This muse is like most writes, the simple opportunity to organize some occasional thinking.
Simply, a weekend NYTimes piece a few years ago posted a photo of central bankers in what struck me, odd I know, as iconic Beatle form. The idea of mingling their words with some occasional market thinking was planted.
As a 60’s child I grew up cherishing their music and so if nothing else mining their past makes me happy.
I’ve spent a career following and trading in markets. I wrote my Canadian Securities Course test in 1979 when I was still in high school. I’ve traded bonds on the buy side and sold them institutionally around the world from Toronto for MYW (Scotia) and Goldman Sachs. I’ve sold energy equities for FirstEnergy Capital in Calgary. By the 2001 tech crash, this bond trader who really always wanted to be an equity analyst gave up institutional energy sales because he’d shorted tech stocks.
We settled in Victoria BC to raise our family and I’ve remained immersed in markets and trading independently since. No knock on my family but I really did have the great experience of working with some world class talented people, something I do miss. But I recall many retirement memos in which so and so, at 65, was looking forward to spending more time with their now fully grown and gone kids. I’m unapologetically ecstatic to have been able to be around for mine while they were still around and in reflection even more so now that the nest is empty.
I must say it’s easy to feel like a financial dinosaur these days. Today anyone in the business in their early 30’s or younger have only seen interest rates near zero and stock markets incessantly rise on bad news because of the promise of more monetary ‘stimulus’. When I was 30 interest rates in Canada were in the low teens. Once upon a time big debt supply and deficits determined interest rates. Since the credit crisis markets don’t freely function, nor collectively vote on outlook anymore.
On the surface, writing about central banking and markets might be the absolute most dull topic imaginable. In a normal world it should be. But these are not normal times and much of the prosperity behind booming asset prices is underwritten by the desperate experimentation of these appointed academics and bureaucrats running central banks. An experimentation from which the politics of out of control debt gets to hide and grow. In some ways the great recession never ended. So we have the Great Manipulation, a policy of separating asset prices from their otherwise reality in hope of changing the economic one. Their search for stability has created a fragility and reliance that they cannot now escape.
How this evolves is anyone’s guess. As Citibank’s ex-CEO famously said before the credit crisis, as long as the music is playing keep dancing. Only now this music is getting made up as we go, and by the same people and think that created this historic mess in the first place.
So while the topic can be dull, it’s important.
And what’s not to like about a Beatle song? Enjoy.