At some point, the economy will have to restart and people will return to work, but many questions remain. What will a restart look like? What kind of economic life will we return to? The economy needs to regain nearly 100% of its pre-virus activity to avoid a long stagnation. Georgia's reopening this week should provide a window into our economic future.... Read More
It is difficult to find a superlative to describe what the Fed announced this morning. At first blush, it looks like they are nationalizing financial markets, except for equities and high yield.... Read More
Central banks fired all their weapons to stop markets from declining, but U.S. stock futures are locked limit down as we write. The central bank "put" no longer works. If risk markets make new lows, regulators and government officials may have no choice but to close the financial markets to prevent chaos and lasting damage.... Read More
Friday, the 13th, between 7:45AM ET and 9:00AM ET the Fed will offer the massive sum of $1.175 trillion in liquidity (repo) in an attempt to help dysfunctional financial markets. If it works, and liquidity returns, financial markets should resemble normalcy. If it does not, and continued liquidation and illiquidity remain, the next option might be a temporary closure of financial markets.... Read More
S&P futures opened 60 points lower (1.9%), but have reversed to positive on the day. The market has priced in a 50 bps cut for tomorrow morning.... Read More
Official statistics show that the coronavirus growth rate peaked a few days ago. Many hope this is a sign that the worst of the coronavirus is behind us. But more evidence is emerging that these statistics are not the measures of the virus growth, but rather the capacity of the Chinese health care system to deal with this problem.... Read More
Using cable news coverage as a gauge of concern/interest, we find little to no panic with the public over the virus. This suggests that little financial market downside has been discounted.... Read More
Below is our collection of coronavirus charts updated through Day 16 of reporting, January 31, 2020. First An Observation – A Hard Arithmetic Limit In Virus Growth? Many news reports suggest that the Chinese are limited in their health facilities... Read More
Many economists are hoping for the best and assuming any economic impact from the coronavirus will be minimal. Because of the exponential growth rate of these types of outbreaks, it is nearly impossible to asses the true economic impact until the growth rate begins to subside. Several metrics will bear watching in the coming days to gauge the potential economic fallout.... Read More
The growth in coronavirus infections has continued along a geometric progression for the last 12 days. While not overlooking the human tragedy, the markets have the difficult task of pricing an event that has a small chance of being devastating to global growth, but a more likely outcome of being contained.... Read More