How Rock 'n' Roll Changed the World!

Monthly Market Commentary: August 1, 2021

The other day, I read an article, which appeared in the Telegraph entitled ‘A Nightmare of Mud And Stagnation’: Tearing Down the Woodstock Myth by James Hall who is a London-based freelance journalist.

According to Hall, “Over six Sundays in the summer of 1969, a series of free concerts took place in Mount Morris Park in Harlem, New York. The Harlem Cultural Festival was almost entirely forgotten until Roots drummer Ahmir ‘Questlove’ Thompson created the new Summer of Soul documentary earlier this year.

That same summer, around 100 miles to the north-west in New York state, another music festival was taking place:
The Woodstock extravaganza became a byword for Sixties counterculture. It came to symbolise the hippy ideal of free love. Fifty years on, we still talk about The Woodstock Generation.

But, in reality, Woodstock was appallingly organised, insanitary and dangerously overcrowded. The performances were so-so and the sound was patchy. There were food shortages, scant facilities and a batch of dodgy brown acid was doing the rounds. …..The truth is that Woodstock was a snapshot of a moment in time. It happened less than a month after Neil Armstrong became the first person to walk on the moon, a week after the Manson murders, and the month before The Beatles released Abbey Road. It fits. But the same holds for the Harlem Cultural Festival. Same country, same frame of events.

The reason one event was forgotten and the other lauded was, to state the depressingly obvious, because music writers and filmmakers were predominantly white. Just like Woodstock was predominantly white. Black cultural events were of little interest. Woodstock’s beacon status came about because of the white authorship of pop-cultural history.”

When I first glanced over Hall's essay about the Woodstock festival I felt right away that there was a rat somewhere in his piece. When, I re-read it in peace I immediately spotted the rat. Woodstock became famous "to state the depressingly obvious, because music writers and filmmakers were predominantly white. Just like Woodstock was predominantly white."

Having been all my life in the investment business I am used to reading a lot of nonsense. But the above statement exceeds all the nonsense I have recently read. If Woodstock was anything it was certainly not about "White" or "Black," Indian, Chinese, Russian, etc. It was about music and about the then ongoing anti-Vietnam War movement.

Last month I had observed that looking at the recent performance of asset markets, one had the impression of increased volatility. Just look at the daily movement of cryptocurrencies, the price of lumber which within just six months doubled and then collapsed by 50%, meme stocks, which frequently move by more than 5% a day, or the price of gold and gold shares, which suddenly dropped sharply in early June. I still believe that volatility will suddenly spike-up, and that the purchase of the VIX Index would be a reasonable speculation.

Also, I continue to observe a relative tightening of global liquidity which should be unfavourable for stock markets, and the economy.

A divergence in equities concerns foreign markets and in particular emerging markets. Emerging markets (EEM) topped out in mid-February 2021. Thereafter, the EEM ETF moved sidewards until mid-July but recently, it broke down below its neckline, which suggests weakening growth in emerging economies and tighter liquidity. I do not wish to write an essay about the Chinese government's unfortunate and heavy-handed intervention concerning the education sector. However, we can clearly observe not only in China but also all over the world that governments and their corrupt, autocratic and mostly incompetent bureaucrats are determined to gain power at the expense of private sector companies and to strictly control our personal freedom. Personally, I doubt that this more interventionist and authoritarian environment will be favorable for the economy, for my dear readers' well-being, and for asset markets in particular. But this will likely be the unfortunate outcome.

I wish my readers a wonderful summer vacation. About the 1960s, please do also remember the words of the late anti-war activist and author Kurt Vonnegut that,

"No matter how corrupt, greedy, and heartless our government, our corporations, our media, and our religious and charitable institutions may become, the music will still be wonderful."

With kind regards
Yours sincerely
Marc Faber


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