Legend Art Cashin warned, then the other shoe fell and the bottom began to fall out.
The “Number 10 Saloon”
August 1 (King World News) – Art Cashin: On this day (-1) in 1876, a living legend stepped into American mythology. (Actually, he kind of slumped into American mythology.) His name was William Butler Hickok but most of America knew him as “Wild Bill.” Thanks in part to Ned Buntline (inventor of the “Dime Novel”) and in part to Hickok’s appearances in “Buffalo Bill’s Wild West Show”, “Wild Bill” had become a national symbol of the lawman of the Old West. (These days, a cynical press would probably call him a “Rent A Cop” – since he hired out “marshalling” in tough towns like Hays City, Fort Dodge and Abilene.)
Anyway, Buntline and other reporters presented America with the image of frontier towns with a six shooter culture. (Actually, if you totaled the number of shootings in Dodge, Abilene, etc, etc over that dangerous decade, you would find they were a good deal fewer than one week’s shootings in today’s Washington D.C.) Anyway, these authors said that the shootingest of the shootists was a certain Wild Bill Hickok. (Actually, on his roughest duty – Abilene – he shot a total of two folks – and one of them was a deputy – whom he shot accidently.)
Nevertheless, despite what Aristotle may have thought or what you learned in Epistemology, perception sometimes does create reality. Young readers, thinking Hickok was as good as his press, travelled west and tried to bait him or trap him into gunfights. That led Hickok to walk in the street – not on the sidewalk – and to carry two guns in his waistcoat as well as one on each hip.
Okay! Okay! Try to stay awake! We really are getting to what happened on this day.
You’ve got the picture. Wild West starts to get settled and turns to Mild West (fewer job opportunities for Rent A Cops). And transportation brings lots of bright young folks trying to notch your famous reputation onto their spanking new gun.
So Hickok, a doddering 38 by now, decided to pack it in and settle down. And where better than Deadwood where gold had been discovered. But the now married, calmer, Hickok stilled loved poker.
Thus, on this day, he showed up at the “Number 10 Saloon” a little after noon (somewhat later than usual). Due to this lateness, he found his regular chair (back to wall, full view of bar) taken by another player. He asked for the seat but the then present occupant allowed as how he had won three hands running and wouldn’t give this seat to God Himself. Understanding that hierarchy prevailed even in the Old West, Hickok took a nearby seat.
About three hours later, a guy named Jack McCall walked in and moved to the end of the bar (behind Hickok). The night before he had lost very big to Hickok (although Wild Bill had lent him enough for “a room and a meal” at the end of the game). That was particularly generous since Hickok had been forced to gun down McCall’s brother two weeks earlier.
Anyhow – McCall just sipped his drink and looked over Hickok’s shoulder as Wild Bill bumped the table with his “stand pat” hand. Suddenly, McCall raised his gun, shouted “Damn you!” and shot Hickok in the back of the skull.
Hickok died instantly. McCall, trying to escape, fell off his horse! Curious players turned over the hand Hickok had bet so heavily. It was black “Aces and Eights” – now known as “The Dead Man’s Hand.” They failed to record the 5th card. Those of us who were there (it was the Deadwood I.B.A. Convention, boss – I did file a T and E Report), think that we recall it was the Queen of Diamonds.
Traders thought they might be dealt a pat hand Wednesday but Fed Chair Jay Powell threw in a wild card at his press conference.
The FOMC did several of the things that traders had anticipated. They cut the target rate by 25 basis points; they ended the downsizing of their balance sheet and reduced the payment they make to banks on the excess free reserve that the banks hold at the Fed.
They did not announce any program to become more active in the Treasury bill market (which would allow them to directly steepen the yield curve).
The initial reaction to the statement was 15 minutes of zigzag trading as we had predicted in Wednesday morning’s Comments.
It wasn’t until Jay Powell’s press conference began at 2:30 that markets began to react.
Several reporters separately asked Powell what, specifically, led the FOMC to cut rates. Again and again, his responses seemed a bit vague. The closest he came to a reason was – concerns about potential consequences of a trade slowdown. Markets became a little uneasy with the vagueness as it left them with no items to follow in gauging further Fed action.
Then the other shoe fell. He said the FOMC viewed this cut as a kind of mid-cycle rate cut. Traders heard that as “one and done” and the bottom began to fall out of the stock market.
Simultaneously, the dollar began to rally sharply, something you rarely see in the wake of a rate cut.
Around 3:00, with the Dow down over 470 points, Powell tried to clarify. He said that this cut was not the first in an extended series of cuts, it was not a one and done.
Traders tried to turn the market on that comment but a market on close sell program aborted that effort.
The day’s sharp selloff may have done some damage to the charts and you can expect traders to be a bit cautious over the next couple of days.
Overnight And Overseas – Asia equity markets are mixed to somewhat softer. Tokyo closed virtually unchanged, while Hong Kong and Shanghai closed with moderate selloffs. India saw somewhat more significant selling.
Stocks in London, Paris and Frankfurt are currently trading with modest gains.
Among other assets, Bitcoin remains relatively stable, trading just under $10,000. Gold is off a touch and crude trades lower, perhaps in reaction to the firming dollar. The euro is lower against the dollar, while yields are up a tick or two.
Consensus – The dollar will be carefully watched as continued strength can have a negative impact on earnings.
Bank of England stands pat as most expected.
Stick with the drill – stay wary, alert and very, very nimble.
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