By Michael Every of Rabobank
Fifty years ago today a slice of musical genius was released unto the world. Not only does it still sound great today, it still sounds incredibly relevant. I am talking about Black Sabbath’s classic second album ‘Paranoid’, and two tracks in particular – the track of the same name, and ‘War Pigs’. The album opens with the latter, and 2020 is a year which for many reflects that initial air-raid siren over an awesome, spine-chilling guitar groan, building up to a riff that walks up to you and smacks you in the face, the intro to Ozzy’s haunting voice singing these lyrics:
Generals gathered in their masses; Just like witches at black masses; Evil minds that plot destruction; Sorcerer of death’s construction
In the fields, the bodies burning; As the war machine keeps turning; Death and hatred to mankind; Poisoning their brainwashed minds
Oh lord, yeah!
And oh Lord, yeah, indeed! Then there’s ‘Paranoid’ with its own classic riff and lyrics, which many tell me presents itself as a potential theme-tune for this Daily. I think that’s a bit unfair, as I do aim to find the humour in all this as much as I can, but that aside:
Finished with my woman; ‘Cause she couldn’t help me with my mind; People think I’m insane; Because I am frowning all the time
All day long I think of things; But nothing seems to satisfy; Think I’ll lose my mind; If I don’t find something to pacify
Can you help me occupy my brain? Oh yeah
I need someone to show me; The things in life that I can’t find; I can’t see the things that make true happiness; I must be blind
Black Sabbath (or ‘The Sabbs’) were quintessentially English, Brummie, and working class. Their music literally came from the sounds of metal being bashed together, or in the case of lead guitarist Tommy Iommi, of it slicing one of his fingertips off entirely. In his 2010 memoir, singer Ozzy writes: “In those days, the working person’s mentality went like this. You got what little education you could, you found an apprenticeship, they gave you a **** job, and then you took pride in it even though it was a *** job. And then you did that same **** job for the rest of your life. Your **** job was everything.”
With labor markets so very much on the minds of everyone, including central banks, that seems to have as much reverb today as their guitar sound. The difference between then and now, of course, is that first you get an expensive degree in something, and then you get that job; and for too many even the above jobs aren’t for the rest of their lives: in the marvellous, magical gig economy of tech disruption and swipe-rightery, sometimes it is not even for the rest of the week.
The 1970s saw high inflation, by the way. Today doesn’t (Japanese CPI was 0.2% y/y in August and -0.4% core, for example). Want inflation? Think ‘War Pigs.’
On which note, let’s get back to other normal aspects of 2020. For example, the US stating it will imminently be enforcing secondary sanctions on anyone who violates the arms embargo on Iran. The rest of the world may say that the embargo ends in October as scheduled because the US left the Iran nuclear deal, but if they want to act on that belief then they face US wrath – or at least under current management. Or we have the US selling USD7bn of arms to Taiwan in one go, including mines, cruise missiles, and drones, and another US official visiting Taipei against a backdrop of China carrying out military exercises nearby.
Or we have Israel entering a full second lockdown for three weeks (and maybe longer), as 10m in the UK are also told they can’t go to the pubs and restaurants and offices they were actually being paid to go to just a few weeks ago. Or the BOE edging closer towards negative rates, perhaps as soon as February say the markets. Let’s hope they do a better job on the preparations for that than the government has done on its test and trace scheme.
Yet never forget many in markets are not feeling Paranoid or War Piggish at all. Indeed, as they gather in their masses for central banks in their black masses to provide masses of liquidity, they are actually more like….the Spice Girls – another brashly working-class British ‘musical’ act, who encompassed the sugary, credit-driven, globalisation and neoliberalism are great 1990s as well as The Sabbs summed up the grim, 3-day-week-and-power-cuts 1970s. Indeed, the current markets-to-central banks holler-back is more like their first single, ‘Wannabe’:
Yo, I’ll tell you what I want; What I really, really want
So tell me what you want; What you really, really want
I’ll tell you what I want; What I really, really want
So tell me what you want; What you really, really want;
I wanna, I wanna; I wanna, I wanna; I wanna really, really, really
And that is basically what markets want, and basically what they then get, upwards sloping zigazig lines on screens – and as needed, because as The Girls sagely add:
If you want my future, forget my past; If you wanna get with me, better make it fast
Now don’t go wasting my precious time; Get your act together we could be just fine.
So, to summarize, in our K-shaped world some still hum ‘Wannabe’ daily, and not in any ironic way, and others are air-guitaring their way through ‘War Pigs’ to try to find a way to satisfy. Just out of interest, ‘Paranoid’ sold 10m copies back in the days when people actually bought music; the album ‘Wannabe’ was on, ‘Spice’, sold 23m copies.
We few. We lucky few.