Sunday Thoughts
I bet you have that one song that just puts a smile on your face every time you hear it. I adore my music, and I love hundreds of songs, but there is just that one that gets me every time.
The song in question here is “Golden Brown” by the Stranglers. I’m sure you have heard it. If not, check out the video below, which features beautiful nature scenes.
“Golden brown, texture like sun
Lays me down, with my mind she runs
Throughout the night
No need to fight
Never a frown with golden brown”
The single made its debut in January 1982. It's taken from their album "La Folie." The song is known for its distinctive harpsichord riff, which just transports me into a different place when I hear it. The musical underpinnings are also accompanied by ambiguous lyrics, which have led to various interpretations over the years.
Musically, "Golden Brown" stands out for its unusual time signature, mixing 6/8 and 7/8 speeds, giving it a unique rhythm that has contributed to its lasting appeal. The song became one of The Stranglers' biggest hits, reaching number 2 on the UK Singles chart, beaten by the Jam’s “A Town Called Malice”. Shame.
The background and meaning of "Golden Brown" have been the subject of speculation and discussion. The lyrics are often interpreted as being about heroin, a view that has been both supported and disputed by members of the band. Singer and guitarist Hugh Cornwell stated in interviews that the song was both about heroin and a girl, suggesting a dual meaning where the substance and a person are intertwined in the narrative.
Just as the song's hypnotic tones can soothe the listener into a state of peaceful contemplation, the markets too have their phases where they hum along quietly, unfazed by external shocks, and where investors find their rhythm, making steady gains. This certainly seems to be the case in the current setting.
Stocks are ripping, crypto is flying, carry is performing, and Twitter “gurus” are launching hedge funds while selling vol pays handsomely. Junk bond issuers find great demand in refinancing their bonds at relatively attractive spreads. The inverted curve and negative term premium make bonds relatively less attractive and help ease financial conditions despite the overall bond sell-off. Do you still think that policy is too tight? Forget what the Fed is saying. The answer is no.
As stated in Friday’s chart book, I will focus on identifying a few markers which should help us navigate the current reality while identifying the inevitable turn. Usually, our models will be good enough, but we can not solely rely on their adaptability, although they have served us very well.
For now, the soothing tunes shall continue as we look at what the coming week has in store for us.
Attack!
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