Brexit and Zika are the New Y2K's

If you are under age 30, then Y2K may not ring a bell. The Year 2000 problem is also known as the Y2K problem, the Millennium bug, the Y2K bug, or Y2K. Problems arose because programmers represented the four-digit year with only the final two digits. This made the year 2000 indistinguishable from 1900. The assumption, that a twentieth-century date was always understood, caused various errors, such as:

  • The incorrect display of dates.
  • The inaccurate ordering of automated dated records or real-time events.

 

In other words, it was purported to be the “end of the world” as we knew it. I remember quite distinctly people worried about utilities shutting down, gasoline being unavailable, massive food and water shortages and even planes falling from the sky. Bottom line, none of this happened. It was all FEAR (False Expectations Appearing Real). Also, those experts and pundits who garnered huge fees and ratings for spewing such non-sense just quite went on as if oops…my bad, without being chastised for creating such utterly ridiculous assertions.

I believe the same thing is true of the Brexit (i.e., Great Britain (GB) withdrawing from the European Union). The vote is today and we won’t know the results until tomorrow. As such, the bookies or odds makers are showing GB staying, whereas some of the polls show GB leaving. In reality, who knows.

We must remember that this is not a true economic calamity because it is a non-binding referendum and secondly, if the vote is to leave, then the Parliament must approve it and that could take at least two years plus to put into place. Thus, all this fuss is just that, fuss. As a matter of fact, the global stock markets have surged in recent days and are up as I write this.  Yes, if the vote is to leave the EU, global stock markets may react in the short-term.

However, all this talk of Brexit is just a huge distraction and may end up being as impactful or damaging as Y2K. For those of us who remember, it was as cataclysmic as a mosquito bite on an elephant, which leads me into the topic of Zika. Yes, it is something to be aware of and take preventative measures, especially for pregnant women.  However, Lyme Disease and Rocky Mountain Spotted Fever have been around for years, and have neither stopped any of us from going outside for walks, bike rides, strolling through the park or enjoying nature.  Let alone how many of us have ceased taking a vacation, or traveling due to the Norovirus?  Lastly, has anyone stopped eating at restaurants or away from home due to fears of salmonella and food poisoning?

I've had many experiences trying to get one of the last camping spots at a state park, standing in long lines at the airport coming back from a vacation, and waiting for at least an hour to get a table at a restaurant on a Saturday night.  All of these prove to me that many of the fears being hyped by pundits on TV or some “so-called” experts are just baloney! And if you are like me, I could stomach baloney as a kid, but not as an adult.

I would much rather enjoy my free time playing with my kids at the pool or going for a walk, than worrying about something that will probably be a non-event in the long run. That being said, I hope you are enjoying summer and staying cool, both mentally and physically.

Quotes

“Get your facts first, then you can distort them as you please.”

                   Mark Twain

“The problem with world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”

                   Bertrand Russell

Quotes selected by the IAG staff

A perfect summer day is when the sun is shining, the breeze is blowing, the birds are singing, and the lawn mower is broken.”

                   James Dent

“Lighten up, just enjoy life, smile more, laugh more, and don’t get so worked up about things.”

                   Kenneth Branagh

 

Tony Moeller, CPA

The information listed in this commentary is a compilation of various publicly available sources and is for informational purposes only. It is not a recommendation or solicitation of any particular investment or strategy. A risk of loss is involved with investments in the stock and bond markets.

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