If you are at peace you are living in the present

May 11, 2020

Author: Guy Soreq

“If you are depressed you are living in the past.
If you are anxious you are living in the future.
If you are at peace you are living in the present.”

Lao Tzu

Around the world, people are staying home and out of work. Shopping malls and restaurants are shuttered. Trains and highways are eerily empty. In the United States, 20.5 million people lost their jobs in April alone. Meanwhile, the S&P 500 stock index logged its best month in 33 years. Wall Street appears optimistic even as the rest of the world reels in pain. But rather than being driven by the mere prospect of a rosy economic future, financial markets are banking on detached monetary concepts like V-shaped (sharp decline followed by sharp rise) recoveries and government stimulus.

One only has to look to the food supply chain to understand the depth of the rift between Wall Street and Main Street. In the United States, meat processing capacity is down by about 40 percent. In the pork industry alone, that amounts to 200,000 pigs that won’t get sent to slaughter because meatpacking plants are closed or unavailable. Belgians are being told to increase their consumption of frites to save the potato industry. British farmers have dumped millions of pints of milk down the drain instead of churning it into butter. In Iran, millions of baby chickens have been buried alive.

Anyone with even a limited level of experience in the food industry will know that the current breakdown is the product of multiple disruptions that the food system is ill-equipped to handle: lockdowns, closed borders, trade restrictions and the virus itself. Any one of these disruptions would have caused problems in the world’s complex and specialized food supply chains. All of them happening at the same time is wreaking havoc, creating ripples with the power to transform into catastrophic tsunamis.

Even with a finger on the pulse of the real economy, there is a mounting sense of FOMO (fear of missing out) for many looking at the upward trajectory of the stock market ticker. Our fears are further exacerbated the more the market continues to act irrationally. We wonder if we’re currently seeing the inflection point of the V right before the rapid rebound. We wonder whether we should buy now because prices will only go up from here. Even as we see the massive disconnect between Wall Street and Main Street, we still wonder if the former has something of substance to say about the latter.

We’re here to tell you: it doesn’t. The financial sector may be bullish for a V-shaped recovery, but we’ll gladly settle for a “U” while preparing for a challenging progression of volatile “W’s.” So don’t waste your time, or your nerves, looking into the rear view mirror of a market which no longer reflects reality. There is no better indicator of the economic future than the present. Focus instead on getting a clearer view of that present - speak to your sales and purchasing teams, call your suppliers, and of course, log in to Glowlit. Only with reliable information today can we make sound decisions for tomorrow.

So don’t bother us with gambling prospects, we need to get to work.