It’s as Bad on Main Street as on Wall Street
A long-standing observation of ours is this: the further you get away from Wall Street, the more optimistic you get.
On Wall Street, stocks go up and down—sometimes violently—every hour, minute and second of the trading day. Wall Street’s Finest slash ratings on stocks, worry about quarterly earnings and panic at the slightest headline.
Yet head out to La Guardia, and the airplanes are full of business travelers; travel to Silicon Valley and Route 101 is packed with traffic; visit Chicago and Michigan Avenue stores are full of shoppers. Life—and commerce—carries on. The same holds true when we attend conferences and visit companies.
Managements seem always to be holding Wall Street’s hand at these gatherings, reassuring us that whatever Mr. Market is panicking about at that particular moment, business in the real world doesn’t care: people still need to eat, buy clothes, travel, live.
And so it was striking to listen to a handful of companies at an investment conference in New York City yesterday, and hear the uncertainty in their voices and see the concern in their eyes as they grappled with what seems to be happening in their businesses right now.
For as all of Wall Street seems to be holding its breath for The Vote That Will Save the World, Main Street is suffering in ways nobody on Wall Street comprehends, or, perhaps more accurately, can bother to notice given the state of affairs here.
Credit-dependent businesses have collapsed. Order books are slim. And that’s only the half of it. Inside companies, morale has also collapsed. Employees can’t buy houses, cars or even get credit cards. They’re watching their IRA accounts fall. They want their cash now, not sometime in the distant future.
For the first time in our experience, bad as things are on Wall Street, they’re just as bad on Main Street.
We have no doubt The Vote will pass. We wonder if it will matter.
Jeff Matthews I Am Not Making This Up © 2008 NotMakingThisUp, LLC
The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.