Geoffrey Wheatcroft on Tony Blair

He doubtless justifies to himself his work for Kazakhstan's Nursultan Nazarbayev, whose regime has been strongly condemned by human rights organizations, in the same strange antinomian way he justified the manner in which he took us into the Iraq war: whatever he does must be virtuous because he does it.

Fintan O'Toole on the Easter Rising on the NYRB

The Rising acquired its imaginative potency not in spite of its small scale but precisely because of it.  It's power lay in its manufacture of highly individual and meaningful deaths during a period of mass, apparently meaningless, slaughter. It was handcrafted martyrdom in an age of industrial massacre. 

Adam Shatz on Miles Davis in the NYRB

Davis played on some of Parker's finest sessions but he was something of a tentative, even ambivalent, bopper, because he couldn't play as high or as fast as Gillespie. He was searching for a mellower, less frenetic approach to bop, and found it in "cool" jazz, a style he developed in the late 1940s with the Canadian-born orchestrator Gil Evans. So fervently did he believe in his own vision that, at twenty-three, he turned down an offer from Duke Ellington.

Throughout the 1950s and 1960s Davis assembled bands that were notable for their startling contrasts of personnel, like the pairing in his late 1950s sextet of John Coltrane, a tenor saxophonist with a furiously probing gnarled style, and Julian "Cannonball" Adderley, a buoyant, sweet-toned alto player who always sounded as if he'd just gotten out of church.

Charles Gave on Jackson Hole

“The natural rate is going down because we are moving into period of secular stagnation.” This reminds me of Dr Diafoirus in Moliere’s play The Hypochondriac, who declared that opium puts people to sleep because “it possesses a soporific power which induces sleep”.

Mario Draghi on Eurozone banks

You’re right, banks are important, especially important for the euro zone, which is basically a bank-based economy where the credit intermediation goes mostly through the bank lending channel. Bank equities in the aftermath of the Brexit were especially hit. And especially in the euro zone, and especially those banks with a high share of NPLs, or non-performing loans.

Equity prices, bank equity prices are also significant for policymakers, because when if they drop in the way they did one would assume this is to stay cost of capital would increase, and therefore the net return on lending would decrease, that would suggest on the banking side a more conservative lending behavior. That’s why we do care about bank equity prices for the transmission of our monetary policy…

On the solvency side, our banks are better if not much better than they were before… So what is the problem? The problem now that we have to address is the weak profitability, not a problem of solvency.

Morgan Stanley US Equity Analysts lose it

Are we on a cube-shaped planet? Should “Us do opposite of all Earthly things?” Everything seems backwards. Sell winners, buy losers, own staples in both up and down markets. Just do the opposite of what makes sense. Bizzaro World.

Martin Marietta reported last week, and they and a couple of other materials companies have blamed their poor quarters on the rain. Even Milli Vanilli’s success with this line turned out to be fake. The rain? Oh, the stock went up a lot that day. Bizarro World. The credit card companies are discounting a consumer recession. The banks are discounting an industrials recession. But, Visa said volumes were good in January, and jobs, housing, delinquencies, confidence,and other metrics appear to belie the market price action. Bizarro World. Companies with good results are being hammered. Companies with bad results have stopped going down, with freight, WMT ,and other prior losers outperforming. Bizarro World.

Our portfolio advice has been pretty horrendous lately. As my 90-year old Latin teacher used to tell the class in 1985, “son,you are in left field, without a glove, with the sun in your eyes”.

For those who follow our portfolio, we did quite well over the five years from 2011-2015. But, our portfolio just had its worst month in 61 months in January, and things have not improved in February. The market is down more than we thought it would be. Our biggest sector bet has been financials (particularly credit cards). As an investor recently said to us at a conference, “I am doing a lot of things, just nothing with confidence”. Doing the opposite of what we recommended would have been better. Bizarro World. Or at least hopefully not the real world.

What’s the bull case? The positives are this: no one is articulating a bull case for US equities with conviction. Earnings expectations are potentially low. There is some fiscal stimulus this year (vs. drag previous years).The Presidential candidates don’t appear to be multiple expanders now, but they will get more centrist and the riffraff will be removed in a few more weeks. Sentiment is low (two weeks ago an investor on a panel we moderated said “It is a multi-variable world and every variable is negative”.) The US probably looks relatively better than other parts of the world. So maybe, the bull case is just that no one can articulate a bull case.