Here are some data from Ryan Spaeder on Twitter. Ted Williams seasons from 1941 to 1947.
1941- batted .406
1942-Triple Crown
1943- WWII
1944- WWII
1945-WWII
1946- MVP
1947- Triple Crown
Now the best thing about this is that Ted won only one MVP in this time period. In 1941, he was hated by the media who voted on the award so even though he hit more homers, had a higher OPS, and had a batting average almost 50 points higher he lost the MVP to Joe DiMaggio. Joe had had a streak of 56 straight games with a hit, but during that time Ted had a higher average during the streak at .412 to .408 for DiMaggio. Ted also lost two other MVPs during seasons when he had won the triple crown which is leading the league in batting average, RBIs, and home runs. This has happened less than 20 times and Ted did it twice and he was robbed both times. Ted also won a Triple Crown in the minor leagues, and you guessed it, took second in the MVP voting. This shows you that statistics are never enough to make a case in a popularity contest. The narrative matters more often than not. DiMaggio was a New York Yankee, and the Yankees were loaded with talent, and they won the pennant going away in 1941 so despite being much better Ted lost the MVP because the narrative was behind him if not the stats.
Talking about Ted Williams the hitter is certainly the center focus, but the man is the rare person who was inducted to two different sports halls of fames. He was inducted as a fisherman. He was a record-breaking fisherman who fished Canada and Florida with the same obsession as he studied hitting. This focus on athletic achievement might still sell the man short. His career was interrupted not once but twice by military service. He lost 5 good years to the wars as he was a military aviation instructor during World War II and then he flew combat missions in the Korean War as John Glenn’s wingman. John Glenn said that he never had a better wingman. John Glenn was a pretty good pilot himself as he became one of the first astronauts and was the first human to orbit the earth. Of course, Ted was his wingman. Ted was larger than life. He was big and loud and cussed and visited hospitals and raised money for kids and was a giant personality, talent, athlete, and man. Why am I talking so graciously about The Kid as he was known, or Teddy Ballgame, or the Splendid Splinter, or the Greatest Hitter that ever lived? If you look at his 521 home runs and 2 MVPs, then the statistics might not represent the narrative. They were so underwhelming that in another 40 years some kid will not even realize how truly great the man was. They might think that steroid induced ballplayers or players with much longer careers were better. They would be wrong.
Let’s look at this with another statistic, WAR, wins above a replacement player. Simply put, this statistic adjusts for how much value a player created over the league average player. Williams sits 14th currently at 121.8. Now if we were to average his seasonal WAR the year before and after his service in World War II, we would get 3 years of WAR at 10 so we add 30 more to the tally and Teddy Ballgame jumps to 5th ahead of Ty Cobb and behind Willie Mays at 151.8. Now if we do the same thing to his two years spent in Korea, we get to add two years of 7 WAR as even though the Kid was slipping as an older Kid, he was still incredible. Adding 14 more WAR gets us a total of 165.8. Which puts him in 3rd place behind the greatest pitcher that ever lived, Walter Johnson at 166.9, and the greatest player that ever lived, Babe Ruth, who stands alone at 182.6. However much like Shohei Ohtani, Babe Ruth was also a pitcher and an excellent one that generated 20.4 in WAR as a pitcher. If we subtract 20.4 from 182.6, we get 162.2 which puts Babe Ruth right behind the all-time home run leader at 162.8 who used steroids and well behind Ted Williams and his 165.8 WAR stands atop the WAR list for hitters if we adjust for being a military hero as we should.
I bring up this fun little exercise today not because Ted Williams was the greatest hitter that ever lived, which he was, but to point out that there are injustices that must be taken in stride. Can you believe in statistics sure, but you had better have the create and control the narrative. Joe DiMaggio led the league in RBIs in 1941. The journalists used that and winning as narrative control to take away the MVP. The media didn’t like him and didn’t vote for him at times which cost him MVP votes and the narrative is that he was difficult. The fact is he was the most valuable hitter that ever lived if we take a few liberties….Which brings us to today. Today we have a Federal Reserve that keeps saying it is data dependent. Are they using statistics or narrative control or are they reacting to the government and their data which are simply taking a few liberties.
That is like saying that Jeffrey Dahmer took a few liberties with his house guests. They are so blatantly manipulating labor data that it could accelerate even faster than usual. This is how labor markets turn. They bottom slowly and when they start up they go non-linear. Fear breeds fear and layoffs are as contagious as a military leave port city. Last week before the Japan chaos overshadowed the market, the Sahm rule was triggered. This is a labor statistic that tells us when the economy is in recession. It was designed to be a fail-safe condition meaning we are in recession, not going into, not heading toward, but in. It means that the labor market has moved far enough off the cycle low to be a very dangerous signal that more labor weakness is ahead, slowing growth is ahead, and the way she designed it that the government should start sending out checks. Literally that was her thesis. Now it simply means that we need to use that indicator and the uninversion of the yield curve which also happened and realize we are dealing with other statistics like WAR that mean far more than RBIs in 1941 but are being shoved aside for the narrative of Bidenomics or Kamalanomics or whatever we are espousing this week. We keep hearing from CEO after CEO on earnings calls that the consumer is weak. McDonalds, Yum Brands, Home Depot was this week’s participant and Starbucks has been so weak that they replaced their CEO yesterday.
In 2008 there was a Bear Sterns moment, an investment bank saw its stock price vaporize seemingly in a day, which happens to be in the movie Margin Call. The general market continued to appear just fine until later in the fall when Lehman Brothers fell I believe when we look back at this crash, we will call the Japan carry trade unwind fake out as the key smoke signal that informed us something worse was afoot like the Lehman Brother’s moment. If we look in the last two weeks alone, we have seen Dell Computers lay off 12,500 people, Intel laid off 17,500, and Stellantis lay off 2,450. These job losses will end up in the data soon, and there are so many more that are happening. This doesn’t take into account some of the statistic gymnastics that the Bureau of Labor Statistics has been playing with their birth/death model. If you listen to Danielle DiMartino-Booth and I suggest that you do, she will tell you that there are about 800 thousand job losses from last Q3 which will ultimately get revised into the data. The market sold off last week when the jobs data missed by 70,000. This is orders of magnitude different.
Businesses are struggling too. Blink Fitness and LL Flooring filed for bankruptcy this week. That is 194 stores closing, and who knows how many jobs. If you don’t read DailyJobsCuts.com it is a great resource of just data, no opinions, if you want to see what is happening in the real economy. Speaking of the real economy, we know that the regional banks are still under pressure, and we are simply waiting for the next shoe to drop. The falling bond yields will offer some relief, but if layoffs continue and people lose their jobs, and the economy slows then banks have to worry about loans not being paid back. Picture this- a bank with toxic debt on its balance sheet, bonds they owe that might pay less than 1% but their cost to borrow from the Fed is now over 5%, problem number 1. The commercial real estate bubble is bursting and will continue for years. Banks have loaned out too much money to developers. The developers can’t sell the properties so they give the keys back to the bank which now has a property that they aren’t in the business of managing and they don’t want but if they sell it now they have to realize a loss because the current market value of the property plus the amount of collateral falls short of the loan they made, that is problem number 2. Now we have problem number three which is consumers defaulting on their loans. Credit card and auto loan delinquencies are skyrocketing. What you didn’t think that loaning money to a person whose job was to stay home, not pay rent, not work, not pay his student loan, and collect government checks was a good credit risk? Now we are seeing the banks repossess cars and a lot of them. It turns out cars are too expensive when you have to pay for them. The deadbeats of Covid that got loans are now giving it up like the deadbeats that got houses in the great financial crisis. I hope the narrative is a little more balanced in the next Michael Lewis movie when people didn’t take accountability for their own actions. That wouldn’t sell, what am I talking about? Oh yeah, that is problem number 3 and here is problem number 4. Businesses are losing pricing power, they are facing refinancing at double or more what they financed their businesses for just 4 years ago. Remember the Zombie companies? I do, and they are still not making any money. 40% of the Russell 2000 index companies can’t pay the interest expense on their debt, meaning they need a new credit card to pay off the old credit card or they can’t make payroll or pay their vendors or fill in the damn blank. Big companies issue bonds, but most small companies get loans and they get a bunch of them from your main street bank. This is simply too much to bear.
This is why I am saying there will be inflation again. Not now, oh no we are disinflating and perhaps headed to deflation temporarily. The Fed and the government will have to ride in on their money printing ponies and give everyone bailouts. Chicago and broke ass Illinois and their pensions and crappy governments are going to need a bailout, California and their $72 billion debt are going to need a bailout, and then probably more than half of the banks are going to need a bailout. The stock market dropped 3% when the unemployment rate jumped by two tenths of one percent. What will it do when it jumps twice that? What will real estate prices do when the unemployment rate goes up and demand for houses drops. Oh wait, that is already happening. The jobless rate is already up 9 tenths from the low and interest rates are down almost a full 1% on the ten-year bond which tracks closely to mortgage rates and still there is no buying demand. We have a stalled real estate market. In an airplane when it stalls, it tips over and heads toward the ground at great speed and the stall reverses and the pilot is back in business. We need the real estate market to head down and then people will be back in business. Buying homes at much much lower prices is an option, but at these prices and interest rates, it is simply unaffordable.
This is my narrative you are saying. One that I have been beating to death recently and you would be right. The other narrative is that all is well. That’s why we must look beyond their narrative to see what is really happening. Just this morning, Home Depot was down on an awful forecast for the consumer but finished the day higher as the market rallied because inflation in the PPI data was coming down. The inflation number isn’t stalled folks, it is headed straight down to the ground and those that are cheering its descent will be fooled when it keeps accelerating toward earth, the ground or zero. That’s what happens when we are in a recession. Like the pilot wearing an aileron at the scene of the crash, this will be the bulls cheering this rally on. They don’t know that what they see isn’t good news. Its not inflation coming down, its recession coming towards them. The NBER or National Bureau of Economic Research gets the official job of officially declaring recessions, but they can go back date them. Which is what they will do in this case. When the phony statistics are normalized, the elections are over, the political theatre is over, and they start downgrading both economic activity and labor and jobs and growth etc, they will say oops we were in a recession right now and we have been for some time. This will fall on deaf ears because it will grow more and more apparent.
This is why we have to go look at WAR and the other metrics to make sure that we aren’t fooled by the narrative. Theodore Samuel Williams was the greatest hitter that ever lived, and he was forced to deal with false narratives, and we are also facing the same thing today. As I said the narrative matters in contests of popularity but in matters of fact, they are false. Falsehoods eventually are seen for what they are, foolishness. Don’t get fooled by falsehoods or narratives or that little devious owl at the Treasury, Janet Yellen.
Sincerely Yours,
C Thomas Printer
On this date in history… 89 years ago to be exact, Franklin Delano Roosevelt signed the Social Security Act into law. This allowed others to receive the fruits of your labor and is one of the largest abominations against the Constitution and individual liberty in American History.
Also born on this date … Tim Tebow and less famously Arthur Laffer, the economist who will probably help shape Trump’s economy if elected.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.