E What Rough Beast?

One of the more athletic of the school’s security guards bounded into the cafeteria one January day, yelling “pow, pow,” hands holding a phantom firearm.  The remedial class of reluctant readers we were overseeing as a substitute teacher scrambled back to our room as instructed by our principal, himself an overseer of the active shooter drill.

We trailed, necktie flapping, Weejuns slipping on the polished linoleum, claudication stabbing us in the lower left leg. We made it limping through the door, mercifully held open by our charges, literate in empathy if not the printed word. Maybe they couldn’t, and didn’t want to, read, but the high school sophomores and juniors were nice enough guys and gals not to lock the door until their not so beloved Mr. Chips scooted inside.

Our faux escape accomplished, we returned to the lost cause of cultivating a taste for odes evoking beauty and truth versus Instagram and wondered “what rough beast, its hour come at last,” had been born among us.

Indulgent readers will forgive us for mixing our Keats and Yeats, but we wonder if they’ll forgive lawmakers who refuse to take the common-sense measure of outlawing firearms that discharge a whole lot of bullets real fast (buy Dick’s Sporting Goods). It was done once from 1994-2004 and the Republic survived. This is so truly a no-brainer that it strains one’s sufferance of the gun-centric crowd that worries its “rahts” (as non-Southerners mock our accent) will be compromised.

Enough preaching. In the meantime, the “four ‘easter” battering the Eastern Seaboard this spring is an apt metaphor for the four things that spell doom for equity investors in 2018.

  • Withdrawal of monetary stimulus. This is the biggest. The Federal Open Market Committee, under the new regime of Fed Chairman Jerome Powell, hiked, as expected, the Fed Funds rate 25 basis points at its meeting yesterday. If inflation is the result of too much money chasing too few goods, the bull market has been fueled by too much money chasing too few assets. It’s ending.
  • Overvaluation. The market is priced at 143% of gross domestic product. Experience says returns will be subpar until this ratio reverts to the mean.
  • Trade wars. President Donald Trump appears bound and determined to impose tariffs in an effort to erase the U.S. trade deficit. As a wiser head than us (wish we could recall who it was) has said something to the effect: A trade deficit is not a bad thing or a good thing, it’s just a thing.
  • Trump himself.  Whether it’s Mueller or Stormy who rocks his world, unpretty things await. In a way, though, Republicans might be glad to be rid of him and work with reliable conservative VP Pence, we think.
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