The University of Michigan consumer sentiment index just came in at 44.8.

The lowest reading in the history of the survey.

April was already the worst on record. We beat it, then beat it again a month later.

Near-zero unemployment. Record-high stock market. GDP growing. Entrepreneurship at an all-time high.

And the consumer says this is the worst they can remember.

Something doesn’t add up.

Here’s what we covered in this episode:

1. “Record low” is good news.

The consumer isn’t behaving like the survey says.

Nobody’s broke and curling up in a ball.

They’re getting smart. Waiting longer to buy a car. Buying less packaged food. Trading stuff for experiences.

Because the real issue is not the consumer ‘income statement’. The real issue is the consumer ‘balance sheet’ is bloated and designed for a nuclear family that is declining.

* Single family homes that are too expensive and too much space for single people.

* Big cars sold for families that aren’t being formed.

* Groceries to cook in a DoorDash world.

The old linear life script is dissolving. Get married, get the house, get the promotion, collect your Scooby Snacks of purpose along the way. When that script breaks, people go find meaning on their own terms.

2. The synthetic customer, and the race to beige.

Bain published “Synthetic Customers Earn Their Stripes.” AI-generated buyers, backtested against a real conjoint study, replicated about 90% of the outcomes. Which features drive choice. Which products to launch. Even early price sensitivity. Target and US Bank are already testing on synthetic audiences before anything ships.

The technology is a huge unlock.

Sadly most companies will use it the wrong way.

Everybody builds one. Everybody aims it at the fat part of the bell curve. They optimize the average customer into the ground and call it insight.

Synthetic customers trained on average consumers makes us all dumber. We have an opposite POV…check it out.

3. The triple wasn’t good enough.

The QQQ is up around 600% over ten years, roughly 21% a year. The S&P did 13 to 14%. To get rich, you just had to sit still.

Gen Z isn’t sitting still. A third have played prediction markets, a third hold crypto, and a quarter of their portfolios sit in non-traditional assets. The punchline: roughly 69% of Polymarket accounts have lost money since 2022.

The FOMO flipped. A triple every year for a decade, and a whole generation said, not good enough, I want the fences.

Why swing that hard? 9/11, then 2008, then COVID, each one before they could legally drink. When every safety net detonates that early, “wait 40 years” sounds naive.

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Recorded Friday, May 29. Every number above is as of that morning.

Piratey disclaimer: This is NOT financial advice. None of us have a Series 63, Series 7, Series 6, CPAs, CFAs, IUDs, IEDs, and hopefully not IBS (this makes DUDE Wipes sad).

Stay tuned for next week’s episode.

Hey Ho, Let’s Go!

Arrrrrrr,

Category Pirates

Eddie Yoon

Christopher Lochhead

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