Today’s market note from UBS legend, Art Cashin, who has sent out these notes for well over 3 decades.

Well Over 3 Decades
September 11 (King World News) – From legend Art Cashin: We’ve been doing “Cashin’s Comments” for well over three decades. Readers have been overly gracious and generous in their acceptance. Sometimes they even asked for extra copies. The most requests we ever got for copies were for the first two “Comments” that followed 9/11. We are told they were mailed or emailed many times over. Today, the 18th Anniversary of 9/11 will see lots of folks recall how things were. To remember that day and the heroes it spawned we thought it simplest to repeat what we wrote back then. After the encore we’ll look at things like the current market. We hope you don’t mind the repeat. 


On this day, in September of the fateful year 2001, America – and the world – continued to try to find some way to return to normal. There have been no comments since the atrocity on 9/11. All of our family and staff are safe, thank God. But my office was put out of commission. (It was across a small open park from one of the towers.) We hope to get back into it this week and – maybe – begin regular comments next week. 

A Few Personal Comments – A few years back the “New Yorker” magazine ran a whimsical cover showing how “egotistical” New Yorkers might conceive a map of the United States. Satirically it depicted the nation, with three-quarters of its focus on the island of Manhattan. Ironically, after the atrocity on September 11th, the nation’s heart, its concern, its generosity is disproportionately focused on New York in almost the same manner. 

Similarly, in each of our lives, the picture we view of the world around us would surely have had us as the dominant feature of the canvas. Yet after the tragedy of that Tuesday, with its image of victims and heroes, of smoke and tears; none of us shall see ourselves so large again. There will be room in that picture for others – many others. 

Valuing language and the words that give it shape, meaning and impact, I have always been fascinated by that special group who once wrote for the aforementioned “New Yorker” – James Thurber, Dorothy Parker, Robert Benchley, Alexander Woolcott and E.B. White and others. In simpler times (how foolish! Almost any time was simpler, safer, more secure)…let me start again… love for the writers that Harold Ross brought to the Golden Age of the New Yorker (and thus to the legendary “Algonquin Table”) was to the comedic/satiric group. 

The events of 9-11 led me back to E.B. White. He was terrific, but given my satiric leaning I only loved or, at least remember three things about White – his marvelous book on writing style, his caption for a legendary New Yorker cartoon in which an obstinate kid, responding to his mom’s explanation that what’s on his plate is “broccoli, dear” says – “I say it’s spinach and I say – the hell with it!”, and – of course – his short story called “The Hour of Letdown” in which a computer built to play chess against a human, stops after the event to have a drink. (I’m not sure why I love that story.) 

Nonetheless, the atrocity on September 11th recalled another E.B. White essay. It was (I recall) written over 50 years ago, back when the UN was moving into Manhattan from its early life in “Lake Success” on Long Island. 

Much of White’s essay, written over a half century ago is filled with meaning and moment this day. It has recently been republished as “Here is New York”, if you care to see more. Here are some of the things that bridge generations: 

“The subtlest change in New York is something people don’t much speak about that is in everyone’s mind. The city, for the first time in its long history is destructible. A single flight of planes no bigger than a wedge of geese can quickly end this island fantasy, burn the towers, crumble the bridges, turn the underground passages into lethal chambers, cremate the millions. The intimation of mortality is part of New York now; in the sound of jets overhead, in the black headlines of the latest edition.” 

“All dwellers in cities must live with the stubborn fact of annihilation; in New York the fact is more concentrated because of the concentration of the city itself, and because, of all targets, New York has a certain clear priority. In the mind of whatever perverted dreamer might loose the lightning, New York must hold a steady, irresistible charm.” 

“….New York is not a capital city – it is not a national capital or a state capital. But it is by way of becoming the capital of the world….” 

“….Once again the city will absorb, almost without showing any sign of it, a congress of visitors. It has already shown itself capable of stashing away the United Nations – a great many of the delegates have been around town during the past couple of years…” 

“This race – the race between the destroying planes and the struggling Parliament of Man – it sticks in all our heads.” “The city at last perfectly illustrates both the universal dilemma and the general solution, this riddle in steel and stone that is at once the perfect target and the perfect demonstration of nonviolence, of racial brotherhood, this lofty target, scraping the skies and meeting the destroying planes halfway, home of all people and all nations. Capital of everything, housing those deliberations by which the planes were to be stayed and their errand forestalled.” 

Thank you, Mr. White! (Mr. White earlier in the essay noted that New York and New Yorkers – and all Americans – do good, do what they do, and have traditionally defied logic and their enemies by not only surviving but actually thriving. And all that was true even a half century ago.) 

A More Personal Thought – Many of us got out that Tuesday walking through streets onto which ash, smoke and business envelopes fell snow-like, blocking both your view and your breathing. Yet when a stranger was met, they were invited to join the convoy and offered a spare wet cloth (carried in pockets) through which to breath as they walked. When we reached the East River (Brooklyn side of Manhattan), there was a volunteer group of tugboats, fishing boats and mini-ferries that looked like the evacuation of Dunkirk. No charge. 

No money. Just – “May I help you!” No one got anyone’s name. No thank you cards will be sent. But Americans – even New York Americans – who freely give to strangers but argue with neighbors were suddenly one group. 

In the days since, as we wander via new strange ways back to Wall Street, we all internalize the survivor’s quandary. We are lucky to be alive – but why us. As I noted on TV – none of us headed back to re-open the markets with relish or avarice. The President, the Governor, the Mayor and all officials asked that the markets re- open to provide a means for the economy to work – to unclog an artery. Day after day, traders, clerks and the thousands of folks who support them walked to work. No spring in their step. Resolute to do their job, they are civil but somber. As they pass checkpoints, they say “thank you” to the policemen, firemen, and National Guardsmen who may have lost brothers saving us and some of our friends. 

Ironically, the only smiles you see in Wall Street are on the photocopied photos of the missing that family and friends have taped to walls, mailboxes and lampposts. It may take a long time for smiles to naturally return to Wall Street. It may take a long while to find those criminals who took our smiles and our friends. But, we will have patience. 

Back To Today, September 11, 2019 – As the 18h Anniversary of 9/11 looms, markets have turned relatively quiet. We’re sure that’s coincident. Well, we’re pretty sure it’s coincident. 

U.S. stocks opened lower, led primarily by the techs as Monday’s sector rotation continued, albeit in somewhat more subdued fashion. Also weighing on stocks was the health care sector, as potential political fallout loomed over that area as we move toward election. 

By midmorning, the Dow was down nearly 120 points, which would turn out to be the day’s low. As European markets closed, buyers began to surge into the U.S. market, taking the Dow back to neutral. By way of explanation, I shot this email out to some friends. 

Shortly before noon, the Dow erased more than 80 point loss on reports from the South China Post (a presumed government mouthpiece) that China might be ready to soften some demands. 

At the same time, came reports that Draghi might delay new QE on pushback from Brussels. Then the surprise “firing” of Bolton introduces new uncertainty.
Signs of yesterday’s rotation linger. 

The key reaction to the sudden leaving of Bolton was a downtick in crude, as his leaving might bring Iran back to the table. In the final 30 minutes, the Dow saw a smart rally, led by Apple on some of its afternoon product and service announcements. 

Another good day for the bulls. 

Overnight And Overseas – Equity markets in Asia closed in a mixed and rather bewildering fashion. Tokyo saw a very solid rally and Hong Kong absolutely exploded to the upside, closing up the equivalent of nearly 500 Dow points. On the other hand, Shanghai saw a modest selloff and India reopened with a small gain. In London, stocks are seeing a moderate rally as a court challenge to the Parliamentary suspension gains ground. Markets on the continent are seeing modest gains. Among other assets, Bitcoin remains under some mild pressure, trading around $10,110. Crude rallied on the API inventory data and WTI is trading around $58. The euro is slightly softer against the dollar, while yields are down a ticket or two. 

Consensus – Focus begins to shift to Thursday and Draghi and the ECB. Last week the assumption was for shock and awe as he prepares to hand the baton to Lagarde. Now there are hints of some pushback on rate policy and signs Lagarde is pushing for fiscal stimulus as an alternative to further negative rates. Should be very interesting. 

Stick with the drill – stay wary, alert and very, very nimble.

Audio interviews will resume this week on KWN
after the brief end of summer break!

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