There have been very few times in history where the strain of uncertainty has been so abundantly clear in both the stock market and consumer spending behaviors. The uncertainty comes from all different angles, and while you certainly can’t blame investors and consumers for being extra cautious, it is actually part of the vicious spiral downward.

What kind of uncertainty is out there right now for the average investor? There is great uncertainty as to the extent of the current recession, as well as fears of possible deflationary pressures on our economy. The fears that the credit markets have virtually dried up are far from over with as well.

What kind of uncertainty is there for the average consumer? Consumers are worried about job security, investments, retirement plans, as well as a multitude of other things. The truth is as the average American worries whether they can make it from paycheck to paycheck and whether they will have a pink slip on their desk on Monday morning, the economic pain will just continue to worsen. No person in their right mind would continue spending just as much as they had been despite huge changes in the overall economic picture, and more specifically, their own personal finances.

Everyone has always known that the stock market can’t stand uncertainty and a lack of confidence in the system, but consumers confidence in the system is even more important than big investors. Make no mistake about it, the consumer is the driver of our economy and the current uncertainty swirling around our economy will likely leave many questions unanswered for quite some time. The markets and consumers alike can generally handle some pretty bad news, but what they can’t handle is the complete unknown. Right now we are in the unknown, and the pain is getting worse every single day.

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