12.31.19

the eagles: it’s straight-up biblical

Posted in Uncategorized at 2:09 am by Administrator

there’s no other way to put it. it’s straight-up biblical. the eagles have become the stuff of sunday sermons, in the way they bring you so low, and in the way they bring you up so high. you can almost hear the preacher taking those slow solemn tones as he mulls over jonah’s descent into the deep, or christ’s tears of blood in the garden, as the eagles lose to the patriots, and then the seahawks, and then once more to the dolphins. all hope seems lost; the very idea of football becomes bitterness. and then we see the eagles stumble to their feet, rise, rise, RISE. the preacher’s voice quavers with passion as he finds his note, right there, the rhythmic speech matching the rhythm of the insistent pounding of his hand upon the podium, like a drumbeat for our final march into battle. once more unto the breach! our hearts pound with frenzy as one improbable victory folds into the next even more improbable victory, and then there it is—the ecstasy of redemption: jerry jones’s desolation upon seeing boston scott dance his way into the end zone mid-way through the fourth quarter of a season-sealing victory in the meadowlands. the choir erupts in epic cadences as the philadelphia eagles, the 5-7 team that couldn’t get any worse after a humiliating defeat to the one of the league’s very worst teams, conquer their inner demons, prove themselves resilient in the face of incredible adversity, and ascend to take the nfc east crown to the everlasting chagrin of dallas fans everywhere. it’s almost enough to make me believe!

almost.

i love the storytelling. and i love the storytelling that’s evolving even now. i listen with good humor and more than a little happiness but with a whole lot of incredulity as well. brandon lee gowton and john stolnis are already hailing carson as the god-king in philadelphia, a man who has disproven all his doubters with this epic four-game winning streak that sealed the division. wentz won it with clutch play and game-winning drives! wentz won it with receivers that the eagles promoted from the practice squad! 4000 passing yards when not a single receiver exceeded 500 yards receiving! and the crazed podcasters are similarly glorifying doug pederson, the transcending spirit of the age, that sage of the centuries who embraced his team when they needed nothing less than true leadership. look upon this specimen of a man, whose heart is so grand, deep, and wide as to contain all anguish and birth all hope for the faithful. surely doug pederson has now proven himself among the greatest nfl coaches of all time, given what he produced in this group of replacement players facing the constant threat of not only elimination but also utter humiliation? who will stand up and protest against the enduring legacy of dauntless doug pederson and his righteous and resilient right hand, the indomitable carson wentz!

now i’ll say that i didn’t at all predict this 4-game win streak and certainly didn’t believe the eagles would make playoffs. i’m happy to eat those words and all the venom that dripped off of them! i thought this was a broken team with a declining coach and a coin flip at quarterback. yes, i thought all those things—and i still think those things! but i love love love the storytelling regardless, because even though the combined record of the four teams we beat on this win streak was 19-45 (counting the giants twice of course) and even though we barely pulled out wins against two of the league’s worst five teams, the joy of emerging from utter darkness into even the dimness of dawn is incomparable and defies perspective.

there is no doubt in my mind that this eagles team is as troubled and flawed as they were after their last three-game losing streak just a month ago. the offense yesterday sputtered and died on several critical drives, and the giants were firmly in the driver’s seat with 7 minutes left in the 3rd quarter before faltering at the eagles’ 36 yard line and then failing to convert a critical 4th and 4. it was cre’von leblanc’s pass breakup on that play and then daniel jones’s fumble forced by malcolm jenkins on a subsequent drive that absolutely shifted the momentum when the game could have gone either way. sidney jones, rasul douglas, avonte maddox, and cre’von leblanc came up big and put us in a position to win; boston scott and the eagles’ offensive line rose to the occasion and sealed the deal. i think we can all agree: it was a climactic victory against a bad team, and it was particularly climactic because (like many of our wins this year) it almost got away from us.

if doug pederson is going to get credit for bringing us out of hell, then he (like god) must also take the blame for putting us there. for two seasons in a row now, he and his coaching staff have blatantly mismanaged highly talented teams, subjecting the fans to baffling, humiliating losses characterized by blown defensive assignments and stalled offenses. that he’s been able to rally his troops and push them to 9 wins is perhaps a testament to his resilience; but the pattern now also raises the concern that the one thing doug pederson can’t do is handle high expectations. and perhaps this explains wentz’s improved play down the stretch as well; as foles did late last season, wentz brought a different psychology to the game when the offensive was reduced to a squad of replacements. he relaxed and took what the defense gave him; he tucked the ball and ran when there was opportunity; he threw the ball downfield and played to win.

how do you make a talented team like this fight hard for 16 games, even when their backs aren’t collectively against the wall? the easy answer is discipline: you attend to the details and you make your guys focus on what matters. guys in and outside the locker room knocked doug and the team overall for their complacency, hubris, and lack of discipline this year, and while there are two sides to every story, that story of our failures is quite possibly as legitimate as the mythical story of our transcendent victory. yes, they can bring you up so high—but it’s precisely because they take you so damn low. if you like em ugly and scrappy, then doug pederson’s eagles are for you. but if you want a team of guys who do their job week in and week out, then the philadelphia eagles are irredeemably frustrating. it’s that simple.

maybe we’ll beat the seahawks on sunday. i kind of doubt it. but the fans are going to call this an amazing season regardless, because that’s the power of a story. next year, we might just get more of the same: a helter skelter season full of highs and lows, a playoff berth by the skin of our teeth, and not much playoff success to show for all the drama. is that good enough? are the culture and coaching that produce this mediocrity actually good enough? or are we just getting strung along on this ridiculously unpredictable ride and relieved when it doesn’t all fall apart in disaster at the very end? i feel such compassion for you philadelphia, as i extend compassion to myself. we delude ourselves with this story of salvation—because, in truth, it is simply the story of our suffering.

GO EAGLES

12.24.19

beating the cowboys makes everything ok

Posted in Uncategorized at 3:29 am by Administrator

the eagles capped a 3-win streak against divisional opponents yesterday with a climactic win against the dallas cowboys, giving the team a legitimate shot at taking the division. the win has already inspired exuberant accolades of doug pederson, carson wentz, miles sanders, and jim schwartz, and the talk around town is that we’re a shoe-in for the playoffs now. after high-fiving other eagle fans at the local sports bar and insincerely consoling my woefully misguided dallas fan buddy, i was positive exultant and nearly unable to fall asleep. i mean, what a team, right? coming together in the face of such adversity! fielding a roster of 3rd string receivers and out-coaching a more talented opponent! rallying around our maligned quarterback and watching him turn into a hero before our very eyes! maybe we are the team of destiny!

listening to kist & solak extol the many virtues of this squad made me think back on this long and terrible season of highs and lows. every possible narrative has been spun and weaved about this team that has mostly looked god-awful except when we least expect them to perform. the actual facts are less inspiring than the stories. and the actual facts strongly suggest to me that we may very well miss the playoffs—because we’re probably not good enough to beat the giants twice, and because we’re additionally unlikely to win a road game that we’re projected to win. the eagles haven’t suddenly become an inspired team. we’re still the same team that lost to the dolphins, the falcons, and the lions. we’re a poorly coached and very mediocre squad that barely beat two of the five worst teams in the league (the skins and giants) before edging out a cowboys team that simply couldn’t execute thanks to dak prescott’s multiple hand and arm injuries.

the eagles don’t look much better when you dig into the game tape either. we started the game with a bang, and carson connected with his wide receivers downfield on two fairly electric drives in the first quarter. thereafter, the wide-outs essentially disappeared, and it was back to the short passing game with our tight ends and running backs—a conservative and mostly ineffective offense that yielded us just one score after the first quarter. we converted 42% of our 3rd downs, but the stat masks the fact that our play-calling on 3rd downs was generally poor, and our costly attempt at a 4th and 1 conversion featured the dumbest possible josh perkins route into double coverage. we suffered 8 tackles for loss, many of those on 1st down runs that were obvious reads for the defense, and when we weren’t getting stuffed behind the line, we were getting called for offensive holds that killed drives that were about to get us into red-zone territory. i’m not even going to pin the missed field goals on jake elliott; they were long attempts after totally botched 3rd down play calls that couldn’t get our kicker within 50 yards of the goal posts. if our standard for excellence is limiting turnovers and moving the ball downfield, then i suppose we exceeded that extremely low standard. but in my opinion, the 17 point effort was yet another demonstration of our poorly disciplined, utterly uncreative, and consistently inconsistent offense; and i continue to put that on doug pederson and on carson’s ongoing lack of chemistry with whatever receivers we put on the field.

as i predicted, the eagles didn’t win by scoring points; they won with big defensive plays, mostly generated with a 4-man rush that was sparing on the blitz and focused on stopping the run. avonte maddox and sidney jones had a couple of genuinely spectacular coverage plays, and malcolm jenkins was absolutely a beast from start to finish, making clutch tackles and brilliant plays on the ball. our defense has not been as bad as our offense this season (which doesn’t say much), but they’ve had some timely moments of brilliance, and this was one of them. kudos to jim schwartz for playing the cowboys the right way.

we won this game because the cowboys gave it to us, with the most uninspired effort i’ve ever seen from that team. i couldn’t believe the drops from amari cooper, and dak prescott was a shell of himself. though their defense mostly contained the eagles, i thought they did an absolutely terrible job of tracking miles sanders and limiting his impact in the passing game, and of course they paid for it dearly. jason garrett deserved to lose his job a long time ago, but he’s definitely gone after this one. despite dak’s injuries, they had no excuse not to win this game, as they had the better players on both sides of the ball. cowboy fans are going to be hurting bad for the next few days—until they unexpectedly make it into the playoffs next sunday after the eagles lose in the meadowlands.

beating the cowboys makes everything ok, even when things are actually not ok. i don’t mean to be a downer, but it is what it is. beating the skins, the giants, and the cowboys really isn’t a big deal; most of the playoff-bound teams in this league can do that handily. on the other hand, losing to the dolphins, falcons, and lions actually is a big deal, because there aren’t a lot of bad teams in this league that can pull that off. let’s not mistake this eagles team for being a “team of destiny”, unless that destiny is a career day for saquon barkley and daniel jones next sunday afternoon. this has been and will likely continue to be the most disappointing eagles season i’ve experienced since that fool chip kelly got righteously booted out of town.

8-8 still gets us a top-17 pick? at least we beat the cowboys.

GO EAGLES

12.22.19

Rise of Skywalker—and the Fall of the Pundits

Posted in Uncategorized at 3:32 am by Administrator

a few years ago, i gave a talk to the management group of my company i was with back then, and it was about my experience of “The Force Awakens” and the reboot of the Star Wars franchise that it signaled. with the new movie, there were certainly opportunities for star wars fans to be guarded and even critical, given how poorly the star wars prequel movies had turned out. i myself could easily have approached the movie like other “pundits”—people who build personas out of esoteric knowledge and strong opinions and pride themselves in making other people feel stupid. but i chose not to be that way. i rooted for the movie, and because of that attitude i was able to enjoy the movie. and the difference in my attitude had little if anything to do with my maturity or growth as a person. it had everything to do with my son.

my son was nine when “The Force Awakens” came out, and we watched the movie together on its opening weekend. he’d been looking forward to it for over a year and a half and was almost beside himself with excitement the morning that we watched the movie. i can still remember seeing his face in the theater as the lights went out and the previews hit the screen. he was precious. we had a thoroughly good time. when the movie finished and the closing credits began to roll, we looked at each other positively beaming and gave each other a high five. it was, as i recall it, just a perfect moment for us.

the talk i gave that month to the three hundred and fifty managers at my company ended up being one of the ones i’m best remembered for, and it was a simple talk about optimism in the face of change. whether in life or in work, each and every person has a choice about how he or she will approach something new. she can dig her feet in and say that absolutely nothing will ever match the intricacy and raw power of “The Empire Strikes Back”, that the series should have ended right there with episode V never to be tainted by a creative stroke any less deft or inspired ever again. or he can be open to the new, understanding that his attitude will shape how others around him will experience and enjoy this new thing. i asked my managers to decide in a time of great change and turnover whether they would be critics or optimists, whether they would be naysayers or the hopeful, whether they would be destroyers or builders of something wonderful. i asked my managers to consider the people in their lives that they love and hope to develop, because it is the attitude they choose that will forever shape the memories and shared values they will create with these people.

to a great extent, mindfulness has enabled me in these past few years to forgive and to embrace what the great pundit and critic within me would have outright dismissed. i learned not to be a skeptic in the exam room even when presented with a patient ostensibly seeking opioid pain medications or a disability exemption. i learned to listen to people who came at me looking for a fight. i learned to accept people who did not hold my christian beliefs; and then when i realized i no longer held these beliefs, i learned to respect the christians who reached out to me and attempted to recruit me back to the church. i even learned to look upon our controversial president with grace and hope, and this enabled me to realize many things about the donald trump i once chose to despise. this is a president whose administration has passed important laws that support reform of the criminal justice system and a ban of bump stock firearms; he is a man who has stayed true to his commitment to protecting the american worker by renegotiating NAFTA, striking a new trade deal with the Chinese, and personally pressuring multinational corporations into bring jobs back to the U.S. he has brought soldiers home from the middle east and avoided embroiling us in new wars. for these things and many others, i’m grateful. and i can see these things for the good in them despite all that once angered me about him—his arrogance, his lack of sympathy for immigrants, his hesitation in calling out white supremacists, his bullying persona, his lack of respect for decorum and law, and his general lack of competence as a statesman. Donald Trump is not a good leader; but he looks different to me when i assess him not as a critic but as a human being willing to see the good in another.

i say all of this as an extremely long-winded introduction to my central thesis: that the harsh criticism of “Rise of Skywalker” strikes me as terribly unfair. i thoroughly enjoyed the movie. i enjoyed the movie because it was riveting, well-paced, action-packed, and ultimately complete. i veritably received it as a gift from the universe—a historic moment that i could enjoy with my son and daughter. beyond being an excellent stand-alone action movie, it provided a strong finish to a story that was begging to be brought into focus, and it redeemed a universe that george lucas’s prequels had nearly ruined beyond repair. moreover, i enjoyed this movie because i was prepared to enjoy it, and because i was willing to see the good in it. like all labors of love, there was much good in it to enjoy.

there’s one particular critic that i’ve enjoyed and trusted for years that branded this “the worst star wars movie ever”. i read through his review twice and couldn’t understand what he was saying. i understood the words themselves; and i could comprehend what he was arguing. he felt that the plot was canned, the characters were hollow, and the climactic moments were not compelling. he wanted to see this movie address intricacies from the prior movies while going deeper into hero journeys and character developments. the review summoned memories of “The Dark Knight”. dark knight was a wonderful movie. i suppose there’s a parallel universe out there in which “rise of skywalker” presents us with a maudlin version of Rey who takes us deep into jedi lore and even ties up some “clone wars” loose ends before propelling us into an abstract and vaguely disturbing climactic conflict with her own friends that leads her to battle her own dark side, save kylo ren from imminent demise, and prove herself worthy of being considered the ultimate chosen one across the generations. but this “rise of skywalker” isn’t a psychological film in the tradition of “The Dark Knight”. it is a simple story about self-determination and faith in others. and in that respect, it is absolutely in character for a star wars film.

i was honestly quite moved by some of the movie’s seminal moments—leia’s death and its impact on kylo and rey, ben solo’s moment with han, and rey’s last moments with the man who completes his journey by saving her life. i don’t know if all those moments put together make for a perfect story; but it’s certainly a good one. i’m thankful to jj abrams for doing right by the fans, and for all the money and fame that have already come his way and will come his way in years to come, i hope that he’ll be able to enjoy as much satisfaction as a man can possibly reap from rendering a story as important as this one both lovingly and well

12.18.19

roseman didn’t bet on this team; neither should we

Posted in Uncategorized at 3:17 pm by Administrator

when the dust settles on this disappointing year for the eagles, a lot of people will point a finger at howie roseman. they’ll point in particular to his latest draft picks and free agency finds, which featured d-sean jackson and malik jackson (both lost to injury by week 2), a terrible miss at pick 57 with jj arcega-whiteside, and a failure to upgrade the defensive back rotation beyond a one-year re-up with the bafflingly bad ronald darby.

but howie shouldn’t take the blame. the fact is that roseman has been what a good team needs out of a general manager; he’s been aggressive in free agency, adept at freeing up cap space, and consistently committed to keeping the team competitive. prior to week 1 of this season, the eagles were strongly favored to win the nfc east and were considered a top contender for the super bowl; that’s in large part to the roster that roseman assembled last spring.

in light of howie’s win-now approach in the first half of 2019, it’s been startling to see him take such a passive approach as the nfl season has progressed. most fans expected him to make a move at the trade deadline to address our deficiencies at WR and CB, but howie deferred on the prices and took a pass, settling for a relatively pedestrian acquisition in genard avery. people expected him to dump nelson agholor and take receivers off the street, but he didn’t. when terrell suggs and janoris jenkins were recently released by their respective teams, there was good reason to consider the instant upgrade to our defense that both of these guys could offer, but once again roseman didn’t pull the trigger. roseman’s inactivity may strike some as caution, but to me the message he’s communicating to the fan base and the organization is clear: howie roseman’s not going to bet on this roster in 2019. if he wins, doug pederson will have to win with the guys that he’s got.

and it’s the right position for roseman to take. the fact is that roseman did take the plunge in 2018. he was all in on golden tate, coughing up a hugely valuable 3rd round pick for what looked like an elite receiver that could boost our middling offense. golden tate flamed out in philadelphia—spectacularly. anyone who’s watched golden tate since he left philly knows that he didn’t fail in philadelphia for lack of fit, talent, or athleticism. he failed because our coaching staff failed to integrate him, just as they failed to integrate other roseman acquisitions like andrew sendejo, zach brown, and lj fort. this coaching staff has proven more than capable of wasting talent, and it’s not caution so much as frank realism that’s driving roseman’s game now. why waste valuable draft capital just to stick a finger in a dam that’s breaking apart from more cracks than one? better to get flooded and start all over at this point.

i’m not saying that roseman’s relationship with the coaching staff is broken or that he’s rooting for the eagles to lose out. but i have to imagine that roseman doesn’t trust the coaches to make proper use of the talent that he brings on board. and until that trust is repaired, roseman’s going to adjust his sights to focus on the future. he’s already extended brandon brooks and lane johnson this season and is likely going to shift his focus to zach ertz over the next week or two. for howie, this may very well be a lost season; and the conversation with jeff lurie after week 17 is going to have to revolve around the future of the coaches, including our inconsistent head coach who lost not only some winnable games but also the locker room this year.

i’ll admit that though i believe that losing out is best for the eagles, i’ll be rooting for them to beat dallas on sunday. like i projected before the season began, i believe that dallas is better than the eagles at virtually every phase of the game, including at the quarterback position. regarding the latter, i don’t believe carson wentz is less talented than dak prescott; i just believe he’s the worse player right now (12th among quarterbacks by my estimation), and that has a lot to do with how the offensive coaching staff has simply ruined him over the past two seasons. more than anyone else, carson deserves a better head coach and a real offensive coordinator. it may take another season or two to kick doug pederson’s sorry ass out of town, but sooner or later someone’s going to realize that unless superman foles comes back, there’s no saving doug pederson’s rapidly devolving career.

if the eagles win this sunday, they’ll win it not because they scored points (basically impossible with this offensive unit right now) but because of big plays on defense. it seems like an unlikely game script, but it’s our own slim shot at taking the game. they’ll have to focus on stopping dallas’s run game, which will necessarily mean dialing back the pass rush and often keeping eight in the box. this will mean a whole lot of man coverage in the secondary, which is the eagles’ fatal flaw—but what other choice do we have? dallas is mainly beatable when they rely on dak to drive the game from the pocket, and our best chance at winning is to force dallas to be one-dimensional. the eagles have a less than 25% chance of winning this game by my assessment, but if they do win it’s because they force dak to pass into tight windows on every snap.

howie’s not betting on us, and neither am i. it’s time for some major changes in philadelphia.

GO EAGLES

12.15.19

what’s the plan?

Posted in Uncategorized at 5:45 pm by Administrator

at the end of 2016, i decided that i’d had enough of the 1% advisor fee my financial planner was charging me just to invest my money with a turnkey asset management company. i liquidated everything and then sat on the cash, thinking that 2017 would be a rocky year and there would be a better time to reinvest. my father passed in april 2017, and i recommended to my mom that she keep the proceeds from his life insurance and the sale of their home in cash as well. as a result of this brilliant approach, we ended up sitting out an epic 2017 market run that yielded more than 20% of growth in the S&P 500 index. my financial planner, more than a little happy to rub it in, sent me an email in january of 2018 basically taunting me for trying to outdo him in his area of expertise.

i spent most of 2018 trying to figure out how and when to get back into the market. i started to read and to learn about investment strategies, and i came to a vague sense of a plan: that i would incrementally get back into US equity whenever the S&P dipped below 2700. the plan wasn’t rooted in any real understanding of what drove the markets. it was just an intuitive kind of thing, framed by my sense that quantitative tightening by the Fed and global economic conditions would undo much of the bull run of 2017 and offer some opportunities for value investors like me. in 2018, i followed that plan, going into mostly large-cap US equity and some international stock in mid-April and then again in late December. they felt like heady, risky moves at the time, but the plan worked out. the returns on my large cap investments (the majority of the portfolio) have averaged around 25%, while the small cap and international investments have returned 22% and 15%, respectively.

since last december, i’ve been a bit more intentional about understanding the paradigms and theories of guys i would describe as celebrity investors (dalio, schiff, gundlach, and buffett, among others), and i realize now that what i thought of as a plan a year ago would have been considered idiocy by several of these guys. in late 2018, schiff for example was preaching imminent recession and the rise of gold; rosenberg was certain equities would flounder and pushed long-term treasuries. none of them bought into the belief that i had unconsciously absorbed over decades of listening to CNN and amateur investors—that the U.S. was in the midst of a perfectly sustainable secular bull market. jeff gundlach in particular really disputes this paradigm by arguing for a historical perspective on the cyclical rise and fall of regional economies. the common theme in much of what i’ve been learning is that the current state of the U.S. stock market is the unique product of many factors—quantitative easing, extremely low interest rates, spiraling deficit spending by the federal government, the rise of passive indexing, and massive stock buy-backs by large cap companies—which have all contributed to a stock market bubble that is on the verge of busting.

in my effort to understand where these guys are coming from, i’ve had to digest a lot of concepts and metrics like the schiller CAPE ratio, yield curve inversions, the consumer price index, and the Univ of Michigan indices of consumer expectations. to an extent, i can understand now why guys like peter schiff have been passionately bearish about the american stock market while extolling the virtues of the gold standard, international debt, and other non-correlated investments. the risk of global economic catastrophe seems real enough that i’ve begun retreating from US equities in my 403 and 529 accounts, where i’m not penalized for reallocations. but i’ve had to ask myself if i’m really prepared to embark on a new long-term approach to investing money and preparing for retirement. in a strange and unprecedented economic environment such as this, one has to have a plan. what is the plan?

if gundlach and schiff have it right, then we are headed for a global economic meltdown in 2020 that will catch the average american by surprise. it will be a recession that will be characterized by rising prices and falling corporate earnings as early as Q1, rising unemployment, and then a rate hike by the federal reserve in late 2020 to curb spiraling inflation that will quash capital flows and contract GDP. neither gundlach nor schiff see these developments occurring to the same degree in other developed markets, potentially creating opportunities for investors in gold and precious metals, emerging market equities, and foreign debt. it won’t just be a 2020 crash either; gundlach and schiff foresee that the weakening dollar, rising national debt, and other ramifications of economic contraction will put the federal government at imminent risk of defaulting on some of its major obligations to the rapidly expanding baby boomer population, including medicare benefits, social security, and federal pensions. america’s version of a sovereign debt crisis could very well deepen and prolong the imminent recession and permanently reset america’s growth expectations relative to the rest of the world. among many other dire implications, this would suggest that the S&P 500 may very well be a poor performer in the 2020s. their projections are supported by historical highs in 12-month trailing P:E of the S&P, the recent yield-curve inversion, the fall in manufacturing PMIs, an uptick in november’s CPI, and an almost 20% YTD surge in the price of gold.

but there are other factors that lead me to question their doomsday analysis. i might be very very wrong (as i’m a neophyte in this conversation), but the very strong dollar (price-adjusted in november at 101.85) would seem to suggest very strong global demand for dollar-denominated debt. thus, it seems feasible to me that the recent yield-curve inversion reflects the flight of capital from foreign markets into the “safety” of long-term US treasuries. if this is so, then it seems hardly likely to me that an american debt crisis is imminent; if anything, the numbers suggest that the present risks to the global economy will continue to drive strong demand for american debt, allowing the U.S. to maintain its current pattern of deficit spending and high debt:gdp ratio. peter schiff decried this as a federal ponzi scheme eight years ago, and there’s almost no question that it is; but when the rest of the world’s creditors look even worse than the U.S., who exactly is going to call in america’s debt right now?

the other glaring factor i can’t ignore is that despite aggressive quantitative easing and tax cuts, we’re not seeing meaningful inflation. this defies simple explanation, and for sure gundlach and schiff haven’t been able to explain it compellingly. and without inflation, i don’t see the rest of their predictions—rising unemployment, tanking corporate profits, and deep recession—coming to fruition. the november uptick in CPI is fairly trivial in the scheme of things and perhaps even startlingly low in light of the recent jobs reports. and while manufacturing PMI numbers did fall in the latter half of 2019, the service sector maintained strength. some say the service sector inevitably follows manufacturing; but i haven’t seen evidence that this is true. in fact, america’s massive service economy strikes me as the one factor that schiff, gundlach, and other doomsday prognosticators have largely ignored in their analyses. until inflation and high unemployment hurt consumer confidence, the service sector will continue to buoy the american economy; and as long as the american consumer sustains corporate earnings, there will be a floor for the job market. unlike japan, europe, and china, america doesn’t rely on its export economy to survive; it has the greediest, most insatiable, and relentlessly over-leveraged customers here at home, in the form of america’s materialistic middle class.

europe, russia, and japan among other countries are almost definitely headed for a recession next year, but i’m not certain that the U.S. will follow them into the tank. that’s not to say that the U.S. will escape global economic headwinds unscathed. regardless of whether our GDP contracts by the numbers, there’s almost no question in my mind that the stock market will at least correct (if not crash outright) in early 2020. this disconnect between main street (GDP stability) and wall street (a crashing dow) will undeniably reveal one aspect of michael burry’s and peter schiff’s prognostications to be true: that we are in the midst of a stock market bubble, and there is at present no real correlation between equity valuations and the fundamentals of our economy.

so to put it simply, here are my projections (and the plan implied therein):

1. 2020 will be a very bad year for the export-driven and commodity-heavy economies of emerging markets, as global demand sharply decreases. i’m getting out of emerging market investments for 2020, and they’ll be a relatively small part of my allocation strategy going into the mid-2020s.

2. next year will also be a difficult year for other developed economies (i.e. Japan, UK, and Europe), though Europe’s outlook will be very much determined by Christine Lagarde—who is simply the most important woman in the world right now. i’m pulling back from international developed markets for the short term (2020) and then going back in at customary allocations for the long term.

3. the U.S. will experience a slow-down without GDP contraction in 2020, but the S&P will drop by about 25% when corporate buy-backs and over-exuberance give way to realism and fear. while there will be multiple severe drops in the S&P through the 1st and 2nd quarters, the low point for the markets will be october 2019, when it becomes evident that the U.S. will have a democrat (and possibly a socialist) in the white house. that will put the S&P floor at around 2250. it shouldn’t fall further; the senate will remain staunchly republican, promising a divided and ineffectual government that is always good news for investors. additionally, low commodity prices due to global oversupply should curb inflation and stiffen the floor for the american economy.

i’ll be getting out of US equities for the first half of 2020 and then buying back in, mostly focusing on value/dividend at the higher cap ranges. the typical growth portfolio (FAANG and tech) figures to fall the hardest and may not recover for 2-3 years; i’m staying away from tech over the short-medium term.

4. over the longer term, i suspect that global environmental concerns, rising wealth and income inequalities, and the rise of nationalism will factor heavily into the new balance of economic factors, as ray dalio has suggested. in a decade of social transformation, massive economic restructuring, and probably a new war of global proportions, nationalized industries of developed economies and america’s military-industrial complex stand to profit most, while emerging economies (sans china) fall farther and farther behind. it may not be the return to the 1930s that dalio describes, but when i look at all the relevant factors—the aging of the world’s population, the incredible economic burdens imposed by the retiring baby boomers, the accelerating impacts of global warming, and the militant nationalism emerging in many pockets of the “developed” world—i cannot imagine that the 2020s will be like the sunny decades of growth and globalization that preceded it. there will be opportunities for the accumulation of wealth; but these will be inextricably tied to the processes of colonization, oppression, and hegemony.

12.08.19

the Eagles: it’s time to lose out!!!

Posted in Uncategorized at 3:46 am by Administrator

when it comes to the best case scenario for the eagles, i’m sure all philadelphia fans would agree: we’d all be happy to make playoffs and win at least one playoff game. one playoff win may still not meet our preseason expectations, but given our feelings about the team right now, getting out of the wild card round might be enough for us to say that this season wasn’t a failure. this best case scenario is extremely improbable, because it is almost inconceivable that this eagles team can beat either the seahawks or the vikings in the playoffs.

the worst case scenario for the eagles oddly enough also involves the eagles making the playoffs. if we make playoffs and lose our wild card game, we’d reap not only disappointment from the loss but a 6 or 7 position drop in the draft order for winning the division. it would be the difference between drafting 15th and 21st. to put that gap in plain terms, it’s the difference between having a shot at a top-flight CB (kristian fulton) and a prospect with significantly less potential (cj henderson); it’s the difference between a WR with starting potential (ruggs or higgins) and a developmental jack of all trades (laviska shenault). the possible disparities in the 2nd and 3rd rounds are possibly significant as well.

given that making playoffs is vastly more likely to result in a humiliating eagles loss than an extended playoff run, i think that we have to discount the likelihood of the best case scenario and focus on making the best of the realistic possibilities. and the best of these possibilities is pretty damn obvious; we need to lose out and finish the year 5-11.

like i mentioned previously, the eagles need a real kick in the ass to make the sweeping changes needed to turn around this organization. we need a new offensive coaching staff (with the possible exceptions of jeff stoutland and duce staley); and it’s probably time for us to clean house on the defensive side as well. i’m not a fan of doug pederson right now, but he probably has one more season on his post-super bowl leash before he’s up for review. a 5-11 season is disastrous enough for us to clean house, and the fans deserve a total overhaul.

and when it comes to the draft, the difference between 5 and 8 wins isn’t simply about the advantage gained by drafting 8th versus 15th in a draft that’s terrifically strong at WR and CB, our two most important positions of need. the importance of our end-of-season record also has everything to do with what it implies for the draft positions of the Giants and Redskins, our division rivals. if we lose out to the Giants and Skins, they will each end the year with at least 5 wins, which ought to be good enough to take both of them out of the top 4 picks and thus out of contention for chase young and jerry jeudy—two guys that we don’t want to be facing twice a year in the foreseeable future.

it may not seem like a cheery christmas gift, but a 5-11 finish that puts the Eagles at the very bottom of the division might very well be Santa’s best delivery for a philadelphia team that is clearly on the decline. drafting at 5th or 6th would give us a shot at the draft’s strongest overall cornerback jeff okudah, while consigning the skins and giants to mull over the pros and cons of less pristine (albeit still intriguing) prospects like edge players aj epenesa and yetur gross-matos. meanwhile, the cowboys would have the extremely dubious privilege of representing the nfc east in the playoffs, giving them the opportunity to lose spectacularly in one of the first two rounds and then franchise dak prescott. the icing on the cake would be amari cooper signing with another team and dallas attempting to draft his replacement at pick 21.

so, all this is to say that i’m an eli manning fan for one day (tomorrow). it’s time to lose out, Eagles!!!

GO GIANTS!!!