Bloomberg Opinion – Since former social media influencer Kyla Scanlon coined the term “vibecession” she has received all kinds of comments from TikTok users and economists. I sat down with her to chat about algorithms, markets, and more on Twitter Spaces. The following is an edited transcript of our conversation.
Conor Sen: I came across your work in April 2021 when you made your video viral about wood. The way you produce content related to the markets and the economy is really smart and I don’t think anyone else does what you do. I’m curious to know how you came to do it and if you felt there was anything missing in traditional media.
Kyla Scanlon: I started making TikToks around December 2020, around the time GameStop started happening. I had just left my job at Capital Group, so I was no longer fulfilling. The markets were so crazy back then that it was almost impossible not to do stuff like that. Outside of video, I’ve been writing on the Internet for about six years. I started in college and had a blog called “Scanlon on Stocks”.
CS: When you research to find things to talk about, do you look at traditional data and make TikToks?
KS: I include a lot of details on my TikTok, but some of it is opinion based. When I started thinking about what vibecession was, I had just posted this video saying we weren’t in a recession and I was eating it alive in the comments. I thought to myself, “This is like the weirdest thing I’ve ever seen.” So I posted another article asking if we needed a retreat. I got more feedback on it, which shaped this idea of vibration where, if you look at the data, it’s not great, but it’s not terrible either, but people feel terribly bad. Many people like to think in binary terms: Things are bad and that’s it. But it would be ridiculous to say that things are not difficult for people right now. I’m not saying it’s not bad. I’m just saying that how people feel about it can make things worse.
CS: What’s interesting to me is that when you said we’re not in a recession, you got a negative response to that. And then when you wrote the article on vibecession and, you recognized what people felt. And yet people seemed to hate that too. What do you think this is?
KS: Personally, the vibecession article was a very rough experience. They threatened me with death. I have never been through something like this. I think people were looking at it from a surface level and thinking, “My God, this person doesn’t recognize my reality.” I think it’s a perfectly fair answer if you feel like your experience is being diminished. My theory is that people don’t like to be told how they feel. If you start telling people that the “experience of life” they thought it might not be, it can make you angry.
CS: I think when I wrote my article and when I mentioned yours, I wanted to go through the same thing: we are adding all these posts … How do people feel so negative? Since February, we’ve added tons of jobs, but the overall level of real take-home income has gone down.
I think you and I agree that “recession” is not the right term and some may not like the term “vibecession”, but we need a generally accepted word to describe the environment this.
KS: People do not perceive the economy in terms of GDP growth. You experience it in terms of gas and food prices. So if you start to see a reduction in those, I think people will feel a little bit better. But other than that, I don’t know if much has changed. There is still a lot of uncertainty.
CS: What would make people feel better? Are there certain things being searched for on TikTok that suggest things have gotten better?
KS: My comments are the barometer of how people feel in my little bubble. While we talk about how things have improved (at least in the last few weeks), the sentiment in the comments has not improved at all. There is a lot of confusion about what the Fed is doing. When we have our next meeting in September, it will be interesting to see how people respond.
CS: You are between Gen Z and Millennial in a way that no one else is. Do you think Gen Z sees markets and perhaps the economy in a broader or more diverse way than people, say, my age?
KS: I don’t know if it’s really an age group thing. I definitely think there is an element of “financial nihilism” where it’s like “I’m not going to save for the future because who knows (what happens), right?”. That creates many spending patterns. And when I tell my friends that I like the stock market, they say, “That’s not true.”
CS: When I was in my twenties, it was the subprime bubble and people were going to Vegas and then the war in Iraq. People were quite nihilistic, they felt that “this economy is a joke, everything is fake”. I wonder if the last twenty years have been strange, or maybe it has always been like that, and we just have different themes and characteristics that shape this cynicism and uncertainty.
KS: I’m sure it’s always been that way. You can read the literature and see that everyone always felt bad. Social media has many things worse because our brains are not built to consume that much information.
CS: In general, it’s not helpful for everyone to think about the state of the economy and markets the same way they do about their favorite sports teams. Negativity can override your perception of people: Is a recession going to hit us?
KS: Nutrition meetings are now like a Super Bowl party. If you look at their timeline, people are saying things like “The market is going to be super fast” or “Get ready everyone. It will be crazy”. It’s interesting that the CPI print and the Fed’s monetary policy debate can be so exciting.
CS: You want to help people navigate this scary confusing world and those algorithms that try to make us negative. As optimists, what do you think we can do to combat negativity?
KS: The key is to explain things in a really accessible way, using the data and also acknowledging the human experience of it. The reason we don’t like inflation is because it creates uncertainty. Explaining things in an entertaining way will make people feel a little better. Algorithms reward hypersensitivity and catastrophe. And our little brains love bad news. So you have to fight against those two forces. Many people entered the market in 2020 expecting things to go up forever. But it’s okay that things won’t work out all the time. In fact, it might be good to take a break.
This note does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
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