Many businesses are also nervous about the economy and have held back spending on new revenue generating projects<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\nThese facts lead to a natural bifurcated question: what is more important to evaluate right now, the facts or the psychology of the collective consciousness?<\/span><\/p>\nI think that you would agree with me that at this moment the psychology is the more important thing to focus on right now.\u00a0 So what is the mood of the market?<\/span><\/p>\n\n- It still feels as if there is not enough of a unified flow amongst the various economic constituents.<\/span>\n
\n- Most consumers are in a wartime mentality.\u00a0 This is a healthy response to the conditions present.\u00a0 The unemployment situation is not improving, but neither is it worsening.\u00a0 Employers have asked, and will continue to ask, a lot from their employees.\u00a0 Longer hours for the same pay.\u00a0 More responsibility for the same pay.\u00a0 Government has proven that its primary interest is not the people, but their own personal power as demonstrated by the inability of the major two U.S. parties to think as Americans first, and as representatives of a political party, second.\u00a0 So consumers are steady and the most unified of the economic constituents.<\/span><\/li>\n
- Investors are torn.\u00a0 Some are focused on the facts of the situation: the U.S. and Europe have been through an acid test of tremendous proportions over the last three years.\u00a0 Everything that could go wrong has gone wrong and the various nations and their people have survived.\u00a0 But then there are investors who deeply fear that things could get much worse from here, that the specter of another Great Depression is a real possibility.\u00a0 These two groups are playing tug of war with each other and not unified at all.<\/span><\/li>\n
- Governments are unable to acknowledge their own shortcomings and their own possibility for noble action.\u00a0 Instead they seem to be fighting for a greater portion of the pie, a pie that they see rapidly shrinking, rather than fighting to increase the size of the pie.\u00a0 This impotency is what I feel is the driving factor behind the fear felt by the group of fearful investors.\u00a0 Generations of investors have been trained in economic theory that says that in times of need governments are the backstop and guarantor of the economy (i.e. Keynsian economic theory).\u00a0 But governments are on the verge of failing.\u00a0 Not only that, but their method for safeguarding the economy – increased government spending – seems not to have restored the economy to its footing.\u00a0 Unified is the least likely adverb to be used to describe the governments of the First World right now.<\/span><\/li>\n
- Businesses are close to unified.\u00a0 Most feel that the environment is stable, but with a negative outlook.\u00a0 Businesses are confident in their deleveraged balance sheets, comfortable profitability, and head count levels.\u00a0 But they are lacking in confidence as to the next 18-24 month economic outlook.\u00a0 They also see government as being in a protracted period of irrelevance except to the degree that it can serve as a nuisance.\u00a0 Yet, some businesses are taking advantage of this period by investing when prices for assets that they covet are low and stably low.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Taken together, the above situation has resulted in a general sense of instability.\u00a0 Ironically, back in March of 2009 when it felt as if the world was in free fall and in danger of economically returning to the stone age, there was unification.\u00a0 The unifying belief as 9 March, 2009 came to a close was that the situation had to be abandoned and run away from as fast as was possible.\u00a0 Most didn’t want to be invested in the financial markets, most didn’t want to go to work, most didn’t want to watch the stream of bad news on television or the Internet, and so forth.\u00a0 But there was unification.<\/span><\/p>\nPost 11 September, 2001 there was also unification in the middle of potential catastrophe.\u00a0 That unification was that everyone in the United States shared an event as citizens of the same nation.\u00a0 Folks were unified in their shock and in their desire for some sort of action.\u00a0 And that’s just it: united we stand, divided we fall.<\/span><\/p>\nI have been looking for some sort of unified mood for the collective consciousness of investors and it just hasn’t been there.\u00a0 There are inklings of confidence, but there are equally strong inklings of panic.\u00a0 Without some unification in mood the direction will remain what it is: volatile and sideways.<\/span><\/p>\nAs to the question of whether or not the acid test that we have been through has led to a committed group of equity investors, I think so and I feel so.\u00a0 But at the time of this blog posting the Dow Jones Industrial Average is down 455.73 points.\u00a0 So those holding equities really did want to sell after all.\u00a0 But lurking in the background I can also feel a number of investors – myself included – who are excitedly waiting for that moment when the focus of the market switches from emotions to facts.<\/span><\/p>\nBy the way, I have about an 80% confidence level in my ability to intuit the mood of the financial markets.\u00a0 But the volatility in my posts is generated by the extrapolation of what is likely to unfold based on that assessment.\u00a0 To those uncomfortable with intuition as a tool this may sound like a cop out, but it is not.<\/span><\/p>\nIntuition is absolutely a powerful tool for discerning things like the mood of the financial markets.\u00a0 However, intuition does not trump free will.\u00a0 The actors, including you, all get a vote in future outcomes and that leads to volatility in the assessment.<\/span><\/p>\nConsistently for the last several months there has been a back and forth between those of confidence and those of little confidence and that continues to be the case.\u00a0 If I were smart – and that remains to be seen in this unprecedented time – I would stop trying to extrapolate what is a likely future outcome based on the factual and intuitive analyses.\u00a0 But then, I am trusting that you trust me to provide just this sort of forum for interpretation.<\/span><\/p>\nImperfectly, but with integrity, yours!<\/span><\/p>\nJason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Sorry to have been incognito for the last several days, but there just has not been much in the news worth commenting upon.\u00a0 Additionally, I just have not sensed a change in the mood of the investment community’s collective consciousness. For today’s post, I am going to repeat a question that came from the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-4674","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=4674"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/4674\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=4674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=4674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=4674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}