Distance – the space between – defines our present in so many respects, but that’s not what will lead to success in any market.
We have distance from each other, distance from our normal life of just days ago and distance from a future without COVID-19. But that distance has underscored the interconnection of people and markets and their actions like nothing has before. Sure, we knew we were all connected, and we knew the cause and effect of factors that drive our economy, but the coronavirus has inextricably linked the health of one to the health of many, the health of one market to all, and all markets to the economy at large.
This heightened recognition of connection – within market dynamics and without – is the foundation for insight into what may be waiting on the other side of the pandemic, and the steps that should be taken to endure today and thrive tomorrow. The bridge from here to there will be a catenation of market events; identify the chain and follow it to get to the other side.
In an emergency, I’m reminded of the response Chuck Yeager would give when asked if he ever got scared when he found himself up in the air, engaged on a life-threatening experimental mission or battle and things weren’t going his way: “What good does it do to be afraid? It doesn’t help anything. You better try and figure out what’s happening and correct it.”
At the same time, Stephen Covey’s timeless guide tells us that success comes to those who focus on things that are “not urgent, but important” as opposed to those who toil on “urgent, important” activities. The idea is that if you spend your time on non-urgent matters, you stay ahead of, and avoid being reactive to, urgent matters. Easier said than done when crisis is thrust upon us.
The reality of the coronavirus is that market participants need to do it all: be engaged in the current battle in all respects (staying abreast of new proposals, regulations and relief programs), anticipate how today’s events will shape tomorrow (if it takes as little as 18 days to form a new habit and 66 days for behavior to become automatic, how much is consumer behavior about to permanently change?) and, at the same time, plan for coming issues that existed before COVID-19 and may not go away after its vanquished (for example, the LIBOR phaseout).
In the coming weeks, Credit Chronometer will provide information and insights to help the markets do all of these things. As the former Brigadier General said, “at the end of the day, there are either reasons or results.” Markets need to create today the reasons for results tomorrow.
If you’d like to discuss any of the topics we cover or seek input related to any challenges you see in the loan or credit markets, feel free to email me at jcioffi@dglaw.com (Like the rest of us, I’m not going anywhere for a while.)
