WASHINGTON, June 5, 2012 – We’ve been using a variety of metaphors over the last couple of weeks to describe the indescribable—a stock market that, as Wordsworth might say, seems to be wandering “lonely as a cloud.” Bill Murray’s “Groundhog Day” motif has seemed appropriate, with each trading day seemingly repeating the previous down almost to the last measure of detail.
But we begin to wonder if the plotline, such as it is, of Samuel Beckett’s absurdist play Waiting for Godot might be more appropriate. Godot spends its entire two acts focusing on two bums, Estragon and Vladimir, who hang out in a park every day waiting for a dude named Godot who never shows up. Indeed, he has never showed up in the past, does not show up during the play, nor is ever likely to show up in the future.
Beckett got a lot of critical ink out of this play over his lifetime. And as ephemeral and time wasting as Godot seems to be, it’s still routinely performed by amateurs and professionals around the globe and in many languages. One can’t be faulted for wondering just why this is, particularly when there are quite a lot of more visceral and riveting plays available to produce, ranging from Hamlet to Who’s Afraid of Virginia Woolf?
Yet Godot endures, and people still show up in theaters to watch a pair of silly no-accounts and a few other actors spend a couple of hours doing essentially nothing and waiting with great anticipation for something that never happens. Professors, shrinks, and assorted propeller-heads have used hogsheads of ink and felled many a forest to come up with this or that esoteric interpretation of the play.
But the more time goes on, this the more this writer is convinced that Godot may simply prove to be the most accurate description of life under late-stage capitalism as administered by a supposedly democratically-elected ruling class and its crony capitalist friends to no particular end other than keeping the jobs, art collections, and wine cellars of that ruling elite intact.
Like Godot, the current world economic situation as symbolized by the markets is entirely too depressing if you think about it too long. Here are dozens, hundreds, perhaps a few thousand of the supposedly smartest people worldwide who endlessly wring their collective hands while the economic system that’s supporting the entire globe slowly and inexorably implodes. Why do people continually elect clowns like these? Maybe they’re waiting for Godot. Maybe they’re waiting for some sort of secular Messiah to come wafting in on one of Wordsworth’s clouds and save us all.
This absurdist search for The One supposedly ended with the election of Marxist man-child Barack Obama as President of the United States in 2008. What a catastrophe. An indulged product of vapid, redistributionist academic theory, Mr. Obama has only succeeded in setting up the ultimate conundrum. He wants to redistribute more and more from a system that, largely due to his ineptitude, produces less and less.
His counterparts in Europe have worked this model—seemingly successfully—since the early 1950s, more or less. They’re trying to save that model now even though demographics and normal human longings have exposed its absurdist underpinnings. They know far more about the ultimate outcome of this story, but they’re not telling. They were hoping that The One might have an answer, but now they know that he’s not Godot either.
It might seem fatuous to wallow in literary analysis in today’s column. But great art speaks to us in ways that point-and-figure charts never can. The market today is drifting down more or less, aimlessly and at times listlessly, as even the professionals seem to be heading for the exits and turning out the lights, leaving the field to a few hedgies and a bunch of whiz-kid algo freaks and their highly sophisticated yet mindless boy-toys.
You find meaning in this market where you can, but most of it is a joke. This week will be another week waiting for Godot to show up. The Fed will show up this week and read the tea leaves again, with the Street hoping they’ll pre-announce another batch of QE—what is this now, the 4th round? If so, the markets might get juiced a bit. Or maybe there’ll be another Godot showing up in Europe with the feckless EU making a few really soothing pronouncements that, upon second parsing, evaporate into non-being and nothingness. Or maybe we should wait for the Greeks (again) to do the right thing and elect a coherent government later this month.
In the meantime, the market continues to wait for Godot. But he’s still unlikely to show. We’ll get a couple of nifty, positive-sounding head-fakes this week, we suspect. But in the end, there’ll be more relentless, grinding selling as the professionals who are left continue to drain their long positions.
This week, once again, cash will be king. It’s being stashed in mattresses and treasurys and we’re loath to recommend anything else right now other than a few well-chosen utilities whose huge dividends are helping them buck the tide. Even our beloved REITs are starting to show some signs of mortality. Dividends remain outrageously high for many, although the major shopping center and office oriented REITs seem to be weakening as the economy wanes. (And huge REITs like Simon don’t pay dividends worth a bucket of spit anyway, so why bother?)
So let’s park that cash in money markets, treasuries with negative yields, and, of course, our mattresses. Then, let’s go on that long-awaited staycation for a week or two, and then return to resume our Godot-watch. Sam Beckett might even be smiling approvingly at us somewhere from afar, perhaps in Franco-Anglo-Irish heaven. If there is one.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.
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