Who’s Left Holding the Bag?

The market is mixing signals like a middle school dance.

Housing prices and mortgage rates are up. Inventory and home sales are down. But the high end of the market seems unphased. Spec builds might decrease as builders race to catch up on fulfilling existing orders. Lumber and container prices are dropping. Along with the valuations of tech companies. And levels of VC funding. And capital in biotech. Digital prices didn’t move much. But inflation and gas prices did. Crypto skipped fall and went straight from summer to winter. Travel is exploding, both in volume and infrastructure stability. Extra income is down, but consumer spending might go up.

When markets or sectors are running hot, I always wonder who will be left holding the bag. I’m still waiting for that one hotel or apartment project in the local market here to realize they were the one that marked the overbuilt point. I’ve been waiting for years. CNN+ marked that point in the Great Unbundling Race a.k.a. The Streaming Wars. (Let The Great Rebundling begin!) Substack is playing this game with…itself?

Being left holding the bag isn’t always a bad thing though. In some markets that bag is full of money. Grocery delivery companies are scrambling to be the one that secures the bag. Social media platforms seem to take a misguided approach to this (believing they must all be TikTok now).

Everything is either in a phase of unbundling or rebundling (yeah, you’ll have to stretch those terms a ways to make them fit plenty of areas).

Hey, I thought this was a newsletter about marketing and (tenuously) marketing-related news?

It is.

How can you plan your marketing if you have no idea what the larger market and economy is doing? (Tesla started with a luxury sports car because that’s the market that could handle the prices required to manufacture an EV at that time. As scale could be reached, prices could drop, and vehicles with broader appeal (except Cyber Truck) could be launched.(I am not an Elon fanboy, but this is the best example I could think of off the top))

What makes everything so messy now is that the signals are all over the place and the causes are unprecedented. The housing market explosion wasn’t toxic like 2008 (I think, we really won’t know for a few years). It was driven by pandemic-induced lockdowns that had people spending more time in their homes than ever before and with very few other avenues to spend money. “I could really use a [insert: ‘home office’, ‘play room for the kids’, ‘bigger kitchen’, ‘actual kitchen’, ‘second / third bathroom’, etc.]. I know, I’ll buy a house that has one!” Wash, rinse, repeat. Thousands of times.

That same pandemic messed up supply chains like a kid kinking the hose to get you to look into the nozzle.

And then a war was started by a country that exports a lot of oil.

And then we collectively got to a point where we were over the pandemic and decided, at the population level, to do things outside our homes again. Like roleplaying as sardines and getting the hell out of where we are for literally anywhere else and calling it a vacation.

The money that turned the housing market into Shark Week didn’t disappear. It just went somewhere else. Substitute goods reappeared and people yelled “praise be the flying spaghetti monster.” And they went and spent their money.

So, in conclusion: the market is up. But also down. And people don’t have any money. But people are also spending money. Don’t panic. Yet. But understand what’s happening out there when you’re analyzing your marketing. Or business performance. Or personal budgeting. Etc, etc, etc.

You think about yourself / your business more than you think about the market (probably). Others think about the market more than they think about your business / you (unless they’re family, maybe).

Welcome to Hot Weird Summer.


_originally shared in [Rabbbits Weeekly](https://chasingrabbbits.substack.com/p/rabbbits-weeekly-ranting-about-the)_

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