Ken has been offering his thoughts on global markets, events, and trends on a weekly basis since early 2006. His rational perspective, based on decades of experience in risk management and analytics, provides all readers with helpful insights, commentary, and context. Both informative and entertaining, the posts offer clarity and simplicity, often using inspiration from his favorite artists and musicians.
Ken also authored Trading Risk: Enhanced Profitability through Risk Control (Wiley 2004), which challenged the traditional focus of risk management on loss avoidance. The book introduced a new risk management program that can help both money managers and individual traders evaluate which elements in a portfolio are working efficiently and which aren’t using an extremely simple set of statistical and arithmetic tools.
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- Gripping by the Husk Monday, May 5, 2025
King Arthur: It is I, Arthur, son of Uther Pendragon, from the castle of Camelot. King of the Britons, defeater of the Saxons, Sovereign of all England! We have ridden the length and breadth of the land in search of knights who will join me in my court at Camelot. I must speak with your lord and master.
Guard: What? Ridden on a horse?
King Arthur: Yes!
Guard: You’re using coconuts!
King Arthur: What?
Guard: You’ve got two empty halves of coconut and you’re bangin’ ’em together!
King Arthur: So? We have ridden since the snows of winter covered this land, through the kingdom of Mercia, through…
Guard: Where’d you get the coconuts?
King Arthur: We found them.
Guard: Found them? In Mercia?! The coconut’s tropical!
King Arthur: What do you mean?
Guard: Well, this is a temperate zone.
King Arthur: The swallow may fly south with the sun or the house martin or the plover may seek warmer climes in winter, yet these are not strangers to our land?
Guard: Are you suggesting that coconuts migrate?
King Arthur: Not at all. They could be carried.
Guard: What? A swallow carrying a coconut?
King Arthur: It could grip it by the husk!
Guard: It’s not a question of where he grips it! It’s a simple question of weight ratios! A five ounce bird could not carry a one pound coconut. Listen. In order to maintain air-speed velocity, a swallow needs to beat its wings forty-three times every second, right?
King Arthur: Please!
Guard: Am I right?
King Arthur: I’m not interested!Monty Python and the Holy Grail
First off, happy birthday to my grandson and namesake – GHF – who turns 5 — on this 5th day of the 5th month – in the 52 year of the Millennium. And yes, to the rest of you Happy Cinco de Mayo.
For anyone out there – if indeed any exist – who does not follow these notes with fervent religiosity –a bit of context is in order. Last week, we covered the proposition that Washingtonian policy has adhered to the time-honored ritual of The Slap/Suck: aggressive assaults on our sensibilities followed by delicious, rewarding retreats. At the end, we introduced the prospect of migration to The Suck/Swallow, raising, but not resolving, whether the former is transforming itself, tidily, into the latter.
The question remains open, but meantime, that slurping sound you hear is the abiding suck of market participants, lapping up those continued good vibes that improbably emerged a couple of fortnights ago, and which somehow have persisted as April has melted into May.
But will it end in a swallow? I don’t rightly know, which is why I turned to the wisdom of Monty Python’s magnificent Holy Grail for some clarity. And, doing so, I learn that swallows must beat their wings approximately 2,500 times per minute in order to keep themselves afloat. And this to say nothing of what it would take to transmit a coconut – indigenous to tropical regions and indisputably non- migratory – across a large body of water such as an ocean.
And no, gripping it by the husk will not solve the problem.
All of which causes me to remain skeptical about The Swallow. It follows, therefore, that the coconuts, back in them days of the Round Table, would’ve been difficult to source, and, presumably, expensive.
So, having checked the appropriate sources, I’m delighted to report that the price of this most delectable issuance from the palm trees of temperate regions has remained stable at ~$800/Metric Ton, for the last several years:
Coconut Prices – Remaining Non-Migratory Across the Ages:
Presumably, if coconut-bearing swallows were ascendent, the supply of the former would increase, and the price would drop. But they aren’t and it hasn’t.Perhaps perversely in the broader market, the coconuts are multiplying, but prices are rising, causing observers and opiners to marvel at its resiliency.
There are multiple catalysts at play here. Earnings thus far and with about 3/4ths of the precincts having reported in, are stronger than expected, or, at any rate, feared:
Tariffs? We don’t need no stinkin’ tariffs
GDP did blip down a titch, but not so dramatically as had been projected (or feared). The April Jobs Report, painted, by any reasonable measure, a pleasing picture.Though not yet priced into the markets, on Saturday, those episodically accommodating folks at OPEC+ announced a >400K bbl/day production increase, and this against a backdrop of domestic energy companies committed to run their drills and refineries at full stop, notwithstanding. So, if one’s tastebuds run in that oily direction, there’ll be sucking aplenty out of the grounds and sands — from Alberta to Texas to Riyadh. And this as the warm weather driving season is hard upon us.
We also detect a pulse in Congress, raising the prospect of them passing a budget bill, bearing critical tax components, and The President signing it.
Finally, I’m excited (to the extent that anyone can be) about the advancement of that Ukey minerals deal. I’m sure there’s some Easter Eggs in the fine print, but I know this: we really need the stuff we just contracted to source, mine, purchase and deploy.
But to me, all this is secondary to the divine blessings of The Suck, which, at least for now, has completely obliterated The Slap. The tariffing hand across the importing face has tempered its velocity. The somewhat dubious sources in and around the White House continue to sound the coming glories of fantastic trade deals on the horizon. The reckless rhetoric about removing Chair Pow has diminished.
As long as this continues, we’re probably OK. But my instinct is to remain leery here. Because The Big Slap is, in my judgment, not dead, perhaps not even hibernating, but only napping. It could re-emerge at any time. And soon. Case and point – the FOMC meets this week and should they displease Our Dear Leader – newly energized by a market swooning with delight over his recent sucking efforts – could pull out that big orange palm and do some slapping.
Another example: who the fuck – particularly a POTUS – publishes a picture of himself in full papal vestments?
However, if he keeps his chill on, this here market could do some open field running, re-invigorated as it has been by the delights of The Suck. And there are so many tailwinds, as described above, easing his way, I’m inclined to issue a temporary “all clear” for risk taking.
And as to the swallow, well, it’s premature to proclaim its emergence yet, because, as everyone who has been either sucker or suckee is aware, the swallow can only emerge when the sucking has reached its logical conclusion.
And as those husky slaps are counter-productive, it is my hope that we let go the husk and allow the coconuts to drop noiselessly into the ocean.
Because swallows will be swallows. And the same applies to coconuts. They cannot be flown by little birds from the tropics to the English forest. And even if they could, clicking them together is a poor substitute for the sound of horse hooves.
Ambiguous though they be, these are our realities. So, stay tuned.
TIMSHEL