A reader asks: are stocks climbing the proverbial wall of worry?
A reader asks: Are stocks climbing the proverbial wall of worry?
Archer replies: There are those in my adopted hometown (Chapel Hill, N.C.) who believe that the arrival here of Jordon (with an “o”) Hudson is a sure sign of the apocalypse. Others are taking a wait and see attitude; if the 24-year old former cheerleader’s 73-year-old boyfriend does indeed return championship level football to UNC we’ll know for certain someone’s made a pact with the Devil.
The stock market, too, is looking ahead with a weather eye. This can be good, sometimes - the proverbial “wall of worry” is often associated with a rise in asset prices. That’s not to say, however, that the greater the worry the steeper the ascent. There are some things worth worrying about. Random tariffs are one thing. Inflation another. The dreaded stagflation – last seen in the waning years of the Carter Administration – is a third.
Former Fed chair Alan Greenspan was notoriously opaque in his official pronouncements but at least he was a student of financial history. He managed to convey a sense that somewhere in all that garbled Fed speak an intelligent being lurked. There was a little madness, especially as it pertained to the so-called “Greenspan put,” but there was method, too. It was, for those who cared to take the time to decipher it, comprehensible.
The primary source of today’s chaos is our commander in chief with his midnight social media posts and on again/off again tariffs. The subrosa intelligence there – well let’s just say it exhibits a certain elusiveness. Reopen Alcatraz? Why not. One hundred percent tariffs on foreign films? Look out Antonioni. Cod liver oil for the measles? Sounds like somebody’s been watching too many Little Rascals reruns.
All this randomness makes forecasting harder than usual, and the usual forecasts are not usually that great to start out with. As we have noted, what passes for most prognosticating is really more like extrapolating; it assumes that tomorrow will be pretty much like today. But reality TV, the milieu in which our current president is most comfortable, requires a constantly changing storyline.
A 2024 Rolling Stone story described the chaos and confusion that enveloped a typical story meeting at WWE (World Wrestling Entertainment). It was reported to consist of a few minutes spent hashing out a theme, a lot of yelling, and then a complete overnight rewrite by then-CEO Vince McMahon (he “destroyed everything by the time we got to air,” one writer was quoted as saying.)
Hard to believe this was meant as a template for running the world’s largest economy. But here we are. At one end of the Situation Room they’re sending nuclear codes out over Signal; at the other they’re hawking Meme coins. In between homeopathic medical treatments are on offer. The best and the brightest it’s not.
These circumstances tend to disadvantage the linear thinker. It’s no longer about charting markets or analyzing a stock. It’s more like trying to keep track of the characters in a Balzac novel.
Woof!