We’re coming through one of the worst winters – weather-wise – in decades. The economic data is all being skewed by this and S&P 500 company CEOs were more than twice as likely to mention the word “weather” during this earnings season than they were a year ago. As a result of this dynamic, market pundits have found themselves describing the data with a go-to catchphrase of sorts – “Now is the winter of our discontent.” They’re mainly using the term to say that things have taken a permanent turn lower this winter and the weather is merely an excuse for weakness in the “real” economy.
They think it’s clever but many of them are misusing the term. In the spring of 2009 we had heard a lot of this as well. The phrase was misused then and it’s being misused now.
Quick Shakespeare lesson below, sorry in advance for being pedantic on an investing blog…
The line “Now is the winter of our discontent” is the opening phrase of William Shakespeare’s Richard III. Believe it or not, this is actually not a dire or bleak observation that Richard is making. He is actually using “Winter” as an evocation of the end of something, in this case, his family’s unhappiness. The rest of the stanza will illuminate this truth for even the most casual reader:
Now is the winter of our discontent
Made glorious summer by this sun of York;
And all the clouds that low’r’d upon our house
In the deep bosom of the ocean buried.
Richard is referring to his brother, Edward IV, when he talks of “this sun of York“, as Edward has just successfully taken the crown from Henry VI and the House of Lancaster. The gist of this monologue is that the clouds are clearing up and the unpleasantness for Richard’s family is coming to an end. Of course, Richard is tortured for the rest of the play (his discontent is just beginning, ironically), but that’s neither here nor there. The winter of our discontent speech is meant to be taken as an uplifting one.
All the incorrect usages of the phrase emanate from a mistaken belief that the winter of our discontent line is meant to be ominous or dark, to signify that we are in the thick of the awfulness. It’s been the “winter of our discontent” – according to the commentators – since January in terms of jobs report misses, slower housing starts, weak retailer traffic, poor auto sales and on and on.
TV personalities and market commentators aren’t the only ones to get this thing wrong. In the 1993 film Reality Bites, there’s a scene where Ethan Hawke’s disaffected slacker character (named Troy Dyer…clever, non?) answers the Gen Xer’s home phone with “Hello, you’ve reached the winter of our discontent…”.
He clearly thinks he’s being suitably slackerish and negative but in reality, he is unwittingly making the statement that things are about to get better, that spring is headed his way. I guess he’s accidentally right, as shortly after he ends up with Winona Ryder’s tongue in his mouth. No discontent there.
Pessimistic market watchers co-opting Richard III’s catchphrase are largely making the opposite point from what they intend. But the market has largely been able to look past weather-related economic misses from the so-called Winter of Discontent anyway.