Fly by Night
January 12, 2020
Fly by night, away from here, Change my life again
Fly by night, goodbye my dear, My ship isn't coming and I just can't pretend
-- Neil Peart
Yes, my friends, we must, albeit with a titch of ambivalence, pay tribute to Peart, who left us, not unexpectedly, this past week.
The mixed nature of our (or at least my) lamentations derives from our (or at least my) inability to wrap our (or at least my) heads around the outfit that made him world-famous: Canadian Rockers Rush. Part of me has always wanted to love them; the other part knows I am obliged to view them with some derision. So, like the economist with one foot in the oven and the other in the freezer, who conveniently concludes that on average, things are OK, I can only conclude that Rush was just that. OK.
To me, they fall into a specific set of ensembles where the musicianship is unquestionably sublime, but their catalogues just fail to measure up. Van Halen is also on this list. Upon this we can all (perhaps) agree: few can touch Eddie (who, according to published reports, is also on the down) as a guitarist, but the list of truly memorable VH songs devolves to somewhere around zero.
The same can be said about Rush. But boy oh boy can they shred. While Geddy’s high alto can certainly grate on the nerves, it is pitch perfect, and his bass licks are unmatched this side of Jaco Pastorius, Jack Casady, and (yes) Paul McCartney.
Lifeson may be the most under-rated guitarist in the galaxy.
And then there was Peart. Who flew away (by night?) a couple of days ago. Ask any drummer. Nobody could play like him. His kit contained about 50 pieces, which is pretty cool in and of itself, but even more so is the fact that he used them all. From what I know, some of Rush’s music was so complicated (if inaccessible to the rational ear) that even they couldn’t play it. I’ve seen interviews where they admitted as much. Songs like “La Villa Strangiatio” were so difficult to capture outside of the studio that they just gave up. Never played them live. A great deal of the pressure in this regard fell on Peart, who held up his end magnificently – until he just couldn’t do it anymore.
And now he’s gone.
As Rush-Heads know, Peart was also the band’s lyricist, owing in part to his status as the nerdiest of member of the nerdiest bands in the rock pantheon. When, in the early days, they were supporting groups like Kiss, but skipping the post-show, groupie-slathered ragers, to retire to their rooms and read books, Peart was clearly the most erudite of the bunch. So he wrote the words.
And I give him a gentlemen’s B on that score. He had his moments, but a lot of his verses seem forced and overthought. “Fly by Night” was his first-ever recorded composition, and (to my thinking) one of his best.
And that ain’t saying much, now, is it?
But I have a column to put out, and I don’t think I’m out of line for leaning on this theme, at the time of the passing of one of the greatest drummers that ever struck a stick, mallet or boot to a trap, bass, snare or high hat.
And y’all can probably see where I’m planning to take this. Lots of flying by night going on out there, kids. At the risk of using Peart-like verbal device, I’m pretty sure our unmanned drone that took out that Soleimani character was airborne during the hours of darkness in Baghdad. Less than a week later, and also under the cover of darkness, his Persian avengers took down a commercial jet over the skies near their home turf airport in Tehran, in the process sending 176 souls to their better rewards. The much- maligned, Horatio Alger-like Duchess of Sussex actually flew commercial to seek her fortune among her colonial subjects in Rush’s home turf of Canada. Night Flight? Wait… …I. Just. Can’t.
Better news derives from these fly-by-night markets. The Gallant 500 and its comrades managed to regather themselves and stage a modest rally last week, but one that nonetheless projects out, in these early days of ‘20, to an annualized return of ~50%. Once could describe the buying cycle as being airborne, but (it must be allowed) most of the action is transpiring under the visibility of the sun’s rays.
And soon now, disinfecting sunlight will reveal where the capital economy stands as the new year starts to unfold. Friday’s Jobs Report was disappointing to some, but on the whole, I believe an acceptable outcome. Next week, of course, the earnings season launches into the nocturnal ionosphere, and whether it soars like an eagle, or swoops down like a vulture, remains to be seen. Somewhat ominously, we are bearing witness to yet another potentially problematic decoupling of valuations and consensus estimates:
One could be forgiven for suggesting that it takes a busload of faith to be buying against this backdrop. But what, my dears, do we really have other than the clothes on our backs and busload of faith? A Dior bag and some of the world’s greatest records on vinyl? Well yes, but they too are rendered by nothing but faithful love. And, even with these treasures, the future is, at best, uncertain.
In newly time-honored fashion, the announcement season commences with the banks (time was, they let Alcoa go first, and maybe they still do, but if so, nobody is noticing). I kinda worry for Jamie, James, Brian and DJ-Sol, because an awful lot of good vibrations are already priced into their recent trading activity:
Now, I feel compelled to remind everyone that I’m not much of a trader or investor, but here’s the thing about the Banks: I don’t want to own them. Not here and not even, really, at their recent late summer lows.
Because, fact is, they just give me the creeps. And increasingly, it strikes me that their whole business is nothing but a short gamma play – clipping coupons in untroubled fashion – but taking the full hit when external forces take nefarious turns. And that’s before their intermediation game get disintermediated by blockchain: a technology upon which I refuse to give up. Blockchain will be back. I think.
Other matters nominally drawing our attention also from my perspective have a “winging it under darkness” feel to them. Trade wars? You tell me. Impeachment? It looks to me like this is the most troubling aerial operation, undertaken in latter-PM, hours and managed by non-instrument trained pilots, since Kennedy Junior went wheels up in his Cessna on a foggy night over the Long Island Sound (sorry, that was rude).
In a little over a week, we can anticipate the World Economic Forum ritual, held, in longstanding tradition, at a ski resort in Davos Switzerland. It features the planet’s most self-regarding fat cats, swooping in on Private Jet Red-Eyes, to utter platitudinous soundbites on topics such as how (everyone except them) should reduce their carbon footprints, and the best means of redistributing wealth (other than their own). I could go on, but, quite frankly, the whole thing depresses me enough as it is.
Politics also rev up somewhere in here. Impeachment papers are likely to be delivered – at long last – to the Senate, this coming week, if for no other reason than there’s not much else that its sponsors can do at this point. About the best that can be said about this spectacle is that it is likely to soon be over. Until, that is, it re-emerges, Phoenix-like and in the darkness, to soar again, say, sometime this Spring. The primaries are now just a couple of short weeks away, and won’t that be uplifting to observe?
Mostly, though, in terms of the markets, I think we remain at elevated valuation levels, largely due to those massive, dusky, helium injections that the Fed keeps serving up, and we keep inhaling. I won’t get into the whole Repo thing again, other than to remind everyone that our CB is still in – to the tune of hundreds of billions, and will likely linger there, perhaps in larger magnitudes, for the foreseeable future. In my darker, more acrophobic moments, I wonder where equity valuations would be without this assistance. My guess is a lot lower. And again, this tells me that: a) we need Team Powell; and b) they know this, and will be there for us, because the alternative is simply too ghastly to contemplate.
So, in closing, I’m not too terribly worried about anything for the moment. And, I’d even go so far as to offer my sanction for you to do some flying by night – that is, if you take a notion to do so. Just a couple of words to the wise, though. First, I hope you select a destination of your dreams, and the best company you can find, because you deserve both. But if you’re going anywhere outside the Lower 48 (along with Alaska and Hawaii), please remember to bring your passport, because, to do so, is, after all, a First Principal.
If you go, I’ll miss you, but will joyfully anticipate your return, and what’s in store for us at that happy moment. Neil has flown, but unfortunately, I can’t offer much hope that he’ll ever be back. But while he was here, he did the best he could, and a lot of it was magnificent.
So please join me in bidding him a tearful farewell, and in trying to emulate his example. His ship did in fact come, but his time for pretension has passed. And please also bear this in mind:
Philosopher and Ploughman, Each must know his part,
To sew a new mentality, Closer to the heart
Yes, closer to the heart. If we remember these things and act upon them accordingly, perhaps our night flights will evoke happier landings than might otherwise have been possible.