Felonius my old friend, Step on in and let me shake your hand
So glad that you're here again
For one more time let your madness run with mine
Streets still unseen we'll find somehow. No time is better than now
Fagan/Becker
It’s the customary period for me to remind my readers that the origin of ubiquitous epithet “March Madness” is the Illinois High School basketball tournament. Back when I was tickling the twines/riding the pines for my school, 16 teams from each of two divisions would, on successive weekends, motor down to Assembly Hall in Urbana to compete in games held on Friday/Saturday. For several decades, the winning squad was thus the one that copped 4 victories over two days. March Madness indeed.
The term has, of course, since been co-opted nationally, and this year I had my brackets nearly perfect. The only exception being my decision – largely as a nod to my Catholic friends during this Lenten season -- to call forth the vestal vessels of Sacred Heart to upset first the hated (by me) Minnesota-Duluth Bulldogs, and then issue a swift beatdown to Cornell, thereby making it to the Semis in Minneapolis, where I had them losing in the Finals to my skating Lady Badgers.
An article by Jason Gay in this week’s Wall Street Journal proclaimed the University of Wisconsin’s Women’s Hockey Team to be among the greatest college squads of any kind ever assembled. Gay – God bless him – is a bit of a homer though, having graduated from Wiscy a decade after I peaced. I think that the GOAT argument, however, is a stretch. The Penn State Wrestling team has won 12 out of the last 13 titles. Nobody could cop a game against the UCLA Basketball Bruins back in the late 60s and early 70s. Or the UConn women about a decade ago.
But the Badger hockey squad is certainly interesting, among other reasons because of Mark Johnson, who has coached the team since 2002. He is best known for having netted the puck twice against the Soviets in that magnificent Miracle on Lake Placid (1980). But after that, in my senior year, he led the Wisconsin men’s team – a crew coached by his father: Badger Bob Johnson – to the Frozen Four title.
Back then hockey, as us Geritol chuggers are fond of saying, was hockey. Wisconsin was in a perpetual pitched battle with the Minnesota Golden Gophers and the North Dakota Fighting Sioux. With respect to the latter, the rivalry was so intense that the Madtown boys would skate into Ralph Engelstead Arena (aka “The Ralph”) in Grand Forks always to encounter an honest-to-goodness dead badger on the ice:
Wisco men’s hockey has levelled off since then, but then there’s the women to pick up the legacy. And, to retire the question before it is asked, to the best of my knowledge, no one born without ovaries has ever donned the Female Frozen 4 Cardinal and White.
Beyond the world of lady puck shooters and puck stoppers, March passes through. And madness indeed abounds. The men’s hoops tourney is underway, but I can’t work up much enthusiasm for it. The glory days of Magic, Bird, Isaiah, Quinn Buckner, David (Skywalker) Thompson, MJ, Worthy, Ewing, and even the much-derided Christian Laettner have long since passed us by – leaving a string of one and doners to carry on, however vapidly, in this hallowed tradition.
Washingtonian Madness also abides, with this week featuring the shakedown of Ivies and white shoe law firms, and the nominal revocation of presidential pardons. I take the under on the latter, believing that the latter-day Felonius (Hunter?) will remain at liberty to find streets unseen, unencumbered by the legal system.
He also withdrew the security clearances for a former president, a former vice president two former secretaries of state and several free-thinking members of the House of Representatives.
T & M continue to suck the oxygen out of the room, and for the latter it was a mixed-to-negative week. On the downside, his flagship corporation – one TSLA – having lost half its value since Christmas, has now sunk to a piddling $800B of market cap. And this amid repeated episodes of its core product (and dealerships selling same) being torched to ashes.
To the good, one of his companies did lead a successful effort to rescue those poor souls who were stranded for nine months in that space station, and anyone who doesn’t applaud, isn’t impressed with this may want to do some additional soul searching.
The Fed held steady and suggested that they might do something – if and when something is needed. Or they might not.
The markets, in what can only be described as a grinding configuration, responded for an hour or two with some tepid buying.
And now, with one week left in this wit-wandering month, we, as investors are left with more questions than answers. Including one coined by the immortal Joe Strummer, which ushers in that singular banger “Clampdown”.
“What are you gonna do now?”
Answer: you’re gonna wait. But not for long. I don’t expect much meaningful action next week. Maybe somebody still cares about the couple/few PMIs which drop this week. There has been a spate of earnings pre-announcements (mostly negative) and these may continue. Moreover, in an elapsing quarter, which, at the moment, leaves all our equity indices improbably down for the year, there is the possibility of some tape painting. Overall, however, I anticipate a quiet week.
But then March ends and one wonders whether the madness will continue into April.
It looks to me that it will continue. Wednesday week – April 2nd – which has been proclaimed by Trump to be American Liberation Day ushers in that proclaimed-to-be-glorious era of new tariffs. Unless it doesn’t Because it might not – particularly if 47 gets nervous and finds a way to declare a big fat orange victory in these here trade hostilities. Already he’s backing off on whacking certain (presumably politically important) sectors.
While I can’t speak for everyone, I will state that should the new trade policy come to pass, I will feel anything but liberated by the prospect of paying an incremental levy on all the shit that I buy from Mexico, Canada and China.
The latent madness only intensifies from there. Monthly and quarterly macro data begins to roll off the tape. And recent trends – from Employment to Retail Sales -- are somewhat troubling.
The news is not all bad. Existing Home Sales perked up. The Atlanta GDP monitor has ticked up to a robust -1.8%. And, in terms of upticks, that’s about it.
Earnings releases get a late start and will certainly be instructive. The banks report a fortnight after Liberation Day, and I will be paying particularly close attention to how “liberated” auto makers, technology companies and other enterprises feel by the prospect of paying an additional 25% for parts that are critical to their operations.
In addition, we will be on the receiving end of Inflation, Employment and ACTUAL GDP statistics. And weren’t that enough, sometime presumably in the next couple/few weeks, the Big, Beautiful Budget Reconciliation process will unfold in earnest.
It’s a lot for even the most efficiently functioning minds to deconstruct.
I think the most likely outcome is that earnings and macro data, while perhaps lukewarm, will not be disastrous enough to extend the poor showing of the markets thus far in 25. That the budget resolutions will pass, if tweaked in ways great and small but in such a way as to please no one and aggravate nearly everyone.
But we will avoid a tax increase, which, however justified from a fiscal perspective, would be pure poison to the Capital Markets. What I see in the market supports these sentiments. Absent further tape bombs, we’re probably at the lower end of the valuation range.
Still and all, the over-riding question remains: will April feature a continuation of recent madness or will the clouds part, ushering in a much needed Liberation Month?
All that remains to be seen, and we won’t begin two know for an agonizing couple of weeks. More calming to the nerves is the results of the Women’s Frozen 4, with the caveat that while my unfortunate Sacred Heart pick ruined my chances of copping that enormous cash pot, I’ve no regrets – particularly given the final outcome:
But Badger Mark must repeat this feat for each of the next 12 years in order to excel the exploits of those Mount Nittany grapplers (more if they keep winning). At which point he will be pushing 80.
So, let the madness continue, I say. A couple of decades ago, the Illinois High School Athletic Association expanded the number of divisions from two to four. And mercifully extended the calendar of contests over a full week.
The risk management lesson here is that madness eventually runs its course. What replaces it is not for us to know. And whether it be a. continuation of irrationality or the dawn of liberation, we can and will contend with it.
So, lets embrace our current condition, with as much equanimity as we can muster. We’ll know soon enough what follows in its wake, and I reckon the trick is to avoid descent into irretrievable depths of full- on insanity in the meanwhile.
TIMSHEL
