Lady Sings The Market Blues?

Trawling Netflix for interesting viewing, as you do these days to relieve ennui, I came across the 2018 docufilm on Eric Clapton, A life in 12 bars. I can’t say I liked him as much as I wanted to by the end of it, but the film features a short section on one of my favourite Aretha Franklin tracks, titled, Good to Me as I Am to You. A 22-year-old, psychedelically clad Mr E. Clapton provided gorgeous guitar fills… but it’s the lyrics I love especially:

‘If you had a dollar

And I had a dime

I wonder, could I borrow yours

As easy as you could mine?…’

Surely, they were channelling 2020 FOMC minutes from 52 years ago… I sense your reasonable doubts. Let’s take the lady (Aretha) out of this but use her expert observations about the credit stack to lend a sweet tone.

As with all of the blues, even before you have heard any song in full for the first time, you can anticipate almost everything from the first few bars. The hook itself is immediately appreciated, then the chord progressions, and the fills arrive right as expected on the appropriate beat.

Melody and pitch dominate. But timing remains the under-appreciated characteristic, making the music so satisfying in conjunction with the right notes (in the right order of course… thanks to E. Morecambe).

As With the Blues, So With Life and the Markets

‘Lady Soul’ has imbued me with the spirit of the blues, so now I feel compelled to sing my song: a version of another classic track, this one from BB King. Can you guess which one? Spoiler alert, it begins with the first line…

‘I’ve been around, and I’ve seen some things’.

Yes, yes, I know ‘market timing’ is a fool’s game. But here’s the first bar anyway.

‘Keep calm and carry on’ used to be a funny sign you would see in kooky coffee shops or places selling dish towels, you know… the sorts of shops that are now all closed.

I assume that everybody is noticing that the virus isn’t actually the main pressing issue in developed markets anymore?

Globally, SME job losses are turning from a stream into a cascade. It fails to make TV news because the SME unemployed come in tens rather than hundreds and thousands.

The streets and shops are reportedly (and anecdotally) seeing much, much lower footfall than the V-shape narrative requires. Since 1 July, the bloodletting in larger public newsworthy companies has begun entirely as expected, irrespective of improvements in stabilising R0 or death rates or any medical factors.

Trust in Government Narratives Seems to Have Evaporated in Many Countries

The dash to reopen as soon as possible has only accelerated the end of the furlough period and its government-funded support mechanisms… This also brings forward the urgent decisions that larger companies and SMEs must make on headcount, or rather on redundancies, cutting costs or perhaps liquidation or bankruptcy. As of 1 August, support for SMEs (and the citizens of many countries) begins to drop significantly.

In population dynamics, the excess population growth of any species leads to inevitable consequences. The resultant ‘die-off’ is inexorable and yet sudden once a threshold is breached, like say 80% service employment? (Rather ironically, a service ‘culture’ built on huge profit margins but diminishing quality of service itself. I digress.)

COVID-19 isn’t just a virus despite its scientific specifications. It has been misclassified. In fact, COVID-19 is a time machine accelerating the globalised world towards economic, social and political futures that were already headed this way. Years have become months, in some cases actually weeks. Logically, that also implies that any market denouement will also be brought forward too.

‘It ain’t over until the fat lady sings’ used to be common market parlance, though I suspect that it is now almost unsayable in woke-ish companies due its multiple ‘micro-aggressions’. Surely nobody would be ungallant enough to notice the Lady is no longer svelte.

My sense is that the current market tune is drawing to a rapid and unsatisfactory close. It sounds just like a song I heard exactly 20 years ago.

I suppose if I had to give it a title it would be this: Nobody Loves You When You’re Expecting a Year 2000 Redux. Snappy.

P.S. Obviously, the BB King song is Better Not Look Down… though you might choose another BB track, Same Old Story.

‘Same ole story, Same ole song

It goes all right till it goes all wrong’