What Annoys Jeff this Week?

1. A plastic bag. There’s a white plastic bag in the top branch of one of the trees in my front yard. It makes me unreasonably angry. Mostly because even with a ladder I don’t have any implements long enough to haul it down. So, I’ll have this damned plastic bag stuck in front of the house forever or until I cut the tree down, I guess. Just another reason why I hate people. This bag belonged to someone but because they are an irresponsible asshat, now I get to look at it indefinitely out the front window.

2. The days of the week. The only real trouble I’ve had in this long stretch of working from home, is that the days have a real tendency to bleed together. Monday is a lot like Thursday which is a lot like Saturday and on, and on, and on. Hey, I’m a creature of habit, I’m not really complaining… but it does lead to a lot of minor moments of crises that start off with “Oh shit, that was supposed to do that today.”

3. r/wallstreetbets. The Redditors of r/wallstreetbets were mad geniuses last week, executing a classic short squeeze and costing at least one hedge fund a couple of billion dollars. Everyone likes it when the scrappy upstart scores one against the big guys. I get it. The fun part was once things started happening the broader world thought, inexplicably, that everyone could ride GameStop shares to the moon. Now there are posts awash with disbelief that people have the audacity to sell shares and take some profit. Maybe the folks over on Reddit play by different rules, but expecting anyone to ride a stock as wildly overvalued as GameStop had become and then hold it there at its highs indefinitely as the knife started falling back to earth, feels like exactly the kind of wackiness I’ve come to expect from message board people. 

Plague economics…

I can’t tell you how many times in the last 6 months I’ve heard or read someone say “Wall Street isn’t Main Street” or “the stock market isn’t the economy.”

That’s usually shorthand for telling your readers or viewers you want them to ignore record setting highs in the market in favor of focusing on more gritty, personal stories about small businesses. Those businesses are important. No one loves their small, local book shops more than I do, but I’m not going to sit here pretending that how the market does is irrelevant to the overall health of the economy or that it’s only “the 1%” who take advantage of its magical power of wealth creation.

Despite the popular press narrative that most people aren’t impacted by the stock market, the opposite is really the case. According to an article released by Pew Research in March 2020, “a majority (52%) have some level of investment in the market. Most of this comes in the form of retirement accounts such as 401(k)s.” If something north of half the people having a vested interest in Wall Street doesn’t count as having a deep influence on Main Street, I don’t know what would.

Yes, how “invested” someone is depends on many factors – age, race, and income, among others – but you really sound like an idiot when you write an article trying to convince me that I should feel badly that the market is booming. I’m never going to be upset by a story that tells me real money is being made by real people. Even when it’s painted as a story of winners and losers, I’d reminded them that there are winners and losers in ever field of endeavor – none of the great -isms of history have managed to change that beyond shifting a bit of who gets what. The wheel turns, but some group is always on top at any given moment – princes of the church, members of the politburo, or heirs to the House of Morgan – and they reap the reward of being in the right seat at the right time. I’ve never felt the need to hate them for that.

The two streets measure (mostly) different aspects of the economy. While I’ve made an effort to support local businesses with my spending during the Great Plague, I won’t for a moment feel bad about seeing growing equity prices. Both sides of the economy are important and while I’d love to see both go like gangbusters in an endless bull market, having half a loaf in this plague-ravaged environment is something to celebrate.

What Annoys Jeff this Week?

1. Delmarva Power. There’s an issue with my power bill. I called their “customer service” number Monday night and was met with a 50-minute estimated wait time. That’s not going to happen, so I called back Tuesday morning. The wait time for that call was a sleek 27-32 minutes. They split the difference and I waited half an hour to be immediately told by the CSR that the system is down and they can’t answer any questions. They did offer to call back when their system is up, which is fine I guess, but what I really want is to determine when I talk to my vendors myself rather than sitting around looking forlorn like a 14 year old girl waiting for her true love to call. After blasting them on social media, someone did reach our to me and promised I’d get a call back “sometime” in the “next few business days”. Fifty hours later. Still waiting.

2. Staffing. In order to send any information outside the organization you need approximately 4,587 separate lines of approval. It’s not necessarily hard work, but it is what some might call tedious. Reaching the point where something is approved for release always feels like something of any accomplishment… but the best part is when you get something fully staffed, vetted, socialized, and approved only to be notified two hours after you hit send for the final time that someone at Echelons Higher than Reality has decided to “go a different direction.

3. The sky is falling. Look gang, I’m not a fancy big city investment banker, but despite the thrashing Wall Street has taken this week the sky really isn’t falling (yet). The Dow made its high in May of last year. We’re down in the neighborhood of 10% off that high – that’s the operative definition of a correction – but still a ways off from a bear market. If you haven’t jumped out well before now, the only thing cashing out in this market does is lock in whatever loss you’ve suffered. If I were in danger of retiring next year I’d be a little more worried. As it is, I’d say it’s time to stack some cash and do a bit of hedging. If that doesn’t work for you, just win yourself a Powerball Jackpot and you’re all set.

Crushed it…

In the first ten minutes of trading this morning, the Dow sloughed off over 1,000 points. Let that sink in for a minute. 1,000 points, by anyone’s calculation, translates into the evaporation of serious wealth. The only good news on the day that I’ve read is that it didn’t stay down a thousand. It’s a strange day, indeed, when the good news is that we kept the hemorrhaging to something under 600 points.

I’m as if not more risk tolerant than most when it comes to investing, but today had me following the rest of the herd and plowing everything into the (relative) safety of bonds in an effort to preserve principle rather than chase future performance. We’re in correction territory here… and definitive “bear market” status isn’t too far off – especially if we find another trading day or two like we’ve already seen this week.

Still, although this is big news and I find it all delightfully interesting from an academic perspective, I don’t think the sky is falling. I’ve got a mercifully long horizon before I’m going to need to dip into any of the funds I’m trying to diligently shepherd along. Nineteen years is an awfully long time to see the market surge and fall and surge and fall again and again before I need to worry. That being said, I would like to get through this mess quickly and find a bottom so the boys on the street can get back into the business of making money for all of us instead of finding new and creative ways to shelter and protect what we have already.

Today was an impressive example of the market’s ability to crush it on the way down. I don’t need to see them crush it on the way back up, but a little stability after a rapid downhill ride would be greatly appreciated.