It’s on. Let the ’24 stag party rage all year. Or (preferably) not.

This past week brought macro tidings which had all the earmarks of stagflation. The two most widely monitored inflation metrics took everyone by surprise by coming in hot. Meantime, measures of economic activity such as Retail Sales and Housing Starts blew unpleasingly frigid.

Slowing economic growth (stag) and rising prices (flation) are thus ascendant. I am always leery of reading too much into one month’s data, particularly in the current era — replete as it has been with counterintuitive, cross-winded content, but if one were to extrapolate, the clinical term for this construct is stagflation.

I’m not in the prediction business, so I will reserve judgment. But the investors have weighed in with their short-term verdict – by throwing a party.

A stag party.

Risk assets, undeterred by mellow-harshing data releases, have continued their upward ascent. Corks is a’poppin’ on Wall Street. Glasses are being raised, with an accompanying variation on the phrase first attributed to Roman Emperor Claudius:

“For those about to buy, we salute you”.

The soiree’ has even designated the logical master of the spin machine in one DJ D Sol, who, in a nod to numerologists everywhere, managed to cop himself a 24% raise in a year where the firm he leads – Goldman Sachs – experienced a 24% drop in profits.

And this in the early days of ’24.

Again, it is premature to hang the stagflation handle on the economy, but I think we can confidently state that a cooldown from ’23, if it comes to pass, would be in some sense understandable. Last year, GDP growth exceeded 3%. Inflation tumbled. There was other good news, perhaps best summarized by the charts in the accompanying link, issued by the White House itself, and which (it must be admitted) reads like a Biden campaign flier.

https://www.whitehouse.gov/cea/written-materials/2023/12/19/ten-charts-that-explain-the-u-s- economy-in-2023/

There’s little doubt that ’23 was a helluva year for the U.S. economy. But it certainly raises the bar for the current solar cycle, now, improbably, 15% in the books.

One might thus be forgiven for fearing that economic conditions can only deteriorate from here.

All the way to stagflation? Who knows? But the markets don’t seem to be terribly concerned. They paid obeisance to the to the nasty CPI/Retail Sales figures, rudely selling off all day Tuesday. By Thursday, we were back at new highs. Friday’s PPI and Housing Starts data put some renewed pressure on stocks. But it says here that the partiers will gather themselves over the next couple of sessions and belly up, yet again, to the buying bar.

And, while there, the imbibers may wish to hoist a Saki to the Nikkei 225 – now a skinny 1% from all- time highs last breached a generation and a half ago. Back in ’89. When I was still young. And cool:

Meantime, on this side of the Pacific, the Inflation numbers were so jarring that it caused no less than Larry Summers – a recognized oracle on these matters – to admonish the spellbound multitudes that the next move by the Fed may be to raise, rather than lower rates. If so, it would be quite a turnaround from the vibes they was layin’ down as recently as December, when the main speculation was whether the Central Bank would issue a baker’s dozen cuts, or the full smash of 967 of them.

Putting this all together, we may be compelled to consider a scenario where the economy weakens, Inflation re-emerges, and the Fed does nothing to ease, may in fact, abet, our ponderous burdens.

Of course, though, investors have an Ace up their sleeve, poised for deployment at the casino adjacent to the DJ D Sol Stagflation dance floor:

NVDA – a three-bagger over the last rolling year and trading at an impressive 20x its 2019 valuation, reports on Wednesday. Here’s hoping they can meet or beat already ludicrously lofty expectations.

If so, we will ask DJ D Sol to kindly kick up the volume and pump up the jams.

If not, well…

In result, I am of mixed sentiment respecting market conditions. Somewhat ominously, corporate chieftains are trippin’ all over theyselves to dampen expectations. And the must know something, right?

So, yes, I’d be surprised if underlying capital economy circumstances are able to sustain/build upon last year’s Goldilocks construct. Beyond the possibility that the CEO earnings partiers may finally fall under the table, a whole lotta stuff could go wrong. We might even stagger into stagflation. And this is to say nothing of the kettle-boiling situation in the Middle East, the looming election battle between two punch drunk, scumbag has-beens, the Damocles Sword of Commercial Real Estate credit…

…and so on and so on and shoobie doobie do.

Conversely, and for the bajillionth time, there remains too much cash chasing too few investible assets for investors, absent a true catastrophe, to turn tail and head for the hills.

This week, after we honor the POTUSes, and setting aside the life-and-death matter of NVDA earnings, there’s little on the docket of import. Moreover, data flows diminish after that, as they always do in the back half of a quarter.

There are, of course, the hazards associated with unscheduled data flows, which are seldom of a nature to gladden our senses. But this is ever the case, and, if we can’t move forward with associated serenity, we perhaps have chosen the wrong existence. Or, at minimum, the wrong profession.

So, while we may look back at this fast-disappearing winter as the beginning of an unpleasant interval of stagflation, I prefer to take a more constructive view.

Let’s just enjoy the stag party. And call upon DJ D Sol to do what he alone knows how best to do.

TIMSHEL

Let’s first dispense with a couple of pieces of important business.

Today marks the 100^th anniversary of Gershwin’s “Rhapsody in Blue”, and I ask you, whether Gersh is your jam or not, to join me in celebration.

It’s also the 215^th anniversary of the birth of A. Lincoln. Who was A Dude by any measuring stick.

Meantime, as we say goodbye to an exciting NFL season (albeit one with an unsatisfactory ending), I’d like to take this opportunity to shout out also to Steve (Mongo) McMichael for his long overdue induction into the Hall of Fame. It came not a moment too soon, as poor Mongo doesn’t (it must be allowed) look to be long for this world, suffering, as he is, in what appears to be in the final stages of Lou Gehrig’s Disease. With admittedly questionable taste, I offer the following before and after images:

If indeed his hours are dwindling down to nil, he will, at any rate, enter the Pearly Gates as a fully credentialed, Gold Jacketed member of the NFL Hall of Fame. And what a ride to get there. 14 seasons in the NFL; 5 as a Pro Wrestler. Alligator wrestler and rattlesnake hunter throughout, with the only black mark to his name being that he spent the last season of the former career with the Green Bay Packers.

But of course, his legacy will forever be tied to that of the magnificent ’85 Bears – almost certainly the greatest team ever. In addition to winning it all that year, they are best remembered for having created that unfortunate “Superbowl Shuffle” video – a project in which Mongo laudably refused to participate.

Those Bears at that time looked unstoppable, with multiple championships there for the asking. But they only got the one, have made it to the big game on a single other occasion (a losing effort), and have been perpetually breaking the hearts of their fan base for most of the ensuing 40 years.

There’s an important risk management lesson here, of course, which is that even the most formidable of hosts has a finite reign. We’re in the midst of an historic market run, having just completed what I am informed is the strongest rolling 15 weeks period in financial history.

It is, for lack of a better description, a Mongo Market. Its QB-stomping/rattler grabbing ways, will, at some point, have run their course, and we will be compelled to pick up the pieces in the aftermath of its grandeur.

But I don’t see nothin’ on the immediate horizon to stem the tide. Last week, in keeping with the general lethargy we NFL fans always feel in the 14-day break between Conference Championships and the Big Roman Numeral Extravaganza, there was little of consequence to report. Yes, the earnings parade marched on, but it featured none of the truly flashy companies that have so captivated us for so long. Important enterprises are many of these, but from a factor risk perspective, they are little more than useful backbenchers — akin to former ’85 Bears like Ron (Chico) Rivera.

Macro data was also back benching and decidedly a yawner.

Our equity indices nonetheless set new records, and, notably for the numerologists among us, the Gallant 500 for the first time ever eclipsed the threshold of 5,000. Back in the deuce, they used to give out baseball caps and that sort of thing to celebrate these milestones, but apparently, we now dwell in a more sober era.

Next week, in addition to the continuation of CEO podium turns, brings tidings of Inflation and Retail Sales. Not much likely, I think, to stem the tide of the rally.

Because the world is figuratively drowning in cash, and, if the Inflation Beast is truly soothed, there’s nowhere to place the (Detroit?) lion’s share of it other than the capital markets.

This I see as the Irresistible Force of the Capital Economy. The Immovable Object: excessive, unsustainable borrowing levels. There’s lotsa talk about this, both happy and concerned.

Indeed, deposit-based lending institutions (banks) are most certainly better capitalized than during the last fiasco and probably have more rigorous underwriting standards. There is, in addition, great comfort derived from the portion of the funding now being provided by Private Credit, which certainly has advantages over banks — taking such forms as locked in capital, and, maybe, smarter and better incentivized custodians at the helm.

Well, perhaps, but I find it difficult to leap to a place of comfort sufficient to offset my concerns that overall indebtedness is approaching 3x the levels it reached in those pre-GFC days of 2007. I also hasten to point out that the first prominent shoe to drop in that crisis was the collapse of two levered credit funds ensconced in the bowels of then-soon-to-be-toe-tagged Bear Stearns.

I don’t think that the world’s borrowers, all the way up the ladder to the United States Treasury Department, can reasonably be expected to pay back all they owe to The Man.

Something’s gotta give.

But probably not yet. And maybe not for a good while. Because credit bubbles take a very long time to reach bursting thresholds, and, given the bloody mess that said bursting evokes, interested, empowered parties move heaven and earth to stave off the evil hour.

And until the reckoning arrives, the rally is likely to continue.

So, y’all have my sanction – for now – to do the Superbowl Shuffle. Mongo sat that one out because at the point of production, the Bears had won nothing. They did go on to cop their rings and entered the ’86 season poised to shuffle on through. Their defense actually outperformed the ’85 crew.

But problems ensued. LT was raging in the Meadowlands. Joe Cool out in SF was reaching his Jerry Rice- aided peak. Still and all, Da Bears were cruising high heading into Thanksgiving Week, when a Packer thug named Charles Martin slammed McMahon to the turf, in what still stands out as perhaps the dirtiest play in NFL history.

It effectively ended the former’s punky career. And the Super Bowl Bears faded to black.

The intervening years have been less than kind to many of the Shuffling Crew. Sweetness died in ’99. Safety Dave Duerson offed himself in 2011, rendering him the poster boy for CTE brain damage.

McMahon suffers from the same ailment, but shoulders on.

Fridge Perry is broke, bewildered and wheelchair bound. Corner (L.A.) Mike Richardson was arrested 21 times for narcotics and now faces a murder rap.

The Bears have plowed through 8 General Managers, 10 Head Coaches and an astounding 45 starting QBs since that dazzling night in New Orleans. Their ownership remains in the hands of its founder and his progeny.

I hold greater hope for the team right now than I have for quite a while. They are gonna build a new and proper stadium. Old lady McCaskey, now 102, can’t live forever, and her 12 children will certainly sell the team to an individual or entity better equipped to operate it successfully.

And I take the dying Mongo’s enshrinement as yet another element of Good Karma. Gods be pleased, maybe he can survive to witness his induction ceremony in August.

But I can’t help looking back wistfully at that ’85 team. At what they accomplished, and, over the longer course, at what they failed to achieve.

Somewhere in there is a message to present-day toilers in these Mongo Markets, but I won’t spell it out for you. If you know, you know. And if you don’t…

TIMSHEL

Truly, I do not mean to be obtuse here. Most of you know about the Raw Dog. Presumably, though tragically, many of us have ridden it more than once – to the potential detriment of our health and reproductive objectives.

So be it.

The Raw Dog thus abides, nay, pervades, across many realms of our existence. I got to thinking about this after having taken my prized 1945 Martin in for some repairs at my favorite guitar shop on the Upper East Side. The Brothers (yes, the Brothers) did a fine job. The thing looks and sounds great. But I had brought it in caseless, and was prepared to depart with it, in the rain, in the same condition. The Brothers would have none of it, or, as one of them put it to me “Dude. It’s a 1945 Martin. You can’t Raw Dog it”.

So, they guilted me into buying a $200 case for my Merry Martin. And I bless them for it. Raw Dog dodged.

I also been Raw Dogging it for more than twenty years with one of my key business vendors, and recently paid the price for so doing. One of my processes went off kilter and I accidentally requisitioned volumes many orders of magnitude above what I needed, some of it pertaining to content that has not been relevant since the waning days of the Obama Administration. They hit me with the full bill and were in no ways inclined to consider an adjustment. Perhaps I should thank them, because, though a costly lesson, they have compelled me to consider eschewing the Raw Dog altogether.

And, owing in part to these idiosyncratic elements of happenstance, I have become increasingly worried about what I believe to be excessive Raw Dogging in the realms of investment.

The most prominent of these, of course, is the Raw Dog ride we’ve all taken in this era of easy money. Those Raw Dog last gen bankers heroically did all in their power to destroy the financial system about 20 years ago, and nearly succeeded, as we all are aware, in 2008. Then, the Fed stepped in, and, in the intervening decade and a half, have increased the Money Supply by ~2.5x, and their own (now nominally dwindling) holdings by a factor of 8. In result, the Gallant 500 is (from its lows) a 7 Bagger:

Col Naz bottomed out at a titch above 1,000 just before Thanksgiving, 2008, with the Fed Effective Rate at 0% and its beggarly Balance Sheet footing to just under $1 Trillion. Quantitative Easing began the following March. On Friday, Nazzy finished at yet another all-time high of 17,643. The math, for the moment, is beyond me, but even those who don’t own a calculator can see that this is a pretty hefty return profile.

The unadorned pooch ride to untold riches for the select-few, on the backs of the uncooked canines that run our Central Bank, is enough to make me weep with joy.

So, with Inflation at any rate statistically tamed, it is small wonder that said riders were now near deliriously anticipating a return to Raw Dog easy money, taking the form of rate cuts and perhaps even a termination of the viciously cruel policy of Fed Balance Reduction.

But then Chair Pow took to the podium and broke everyone’s hearts by barking out that while the next moves will be easy side up, anyone thinking that the festivities would commence before Spring at the earliest should think again.

Well, of course, the mutt riding mob threw an infantile temper tantrum, unthinkably selling off stocks in the last 90 minutes of Wednesday’s session to the indecorous tune of > 1%.

And this is when I really started to be fed up with the Raw Dog rally. Because, why on earth would the Fed even consider cutting rates in, say, March? Inflation is down, the economy is pumping along at a steady growth rate. Jobs are plentiful (if somewhat less than glamorous) for anyone who cares to hold one.

The market is a rocket ride.

The Fed might cut rates soon – if for no other reason than it can. But what benefit, other than further pumping up already-engorged asset prices, would it bestow? And, though wildly imperceptible, something could go wrong with the strategy. The economy, for instance, could overheat. Perpetually over-extended debtors, busy setting issuance records in these early days of ’24, could go on an incrementally unsustainable borrowing binge. Something could blow.

Yes, it’s unthinkable, but not impossible.

So, the selloff reminded me of the kind of tantrum one of my darling grandsons would throw if denied a second ice cream cone. Like puerile investor hissy fits from days gone by, however, the act wore thin quickly. The Fed wasn’t to be scared out of a judicious pause because a few overfed spit ballers sold some stock. I didn’t believe it would last. And it didn’t. Markets recovered approximately half of these reversals on Thursday.

And the sheer folly of an imminent rate cut was reinforced on Friday, with a blowout jobs report that not only obliterated estimates of newly created gigs, but also showed meaningful growth in wages and other bennies.

So, by Friday, risk assets had recaptured their lost ground (and then-some) from the foot stomping selloff we endured on Wednesday afternoon. Then, the Raw Dog Tech Titans began to weigh in with earnings. Zuck was able to salve the wounds he suffered from the grandstanding assault he received on Capitol Hill (aka Raw Dog Roundtop) by watching his stock trade up ~20%, adding a cool $28B to his wealth count by the following morning. Maybe he should seek to testify before Congress more often. META has risen from 90 to nearly 500 in approximately 1 year. Retail Raw Dog AMZN also blew out, while AAPL disappointed nominally, and now languishes towards the back of the pack.

And, unless my ears deceive me, I believe I hear some barking mongrels in the distance. There are still earnings to howl through. We’ve a week’s respite ere the next round of inflation statistics assault our senses, but the time will go quickly.

Most assuredly, there’s epic geopolitical Raw Dogging from D.C. to Damascus. And in terms of domestic politics, well, I don’t even wanna think about it. The 2020 South Carolina Democratic Primary unleashed the Raw Dog sthat obliterated Bernie and elected Biden. This year, the Carolina Canines made not even a pretense of wrapping their packages and merely gifted their Palmettos to Bull Goose Raw Dog Joe. Raw Dog Don is set to win the state and lock down his nomination, trouncing our last, desperate firewall: former Governor/Favorite Daughter Nikki in consequence.

The City of Miami just concluded its annual Hedge Fund Week sequence. From what I hear, there was a great deal of Raw Dogging throughout, but perhaps the less said about that the better.

The NFL Conference Championship Games featured Raw Dogging at its most extreme, resulting in less favorable outcomes relative to my rooting interests in each case (Note to RD Campbell: I admire your aggressiveness on 4th down, but up 14 with 9 mins left, you gotta take the points). This sets up Superbowl LVIII – to be held in the Global Raw Dog Capital of Las Vegas,– as perhaps the Raw Dog GOAT.

So, I fear that the rooting out of the Raw Dog will be a somewhat quixotic task, and, in truth, I do not wish to eradicate it entirely.

To wit, I asked The Brothers what they thought my heretofore caseless Martin was worth in today’s market, and they told me between $15K and $20K. I paid about a thou for it 20 years ago, and have never, till the above-described episode occurred, kept it in a case. True, the percentage accretion falls just short of that produced by Col Naz, but it nonetheless is the best return on investment I’ve ever achieved. It’s only a paper gain, however, because, as I told The Brothers, I never sell guitars; I only buy them.

So, I can’t say I want to kill off the Raw Dog entirely, for either myself or my readers.

Let’s just go easy now, shall we? Because not only do them naked pups bark, but they also bite.

TIMSHEL

Are you crying? Are you crying? ARE YOU CRYING? There’s no crying, there’s no crying in baseball. Rogers Hornsby was my manager, and he called me a talking pile of pigshit. And that was when my parents drove all the way down from Michigan to see me play the game. And did I cry? NO. NO. And do you know why? Because there’s no crying in baseball.

A League of Their Own

OK, so I’m dipping yet again into an over-drained quotation well, and, worse yet, opining upon a brutally over-reported topic. The quote is one of the best written, best delivered lines in sports-based cinema. I especially love the part about Hornsby, who batted .428 in 1922 – a threshold that has not been reached since, and who led the 1926 St. Louis Cards to World Series glory as a Player/Manager. No doubt he was a tough ol’ cuss, who could have easily hurled the above-referenced insult at an errant player.

But I don’t much like baseball these days. Lost interest maybe 25 years ago. Besides, this here note is about football. As the NFL season winds to dramatic finish, with the following taint hovering o’er it.

Someone, anyone please stop the Kansas City Chiefs. Pronto. Before it’s too late to do so.

On balance, I got nothin’ against the Chiefs. Apart from my passionate rooting interests (Da Bears), I tend to empathize with teams that display humility rather than arrogance, ideally from metropolises that bear the same qualities. Never been to Kansas City. But it seems like a nice town, where folks tend to mind their own beeswax, stoking up their Webers, filling their bellies, and going home.

So, over the years, I have had nothin bad to say about the organization. But they began to jump the shark with those Allstate commercials, running on endless loop, featuring Mahomes, the Walrus-like Coach Reid, and the actor they hired as straight man. Them and (the undeniably fetching) Lilly from Verizon have made football almost unwatchable. After all, a guy can only take so many bathroom/beer/food breaks to avoid commercials.

But matters devolved from there, when you know who started dating you know who. The world lost its mind. Suddenly Kelce and Swifty were everywhere, and it didn’t make for good football. I suspected, and continue to suspect, that both these ubiquitous icons will suffer professionally from their globallybroadcast, never-ending coochie coochie coo. Again, I got no specific beef with either of them. Kelce is a helluva Tight End, who has, by all accounts, earned everything he’s got. Swifty doesn’t bug me much either. No, she’s not my jam, but I sort of view her as a latter-day Brian Eno.

But God Oh Mighty, this past Sunday, they took it too far. The Chiefs were playing a tough contest against the Buffalo Bills, with a ticket to the AFC Championship Game on the line. Sometime in the first half, Mahomes found Kelce for 6.

Then everything I consider holy dissolved before my wondering eyes. For what did they witness but Travis flashing the old hand heart sign up to the fancy luxury box occupied by his Lady Love?

I saw it flicker mostly in disbelief, but there it was on the replay, and, in case you missed it:

I do have to admit that the red gloves are a nice touch, and perhaps, as this is the color motif of Chiefs merch, Trav can be forgiven here. But the gesture was otherwise so thoroughly scripted that I nearly retched.

Call me cynical, unsentimental, whatever you’d like, but all I can think of is the TK/TS pre-game canoodle, with the former, awaiting the full fury of a formidable and desperate-to-win opponent (now thrice denied in similar contests this decade alone), saying to his beloved: “listen baby, when I score, Ima gonna flash you the hand heart”.

One can then imagine Tay Tay (as us legit Swifties are fond of calling her) squealing in delight, not only at the romantic panache of the concept, but also (recalling that Tay-girl has sort of co-opted the pose) at the incremental Benjaminz certain to flow their way in result.

Somebody, ideally Von Miller, should’ve taken TK’s head off right then. But it didn’t happen. Kelce led the Chiefs in receiving and scored not one but two touchdowns. Meantime, Miller had all of two tackles. KC won a nail-biter: 27-24, and moves on to face the vicious Baltimore Ravens, where, if there is a God in Heaven, my ex-Bear Roquan Smith will end the madness.

It probably won’t happen, because, apparently, now, all our efforts, all our tears, all our blood and treasure, are reserved and poured over branding opportunities. And it’s a great deal to ask of Ro to go rogue with the narrative.

So, I should hardly be surprised that investors reacted to the gesture that so outraged me by promptly and enthusiastically taking our benchmark indices to yet another set of all-time highs.

And it’s not as if they don’t have other reasons for their giddiness. Q4 GDP clocked in at an astonishing 3.3% — particularly relative to expectations of ~2%. The PCE Deflator is at 2.6%, gratifyingly proximate to Fed target Inflation levels. Consumer spending is a rocket ride.

True enough, earnings are a bit poky thus far in the cycle, and the rally is decidedly narrow. But the Mag 7 is about to weigh in, with investors panting and moaning in anticipation. META, NVDA and MSFT initiate the proceedings, each with an amazing tale to tell. META is up an astonishing 177% in precisely one year. NVDA continues its AI/Crypto/Quantum charge to world domination.

MSFT has joined AAPL as the only company ever to have achieved a $3T valuation. And AAPL, which also reports midweek and is having a bumpy rolling quarter, has suffered the indignity of witnessing its valuation slip to a beggarly $2.98T

And market participants are showing their hand heart love by more than just buying risk assets – issuing a record amount of January debt, with Corporate Spreads tighter than they have been in 8 quarters:

One can hardly blame corporations and governments for borrowing while the borrowing’s good. Yes, rates are up, but though barely conceivable at this juncture, it’s just possible that at some point, in some parallel universe, monetary conditions may tighten, transforming the open heart-hands of bankers into closed fists.

But not yet, and, in a troubled world, I’m not sure market conditions can improve much from their current benign and serene configuration. And, as such, but only for the moment, you have my full blessing to go forth and buy up some shit.

It may even be time for me to embrace the hand heart, loading up also on friendship bracelets and other tokens of Swift-mania. Certainly, it might reduce my aggravation and maybe even improve my mood.

Because let’s face it. Everyone else is doing it. And if you doubt this, consider that the eternally menacing Hillary Clinton just registered her own form of capitulation, taking the form of her “X”ing out a hand heart tweet under the handle #HillaryBarbie.

Many of you may not remember this, but I seem to recall a time when the mention of the First Lady/Senator/Secretary of State/Democratic Presidential Nominee in the same sentence as Barbie – particularly in the former’s regal presence, would have caused the utterer to be fried in hog fat.

But times change, and we must evolve. So, in closing, I offer each and every one of you my enthusiastic hand heart.

Still and all, if someone on the Ravens clobbers Kelce as his fingers form this trademark configuration, they’ll get no complaints from me. However, I’d settle for a Baltimore win of any kind, because I don’t think I can endure another year of counterintuitive, ubiquitous, commercially ionized hand hear football love.

EDITOR’S NOTE: Y’all saw what happened. TK has 11 catches on 11 targets and 1 TD. Ro had 16 tackles, but never saw him lay a glove on Kelce. Looks like a long haul thru the Super Bowl and beyond.

TIMSHEL

Let us acknowledge, to commence matters, that yesterday marked the 100th Anniversary of the death of Vladimir Ilyich Ulyanov, better known as Vladimir Lenin, political founder of the Soviet Union, as well as its first Supreme Leader. Some confusion reigns as to when and why he changed his sir-name from the highly Slavic Ulyanov to the more Germanic Lenin, but it appears to have been around his 30th birthday, and shortly after having completed a multi-year prison term for revolutionary activities. He went on, under the Lenin handle, to lead both the 1905 and more decisive 1917 Revolutions, talked his contemporaries into withdrawing from WWI, and took over operations, whereupon many of said contemporaries tragically and in Grand Russian Tradition, disappeared.

He ran the show until his death in January 1924, leaving those of us among the living to wonder how we have endured a full century without him.

Fortunately, in one sense, he’s still with us. One can still view his remarkably well-preserved corpse, encased as it is in ice, in Red Square. However, as a public service to those not wishing to travel to Moscow at this frigid and geopolitically dangerous juncture, I offer the following image:

He takes a nice snapshot, no doubt, even dead, but let’s face facts. It’s not the same.

But this here note ain’t about Vlad. Instead, I wanted to write about the wholesale dispatch of virtually the entire staff of the iconic Sports Illustrated Magazine, which controlling enterprise Arena Capital Management announced on Friday. The ACM crew is making appropriate noises about ensuring the continuance of the publication, but we’ve heard that yarn before. More likely than not, the script calls for its full toe-tagging, on the same trajectory, as, say, the much more deserving of our lamentations Village Voice.

One wonders what went wrong at SI, and there are several unforced errors that come to mind. Perhaps it was the embracing of the cause of quixotic quarterback turned social justice warrior Colin Kaepernick. More likely, the force multiplier for brand erosion was the unfortunate inclusion (if you’ll pardon my wholesale descent into the vernacular) of trannies and fatties (and, in some cases, both) in the roster of models gracing the pages of their perpetually hungered-for-this-time-of-year Swimsuit Issue.

But if I was to mark the time when this whole thing was set in motion, I would wind the clock back further. To the late ‘80s. And, more specifically to the creation and widespread distribution of the SI Football Phone.

It was, plainly, a remarkable device – part football, part phone, but, objectively, and to borrow from that great 20th Century philosopher Archie Bunker “a little too much of both and not enough of neither”.

It looked like this:

Or, if you prefer action photos:

Operational problems abounded, naturally. It was nigh impossible to throw it in a tight spiral – into, say, the waiting arms of Fred Belitnikoff. Even if you were Ken Stabler. Kicking a field goal or extra point rendered the place holder at direct risk of electrocution.

Using it as a telecom device was also a dubious proposition. It required an ethernet connection, and even if you managed to reach your intended recipient, reception was, at best, sketchy. The dial tone sounded like a ref’s whistle, and signal for an incoming call was not a simulated bell, but rather the Notre Dame fight song.

However, from a commercial perspective, it was an unmixed success. SI outsourced to China the production of hundreds of thousands of these faux pigskin dialing contraptions, at a cost of $4/unit. In a flash of ‘80s marketing brilliance, Time, Inc. then the owners of Sports Illustrated, gave the device away for anyone willing to pluck down $55/year for a magazine subscription.

1.6M did. You can do the math here, but by my cipherings, Time did OK.

But it may have been Time’s top tick. In 1990, it merged with Warner Brothers, thus combining a print world once occupied by such luminaries as J.D. Salinger, Gore Vidal and even Donald (The Bard) Trump with turf controlled by Bugs Bunny.

Even that was hardly a disaster. But then, a mere 10 days into the new millennium, the magazine/cartoon factory merged with AOL, and what could’ve gone wrong there? A couple of years later, I recall asking a friend on the periodical side how the merger was going, and he replied: “what merger?”. “Why, the AOL merger” I answered. “He looked at me and said: “I don’t know. I’m still working on the Warner integration”.

So, Time (which still exists) and Tide (which continues to grace our washing machines) do indeed march on. It’s 2024. AOL is, if not gone, at minimum zombified. We now have smart phones. And metaverses. And AI. I don’t think the designers of the SI Football Phone properly anticipated any of this. And now, perhaps in result, SI is entering its death throes.

The markets have taken it all in stride, with the Gallant 500 and (albeit amid less fanfare) Col. Naz closing at all-time highs on Friday – wobbly first fortnight notwithstanding. I kinda suspected investors would rally and bid ‘em up. I’m not overly enthusiastic as to how high they go from here, but I did know a bid would materialize.

And, while streams of data flows await us up-river, including the fat part of earnings, introductory Q4 GDP estimates, and, by the end of the month, the latest proclamations from the FOMC, I sense that what moves the market in either direction will have more to do with vibe than analytical content. Investors are either gonna take a notion to bid ‘em up. Or they ain’t. And, when one delves more deeply into the matter, there is a solid case to be made for a continuation of the former.

The Fed, depending upon the measure one selects, has reached its Inflation targets. Q4 GDP estimates range around +/- 2% — a Milton Friedman wet dream. The FOMC, albeit with iffy time targets, has shifted its rhetoric towards rate cuts. Somehow, amid the din of despair about the perils of fossil fuel production, the United States has achieved record Oil Production:

Funny how one fails to hear much about this assault on either the planet or the ozone layer – even at the recently completed (and miraculously survived) Gathering ‘O the Hypocrites in Davos. But, then again, it is an election year, and the Green Private Jet crowd might perhaps be forgiven if they allow this outrage on a temporary basis, with notions to rudely shut down the pumps if they emerge victorious in November.

Plus, if all else fails, there’s this handy little item:

So, lotsa cash available, under the right circumstances, to pile into the private securities markets. And All of this represents pretty strong tailwinds for risk assets.

None of which is reason for over-optimism, as factors can change – instantaneously or over time. Time Warner decided that a football is a football, a phone is a phone, and ne’er the twain should (again) meet. Four decades later, Sports Illustrated itself began its own football phone descent.

Lenin shed his mortal coil and gave way to Stalin. There was another World War, a Cold War, the collapse of the Soviet Union. The year he died, the Soviets renamed its spiritual capital – St. Petersburg/Petrograd – in his honor. 67 years later, and not many months after the collapse of the Berlin Wall, they shamefully (shamelessly?) reverted the metropolis back to the original handle of St. Petersburg.

All of which begs a couple of questions. Could a SMART football phone save Sports Illustrated? And, had Vlad simply retained the original Ulyanov, would ANY Russian leader DARED to rename a city away from the elegant (if somewhat garbled) name of Ulyanovgrad?

Well, my friends, these are counterfactuals, and thus unknowable. Better instead, I think, to look ahead. And hope for the best.

TIMSHEL

This week’s theme is based upon a suggestion from one who wishes to remain nameless. He is among the most enthusiastic consumers of this content, as well as perhaps the most discerning. Each week, he offers an unfettered critique of my most recent note, and let me tell you, he doesn’t hold back. More often than not, he gives me the Siskel/Ebert double thumbs down. But makes it all worthwhile on those rare occasions when he flips these appendages heavenward.

When I saw him a couple of days ago, he told me that he had an obvious topic for this week but refused to identify the specifics. He gave me a few clues, but I still couldn’t crack his code.

After some prodding, he spilled the beans. He wanted me to write about Kenny G.

Thus far, 2024 has been a mixed bag for those of us who are honored with this appellation. I myself have faced a few frustrations in the introductory fortnight (my furnace, for instance, has crapped out twice in the first ten days). The effete soprano sax player bearing the name is in a nasty battle with his ex-wife over a $600K/mo Malibu shack that he rents from the recently divorced Jeff Bezos.

Elsewhere in Kenny G-land, on January 5th, a U.S. District Court judge in Alaska denied a motion by one Kenneth Grant, Jr. for relief respecting his refusal, due to health reasons, to take the covid vaccine. Not gonna lie – this one confuses me, so, for those wishing to learn more, I offer the following link:

https://casetext.com/case/united-states-v-grant-384

On the happier side of the ledger, there’s that wily Kenny G, who, last year, moved his gargantuan financial operation from Chicago to Miami, whose fund put up a whopping 15.3%, and who, by my math, may have eclipsed his astonishing 2022 personal take of $16B.

And then there’s the Kenny G who inspired the recommendation. Michigan DL Kenneth Grant, Jr., about whom I’ve written before. Now, just to get it out of the way, neither of the above-mentioned Kenneth Grant, Juniors are (to the best of my knowledge) my sons, nor (again to the best of my knowledge) relations of mine of any kind. Meantime, the Wolverine KG Jr. just came off a monster NCAA Championship Game, capping off a monster season, wherein he dominated an All-American Tackle, recorded a sack, and helped his hated (by me) Wolves to cap off an undefeated championship run.

I could’ve lived without all that Ann Arbor giddiness, and also with the rush to anoint Harbaugh to Rockne status. My risk management advice to him is to enjoy all this while he can. Guys of equal or superior accomplishments in his field got given the gate this past week, including Belichick and Carol.

Or he could just get tired and go home. Like Saban, who was replaced in about 5 minutes by the guy who punted the Championship Game to Harbs.

Moreover, his Kenny G. while only a sophomore, may, with all that fancy ink spilled all over him, declare for the draft.

So, Harbs, like I suggested above, enjoy it while you can. It won’t last, because nothing does.

Something akin to this dynamic is also afoot in the markets, which, come what may, won’t match their U-Mich-like ’23 season. Our equity indices are off to a mixed start, and, while they might ultimately prevail (and, FWIW, I think they will), they are likely to stumble on a few burrs along the way.

The Q1 data drop season is now unfolding at an accelerating rate, with (thus far) mixed results. The big banks reported last week and (apart from the mighty JPM) disappointed. After an embarrassing false start, the SEC approved retail crypto ETFs, and Alpha Dog Bitcoin dropped on the news.

Also last week, we got CPI/PPI, with the former manifesting an annoying December blip while the latter clocked in at a goose egg.

I must reiterate my astonishment at the obliteration of Producer Price Inflation, which a handful of quarters ago breached into double digit territory, and now registers a piddling 1.8%:

But before we get too comfortable, we should bear in mind that this here game may not yet be over, what with us and the Brits locking horns with the unfortunately named, Iranian oil-backed Houthis, in the important energy exporting hub of Yemen, and various shipping rates across the orb going parabolic:

But then on a more encouraging note, and in continuation of what was reported last week, both Corn and Cheese remain on the down.

And yes, today, our favorite corn growers in Iowa must brave a blizzard and sub-zero temperatures to do their quadrennial Caucus Dance. I really can’t add much to the erudition on any of this. But if the line holds and the two misanthropic frontrunners cop their respective nominations, then the November results are likely to leave half of the country as pissed off as they’ve been since 1861, and there’s bound to be a great deal of acting out along the way.

All of which causes me to obsess about the following question: Where are the Bernie Bros when you need them?

And, lest we forget, today is the 95th anniversary of the birth of Martin Luther King, Jr.(as well as the 15th anniversary of Captain Sully’s heroics). We could sure use him now, because, increasingly in recent days, and contrary to his overarching message, color of skin matters more than content of character.

The markets, meantime, remain in jump ball configuration. Or should I say, pre-kickoff coin toss mode? And, before we step one more foot forward, we must endure the annual Gathering-O-the-Hypocrites, otherwise known as the World Economic Forum, held ritualistically in Davos, Switzerland. And about the only good news here, as our betters gas up their Private Jets and prepare to take to microphones to scold us about our grievous energy consumption, is that no one ls likely to be listening.

I think it’s safe to own ‘em here, and, if they drop, to buy ‘em. It’s likely to be a tough contest, but at least for ’24, I think we have the weapons – particularly in the skill positions embodied in the Mag 7, to bring home the win.

But the College Football season is over. Lots of speculation about Harbs, and as of this writing, he is nibbling, and the only issue appears to be whether he has priced himself out of the ~600 NFL Head Coach openings that would otherwise be his for the taking.

His star Defensive Lineman Kenneth Grant, Jr. has a decision to make about the upcoming NFL draft, and my guess is that Harbs’ career choice won’t enter much into his thinking.

Across the rest of the vast expanse of Kenny G-land, the curly-haired pied piper of the ‘90s will presumably split his time between the courtroom and the recording studio, where he toils, in the latter enterprise, in relative obscurity.

The relocated snowbird financial titan will likely continue his path towards global economic hegemony, with little apparently in the way to stop or slow him.

All of which leaves me and my brother from another mother in Alaska. We’ll muddle through as best we can, which is all either of us is able to do.

I’m not sure which of us will fare better, but I at least carry the following advantages.

My furnaces are running, and I’m dosed. Twice.

TIMSHEL

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