Why GI-GO Matters - mytrbroadcast.com

I’m constantly amazed at just how many smart people can willfully abscond from logic and/or reality if it fits their narrative for __________ (fill in your favorite here).

Today’s narrative is, of course, the stock market.

For those that forget what the acronym leading off this note means, it’s: Garbage In – Garbage Out. A once widely understood concept that became prevalent when computers were really becoming “a thing” in days of yore. Everyone understood that the machines and its responses were only as good as the data used to correlate. Put in garbage data? You got garbage results. Simple concept to understand. However, today? What’s “garbage?” All that matters are the results that propel the narrative for more and more to buy more stocks ever-the-more. Period.

I’ve already expressed my thoughts concerning the Federal Reserve and others in prior notes. But I do have to ask this one question that all the so-called “smart crowd” seem to be conveniently forgetting, which happens in only a week or so from my typing this. e.g., October 1st.

“What is that?” you ask. Great question, for it is this….

The shielding of delinquencies (aka, COVID era forbearance) reported against FICO® scores for mortgage payments ends October 1st, 2025. Meaning: There just might be a wave of sudden issues for not just peoples credit scoring, but worse, said new scoring could suddenly affect (as in suddenly evaporate) prior credit limits and more. Think: the resurgence of student debt reporting on steroids.

Let me put it this way….

Say someone has one or two credit cards (some can have more) with a credit limit of $25K on each, with a rotating balance of around $2K on each. Then, suddenly, their FICO score gets slammed with negative reports and drops precipitously. What does one think happens to said person’s credit cards with near immediacy? Hint: Credit limit gets halved, if not more; monthly payments to carry a balance can double, triple, if not more. Or worse, credit limit is cut completely and reduced further with every payments to reduce balance, aka systematically closing an account by the funding entity – with no recourse.

Additional question for extra points: How many people do you think there are that think (I would side more towards believe) a cc, with a high credit limit, is much the same as having an “emergency fund?” But wait! There’s more!! as the late nite infomercials proclaimed…

Then, take whatever metric you think fits, and superimpose that result with what would happen if they (our cc for emergency fund example) suddenly found out not only was their limit gone, but also their ability to borrow from anywhere not just simply reduced, but possibly gone entirely, in unison. Think the “solid”, “great” economic consumer health metrics (aka Retail Sales et al.) we’re incessantly told/sold month after month remain ebullient? Hint: do you need to be reminded of the jobs reporting debacle?

Think it can’t happen?

Then it’s quite possible you either forgot what transpired in the Great Financial Crisis of 2007/08 or, you weren’t actively involved in the economy because of age.

We thought a lot about this type of stuff back then, and I was even writing about it during that period, in real time. Today?

No one cares. Not the Fed, not the mainstream business/financial media, no one. Why?

Because garbage (aka, reality is anything but) is what’s on sale today, and everyone now believes its aroma is just a new fragrance worth buying all the more. So, pay no attention to the visible rot. Just buy more!

Note: This commentary is for education purposes only and is not to be construed as trading or investing advice of any sort. These commentaries/opinions are for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.