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Busting Out All Under

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Just as May must follow April in her prime,

June will always find me, counting out time,

They buried Miss July, put her face down in the earth,

She called her baby “August” and died while giving birth

— Dave Rotheray

 

Well, my darlings, it is indeed June, but one hardly sees it busting all over. For one thing, the weather –at least in the Northeast, has pretty much sucked.  This here is shaping up to be a pretty nice weekend, and all I can say is it’s about time.

We just concluded the 6th month’s first full week, and for all of the dramatic promise it portended for those in the investment game, on the whole it was a yawner.

In fact, to date, I’d go so far as to state that from a trading perspective, June, thus far, is indeed busting out all under.

We can take last week’s big events in chronological order, beginning as late as Thursday with the widely anticipated, over-hyped Comey testimony.  With those on both sides of the political spectrum in pitched battle to outflank one another in hysteria, the end result was something of a disappointment.  To paraphrase Forest Gump’s mother, Comey is as Comey does, and Thursday’s turn at the microphone, in front of a group of glowering Senators, served to reinforce the point.  I found all of his responses to be lawyerly and self-serving.  When it suited his defensive interests to describe himself as a weak sister, he freely did so.  When, on the other hand, it behooved him to articulate his heroic support of his country, the government agency he recently ran, and his standing as a patriot, he did just that.

I do think there’s one under-analyzed thread in that whole sequence, deriving from his justification for contemporaneous note-taking as being driven by his agenda to see that a Special Counsel was named – to investigate the purportedly nefarious but as yet undefined Russian interference in the 2016 elections.  I suspect that this was indeed his game all along, and gosh all fishhooks if it didn’t work.  We’ve got us a Special Counsel, one Robert Mueller, former occupant of the seat from which Comey was so rudely dispatched, and longtime bestie of Comey himself (side note; Mueller was named FBI Director on September 4, 2001, so he must’ve had an interesting first few weeks in office).

Given that Comey was unwilling to answer any specific questions about the investigation, I suspect that there’s a long game afoot here, and one that continues to threaten the current administration.  Comey’s job was to get through the ordeal with as little mud splashed upon him as possible, and to punt any substantive queries to the SC. My guess is that this means, though we may not have to endure the redux for several months, that this thing ain’t over.

Investors: be forewarned.

As fates would have it, the Comey testimony came on the same day that the good citizens of the United Kingdom took to the polls, this time to deliver a rather unambiguous one finger salute to recently elected Prime Minister Theresa May.  The Brits stopped short of giving her the gate altogether, but the outcomes are such that she will have to struggle to retain her residence at 10 Downing Street, Westminster, London, SW1.   Perhaps as bad (or worse), the self-imposed ordeal (it was May herself that called for the elections) served to resurrect the political career of Labor Leader Jeremy Corbyn, a chap whose politics are often described as being to the left of Bernie’s, and who was, prior to Thursday, expected to fade into oblivion.  None of this of course, is an encouraging lead-in to the pending Brexit negotiations, which were going to be tricky under any circumstance, and may now devolve into a circus.

Some markets reacted to these tidings.  That the British Pound took an, er, pounding was perhaps to be expected, and, for what it’s worth, I can also see the framework for the rocky EUR ride:

 

Investors also served themselves up a hearty helping of government bonds, with most of the action, somewhat improbably, centered around the oft-beleaguered debentures of Southern Europe:

Spanish Yields:                                                 Italian Yields:                          

If one is looking for root causes here, the glibbest and most accessible justification is that the Continental unrest is likely to keep the ECB Ï printing machine running on all cylinders, and why not? Euro QE is humming along at about Ï90B/month, implying that Team Draghi has printed about $500B in 2017 alone, all directed to the purchase of member nation bonds.  With less transparency on Brexit, is a downshift likely? I think not.

I should also mention that my grain complex had quite a week, with the bulge bracket of Wheat, Corn and Soy Beans all enjoying bids across the cycle.

But as for the equity markets, they seemed to shrug off all external news flow.  In fact, most of Europe, including the U.K. gathered itself admirably by Friday.  Stateside, the SPX dropped 8 skinny handles for the week (> 0.25%), while the Dow actually closed at record highs.

Now, I know a lot has been written about Friday’s big puke of the power part of the U.S. equity lineup, with names such as Apple, Amazon, Alphabet, Microsoft and Facebook (which together, account for nearly half of the 2017 valuation gains in the S&P 500) all dropping 2% or more by the close.  This does indeed bear watching, but here, I can only go with my gut, which tells me that extrapolating out from this action is a dangerous construct.  There’s certainly a meaningful probability that investors view this selloff as a buying opportunity, and, gun to my head, if they don’t adopt this mindset now, they most certainly will at levels not much lower than Friday’s undignified close.

But what strikes me more directly is that there was a significant rebalancing of equity holdings across large capital pools late in the week, that it may not as yet be over, and that there may be more to this than the big whales being tired of making all of that FANG (or, if you will, FAAMG) money and deciding to ease back on that score alone.  I do expect other equities to be in play, and I don’t know how this will evolve, but the individual stock action early next week should be watched with careful eye.

Apart from that, we have a very low-drama FOMC announcement on Wednesday, where another quarter-point raise is a foregone conclusion.  However, by Thursday, we will have reached the midway point of June, and as mentioned in previous installments, I think that pricing action quiets down to almost inaudible levels from then till after the 4th of July holiday.

If I’m right about all of this, then, when all is said and done, June will indeed have spent its short life span busting all under, and then we’ll be on to July/August, during which time the action promises to pick up visibly.  In the meanwhile, perhaps we can take our cues from the song quote purloined above, and spend the last two weeks of the current month counting out the time.

I reckon there are worse fates than this.

TIMSHEL

With a Little Help From My Friends

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What would you think if I sang out of tune, would you stand up and walk out on me? — Billy Shears

For those not counted among the teeming millions that comprise my social media presence, allow me to formerly announce the arrival of my grandson, William Thomas Feller.  Further, as a public service of sorts, I offer the following glimpse at the little fellow, taken in the first hour of his existence:

Over the last few days, the looming specter of his arrival pressed the following problem on me: what on-line persona should I bestow on him? With my first grandson: James Alexander, the answer was easy.  From the moment of his birth he was, is, and will remain, The Dude.

But there’s only one Dude, right? (OK, so there are other dudes, but bear with me). Looking for something materially different, I (with the help of my wife) cast about for the catchy, the urbane, the relevant.  We first focused on the John Coltrane, whose birthday, so we believed, was shared by our newest bundle of joy, rendering the handle of ‘Trane a viable option.  But a quick check of the record books indicated that Coltrane was actually born in late September.  Not that this would’ve stopped us, but I won’t lie: it did give us pause.

Then it hit me, the iconic album: Sergeant Pepper’s Lonely Hearts Club Band was released on June 1, 1967, 50 years to the day prior to our blessed event.  Given that our little guy’s name is William, the answer came to me.  So let me introduce to you, the one and only Billy Shears….

(By the way, as my tragically constrained contributions to the future gene pool progress in a gratifying manner, it does strike me that I am being pushed further down the bench with respect to the birthing process.  I was in the Labor Room the night The Dude was born, but was perpetually plagued with “make work” assignments, such as walking the dog, in such a way that I suspect was driven by an agenda to get me out of the way.  Eventually, my wife and daughter ran out of pretexts and sent me home.  This time ‘round, I wasn’t even at the hospital.  But I am content, because, after all, what is life itself if not a process of making way for the new, while we the old fade to black?).

In any event, Billy Shears has indeed arrived, and from my vantage point, not a moment too soon, as it strikes me that the markets are in a paradigm that brings to mind the first lines that the original B.S. ever issued forth.  Something indeed seems out of tune, but are you, is anyone standing up and walking out?

They are not.

In fact, if anything, investors are rushing the stage.  U.S. equity indices hit a series of all-time highs this past week, and global markets are experiencing more or less the same paradigm:

Global Dow:

Bonds around the world are also in bid configuration.  There’s some bouncing around in FX-land, but other that some intervention-driven strength in the CNY, there’s not much to report from that corner of the universe.  Other than visible downward pressure on Crude Oil (proving, above all, that all the “smart” long speculation into the 5/25 OPEC meeting was, as I suspected, so much Dixie-whistling), the Commodity Complex is in strong bid configuration.  Consider, if you will, the oft-overlooked but sentimental fave Cotton tape:

More than Dixie Whistling in the Land of Cotton:

Defying reverse gravity, the VIX actually managed to trade modestly down from last week’s record lows.

Through 5-and-a-stub months, the Gallant 500 is up 9%.  So why is everyone so angry and nervous? Again, I think a good deal of the blame can be laid at the doorstep of the White House, or if not, blame, then at least root cause of agita.  At this point, one simply does not know what next to expect, either from the President or from his well-funded, well-organized and increasingly unhinged enemies.  I do indeed worry about this, my darlings, because never in our collective lifetimes (and perhaps not since the pre-secession Lincoln administration) have we witnessed such vitriolic hate of a sitting POTUS, nor, perhaps one so prone to fall into traps that empower and embolden his enemies.  He simply, from my perspective, cannot resist lunging at any bait that is placed in his field of vision and I increasingly worry that sooner or later, he will indeed be hooked once and for all.  Far be it from me to politically proselytize, but I don’t think that the organized resistance will be particularly pleased with any material success they achieve.  It is, from my perspective, a case of careful what you wish for.

I am troubled, in particular, by the growing chorus suggesting that anyone not outraged to their cores by the current government power structure is either stupid, immoral or (more likely) both.  The response from those on the winning side has been characteristically polite, muted and dignified, but if matters carry forward much further, this CANNOT last.  The tens of millions who not only voted in Trump, but also carried home both houses of Congress, 30+ governorships and 60+ state legislatures, have significant, but in the end finite patience for being trampled upon.  If pushed beyond their limits, they will respond by causing their own forms of trouble, and then, from a market perspective, it’s look out below.  Again, I’d feel less concerned here if I didn’t think that Trump is an ideal target for the traps being set for him, but he is such a target, and if/when he steps into it for good, I shudder to think what comes next.

I’ll offer one last case and point with respect to this.  The organized opposition has, by all accounts, crippled Fox News.  It kneecapped its founder (now dead), it chased away several of its most popular hosts, and hired away a number of others.  Those that remain are in the cross-hairs of the opposition and may not last out the summer.  Its ratings are, inevitably, dropping.

But let’s extrapolate and imagine that they take down the organization entirely.  This will leave the free TV networks, along with MSNBC and CNN to tell us what to think, and I believe that it would be a matter of microseconds before a right-oriented replacement sprung up, unconstrained by the opposition’s destructive playbook. At that point, the Kathy Griffin contingent may wax nostalgic for the happier days of the Ailes/O’Reilly/Hannity/Kelly/Van Susteren Fox News.

And no one will win.  And the markets won’t like it.  And this, I feel, is the biggest risk we face: a full-scale political unravelling that I believe is more probable than what is reflected in current valuations.      As June busts out, and after the Fed raises rates next week, there won’t be much else upon which to focus, at least until after our Independence Day festivities are complete.

So take care out there everyone.  You’re all my friends, I can’t get by without you, and neither, can, for that matter, the newly born Billy Shears.  As for the original, he’s doing just fine.  I read yesterday, with interest, that after spending the last 28 weeks on the Billboard 100, the original SPLHCB actually hit Number One this past week, some 50 years after Billy I first warbled his way into our collective consciousness. His words are as fresh and as true today as they were during the Summer of Love, and if I have anything to say about it, they will indeed inform the experiences of my progeny, for as long as the (Lonely Hearts Club) band plays.

TIMSHEL

I Don’t Know Why The Caged Bird Sings

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I begin by taking care of an essential item of business: Happy Mother’s Day, everyone.  Today is my first motherless Mother’s Day, which is sad, but, on a happier note, my daughter (a mother of nearly two year’s standing herself) is due any day. So there’s that.

In addition, it’s true: I don’t know why the caged bird sings.  I have never read Maya Angelou’s magnum opus, and I don’t expect I ever will.  What’s more (though I’m not particularly proud of this), in terms of the motivations for the warbling of the captive orinth, I have never particularly cared to find out.

That is, perhaps, until now.  And here, of course, though reluctantly, painfully, I refer to the recent doings in the White House.  Indisputably, the Presidential Manse is something of a cage, and its current occupant is certainly capable of both flying and singing, or, more pertinent for our purposes, tweeting, which is, after all, the type of singing in which your typical winged tree denizen engages.

I wish he’d just shut his big fat beak.  His electronic croonings, long since tiresome, have now become dangerous.  Case and Point: this Comey thing (sorry).  When I’d heard that he canned that dissembling, misanthropic domestic law enforcement czar, I was pleased.  The guy should’ve been shown the door a long time ago.  Upon further immediate reflection, I decided it was a sublime political move.  I mean, his recently vanquished political opponent had just emerged, in rather unseemly fashion, to inform a sequence of enraptured audiences that, but for Comey, those new curtains she picked out would be dangling from the broad windows of 1600 PA Avenue as she spoke.  Of course, the other half of her rationalizations dealt with some nefarious, improbable linkage between the WikiLeaks DNC leakage, the Russians, and the Trump Campaign.  I’ll go on record as opining that this is hogwash, well, part of it any way.  Did the Russians hack the DNC? Probably. But so did everyone else.  Were they seeking to influence our elections? Of course they were. But boys and girls, it’s time to grow up.  Major nations have been messing with each other’s elections since mankind was still sporting tails, and I suspect that the most enthusiastic and effective perpetrator, for most of the last couple of centuries, is the good old U S of A.

But were the Trumpsters actively working with the Ruskies on this one? I highly doubt it.  What was the nature of the alleged collusion?  No one has said.  And what form could it have assumed? Did Team Trump pay Putin to do this? Please.  First off, Putin is, almost inarguably, through purloined riches, the wealthiest man on the planet, and the DNC Server was such a sitting duck that it couldn’t have cost very much.  Did the Russians feed the data to the Campaign, for them to leak? It would seem unlikely, and one way or another, the information would’ve gotten out.

Also, it may be worth remembering that as late as dusk on November 8, 2016, the probability of a Trump victory was placed, at best, in the low double digits.  The HRC triumph bash, replete with shattered glass and riverside fireworks, was all teed up.  And how long do you think, after, she took her hand off the bible on January 20th, would she have instructed the Bureau to put cement shoes on her hated opponent? Not very long, I imagine. Trump’s people weren’t stupid (they won an unwinnable election after all), and I doubt they were taking any undue risks of this nature with the perfidious Russians.  Plus, there was a great deal of roadkill on the President’s journey to the White House.  By my count, he deep sixed at least a dozen campaign managers alone.  Are there no disgruntled former insiders ready to sing a Russian ballad as a means of score evening? If so, they have yet to emerge.

But the Russian interference story lingers, used by Progressives like the drunk uses the proverbial lamp post: more for support than illumination.  And, with the Dems complaining that the FBI Director who was incentivized to push this narrative was to blame for their loss, how beautiful was it to have sacked him? Had it been handled correctly, it would’ve left the, er, left, with little fodder to use against their political foes (lest they demonstrate, yet again, their seemingly insatiable acumen for hypocrisy), and, as such, might’ve disappeared from our capacity-addled attentions quicker than a Snapchat photo (or, for that matter, the valuation of the device’s corporate owner).

But then came the tweets, including perhaps the most idiotic one in an ocean of moronic 140-character brain fluffs: the one warning Comey about the potential presence of taped conversations. Now, I hate to agree with the millions that are seeking to undermine the current government at every turn, but this stunt was completely out of bounds.  Just as (as pointed out by Deputy AG Rosenstein) FBI Directors do not comment on the decision factors on a case they’ve tried to drop, presidents don’t issue veiled threats at deposed FBI Directors.  And now, I think everyone’s got some reason to worry.  There is literally no telling what may next be issuing forth from the Presidential keyboard, and, if it gets much worse, Trump’s enemies may actually have a legal case against him.

But what offends me most is that this sequence more or less destroyed last week’s confident call for a breakout of the U.S. equity complex.  These ornithological discharges made me look like a simian, and I’m not one to sit idly by in consequence.  Yes, there were other contributing factors.  The late reporting Consumer Discretionary Sector dropped some pretty nasty waste — at a point contemporaneous to a rather tepid Retail Sales print.  There was some sort of global cyber-attack that hit about 900 countries on Friday, crippling enterprises ranging from Fed-Ex to the British National Health System.  The Energy Complex is bouncing around like a billiard ball.  L’il Kim lobbed another one into regional waters this weekend.

Still and all, Q1 manifested a 13.5% increase in earnings and a 6.5% jump in sales.  According to the published genius of the investment class, affairs are even rosier in portions of the investment universe ranging from Europe to the Emerging Markets.  Rates are low and showing no signs of busting out.  Most economic models are projecting back-loaded acceleration in economic statistics.  I’ve seen worse backdrops for loading up on stocks – Washingtonian nonsense notwithstanding.

But a couple of points bear mention here.  First, I’m really skeptical about all this Europe love.  I’ve seen the analyses that suggest the Continent is cheap relative to our own valuations, but I advise those who care to proceed to do so at their own caution.  It strikes me that Europe remains the same geriatric, declining economic beast with which we’ve been contending for most of our adult lives, with high unemployment, widespread credit issues, an unworkable fiscal matrix and a measurable disposition towards redistributive socialism.  Some of you pros may be well positioned to take advantage of transient upswings, but as for me, I think I’d rather keep my risk capital moored on these here shores.

On the other hand, I don’t, as a matter of policy, invest in the markets.

But even domestically, I’d be careful about where I place my bets.  That a perversely disproportionate segment of gains derive from a small handful of names is a widely analyzed phenomenon that need not be rehashed in this space.  For the mere mortal tickers in the stock trading universe, it’s really all about earnings, and, creeping into the dynamic, is the age-old problem of disappointers being punished more severely than delighters have been rewarded:

 

But with quarterly earnings substantially behind us, this is something that we arguably can ignore for a few weeks.  In the meantime, it may be worth remembering that tomorrow marks the 45-day window for hedge fund redemptions, and this may perhaps cause some gratuitously violent price action, as catalyzed by an 11th hour wave of unexpected redemptions.

The latter would be particularly true if the Washington bird flu, rather than subsiding, spreads to epidemic proportions: a scenario that one can now neither rule out nor discount.  As I have reviewed this wearying sequence of events, I cannot help but fear that Trump may have made the same type of early-term mistake as his two predecessors: taking a constructive action too precipitously, and with inadequate understanding of deferred consequences.  W. Bush invaded Iraq at a point of maximum post-9/11 goodwill, and we’re still stuck there.  Few rational folks would argue that deposing Saddam Hussein was an unholy objective.  But at the time we had more pressing geopolitical problems with which to contend, he failed to form the type of broad coalition that worked well for his father in Gulf War 1, and the W presidency arguably declined in a more or less linear fashion from there.

Then there’s Obama, who rammed through a massive, poorly framed and ineptly executed re-engineering of the Health Care system at a moment when our post-crash capital economy itself was just emerging from the critical care unit.  Unemployment at the time was peaking at 7.5%, and of course, he passed the bill through a reconciliation process that removed all transparency from the drafting of the final provisions (recall the Pelosi line).  At that point, the Health Care system was broken and needed fixing, but the timing was terrible, and, like the Iraq War fiasco, the coalition behind the reform was self-servingly narrow.  Of course, the economy slowly regained its footing in subsequent years, but ultimately, the framework at least partially imploded, and, as I’ve stated previously, I believe that the sticker shock of 2017 premium increases (disclosed in October of 2016) was, more than WikiLeaks, more than Comey, what turned the last election’s tide against his preferred successor.

As for Trump, though it’s impossible to know at the moment, it may be that he has fallen into the same trap.  Comey is indeed a showboat, more interested in his own agenda/standing than in doing his job appropriately.  He was not capable of running the FBI effectively and needed to be fired.  Had Hillary won, I suspect she would have taken this step herself.  But the timing may have been too precipitous.  Like his predecessors, he might’ve been better served by waiting, maybe getting the Republican Congressional Caucus together to pass some legislation, before putting two to the head of his target.  And the execution was terribly, well, executed.  Why not follow the Clintonian Friday afternoon news dump and then announce something constructive to change the subject?

But no, he did this on a Tuesday and then made matters worse with his messaging.  As a result, not only may he have bought himself a whole passel of problems, but also, as everyone has stated, he has rendered the path to delivering on key parts of his agenda much more problematic.

But the world is full of such improbable contradictions.  Take Maya Angelou for example.  She wrote (I’m told) profoundly of racism, sexual abuse and other horrors of growing up as a black female in the postbellum South.  Yet she freely admitted to operating as a madam in her young adult years.  Then, she settled down to accept an endowed professorship at Wake Forest University, which, though a fine academic institution, was founded and resides on a tobacco plantation that relied for centuries on slave labor.

So I’m gonna stop wondering why the caged bird sings, and can only, for the moment, pray for the sound of crickets emanating from such locales as the White House, Trump Tower and Mar-a-Lago.

TIMSHEL

Success Story

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“We got the greatest country in the world here. The highest standard of living. The grossest national product.”
— Archie Bunker

For want of superior alternatives, I’m dedicating this edition to Archie Bunker, erstwhile “everyman” hero of the seminal 1970s CBS series “All in the Family”. Many of you may be too young to remember Archie, a hard-working, family loving, WWII vet, spewing out politically incorrect bon mots from his Queens enclave, but much is to be learned from him, that is, if one takes the trouble to pay attention. Improbably (at least to me), I’m now older than he was purported to have been during the run of the series, and, while I always liked him, I believe, with the passage of time, I have come to understand him better. He is a product of his environment and times, working hard, fighting for his country, supporting his family, and, in his off hours, coming home to arguments with his left wing graduate student son-in-law (whom he is supporting) who seeks to tame his ignorance even as he eats his food. He tries is best to cope with the world, rapidly changing before his eyes, but often, it becomes too many for him.

As time goes by, I increasingly know how he feels.

I felt particularly sorry for him when his best buddy, Stretch Cunningham, his doltish, wisecracking comrade on the loading dock, drops dead of a heart attack. Archie is asked by the family to speak at the funeral, and in the process, finds out that, unbeknownst to him and all his peers, Stretch was actually Jewish. This being a problem at the time for a middle aged, working class, high school grad, he struggles to understand, particularly given his fallen buddy’s decidedly Anglican surname. His family offers up the possibility that perhaps he changed his name, but Archie rejects this out of hand, for perhaps the best reason imaginable. If Stretch had indeed changed his name but retained his Jewish identity, one thing was certain:

“There ain’t supposed to be no ham in there”.

Apart from his devotion to his wife, daughter and (eventually) grandson, Archie is above all, a patriot. And, responding to one of his meathead son-in-law’s endless stream of criticism of the country that spawned him, reared him, and provided him all is comforts, he did indeed point out, in a first season episode called “Success Story”, that we have the greatest country in the world, the highest standard of living and “the grossest national product”.

A reading of Friday’s action would seem to corroborate, yet again, Archie’s clairvoyance. Though pointy-headed economists (a tribe to which I belong), for reasons that I have long ago forgotten, decided a couple of decades ago to switch the benchmark metric for nationwide output from Gross National Product to Gross Domestic Product, the introductory first quarter estimates can aptly be described as gross.

The Atlanta Fed’s GDPNow model, often referenced in this space, saw it coming, and, as the hours trickled down to the Friday/8:30 print, private economists started to catch on, with the final consensus coming in at 1.0%. But we missed even this diluted number by a full thirty percent, as, as everyone knows, the actual figure clocked in at 0.7%, annualized: the worst such showing in three years:

The results failed to jolt market participants over-much, and the rationalizations (crazy weather, seasonality, etc.) had been working their way into valuation for weeks. But the consumer spending print of 0.3% (vs. consensus estimate of 0.7%) is somewhat worrying, as is the unmistakable gravitational pull evidenced in the graph supplied immediately above.

Be that as it may, we all knew that the totality of the data coming our way was ambiguous, as evidenced in part by some boffo earnings results released in advance of the Archie Bunker GDP print. Names like Alphabet (OK; Google), Amazon, and sentimental favorite CAT were all astonishingly good. And, while there were some embarrassing misses (Airline Companies, Auto Companies, Starbucks), on balance, with nearly 60% of income precincts reporting, the overall tally is anticipated to come in at a 12 ½ % year-over-year gain – the best showing since the wretched year of 2011.

Moreover, the earnings picture has gained encouraging momentum in recent days:

Perhaps the other most salient dynamic is that Team Trump (never a group to let recent failures and/or humiliations slow them down in their headline grabbing frenzy) released its tax plan last week, a document which fell considerably short, in terms of volume, of the Manhattan telephone book benchmark for quantity of content. In fact, it is precisely one-page long. Scanning its voluminous details, I find it to be a bullish blueprint, and one that investors should embrace. But there’s a lot of caveats here, kids. First, as of right now, there’s no indication that anything of this nature can pass through Congress, and tax reform, an exercise not even attempted in 30 years, is a particularly sticky wicket. It may in fact be even stickier now, especially insofar as the Democrats seem determined to cast not a single vote (other than irrelevant salves to politically threatened seat holders of their own party) in favor of any bill produced by their opposite numbers, and that there is a core group of Republicans who are unlikely to support any tax plan that doesn’t provide offsetting revenues to match any relief provided therein. On offsetting revenues, the, er, tome is silent.

If, however, something of this nature goes through (and it says here that, best case, we’re looking at the end of the ’17 Congressional Calendar or beyond), there will be winners and losers. Perhaps in a dose of poetic justice, the plan calls for the elimination of the deduction of state and local taxes (a dubious and unfair proposition from the get-go) from the Washington-bound levies, thereby forcing us coastal denizens to pay the full freight already imposed upon residents of zero state tax jurisdictions such as Texas and Nevada. In addition, the banks will take a short-term hit – particularly (and you can’t make this stuff up) given the fact that significant portions of the left side of their balance sheets take the form of deferred tax credits, the value of which will be diluted by any reduction in the base rate itself.

I reckon they’ll survive this blow.

And, on the whole, I can’t say there’s an awful lot of which to complain, as the first trimester of ’17 melts into the second. There appears to be earnings momentum, and the dubious consensus may be right this time that: a) Q1 GDP is ripe for an upward revision; and b) the force of this metric may very well gain traction as the year unfolds. In the meantime, mixed macro numbers are likely to keep a lid on domestic rates, and, oh by the way, mid-week, ECB Chair (Super) Mario Draghi took to the podium to announce that he’s in no particular hurry to stop, or even downshift, the Brussels money printing machine.

Perhaps this is why the SPX, though nominally and patriotically selling off on Friday, is 13 puny index points from breaking out of this increasingly tiresome 23 handle, and 10 punier points from all-time highs. It also bears mention that the NASDAQ Composite, with minimal fanfare, crashed through the heretofore un-breached 6,000 threshold, and held this territory even through Friday’s Gross Domestic Product print.

So, on the whole, I am getting a bit more constructive. Next week features a continued onslaught of earnings releases, and, in macro-land, Friday’s potentially important April Jobs number. But this sets up to me as a bad and good news is good news paradigm, with a strong number corroborating happier days, and a weak one likely to be interpreted as being accretive to bonds and catalyzing to constructive fiscal (e.g. tax reform) and monetary policy.

But, global citizens that we are, it bears remembering that the week begins slowly, given Monday’s traditional celebration of International Workers Day. So I’ll conclude by giving a shout out to all of those wielders of shovels and welding equipment. It’s your day, and, as always, you’ve earned it. We don’t pay too much attention here in the States, but what do we know?

And as for Archie, he went from union man to entrepreneur, eventually taking ownership of his favorite local watering hole. Some of his simpatico was perhaps sacrificed in the transition, but at the end of the day, he was indeed a Success Story, and, were he with us today, I doubt he’d be taking May Day off. More likely than not, he’d be pouring drinks and ringing the cash register like always. As Archie knew in his bones, the path to Success, for all of us, makes very little allowance for virtues that run in conflict with diligence and perseverance.

TIMSHEL.