TRENDLINES, LOGIC AND AGE-OLD VALUES: WHERE HAVE THEY GONE?

Trendlines, Logic and Age-Old Values: Where Have They Gone?

I can’t make sense of anything right now:

• I can’t find trendlines to help guide actions for the short or long term.
  
  
• I can’t understand why the Fed raised rates again, or why we’re bailing out bad leadership in business, or why crypto is even still a thing – to me, all of it defies logic (as do so many things today).
  
  
• I can’t believe that what we’ve long suspected but maybe hoped wasn’t quite true – that money is the one thing, the only thing, that we as a society increasingly value – has been confirmed through at least one recent poll.

These are weird times and at least for the moment, I admit that I don’t know what to do with these issues. And now, with an indictment handed down by the NY AG, everything feels up in the air. But that won’t stop me from trying to find some sensibility, for my own sake as well as yours.

Here goes.

Trendlines

Way back in June 2021, in a post titled “Information is Everywhere: Leverage What You Learn,” we were looking for ways to make sense of the weird mix of devastation and opportunity that were just behind and just in front of us in a not-quite-post-Covid era. 

Back then, I advised, “read the tape and analyze the trendlines.” 

To recap from that, in Investopedia, James Chen explains, “Trendlines are easily recognizable lines that traders draw on charts to connect a series of prices together or show some data's best fit. The resulting line is then used to give the trader a good idea of the direction in which an investment's value might move.”

Investopedia; Image by Sabrina Jiang

Almost two years ago, here are the trendlines that I saw then (summarized here, but you can go back to the post for more details):

• Inflation is here and will stick around for a while
• Interest rates are due for an increase
• Tech isn’t unwinding from the overexuberance that we saw last year, but it’s settling a bit, although we should expect its strength to continue
• Residential real estate is still stuck in an inventory shortfall
• Major cities are swiftly making a comeback
• Hard assets look like a decent bet to me
• And whether I like it or not, crypto is here to stay, although I think that for a while still, major companies will hold off on investing heavily, simply because it’s still too difficult to account for it

See, back then I could read the tape and find the trendlines and make predictions that now, almost two years later, have all essentially come to pass but now, I can’t find the trendlines. Information is skewing all over the place and there’s tremendous volatility everywhere you look.

As someone who has long relied on reading tape and trendlines, I find all of this rather disconcerting – it’s a rollercoaster ride that I don’t want to be on. 

I believe it will pass but it could also be the new way that our economy and markets work now: Ridiculously rapid ups and downs continue to dominate, defying all logic. 

Which brings us to my next point.

Where has logic gone?

I devour news like beagles and their kibble: Ordinarily, there’s never too much, in my opinion. But right now, everything is bringing me down – and I’m someone who always finds the silver lining!

It boils down to one thing: I can’t see the logic in anything that’s happening right now.

The economy has been teetering on the brink of recession, but it continuously gets inched back by a strong labor market and continued consumer spending. Home prices are still high relative to incomes, and buyers are still scrambling to scoop up limited inventory (although there’s some evidence of price softening, in many markets, there are still multiple offers on homes, despite high prices). 

According to National Association of Realtors Chief Economist Lawrence Yun:

“The affordable U.S. regions – the Midwest and South – are leading the recovery,” Yun added. “Mortgage rates have improved in recent weeks after the federal government guaranteed the status of most mortgages amidst uncertainty in the financial market. While access to commercial mortgage loans could become increasingly difficult, residential mortgage loans are expected to be more readily available.”

China’s in cahoots with Russia, but Apple CEO Tim Cook is working his big-business diplomacy there, too (according to the report on CNBC, “The two sides exchanged views on issues such as Apple’s development in China and the stabilization of the industrial and supply chains,” the statement from China’s Ministry of Commerce read.

Apple declined to comment on Cook’s activities in mainland China, where he was one of a handful of top American executives to attend the weekend’s China Development Forum.”). We’re still talking about crypto bouncing back while it’s imploding in front of our eyes. And we’ve barely scratched the surface regarding the bank crisis.

Since logic seems to have evaporated, what we need now more than anything else is strong, visionary, resolute leadership. We need leaders who can get us through the short-term chaos and create sensibility and who understand how to play well with others, and also how to stay true to what’s right, even when it’s not popular. 

Which brings me to my next point.

Where have our values gone?

Societies change; that’s just a fact of cultural evolution. But what do our changes say about Americans today? Take a look, in this newly released report by The Wall Street Journal of a poll conducted by WSJ and NORC at the University of Chicago:

The Wall Street Journal

Don’t get me wrong: I work hard for my money and I enjoy the lifestyle that I have because of it – but when the only thing that our society considers increasingly important is money, I can’t help but feel like we’ve pushed a good thing too far (especially considering the vast income disparities that we have today).

Tellingly, from that same poll, we also learn that although money is the thing most valued, hard work is less interesting:

And perhaps one of the most telling, and sad, findings was also one of the least surprising: “Tolerance for others, deemed very important by 80% of Americans as recently as four years ago, has fallen to 58% since then.” Last night’s indictment announcement will likely only deepen the divide.

What to do with all this?

If you’re feeling unsettled (and maybe you weren’t until you read this post!), then all I can advise is to keep your eyes open and your wits about you, whether you’re looking to invest, launch a business, get a promotion, buy a house, sell a car or volunteer for your community’s Little League organization. I don’t know where things are going.

To me, the lack of trendlines, logic and values indicates that we’re at a crossroads as a society. It feels like we’re putting out fires, rather than planning for the future, which isn’t a good place to be.

Still, there’s reason to be optimistic: Despite challenges that seem to grow by the day, the US is still one of the strongest and most stable countries on Earth. We’ve got enormous talent among us and a democracy that supports us. And we’ve got the ability to do right and do well. 

In the end, that’s the beauty of America: It’s full of potential. 

I guess this week’s lesson is that there’s no point in looking back for too long, so let’s start a new time series – and as we move forward, it’s okay to let financial success be one of the carrots that’s dangled, but let’s do better than letting it be the only one.