annual fiscal deficit in excess of $1B, one hopes that they are good ones:

As pointed out by the WSJ, the Windy City’s $10B of assets generated a 3.6% return last year, which falls short of the >4% yield on the U.S. 10 Year Note.

Presumably, though, the boycott is good politics –as she moves towards assuming the Congressional Seat of Danny Davis – retiring along with Pelosi after serving 14 terms. On the other hand, I think she stands about as much chance of losing as does JFK’s grandson Jack Schlossberg, now running to represent Manhattan’s 12^th District. Kalshi place’s Schloss’s odds at a meagre 25%, but given his connection to Camelot, I’ll take the over.

On a related note, and with only partially functioning math, the government re-opened this past week, after 7 weeks of furlough which nobody even noticed until the shortage of air traffic controllers disrupted the travel plans of the electorate. At which point peace and harmony prevailed on Capitol Hill.

One side benefit of this, albeit of dubious merit, is the deferred release of critical macroeconomic data – including September Retail Sales and (perhaps even more importantly) that month’s Jobs Report. However, no data point under the sun rises to the dignity of Wednesday’s NVDA earnings release, upon which not just the fate of the markets, but that of the economy and arguably of the entire world, rests.

Investors have demonstrated happy feet on the name, and, indeed upon the whole tech complex, wondering, in a non-mathing way, if this whole AI thing is all it’s cracked up to be. I wish I could help y’all here, but I’m fresh out of ideas and my subscription to Gemini just expired.

Some of the hand wringing is also owing to increased concern that the Fed, rather than cutting rates, is more likely to stand pat. So much so that the futures market now tilts probabilistically towards the latter:

I’d hasten to calm everyone’s fears about this. The decision is still 2 ½ weeks away and I’ll all but guarantee that it’s another slice at Fed Funds. If not, it’s so long Powell, been good to know ya.

More broadly, rates across the curve are coming down. By all accounts, the Treasury Department is active, if surreptitious, buyers of their self-issued securities and will continue to be so for at least the next year.

Whether this offsets the rate-rising impact of the Chicago boycott remains to be seen.

After that, the trajectory of rates will depend entirely on mid-term election outcomes. And it is a near-certainty that if the Democrats win, Team Bessent will be a less enthusiastic buyer of its own paper.

Till then, though, fixed income and equity securities should, at minimum retain a bid.

There may be some math that doesn’t math about the associated impact on inflation. But that, I suspect, is a trade-off that our betters are willing to accept. Among other matters, and as has been the case throughout history, the academic community sets the tone – as evidenced by a recently released internal report from Harvard University, indicating that grade inflation is now so rampant that the average Crimson GPA has reached a near-upper bound at 3.83.

I fell somewhat short of this threshold back in my undergrad days. At the University of Wisconsin, where, in 2024, the average GPA clocked in at a paltry 3.481.

I won’t say where I landed relative to the Wiscy standard back in ’82. Suffice to state that with the Math Pistols on the rise, I didn’t see much point in busting my hump.

But the Pistols broke up and I went on to grad school. Where non-English speaking, non-math majors cleaned my GPA clock.

Meantime, I am proud to be affiliated with an undergraduate institution that does not bestow the mark of perfection on its constituents for simply existing and showing up.

From this perspective, my world of non-mathing math comes full circle, the area of which is equal to the square of its radius, multiplied by T.

As even some non-math majors know, T is an irrational number, meaning it goes on forever. At last count, it has been calculated out to 105 trillion digits, a task which took a supercomputer 75 days to complete. And it’s not done. In fact, it is closer to the beginning, because there is no end.

Mathematicians have accepted this paradox with blithe spirit since T was first discovered. In ancient Egypt. More than 4,000 years ago. One could therefore argue that mathematicians have been non-mathing for more than 40 centuries.

Maybe the rest of you are simply catching up, and if so, it’s about time you did.

Because, viewed correctly, non-mathing math can not only be lucrative but fun.

TIMSHEL

Not gonna lie — from a general news perspective, I’ve had better weeks. Election Day Tuesday, my birthday notwithstanding, didn’t turn out as I would have wished it. Never thought I could root for any Cuomo other than Mario – any office in the land. But was forced to pull for his boy Andrew in the NYC Mayor’s race. And he lost. Badly.

I really liked the divinely named Winsome Earle-Sears, Virginia’s Lt. Governor. Who ran for the Dominion’s top spot. And got crushed.

I’ll never understand New Jersey – home of the highest state income taxes in the land and surrounded by economic agents from jurisdictions that would love to view it as a tax efficient alternative. If they weren’t so greedy – and particularly with Zor about to enter Gracie Mansion, the Jersey crew could be rocking the joint.

But no. Now that the current governor/former Goldman Sachs partner centimillionaire (all of whom, once they cash in, become touchingly liberal) has been term limited out, they replaced him with someone who will, with purpose, squander the opportunity.

California voters, ostensibly in response to a similar stunt by Texas, passed a 5-seat gerrymander. And, in general, it’s fair to summarize the Tuesday result in the following manner: if the midterms were held tomorrow, the Democrats would probably win by slaughter rule. At which point we can bust out a few dozen impeachment articles and have ourselves a real good time.

It only got worse from there. On Friday, we lost James D. Watson – co-discoverer of the DNA Double Helix structure, at the pleasingly advanced age of 97. He was kind of a crazy dude, but I will miss him, nonetheless.

The unkindest cut, however, came with the announcement of the pending discontinuation, after 208 years of publication, of The Farmer’s Almanac. And even though: a) it’s not done yet/will put out one last annual edition; and b) I have never cracked a single one of its pages, I feel the loss.

Adding to the confusion is the reality that there are two Farmer’s Almanacs – the soon-to-be-discontinued, above-mentioned periodical, and an even more ancient one, originated in 1792 (during George frickin’ Washington’s first term and in the midst of the French Revolution’s Reign of Terror), called, appropriately, the Old Farmer’s Almanac, which will continue to role out its annualized wisdom – in print and digital form.

Given that the Old Farmer’s Almanac launched a full generation before the regular Farmer’s Almanac, one wonders about the nomenclature. Did the former publication use the introductory geriatric modifier at the start, or did they only add this when the rival publication emerged in 1818? The question reminds me of the old joke about Famous Amos and his eponymous cookies. And the associated ponderings as to what, other than his indisputable cookie making acumen, what made him famous in the first instance and allowed him to so declare himself as a celebrity ere a single sheet of dough emerged from the oven?

All the above put kind of a buzz kill vibe onto the markets. Which a month ago would have bothered me not at all but is beginning to get under my skin.

And I believe I know part of the reason. Specifically, this past Wednesday the U.S. Supreme Court heard the first Oral Arguments in “Learning Resources v. Trump, and Trump v. V.O.S. Selections” — a combined case intended to determine, once and for all, the legality (or absence thereof) of the current administration’s wandering, often indecipherable International Trade Policy.

And it seems like a particularly sticky wicket because of all the unknowns. We begin with the timing of the decision, which, under normal protocols, would likely not take place until the end of the SCOTUS session next June. However, given the stakes, I have a hunch that they move quicker on this one.

There is also a good deal of uncertainty as to the predisposition of the justices themselves. Multiple published reports suggest that even the conservative contingent is expressing skepticism as to whether this policy is consistent with Presidential protocols. And, for my part, I join them in this doubt. In addition to my general disdain for economic transactions under which private agents are the payers and governments are the recipients (which I believe to be necessary but should be kept to a minimum), my reading of our laws grants the power of taxation not to the President, but rather, to Congress.

Finally, I’m not sure how the following Harvard Matrix should be populated:

Gun to my head, I think the market does better – at least in the short term – if The Court gives Trump his way – mostly because if the Big Guy can’t do his tariffs through the front door, he’ll do it through the side or back.

But I don’t know.

And, given all the above, it’s little wonder that the tape felt a bit wobbly this week.

Meantime, there are weird doings in the short-term bank funding and Repo markets – at a point when (coincidentally or otherwise), margin debt is surging from one all-time high to the next:

And were that not enough, the government shutdown is now squeezing out U.S. airspace. However, perversely, I believe this is a good thing. Nothing will bring politicians to heel in my opinion quicker than a bunch of cancelled and or delayed flights – particularly with Thanksgiving looming. So, my bet is that Congress gets its act together and passes a Continuing Resolution within the next fortnight.

To this end, it does appear that the Labor Department is fixin to release Inflation and Retail Sales figures this week. Apparently, pricing and affordability were wedge issues in last week’s elections – particulary in New York City, where, seconds after the Times Square year-end ball drops, the new mayor will take office and everything will be free.

And adding to this positive pricing vibe is Trump’s insistence that we believe him instead of our lying eyes and that prices are not increasing but actually coming down.

Phew, that’s a relief. Not only is everything cheaper, but the trend paves the way for the series of interest rate cuts which I am convinced, come what may, are imminent. Particularly after last week’s election pendulum swing, either Powell accommodates this, or he’s gone by Christmas.

I believe in light of all the above, the market is in double helix configuration:

It ain’t pretty. Nor is it easy to trade.

But it is our DNA. So we learned from James B. Watson and Francis Crick.

Both are now dead, as will shortly be the Farner’s Almanac.

I’m not gonna pretend to understand the DNA stuff, or even the weather and gardening content of the Almanac. Instead, I simply hang on to the reality that both have served us for ages – the former since we emerged from the primordial ooze; the latter for more than two centuries.

These are the tools bequeathed upon us by the heavens. Let’s use them wisely, and weep for no troubles but our own.

TIMSHEL

Honey, got no money,
I’m all 6s and 7s (and 9s)

Mick and Keith

I begin, stepping intrepidly into the realms of the overly personal, by informing you that tomorrow is my birthday. My 66^th birthday. Which means I will be beginning my 67^th trip around the sun.

To which I only have one thought.

6-7!

If you’re wondering what I’m writing about, you’re not alone. But know this: 6-7 has taken over the world and no one knows why. The phrase was once believed to have originated during the height of the Roman Empire: with senators and the privy council uttering VI-VII, as a precursor to Caesar’s famous phrase Veni Vidi Vici.

This is not correct, however. In point of fact, it was first coined by a Musical Maestro Skrilla – in his Symphony 27 — 3^rd Opus for Oboe and Viola (aka “Doot Doot”). And then, somehow, a TikTok video superimposed it upon the persona of upper tier and still-emerging NBA player LaMelo Ball (who happens to be 6’7”). And off we went.

The phrase (often accompanied by an alternating upward/downward move of each hand, as though operating an invisible Slinky) has since dominated the pre-teen/teen lexicon. I first learned it from my older grandsons – age 10 and 8. I asked them what it meant, and they didn’t tell me because they didn’t know. Nobody does.

The inference here is that it has no meaning, which, I reckon is the beauty of it. Near as I can determine and depending upon context it reflects either greatness or mediocrity.

Or (if you’re into dialectics and who isn’t?) both.

I was at least relieved to rule out its association with the misandrist, arguably diabolical phrase 6-6-6, suggesting that a man is only datable if his salary is (at least) 6 figures, he is (at least) 6 feet tall, and his privates measure (at least) 6 inches in length. Though (not to brag) I check each box, I find the standard to be humiliating.

Instead, I prefer 6-7, which one can interpret any way one chooses. And aside from that, I believe it well reflects the realities of the world in which we live, as well as those of the markets in which we invest.

If one takes the effort to look around, one sees helzapoppin’. Lots to do; lots to see. One can go whale watching in Nantucket for example. Or visit the Great Wall of China. Until yesterday, all four of Americas fave sports were operating at full throttle.

There are high-profile regional elections tomorrow – none perhaps more impactful than that for the NYC Mayoralty. None are likely to change anyone’s life much (including in NYC, where the presumptive winner is likely to neither do anywhere near the damage that many fear nor confer the bennies for which many hope). But here’s the best news: it should be a boon to cable viewership and associated advertising revenues.

Referring to the latter, want new bathroom appliances? There’s a company out there that will simply build a new bathtub right on top of your old one and complete the process in a single day. There are supplements which will energize our sorry carcasses, improve our memories and extend, no matter what our anatomical footprint, our most pleasureful romantic interludes.

6-7.

There’s new technology out there which allows us to relax our weary, worried minds by doing our thinking for us.

Again, 6-7.

This last concept dominates the current market vibe – particularly during the Earnings Season. Our best loved companies are reporting blowout results, but experiencing, at least episodically, the wrath of the Investment Community concerned about how much all this is costing.

6-7.

The Government Shutdown carried across the November 1^st milestone, where, according to law, it must stop the conveyance of food benefits – allowing both sides of the political spectrum to accuse the other – not only of starving babies, but of doing so purposefully as the main objective of their policy agendas. Meantime, we can look forward to the prospect of a glittering new White House Ballroom to be enjoyed not by us, but by our betters.

6-7.

As expected, the Fed cut overnight rates by 0.25% this past Wednesday. But Powell was a little pissy in his presser, suggesting in particular that we cool our jets on further hackage and thus causing a petulant selloff into the close.

Well, 6-7. But I have a strong suspicion that if he doesn’t cut again at the December meeting (the 10^th), Chair Pow will almost certainly be deep sixed (sevened?) by 4(6?)7. Because we are entering the portion of the cycle when the politics of interest rate policy will begin their path towards crescendo. The powers that be must have lower rates by Spring – to goose, among other things, the Housing Market. And they will have them. The process has already begun.

It should thus come as little or no surprise that along with the distressingly (though benign) hawkish tone adopted by Powell in his remarks, comes news that Fed Balance Sheet reduction is at a practical end (for now at any rate). It is at the longer end of the curve where Fed activity will be most impactful. Don’t be surprised if, as opposed to shedding assets, our central bankers do a little shopping.

(Everyone say it with me –) 6-7.

To great fanfare, our heroes at NVDA witnessed their stock breaching into quaint >$5 Trillion territory. This figure, of course, is in eyes-glaze-over realms, but make me rather nostalgic. For those simpler days of 2018, when there as much hand wringing over the prospect of a single company’s (AAPL’s) valuation reaching for the first time to a dainty $1 Trillion.

The new figure is, of course, 5x this value, over a period where U.S. GDP growth increased an impressive 50%. But back in ’18, NVDA market cap, which backed of by the week’s end to an ignominious $4.92T, topped out at about $90B.

6-7, 6-7, 6-7, 6-7, 6-7.

Earnings season continues but we must wait till nearly Thanksgiving ere we are enlightened by the latest NVDA tidings. There’s plenty with which to occupy ourselves in the meanwhile. But one data point which we will be compelled to forego is the October Jobs Report – scheduled for release this coming Friday but postponed due to the (presumably temporary) shuttering of the Bureau of Labor Statistics.

The Fed, which however remains open, continues to project a ~4% growth rate for Q4, which is a heady performance.

Of course, there’s some spooky spots out there. Including that reflected by this little tidbit I unearthed:

I reckon nobody told the credit markets that Halloween is over.

In general, however, I think there is ample cause to embrace our inner 6-7, viewing it not as a wishy-washy non-factor, but rather as a joyful expression of glad tidings to come. Market conditions are on the whole favorable, and this is neither always the case nor a condition that lasts forever.

Because some of these days, 6-7 will also disappear from our awareness, as did its predecessor: Skibidi – another term of no coherent meaning.

So, I say, chin up, y’all. If I didn’t mention it before, tomorrow is my birthday. The start of my 67^th trip around the sun. It’s not beginning as I would have willed it, because of the miles between us. I deeply wish it were otherwise and recognize that it’s on me to make it so.

Because now is the time.

And in closing, I have only one more comment to make. But won’t offer it.

Because if you haven’t figured out what it is by now, it’s likely you never shall.

TIMSHEL

“The pigeon,” said Archimedes, “is a kind of quaker. She dresses in grey. A dutiful child, a constant lover, and a wise parent, she knows, like all philosophers, that the hand of every man is against her. She has learned throughout the centuries to specialize in escape. No pigeon has ever committed an act of aggression nor turned upon her persecutors: but no bird, likewise, is so skilful in eluding them. She has learned to drop out of a tree on the opposite side to man, and to fly low so that there is a hedge between them. No other bird can estimate a Range so well. Vigilant, powdery, odorous and loose-feathered -so that dogs object to take them in their mouths-armoured against pellets by the padding of these feathers, the pigeons coo to one another with true love, nourish their cunningly hidden children with true solicitude, and flee from the aggressor with true philosophy—a race of peace lovers continually caravaning away from the destructive Indian in covered wagons. They are loving individualists surviving Against the forces of massacre only by wisdom in escape.

 T.H. White “The Once and Future King”

By way of context, I will cop to being highly confused about King Arthur –a tragically elusive figure if ever there was one. He rose to the throne, supposedly, around the 6^th Century (500 years prior to Battle of Hastings and the attendant Norman Conquest) by implausibly dislodging a sword (Excalibur) embedded in a rock, as abetted by a dubious nymph called the Lady of the Lake. His main advisor was an addle- brained wizard who, according to some accounts, experiences time and memory in reverse chronological order . His war council wastes its blood and treasure in fruitless search for the Holy Grail. His wife steps out on him and falls in love with his best friend. His nephew usurps his throne, and both die in a battle of reclamation.

Cheery stuff, n’est ce pas?

About the only uplift one can derive from this story is that it is fictional. It is captured most notably in a 15^th Century Sir Thomas Malory work, the titularly Frenchified: “Le Morte d’Arthur”. But the legend has persisted – albeit with significant modification, across the centuries. It is the subject of an endless sequence of poems, plays and (in more recent times) films – but perhaps never better captured (at least since in Malory’s day) than in the 1958 T.H. White fantasy novel “The Once and Future King”.

It is from this last source that we derive this week’s theme, which has nothing to do with Arthur, Guinevere, Camelot, the Knights of the Round Table in general, or such illustrious members as Sir Lancelot or his son, the idealized-as-the-perfect-knight Sir Galahad, in particular.

Instead, it is White’s above-supplied tribute to pigeons upon which we focus.

These much-maligned, ubiquitous, feathered creatures are more often dismissed as disease-ridden pests than celebrated as a noble, virtuous and heroic subspecies. Nonetheless, White has a point. They co-exist, in frighteningly large numbers, with mankind – mostly by adapting to our conceits and idiosyncrasies. One almost never encounters either their young or their dead. Across history, they have been trained as messengers, reliably delivering information across thousands of miles with near-perfect accuracy. Though no one seems to like them, they bear our animosity with pacific tranquility.

Until recently.

Has anyone else noticed that these so-called flying rats seem to be getting significantly more aggressive in recent days? Not long ago (well, over the summer anyway), I had multiple episodes of a pigeon nearly flying into me. One of these was in front of the Metropolitan Museum of Art and nearly sent me to the same fate as that of Van Gogh – whose one-eared straw-hatted self-portrait resides therein.

One might thus fairly inquire: what’s eating them? Is it the government shutdown? The unannounced remodeling of the East Wing of the White House? Climate Change? Income and Wealth disparities? NBA gambling scandals? The Louvre heist?

Maybe they don’t like being tariffed (and this might be particularly the case for carrier pigeons who must cross into multiple jurisdictions to perform their sacred missions). If so, they have ample cause for complaint:

Alternatively, and upon reflection, their pique may be owing to the pending and near-certain elevation of that socialist dude (call him Zo) to the lofty position of Mayor of New York City. Here, he will have big shoes to fill, including those of Ambrose Kingsland (1851 – 1853), Shady Jimmy Walker (1926 – 1932), Fiorello LaGuardia (1934 – 1945), Michael R. (3-Term) Bloomberg (2002 – 2013), and, of course, the GOAT: William de Blasio (2014 – 2021).

Zo has promised several bennies to New Yorkers (e.g. free transportation and childcare), but nothing for the pigeons. They won’t be allowed on busses — fare-free. They will be compelled to care for their hatchlings in an unsubsidized manner. Whatever they are paying in rent, the rate will not be frozen.

It could almost make a pigeon feel disenfranchised.

Perhaps, also, they’re a bit nervous about Wednesday’s Fed decision, during which, according, at any rate, to the futures markets, a quarter point cut is in the bag.

If so, I think this is an unjustified worry on their part.

Some may be long BTC and therefore justified in having a nervous breakdown. Perhaps they should take heart now that Trump has sprung CZ.

Of equity markets they have little to complain, what, with the Gallant 500 and Col. Naz, for the 32^nd time this year, closing Friday at all-time highs. Moreover, this latest leg up has a holier look and feel than recent surges, being driven by what only can be described as an impressive earnings cycle thus far.

However, we’ll know a great deal more about that by the conclusion of this week, which features podium turns for no fewer than 5 out of the Mag 7 I have a hunch that these representatives of greater corporate beings won’t disappoint.

But maybe this is just another cause for pigeon aggression. Published reports indicate that bankers are about to book their biggest paydays in quite a spell, and, to the best of my understanding, their ranks include very few pigeons.

But pigeons aside, it appears to me that it remains a fairly strong environment for grail-hunting in the world of investment. They’s less than ten weeks left to this year. And lots of potentially positive catalysts loom. This coming week, I believe the Mag 5 rhetoric will please us. The Fed is most certain to cut rates. The tariff TACO trade – at least with respect to Canada and China – appears to be back in play. The gendarmes nabbed those muddle-headed jewel thieves this past weekend.

Yes, problems persist. There’s this nasty bit about the Fed’s Reverse Repo program collapsing upon itself, a phenomenon I won’t attempt to understand (much less Explain)

And across the Channel, The Bank of England’s quarterly report on financial stability warns of the possibility of an AI bubble (ya think?).

Unless your name is Soros (with deputy appellations such as Druckenmiller and Bessent), it seldom pays to mess with The Bank of England. It’s been around for well over 400 years, has stood solid through the American Revolution, the French Revolution, the Industrial Revolution, two world wars, and a whole bunch of other nasty shit.

Prior to that, matters were up for grabs. There was the above-mentioned, fictional Arthurian legend, the referenced revolution of 1066, The Hundred-Year War (actually, 116) and The War of the Roses. Somewhere in there, a nasty battle transpired between Richard II, his deposing successor Henry IV. It is a poignant tale which is a current obsession of mine.

Through it all, though, pigeons have not only survived, but, arguably, thrived. Among other reasons because they tend to their own business and little else.

There’s a lesson for all in this, including today’s more aggressive avian neighbors.

I only ask that they stay out of my face, and I will return the favor.

Otherwise, I can’t be responsible for the outcomes.

TIMSHEL

Will all your money, buy you forgiveness?
Keep you from sickness, or keep you from cold?
Will all your money, keep you from madness, keep you from sadness?
When you’re down in the hole?

The Glimmer Twins

If you’re bored, give our title tune a listen. It was recorded in 1980, as part of the otherwise-forgettable “Emotional Rescue” sessions – at a time when, already long past their prime, The Stones still managed to pump out a gem or two on each record. To me, even this era of descent from the mountain top is long over; they haven’t, to my ears, laid down a memorable track for at least four decades. I don’t fault them for continuing to trudge into the studio though, having long believed that artists of every stripe should be judged largely by their best work, and that their choosing to carry on at lesser amplitudes is their earned prerogative. As far as I’m concerned, the band that gave us “Let it Bleed” can thus do whatever it wants, for as long as it is able.

Meantime, “Down in the Hole” is an example of a divine ensemble on the decline, catching, yet again, their full creative fire — even as their embers were otherwise dwindling.

Because – let’s face it – we’ve all been down in hole at various points in our existences. I’ve been there many times myself. Never, however, have I been in a K-Hole. Didn’t even know there was such a thing. Until recently, when I was enlightened by my niece who is a naturopathic doctor that specializes in K treatment.

I was forced to disclose to her that I am a K virgin, never tried the stuff, let alone having fallen into the hole which bears its name. Most of you probably know this, but the condition is one under which an individual, using the general anesthetic Ketamine, has done so in sufficient quantity and/or with sufficient enthusiasm to render them in a state entirely disassociated with body and environment.

Sounds like fun, don’t it?

For some, apparently, it is. Others slip into the K-Hole and regret it. On the whole, I think I’ll pass.

The world, of course, has been overindulging in K for quite some time. And, arguably at some point, dove right down into the Hole. Though probably a waste of effort, I have endeavored to determine precisely when the formal descent transpired.

The US, always at the forefront, was way ahead in this game. For lack of a better alternative, I pinpoint its arrival into the K-Hole to when the Minnesota North Stars re-located to Dallas (1993), thus, for a time, depriving Minnie of an NHL franchise, and deeply ruining the frozen vibe on all levels. The Minnesota North Stars are now the Dallas Stars (I asked myself)? Something went deeply wrong here, causing a contagion which, more than 30 years hence, we have failed to remedy. And it matters little that seven years later, the Twin Cities copped a new expansion franchise called the Wild.

We were in the K Hole – perhaps never to emerge.

Beyond these shores, my best estimate, not of when the global K-Hole materialized but rather when it subsumed all above-ground oxygen, was in 2022, when Ferdinand (Bongbong, yes Bongbong) Marcos Jr. – son of Kleptocrat Ferdie Sr. and his 50-dozen-shoe-possessing wife Imelda, assumed the Presidency of the Republic of the Philippines – a position held by his father (who managed to steal about $10B of loose change out of the joint) for some 20 years.

There’s Bongbong. Lookin’ sharp by any standard.

His name, of course, suggests a preference for ganja, but word is — in Manila and adjacent realms, he rather inclines towards the blow.

There is no documented association between Bongbong and Ketamine, but that doesn’t mean one doesn’t exist.

And even if it doesn’t, I am still formally accusing this nepo-statesman of being the catalysts for the worlds collapse into the K-Hole.

Because this is the Filipino equivalent of a Stalin scion being next in line to replace Putin. Or Hunter revving up for the 2028 throwdown here in the States.

Our immersion into the global K-Hole has taken many forms. There was the magnificent spectacle of the exploding beepers. Mexico elected a Jewish lady as president.

Just this past Friday night, a Japanese Man playing an American game astonished the world by pitching a 10 strikeout/2 hit gem AND hitting three home runs – all to send a team paid like maharajas back to the World Series to defend its title.

New York City, the global center of capitalism, is about to elect a socialist mayor, who somehow is sweeping the election with plans to offer free transportation, free childcare, the arrest of Netanyahu, the raising of taxes and the freezing of rents. Let’s call all this, shall we say, aspirational. You can’t raise taxes anywhere in New York without the approval of Albany, which wants the money for itself. I will also be watching with interest as he seeks to deal with the city’s transportation unions, who are not only unlikely to match Zo’s largesse, but instead sure to demand larger sums for hauling around NYC’s free riders.

Disembodied conditions also, of course, plague the financial markets. But then they always do. Gold and Silver are making new highs every day. Credit markets begin to wobble in menacing ways, as catalyzed by a couple of disturbing bankruptcies.

These latest developments are particularly troubling insofar as they threaten to kill what has been one helluva debt issuance party. One of them (First Brands) is a tale as old as time – involving, apparently, multiple borrowings against a single pool of collateral. From what I can read, the issuers here didn’t look too closely, because they had buyers for all this paper and a fat commission to book.

All of which has me thinking that excess demand for credit investment is a dangerous thing. When credit buyers want to buy, sellers always find a way to accommodate them. Inevitably, this leads to a deterioration of credit quality, and much Hijinx is then certain to follow. We found this out in the lead-up to the Great Financial Crisis but apparently learned nothing from the exercise. We are almost certain, instead, to receive this lesson yet again.

Lest anyone pass off this bad paper issuance as a one-off, I draw their attention to recent action in the auto loan market:

Much as I’d like to pass this illustration off as a leveling of a playing field, which now enables the insolvent to cop sweet new rides, I can’t help but feel a bit concerned about the implications for debt markets.

Also, of course, I fear (though I hate to mention it) that some of those represented in the tan line may be, indulging, ad perhaps at serious risk of falling into the K-Hole while behind the wheel.

And of course, the U.S. Government – itself in hock to the tune of ~$37 Trillion, is now in a disembodied battle to legislatively unleash the incremental borrowing it needs to pay its bills. It is in slow-motion shutdown mode, sort of like the HAL 9000 computer in “2001: A Space Odyssey”.

The disassociation with the real world here is breathtaking to behold. All God’s Children know that the borrowing limit must rise, just as it has done 78 times during my lifetime alone. This time, the political parties have chosen to stand off against one another – a prelude to many such standoffs which will transpire over the next year as part of what promises to be a particularly nasty Midterm election. In the process, the pols will drag the rest of us down into the K-Hole with them.

And, through it all, the K-Holed Investment Community continues to bid up risk assets. It’s not a particularly heavenly ascent, but at minimum, buyers materialize at every downturn:

All of which goes to prove that in the K-Hole, FOMO rules the day.

And, as we further immerse ourselves into these rounded depths, we can probably expect more of this sort of thing, going forward.

Meantime, The Stones are set to drop another new album, while the rest of us yawn. Yes, we’re down in the K-Hole, but if you’re there with me, everything’s gonna be alright.

TIMSHEL

We appear to have survived the annual reminder of the ruination of what once was a fine holiday – Columbus Day. Celebrating, well, Italian Explorer Christopher Columbus. Who certainly was not the first human being to set foot on North America, nor even, it is likely, the first Son of Europe to do so. Heck, he never even made it to the mainland of this continent. Across 4 separate expeditions over more than a decade, he bounced around the Caribbean for a few months and then beat his ass back to the protection of his underwriters in Spain. He never made the big score he promised to Queen Isabella, but over the subsequent 5+ centuries, the venture certainly amortized itself. And then some.

Since 1792 – 300 years after his initial voyage – and up until some unspecified date in the recent past – this country has used the occasion of what is believed to be his birthday (nobody really knows the exact date) to celebrate Italian American culture, contribution and heritage. This seemed — to me at any rate, to be well enough. But it is not in the ethos of these realms to leave well enough alone. Instead, A re- thinking of that ancient history marks these transatlantic journeys as the beginning of an extended era of brutal, still on-going cycle of exploitation.

So, now, because not everyone buys into the narrative, the day has transmogrified into a hybrid, as marked by the addition of its designation as Indigenous Peoples’ Day – thereby creating a desperate struggle of the vibes between European Imperialists and the longstanding occupants of the land they claim to have had stolen from them.

So be it. But it does make me somewhat sad. Because I was (am) a big fan of Columbus Day – if for no other reason than that it features the best damned parade in the whole damned NYC marching calendar. Others may prefer the Halloween Spectacle (too rambunctious), the Macy’s Thanksgiving ritual (too crowded and best watched on television), the Saint Patrick’s pre-game stroll in advance of some serious imbibing (close — but ruined by the absence of floats), or the too-inclusive Easter Parade.

Nope. Gimme the Columbus Day saunter up 5^th Avenue. If you go, you’ll find me adjacent to the parade route, eagerly awaiting that Long Island Car dealership float, featuring the owner channeling his best Vic Damone while singing “That’s Amore” on continuous loop.

The Vicster:

This year, I have a long wait ahead of me. Because the Columbus Day Parade has been cancelled due to weather conditions.

And as I stand here, wet and bereft on 5^th Avenue, I can’t help but wish things were a little different. The spirit of today’s holiday, after all, is a celebration, not of Columbus, but of Italian Americans. Which Columbus was not, but which the Brooklyn-born Damone was. Maybe we change the name of the holiday to Damone Day? Make everybody happy?

Meantime, and particularly for us financial eggheads, Columbus Day also marks the beginning of a 10- week sprint to the conclusion of yet another year. Thus, as the last tuba is snapped into its case, as the last uniforms are return to mothballed closets, etc., another travelling show begins – the dance of the year-end valuations.

And what a show it promises to be. From a sheer drama perspective, it — even now — has all the elements necessary to be a real banger.

The government is, by degrees, shutting down, and this time, potentially, it’s more than just show. Each side is smelling the other’s blood. Whither this takes us is anyone’s guess.

Federal troops are policing several cities, and the list will probably expand.

Perhaps the most important Armistice of the 21^st Century is unfolding. But whether it sustains itself — or devolves into further madness — is entirely uncertain.

We continue to dance on the string of whimsical and whimsically articulated International Trade Policy. We’re flying blind in terms of government generated economic data. The Q3 Earnings Cycle, beginning, in time-honored fashion with the banks, commences this coming week.

This combination alone spices up the narrative. With no government data releases, it behooves investors to seek clues about overall economic health in the dominions of earnings. How are the credit card companies faring? What’s the technology spend? What quantity of goods are Amazon and FedEx shipping? How much are American corporations exporting and importing? And at what price(s)?

I suspect these matters will merit closer scrutiny than usual across the coming cycle. Which forces the rest of us to consider them as well. And, as we enter the proceedings, myriad indicators suggest that it promises, in general, to be a wooly ride.

Meantime, the subsuming of the Fed into the political vortex continues apace. Bringing the entire yield curve into play, and this well into next year and maybe all the way to the election.

In result, all asset classes are potentially on the move – so much so that it has driven that Coldplay Kiss Cam couple right off the financial pages.

And so, if you can’t find something to trade between now and Christmas, well, it’s all of your fault and note of mine.

The markets had a pissy selloff on Friday. And, not gonna lie – some of my peeps was spooked. Maybe they’re right, but I think the arrows still point up. Going into our Columbian celebratory weekend, with the government unable to fund itself, with crises from Portland to Putin to Palestine, it only made sense for investors to lighten the load a bit.

I don’t see a rocket ride from here, but with a ubiquitous Administrative State, which – let’s face it – is on a major roll, bent, through Monetary Policy and other dynamics to goose asset prices, with the ocean of liquidity still sloshing around a Nina/Pinta/Santa Maria market, the bovine is, in my judgement, likely to, er, Trump, the ursine.

It’s hardly the holiest of rallies – frighteningly narrow and driven by much gimmickry. The economic situation – even before the shutdown – is very opaque.

Absent the unabashed determination of the White House to lower rates and elevate asset prices, if conservatives on the Fed had any juice to reduce these forces, the issue might be very much in doubt. But it isn’t.

Somewhere, in the heavenly equivalent of 10 Downing Street, Margaret Thatcher, born 100 years ago today, is shedding an ironic tear.

And a good rule of thumb is as follows: in a free market economy, a government may be able to dictate pricing, but only: a) for a finite time, and b) at significant (though perhaps undefined) cost for having done so.

To me, this is what we are observing at present. With the political winds at his back and facing a life-or- death election in 12.5 months, Trump is operating a Command Economy. It won’t last forever, but it might enable him to skate through the midterms. Or it might not.

And in terms of the price we might pay, well, of course, it could take the form of a surge in Inflation, an economic concept upon which the government hopefully informs us it may be able to shed light in a couple of weeks. Or it could be something else.

But one problem it doesn’t solve, and which we’ll have to address at some point, is depicted in the following graph:

Raise your hand if you believe this is sustainable or will reverse itself on its own.

Didn’t think so.

But that is an issue for another day, my love. Meantime, we got us some trading to do. There’s money to be made and money to be lost.

But I reckon I’ll sit this one out.

Because the moon did in fact hit my eye like a big pizza pie. And the stars made me drool, just like a pasta e fasule.

And you know what that means:

Amore’.

That’s all we got. But l reckon it’ll do.

TIMSHEL

Lordie how I hate writing about politics and world affairs; would rather offer probing and nuanced insights into the nooks and crannies of the markets.

But the former is chockful of subject matter, while the latter is a content wasteland.

In each realm, however, our titular phrase applies. It is so concise a description of so much of what happens in our world that one would think that it dates back to my youth, when we mostly spoke in Sanskrit.

But even Wikipedia – my favorite website, now under the dual threat of political assault and the surging power of Artificial Intelligence – cannot identify a source earlier than a 2015 album of the same name — by a British post-punk producer named Samuel Kerridge.

Now, I had never heard of this Kerridge person, and, as further evidence of his selective appeal, it should be noted that he doesn’t even have a Wikipedia page. I did stream a couple of his tracks – including, of course, AO/NA, and, while I didn’t hate them, I can confidently assert that the album will never supplant any of the existing elements of (“Blonde on Blonde”, “Tumbleweed Connection”, “London Calling” and “LA Woman”) my personal, sonic Mount Rushmore.

But his titular sentiment is nonetheless, well, sentient. And here I reckon I’d be remiss if I failed to acknowledge the 2-year anniversary of that dainty Hamas attack on an Israeli music festival (and other targets), which (among other matters): a) caused the death of some 1,200 indigenous civilians; and b) somehow awakened us to the reality that the denizens of the southern portions of that country, rather than being the victims, were the transgressors in the episode.

Kinda makes you nostalgic now, don’t it?

It took roughly a week for the global political consensus to turn assertively against Israel, and “enlightened” thought has maintained this attitude over the ensuing two years. I have no doubt that the Israeli Defense Force has responded with all its substantial retributive powers.

But the vigor with which the world has taken offense has been somewhat frightening to behold. And, near as I can determine, no one is ashamed of this.

As we went to press with this week’s edition, there seems to be some momentum towards settling this thing. Count me as skeptical. I have long believed that if Middle East anti-Zionists do not wage war on Israel, they will turn their fire on each other, which they’d prefer not to do. Moreover, and particularly with the backing of most Western World nations, along with that of the entire Squad, Bernie, and our fabulous performing betters – including Ariana Grande, Mark Ruffalo and Angelina Jolie, they have very little incentive to bust out the branches of the ten million olive trees that populate the war-torn region.

Instead, it is in their interest to pay lip service to peace efforts, continuing to lob bombs into Zion, while burying their key military apparatus beneath hospitals and orphanages in order to paint the enemy as cruel, heartless savages, bent on sinful destruction and little else.

Serves Israel right for having been attacked two years ago.

And, by our thematic scorecard, it’s Offense oo/Shame 0.

Closer to home, there’s this whole government shutdown thing going on and it’s impossible to discern where we are with this unholy mess. This, like William Makepeace Thackaray’s “Vanity Fair”, is a tale without a hero. The straw man core of the dispute appears to be whether undocumented non-citizens are entitled to federally subsidized health care. Both sides appear to agree on this much – from a political perspective at any rate, the answer is a resounding “no”.

We can be certain of this because the Democrats are claiming that no such money will be so allocated (“Not. One. Dime”), while Republicans insist that the proposal contemplates the distribution of several hundred billions of taxpayer funds to this same cause.

Both cannot be correct. And I suspect that the answer lies somewhere in the middle – no direct subsidies but oodles of loopholes to get around this constraint. In other words, both sides are deeply offended and lack a shred of shame. And both sides are lying.

Meantime, I don’t mind stating that these infantile nomenclature designations for everything that either annoys Trump or gets in the way of his agenda are nauseating me. In this case, the designation of the standoff as the Schumer Shutdown is particularly vomitous — for the following reason.

The dude will be 75 this November but looks more like 90. Yes, he holds the title – oxymoronically — of Senate Minority Leader – nominally in charge of a caucus that pays him no heed, is more inclined to listen to Cory Booker or even Bernie Sanders (10 years his senior), and spending most of his time living in holy terror of being primaried by The Squad. He didn’t cause the shutdown for the simple reason that he didn’t have the juice to do so.

But gosh how clever these cute little nicknames are.

More to the point, though is how obvious it is that the government shutdown is a pretext for a serious skirmish in advance of the 2026 midterms. Both sides are bent on hurting, or at least embarrassing, their opposite number. Thus, instead of passing a resolution that would extend the deadline by 7 weeks and achieve little more than a can kick down the road, they have agreed to select this as the hill on which to kill or be killed.

(God Oh Mighty! Ain’t that some metaphor mixin’ to beat the band? I hope you’re not offended. I am ashamed. But not much).

Dems are betting on their ability to scare the public into believing that their health care is at risk, and, in all honesty, it’s not a bad bet.

Meantime, Team Trump is having more fun than a speedboat ride in cancelling projects designated for hostile jurisdictions and firing whole government departments that annoy or offend him.

On this, though, perhaps we can agree: the sequence is both offensive and lacking in all shame.

And in terms of the economy and the markets, neither characteristic has materialized

I’m less confident about the former, for the simple reason that this most recent nonsense has caused the suspension of economic data reporting. Thus, for the first time in my professional life, there is no Employment Report to analyze at the beginning of the month. Near as I can tell, Inflation statistics, otherwise due this very week, are cancelled as well.

At least we still have the Atlanta Fed’s GDP Now metric – even if I’m not sure why it hasn’t been cancelled like everything else. And it sure is purty:

Yes, GDP Now is still a thing – for now. A look at the explanatory notes, however, indicates that it is currently relying upon its own models, rather than actual government statistics, and that if they don’t re- open some key bean-counting departments soon, they may need to suspend operations altogether.

There are other matters that adhere to the AO/NA construct, including the widely reported episode where the Secretary of WAR (no longer DEFENSE as the latter has been deemed too sissified) summoning all generals and admirals to Quantico for a little fat-shaming. None present appear to have taken offense.

And then, of course, there’s the pending takeover of the Fed by the Executive Branch, about which we have already written so much. It is being done sans shame, and if anyone is offended, they’re keeping pretty quiet about it.

Maybe because, I believe, it is the key driver of the current, improbably extended rally. Which for the same reasons, is likely to continue.

And as for you and I, I believe we have gone too deep for either attribute to apply to our bond. Nonetheless, I feel some level of shame, which I am determined to convert into the actions we want and need. To carry on.

But I reckon it’s time to close. It’s probably best, for our own peace of mind to embrace the AO/NA vibe. Because it has always been with us and is unlikely to remove itself anytime soon.

And neither will its ideological companion – Entitled to Everything, Contributing Nothing.

But that, my friends, is a story for another day.

TIMSHEL

The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

William Butler Yeats

I thought I was back. But now I’m not so sure. So, let’s forget about my Second Act braggadocio from last week. Because the truth is that September got away from me. Almost entirely. As such, and in honor of my favorite poem, written darkly in 1919 – the aftermath of WWI and the tail end of the polio epidemic.

Call it thus, not a Second Act, but rather a Second Coming.

It seems, or so I’m told, that a number of significant proceedings may have passed me by this past month. So, I’ll rely upon all of y’all to tell me if the following events did, or did not, occur:

• Did somebody murder the country’s most well-branded young conservative, with a WWII rifle, from 200 meters away?

• Did the Justice Department really lay indictments down on the perfidious James Comey?

• Does it really now cost one hundred large to apply for an H1B visa?

• Did the entire British Empire recognize the Palestinian State?

• Did Trump tell the N. General Assembly that the whole organization is worthless (he has a point) sham?

• Did he actually appoint his Chief of the Council of Economic Advisors to a voting position on the Federal Open Market Committee (FOMC)?

• Did this clown really vote for an >150 bp cut at the last meeting?

• Did the Fed, nonetheless, make me look stupid by only cutting 25 bp?

• Are we really now only a couple of days away from another one of those annoying government shutdown psychodramas? YAWN.

And all the above notwithstanding, did our equity indices, entering the final two sessions of the month, put up respectable positive returns?

This, at any rate is what I find, as my beastly, ursine body awakens from an extended slumber. And, on balance, it is no more, and no less, confusing than my last images from these dominions ere I nodded off.

However, one might argue that the stakes are higher now than then. Summer is over. We are entering the fourth quarter. Otherwise known as the “money quarter”. The one which will determine (at least for some of us) whether or not we get paid.

Thus far, and from a market perspective, it’s been an interesting year – perhaps one of the more interesting ones of my overlong career. We entered the proceedings, whatever our political predispositions, in a nigh-giddy state at the prospect of the return of our heroic, capitalist-businessman- turned-television personality-turned politician’s return to the White House. Now, at last, or so we told ourselves, we can do some business. But something went wonky along the way. Oh sure, we came out of the gate strong, but a few weeks into the proceedings, our peerless leader not only co-opted trade policy but began managing it like some cross between Finnegan’s Wake and a Pink Panther movie.

Investors didn’t like this, and, by the early stages of Q2, the Gallant 500 was down an ignominious high single digit amount.

But as I wake, the G5 is showing a ~13% gain on the year – quite a turnaround from those early days of Spring, and what has caused this remarkable reversal is difficult to pinpoint. Trump scored some optically pleasing trade wins – as well as some victories in the realms of domestic and geopolitics. One could therefore fairly deduce that market participants were imbibing some orange kool aid.

Earnings were about as strong as any rational investor might’ve hoped. GDP clocked in pleasingly. The Jobs market showed some signs of fraying, but giving hope to one and all that the Fed might, at long last, cut rates. However, Trump wasn’t living on hope in this regard – preferring, instead, to exert his by now well-honed muscles — on the Central Bank. He threatened Powell within an inch of the latter’s life. More hawkish members of the Federal Open Market Committee began to either change their disposition or resign. He tried to remove one of these on legal grounds, and, while at present still thwarted, I wouldn’t take the over on her extended tenure.

He also installed his Chief Economist into the FOMC, dropping even the flimsiest pretext that he believes in Fed Independence. And I believe that before long, he will have taken over the whole organization. The first step of which will likely be the completion of his long-pined-for dispatching of Chair Pow. And if you doubt this, take a look at this clever little tidbit, posted yesterday by the Leader of the Free World, to a for-profit media outlet of which he is the majority owner:

I’m not sure that he drew this picture; mad props to him if he did.

Washington’s Farewell Address to the Troops it is not. Neither is it Lincoln’s Second Inaugural (“with malice towards none, with charity towards all”). As a eulogy, it falls well short of Marc Antony’s tribute to Caesar — as re-imagined by Shakespeare.

But you gotta give the big guy points for clarity. He’s drawn a bead on the Federal Reserve Bank of the United States and intends to take it down.

His immediate objective will be to dramatically lower interest rates. This is an entirely political calculation, based on the premise that lower rates will boost the economy, generating immediate bennies to the electorate, and that if Inflation surges, it will do so over a longer period of time – ideally to a point beyond the ’26 Midterms. After which, if his party retains both chambers of Congress, he’ll have a hall pass to do whatever he wants.

And if they don’t, he’s in for a passel of aggravation.

Either way, a bet on being long Treasuries across the entire curve looks to me like a solid one. And the market will like this. It already does.

Between these dynamics and the excess funding liquidity which has plagued us since 2008, it looks to me to still be game on. Valuations may not go into afterburner velocity here, but, absent the immediate appearance of the rough beast slouching towards Bethlehem, any material selloff will be arrested by those seeking to accumulate all available securities in a world where, relative to the demand catalyzed by all that QE, they are in increasingly short supply.

What worries me most at the moment, however, is the looming government shutdown. Oh sure, we’ve been through this sort of thing before – maybe a million times. But this round, somehow, seems different. The battle of the wills between opposing sides in the political debate seems nastier, more personal and less conducive to the type of give and take that the Founders intended. There are no good guys here. The Dems appear to wish to make a stand – primarily on the topic of health care spending. But there is little pretense that this is anything but an exercise in making the other guy look bad.

To quote W.B. Yeats – the centre cannot hold.

It will be difficult for either side to back down from their current positioning, and it appears to me that the Dems are taking the bigger political risk – willing to move forward with the shutdown unless huge medical subsidies are immediately reinstated. They already rejected a bid to extend the discussion a mere 7 weeks, and it looks to me like this indeed might be the hill upon which they are prepared to die.

On the other side, we can take it as a near-certainty that Trump is spoiling for this fight – if for no other reason than that he has demonstrated his preference to spoil for any fight. If armistice terms are not soon reached, he’ll start firing Federal workers by the truckload, and the other side may dig in – because they have few other alternatives.

I could see that getting quite messy – and in such a way as to displease the investor class. Ultimately, these things tend to resolve themselves, but if you’re looking for a near-term “sell” catalyst. This may very well be your ticket.

Absent that, I believe we’ll end this crazy year on an uptick. But just like Yeats’ bird, turning and turning in the widening gyre, if the falconer is out there, we can’t see him.

I reckon this is grim fodder for my own Second Coming. But I will strive to reclaim my ceremony of drowned innocence.

I can only do this with you. And no one else.

Turning our lack of all conviction into a passionate intensity will be quite a challenge. But we have no other alternative. It’s our hour. Or that of the rough beast.

So, let’s be reborn, shall we?

TIMSHEL

Well, I’m back. After a two-week absence – the first such breach of protocol in this column’s nearly 2- decade history. Prior to this, no matter what else was going on, I. always represented.

Where was I? What was I doin? I ain’t sayin’. Other than this: IFYKYK.

Call it my Second Act — yet another refutation of that ill-formed observation, attributed to F. Scott Fitzgerald, that there are no such scenes in American lives. Perhaps this was true in Fitzgerald’s time. But that was a century ago. And, in the interim, I’d (oxymoronically) suggest that we have evolved in such a way as to now enjoy more Second Acts than first runs.

And this is true across virtually all realms of human operation. Let’s consider some examples, shall we?

The first which comes to my mind is Martha (M. Diddy) Stewart – a dewy 20^th Century fashion model who built an entire industry around the concept of (what?) tasteful living. It all came crashing down in 2005, when she was (ridiculously in my judgment) convicted if Insider Trading – on the skinniest whisp of evidence I’ve ever encountered. She went to prison, where the other inmates loved her so much that they hung the above-mentioned Diddy appellation on her. And when she got out, she, I believe with great humility, began rebuilding her empire. It worked. She sold it for a shit pile, and just a couple of years ago, made history again by becoming the first octogenarian to pose for the Sports Illustrated Swimsuit issue.

Sports? Consider the sagas of Kurt Warner, Warren Moon, Baker Mayfield, Muhammed Ali, or Michael Jordan. Tommy John had a virtual pitching arm transplant and returned to produce his greatest mound- based glories. Bill Walton – so thoroughly crippled that he could barely hobble his way to 200 Dead shows he attended the previous year, summoned enough mojo to join, and, at minimum, inspire, perhaps the greatest season in NBA history — the 1986 Boston Celtics championship run.

And speaking of The Dead (and of music generally), they went from Summer of Love Sensei in’67 into relative obscurity in the mid-70s – only to re-emerge for a 15-year run as the top grossing act on the touring circuit. Fleetwood Mac has reinvented itself so many times that it is difficult to keep track of them. Before he died, Johnny Cash dropped several successful alt-pop records with the improbable assistance of Nine Inch Nails and the Violent Femmes. Lou Reed transformed himself from the leader of the magnificent Velvet Underground into an edgy but nonetheless commercially successful solo artist.

And then there’s Def Leppard – a marginal band on their best day but distinguished by the following points: 1) their lead singer stole my uncle’s sister-in-law from the late Ronnie James Dio. Married, divorced her and now presumably pays her substantial alimony; and 2) they retained their founding drummer after the latter lost a wing in a car crash – prompting perhaps the greatest rock and roll joke of all time (Q: what has nine arms and sucks? A: Def Leppard).

Closer to my own professional domain, comebacks are legion. Jamie was the deposed heir-apparent to Sandy, having been rejected in favor of Sandy’s daughter. Brick by brick, he built a banking colossus and now reigns as the indisputable king of depository institution overseers.

My longest-standing client spawned itself out of the ashes of an earlier-rendered multi-strategy hedge fund, which blew up in a highly public fashion not long after M. Diddy was released from prison. The “new” platform (now in its 18^th year) is bigger, badder and more profitable than its siring organization.

After seeing his firm indicted, convicted and banned from the Money Management biz, my old boss achieved a reversal of this judgment, re-opened his fund to outside capital, and, not only has crushed it ever since, but manages to find time to run a Major League Baseball franchise on the side — that he purchased with his investment profits.

Finally, in the dominions of politics, we can present perhaps the greatest Second Act in all recorded history: the return not only to prominence, but towards absolute power, of one Donald J. Trump.

While a matter of overwrought, over-prolific public record, for our purposes, some context here bears reiterating. That as recently as, say, 2.5 years ago, he stood, a wardrobe-less, deposed emperor, twice- impeached, four times indicted – 88 counts in all (and probably more on the way), 34 of which he had been found guilty. He’d been fined to the tune of ~$500M. Under what amounts to only slightly modified circumstances, he might right now be cooling his heels in federal prison.

Perhaps his last, best hope was to recapture the White House, and we all know how that played out.

Most of us would have deemed this a sufficient self-vindicating Second Act performance, but as is more apparent every day, we’re dealing with a different breed of cat here.

It appears, moreover, that seeing as how he’s back in town, he might as well make the most of it – issuing swift beatdowns to his political enemies, using his office to achieve unfathomable personal enrichment, and assuming Executive Powers never even imagined by the framers of the Constitution.

I wrote about this extensively during the last portions of Act 1 (Scene 5?) and am not over-inclined to relitigate much of what was covered at the time. Suffice to state that the pattern continues. And few paying attention can doubt that locking horns with 47 comes at a significant price.

Some of it is annoying, some worse than bothersome. I was, for example, irritated by his “suggestion” that the SEC reduce Corporate Earnings reporting requirements from once a quarter to twice a year. Completely apart from being a stone-cold grandstand play, the idea is entirely counterproductive. Though the New York Real Estate market may fail to recognize this, shareholders are the owners of corporations, entitled, as such, to more, rather than less, information about their holdings. This does not imply that they should have the ability to strike and publish a daily P/L, but what benefit is served by reducing the frequency of their public disclosures? And to whom? And to what purpose?

Moreover, to my way of thinking, the ability to operate in such a way as to publicly and formally share results with the investing public every three months is an excellent measure of operational competency. Those enterprises that can do this (particularly profitable ones) can only advance themselves by dhering to this time-honored practice.

And finally, even if Trump muscles something like this through, my guess is that few corporations will avail themselves of this enhanced latitude and will instead continue to report 4 times a year. Because I believe that investors will punish them if they don’t. And one can hardly blame them for so doing. A company that reports once every six months is operating with more opacity than a quarterly reporter, and, for this reason, compels a higher risk premium.

But all this is small potatoes compared to the latest stunts pulled by the Administration on the Federal Reserve. Though stopped by the Supreme Court (for now), they did all in their power to remove dissenting Governor Lisa Cook from her post – ahead of last Wednesday’s FOMC meeting. And the Committee itself cut only 25 bps.

But they were just getting started. The Big Guy filled the open seat with Steven Miran — his own Chairman of the Council Economic Advisors. For form’s sake, Miran took a “leave of absence” from the top Economic advisory post in the Executive Branch. But please. Trump just installed his top econ guy as a voting member of the Fed. Of course, he was there for Wednesday’s vote and, as indicated in the following dot plot, he made his presence felt:

I draw your exclusive attention to the left-most data set – indicating the current-day preferred levels of Committee members.

For the most part, they present themselves in a tight band between 4.0% and 4.5% (we’re currently at 4.25%).

Except for one – which clocks in at < 3% — over 100 bp below current levels.

Steven I. Miran. Once and future Chairman of Trump’s Council of Economic Advisors.

Yup, T-bear is muscling in on the Fed, and, for better or worse, will soon control the whole shebang. Meantime, there’s been a great deal of pointy-headed debate as to whether, and if so, why, Fed Independence is important. Its formation documents are vague on the issue. And, for that matter, one might question the need for a Central Bank in the first instance. Hamilton created the First Bank of the United States in 1791 – largely to consolidate the Revolutionary War debt of the former colonies, and under a 20-year charter that was not renewed in 1811. The country then managed to muddle through for more than 100 years before the modern-day Federal Reserve was established in 1913.

But to my way of thinking, if we’re to have a Central Bank at all, it must have a measure of separation from the grasp of elected officials – lest it become little more than another tool in someone or other’s political arsenal. At which point, any pretense of dainty, anachronistic objectives such as the dual mandate of maintaining price stability and full employment become little more than cruelly farcical ruses. Instead, it evolves an instrument of pure political tactics – a role it is well on its way to assuming right now.

Trump wants lower rates, and by God, he’s gonna get ‘em.

And after that, any pretext of monetary policy decoupled from our perpetual game of Thunderdome politics will have vanished. It kind of reminds me of the scene in Goodfellas, when Henry convinces Paulie to take a stake in that restaurant. After which the dining establishment became little more than a fencing operation, which, after the last dollar had been squeezed out of it, you torch the place.

But I reckon there’s a titch of good news in all this. Rates – particularly at the long end of the curve – are coming down – as impelled by our overseeing betters. And with those lower rates, a period of extended (if finite) valuation expansion.

Plus, I’m back. In Round 2 and energized by the concept. Heck, when I contemplate the possibilities, I can even anticipate a Third Act. If so, I’ll take my inspiration from The Dead, whose Second Act ended (for what I believe should’ve been all time) with the demise of Jerry. But over the last several years, the remaining founding members have re-gathered themselves, and formed an enterprise that I believe generates more income in a month than the original band could produce in a year.

Round 2 will be OUR round. Justifiably earned by us for having never properly experienced Round 1.

Fitzgerald, on the other hand, died at age 40 – drunk, broke and discredited. He has since experienced a magnificent revival. But he never lived to enjoy it.

Which is a shame, because it might’ve changed his mind about Second Acts, and, for my sake, and ours, I hope that it would’ve.

TIMSHEL

“Now I suppose you’re thinkin’ I’ll bet he is sinkin or he wouldn’t get in touch with me”.

Rod Stewart and Martin Quittenton

Well, you’re half right anyway. I am sinkin’. But not get in touch with you? I thought you knew me better than that. Sinkin’ or risin’, I’ll always be in touch.

Meantime, having nothing to do on this hot afternoon, I’m trying to write a line, an elegy — a poem of reflection, a lamentation for the dead. For Beppie. Who we lost last week (ironically, on the 30^th anniversary of the death of underappreciated VU guitarist Sterling Morrison). Not being a poet, I’ll do the best I can in terms of lyrical flourish. As a start, I’m lifting quotes from my favorite song: “You Wear It Well”. The one I danced to with my daughter. At her wedding. Where Beppie was an honored guest.

Beppie had been my friend for more than 40 years. But we didn’t start out that way. Our beginning, marked by religious and philosophical differences, along with optically conflicting agendas, was, shall we say? A titch icy? But ice melts, and when ours did, a warm friendship emerged. One that was informed but went beyond her being my mother-in-law, grandmother of my children, and great grandmother of my four grandsons. When each these beautiful laddies was born, she would call me with congratulations. To which I always responded:

“Beppie, I couldn’t have done it without you”.

Which was true, biologically and in other ways.

But seeing as how, in addition to being an elegy, this is a space is devoted to all matters relating to the markets, you should be made aware of this:

Beppie was the best damned trader I ever came across. And I’ve worked with some stone-cold legends – Stevie, PTJ, the current Treasury Secretary among them. Over the past ~40 years (or any subset thereof), her track record obliterated theirs – on both a nominal and risk-adjusted basis. She traded exclusively prominent American stocks, long only, with no tools at her disposal other than her own wits and the materials provided to any schmuck of a retail investor that cares to open an account.

Yet never a down year. And overall average of ~25%.

How did she do it? Beats the hell out of me. But what I can to discern is that much of it is owing to her having developed a comprehensive, well-adapted methodology, and sticking to it. Which is a great deal more than I say about any number of professional investors with whom I have had the pleasure to interact – across my (arguably over-long) career.

She paid attention to trends – particularly in Retail. Read every research report upon which she could get her hands. Watched the markets on a tick-by-tick basis. Always meticulously planned her time horizon and price entry/exit points.

Plus, it must be stated, she just had that certain je ne sais quois. That indefinable edge. Like Stevie. Like Paul. You didn’t want to sell what she was buying. Or buy what she was selling.

And, other than routine performance setbacks which investors of her pedigree know to be opportunities in disguise, I never knew her to fail.

About than 10 years ago, I gave her some of my money to manage, and let’s just say that them Bejaminz proved prolific, were fruitful and multiplied. In the wake of her passing, I am left, from a market perspective, with two primary regrets: 1) that I didn’t give her more of my cash to invest; and 2) that she is no longer here to work her portfolio management magic for me.

In pertinacious turn of fortune, I was not entirely unprepared for this. Beppie had been sinking for the last several months, unable, all year, to trade. So, I’ve been forced to fend for myself for some time. I left the portfolio alone until a few weeks ago, when, on my own (and I am extremely proud of this accomplishment) I managed, somehow, to execute a transaction – specifically the sale of some NVDA, which represented a disproportionate percentage of my overall risk profile.

Which goes to show that even with the gathering of the Great Beppie to the dust of her forebears, the world marches on. Each of us is assigned our time slot, and perhaps hers had fairly run its course. Even for me, matters are moving beyond the scope of my easy understanding.

Consider, for instance, that at long last, the number of listed ETFs now exceeds that of plain old stocks:

I’m having a hard time understanding how this can even be a thing. But that, I reckon, is beside the point.

And as for Beppie – she was always a single stock kind of gal – none of this ETF monkeyshine for her!

Thus, perhaps in some perverse way, the heavens were sending signals to her that her time had passed. As it will, eventually, for all of us.

The logic of more and more of what is transpiring before our eyes escapes and worries me. But not much of this is immediately revelatory.

AI models are assigned culpability for multiple suicides, murders and other breakdowns of decorum. Is genocide next on the menu?

U.S. taxpayers, widely known as the world’s greatest technology engineers, are now in the microchip production business. State governors seek to outflank one another in gerrymandering frenzy – not disguising, in fact celebrating, the undiluted political agenda driving these efforts. Federal troops have subsumed local police in multiple jurisdictions – including our nation’s capital. More such activity is on the horizon.

Annoy Team 47 Insiders and you get busted down to the ranks, demoted, for instance, from running the IRS to being named Ambassador to Iceland. Run a department that pumps out some statistics inconsistent with the prevailing political narrative and you get disappeared altogether.

What concerns me most acutely now, however, is the emerging takeover of the Fed by the President and his minions. At this point, one can neither deny nor ignore their acquisitive intent. Their Goon Squad is digging up dirt on FOMC voting members — anywhere the earthy stuff may be found — and is well on its way to co-opting the entire commission.

But this, to me, is simply the prelude to a plan the ultimate objective of which is to subsume the Central Bank into the Executive Branch. And I shudder to contemplate the near and longer-term implications. As a pseudo independent entity, lord knows it’s political enough. Place it inside an administration – inside this administration – and we can forget about any pretense of sound custodianship of the money supply and Interest Rate Complex.

If a Trump-controlled Fed operated in any mode like their management of International Trade Complex, we can anticipate the shifting of monetary regimes with the approximate frequency at which the Big Guy changes his socks. It will be weaponized to punish enemies and achieve tactical political ends. If we get lucky, the issue will be fought out in the courts, which it almost certainly will. Like tariffs.

Won’t that be fun?

And, when this outfit gets run out of town, its successors will be worse.

The implications for disruption of the management of the Capital Economy are breathtaking to contemplate, and, under the circumstances, it’s small wonder that Beppie chose this moment to take her departure from the scene.

The carnage is, at present, difficult to see clearly. Equity Indices, while ginning up a modest sell-off in advance of Labor Day festivities, reside nonetheless at proximate all-time highs.

Our friends at the Atlanta Fed, goosed Q3 GDP estimates by a big slug just this past week:

This bump notwithstanding, though, futures markets regained their conviction about a September rate cut, again throwing off a probability of same to nearly 90%.

We will find out in a couple of weeks, and lord help us if they’re wrong. But they’re not. The cuts are coming.

But it’s important to remember, that by a wide margin, September is the worst-performing month on the investing calendar. I don’t say that 9/25 will necessarily contribute to this dismal tally, but it ought to be, at any rate, volatile. With virtually all roads leading to the next FOMC meeting on the 16^th/17^th. In addition to learning the next step in the Fed Funds Journey, it will be interesting to see how the Committee is constituted, or if, indeed, there’s any Committee left at all.

But now my coffee’s cold and I’m getting told, that I gotta get back to work. So, when the sun goes low and your home all alone, think of me and try not to laugh.

And spare a thought for Beppie. Now in the palm of the Good Lord’s hands.

And whatever else can be said about her, this much is true:

Wife, mother, grandmother, great grandmother, sister, aunt, friend, businesswoman or investor, she wore it well.

TIMSHEL