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

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

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

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

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

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

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

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

Well, duh.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Beats and upward guidance abound.

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

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

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

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

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

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

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

TIMSHEL

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

Little David Wilkins

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

Bob

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Free busses? Don’t even get me started.

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

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

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

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

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

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

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

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

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

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

It’s the only way.

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TIMSHEL