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The Economy: On the Other Side of the Abyss

The good news is that a vaccine is definitely coming.  But getting to herd immunity is going to take more than a quarter or two, especially given the resistance of about half of the American population to getting the vaccine, at least early on. The economy is likely to remain soft until well after the pandemic passes.  There are many reasons for this including a decade of poor policymaking and …Read More

The Shape Of Things To Come: ‘V’ Or ‘L’ Recovery

What do -38%, -34%, -30%, and -25% have in common? If you guessed that these are the Q2 real GDP forecasts from the major financial houses (Morgan Stanley, Goldman Sachs, Bank of America, JPMorgan), you would be correct. Incredible as it may seem, we are likely headed for a drop in Q2 real GDP in that magnitude, and the just passed Q1 quarter looks to be somewhere near high negative single digits. …Read More

The Shape Of Things To Come: ‘V’ Or ‘L’ Recovery

What do -38%, -34%, -30%, and -25% have in common? If you guessed that these are the Q2 real GDP forecasts from the major financial houses (Morgan Stanley, Goldman Sachs, Bank of America, JPMorgan), you would be correct. Incredible as it may seem, we are likely headed for a drop in Q2 real GDP in that magnitude, and the just passed Q1 quarter looks to be somewhere near high negative single digits. …Read More

The “Avoidance” Reaction

Preamble I received an email from my travel agent last Monday (March 2) informing me that, because Italy had been raised to a Travel Level 3 by the CDC (strongly advised not to travel there), our vacation to Italy (March 12-22) had to be postponed, else we risked being quarantined upon our return.  In addition, the previous Friday, two corporate meetings in my immediate schedule for the week in the …Read More

Corona, Corona, Corona Bonds Really Do Have More Fun!

The equity market finally showed some sensitivity to the effects of the coronavirus (Covid-19) last week with the S&P 500 falling 1.25% from its record high close on Valentine’s day for the holiday shortened week.  The leading issue which dominated every news cycle (except for the Democratic debate for a few hours) was Covid-19 and the economic uncertainties surrounding it.  Markets rose on news or speculation that infection cases were …Read More

Virus’ Total Impact Unknown – But Economic Impacts Are Serious

There were three headlines on Page A6 of the February 6th Wall Street Journal (WSJ): · “Viral Outbreak Squeezes Manufacturers” with the sub-head: “Airbus, Hyundai among multinationals cutting back because of constraints in China;” · Apple Faces Risk In Its Reliance on Chinese Factories;” · Cruise Passengers Quarantined on Board.” We have seen similar headlines since, and will continue to see them while the virus rages. As I write (February …Read More