Maravillas DelgadoThere is something strange in the current economic discourse. On the one hand, no one doubts that we live in fragile times: geopolitical tensions, unsustainable debts, inverted demographics, climate change, technological disruption… On the other, markets are trading near highs. Who is right? There are three ways to look at it. The first is that the markets get it right. The risks exist, but the system lasts longer than the doomsayers believe. Tensions will be contained, the debt will be liquidated, robots will replace the missing workers. It would not be the first time that the prophets of disaster are wrong. The second interpretation is that the anxious are right. Prices reflect support from central banks and passive reinvestments, and new purchases of financial assets do not respond to calm judgment. After all, markets are not repositories of collective wisdom, but rather they are often amplifiers of collective illusion. When the adjustment comes, it will hurt. The third way to look at it is that they are both right, but about different things. Markets value what is quantifiable well, but are blind to what evolves slowly. A war in Taiwan would cause an instant readjustment, but demographic decline is moving so slowly that no one can arbitrate it. There are different types of risk. Some are existential: an open conflict between powers or a collapse of the dollar. They are unlikely, but their consequences would be so devastating that traditional calculations are useless. Others are serious, but recoverable: financial crises or inflation. They hurt, but the system adapts; These are the risks that markets try to value. And others are structural: demographics, stagnant productivity. They advance without noise, invisible to price mechanisms, even if they are the most important ones. The anxiety of this moment comes from sensing that structural risks have accumulated and that we have weaknesses that have reduced our ability to absorb them. Given this diagnosis, the temptation of pessimism is to seek refuge in safe assets or remain liquid. Nobody knows when the collapse will occur. Those who identified the housing bubble in 2005 lost money three years before they gained. Structural risks do not come with a date. Furthermore, if pessimism leads you to prioritize liquidity, you will have negative real returns if there is inflation. Pessimism is always passive: it exposes you to outcomes rather than allowing you to choose. Optimism is also a trap. Believing that things will turn out well because they turned out well before is not an argument. There is survival bias because we only see successful cases from the past. It involves a fallacy of composition: each risk seems manageable separately, but together they can be overwhelming, as happened in 2008: that was not a real estate, banking or liquidity crisis, but the interaction of all of them amplifying each other. And there is agency bias: since the problems have a theoretical solution, we assume that they will be solved, a strategy that ignores political economy: we know how to address demographic decline, but we lack the political capacity to implement the measures necessary to solve it. If pessimism is passive and optimism naive, what is left? Something we could call resilient ambition: a strategy that does not aim to predict, but to prepare. A strategy that begins by accepting that uncertainty is irreducible, but that we can build financial resilience and operational resilience. This third way above all requires what we used to call intellectual honesty and now cognitive resilience: being willing to rigorously evaluate one’s own weaknesses when the news we receive is bad. Those concerned are right about the seriousness, but they are wrong if they conclude that the appropriate thing is to remain paralyzed. The great challenges have been overcome not because they were solved alone, but because someone decided to solve them. The world is fragile. The risks are real. The markets can be wrong. Precisely for this reason, intellectual honesty and leadership to act have never been more necessary.
