Marc Cuniberti With mortgage rates pushing decade highs, and the price of everything from food to insurance of all types skyrocketing, it’s perplexing how both the business news anchors and the Wall Street cheerleaders continue to insist all is fine in the markets and the consumer that supports them.
The stock market does not necessarily reflect the health of the average Joe on Main Street. However, we now hear that the markets are healthy and that consumer spending will continue until morale declines.
Truth be told, my local shopping mall parking lot is STILL packed to the gills and I continually scratch my head in wonder.
Where is the slowdown this analyst predicted so many months ago?
I am tempted to think my half-century of economic education has been all for naught. Then my good sense kicks in and I remember the old adage: “The stock market can stay illogical longer than you can stay liquid”.
In plain English, it means the market and the consumer are not science experiments where we can prove or disprove 100% that something will or will not happen.
What we expect to happen probably will happen at some point, but when that “some point” arrives can be further off in time than we expect.
My Dad, when he asked a waitress where his meal was, was usually told “It’s coming”. He would subsequently reply “So is the end of the world but when”?
Great response I know, and it reminds me that with higher mortgage rates, and inflation raging, I am sure consumer spending will fall off a cliff, but much like my dad, the question becomes “But when”?
I will admit, it’s a tad frustrating hearing good news after good news concerning the markets and how well the consumer is doing. But then I chastise the man in the mirror for feeling as such.
Shame on me for sure.
What is so bad about the consumer continuing to spend and the markets plowing ever higher Marc?
Then in a fit of head shaking, and not in a good way, I think “I should be glad I am wrong”.
Much like a survivalist who spends his day preparing for Armageddon only to see sunny day after sunny day, is he upset the world hasn’t come to an end?
I mean, who wants that?
I suppose expecting something to happen, based on my extensive economic education and experience, the fact that it doesn’t occur should make me happy. After all, I projected (and continue to do so) that the economy will turn south and the consumer will see his pocketbook collapse under the weight of all this inflation.
After all, my ego should not be so wrongly ingrained as to feel vindicated when the economy implodes just to prove I was right in my prognostication.
It is said we learn something every day. And as I read all the positive economic news last week and listened to all the optimism, I indeed learned something.
The lesson was that I should be a little more humble in the importance of my economic prognostications as it pertains to my introspection.
That means if my prognostication centers around something bad happening, and it doesn’t occur, I should be very grateful that I was wrong, instead of feeling something else.
I am sure I am not the only economic analyst that has come to this realization. It just goes to show how flawed as humans we sometimes are.
I still think that we will see a miserable downturn at some point. The economic machinations simply point to no other outcome.
But in my newfound awareness, I will be glad if I am wrong.
“Watching the markets so you don’t have to”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance
services. Email: [email protected]
