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Latest UVA News Posts

The Recession Has Arrived, & with a Vengeance

For some time, I have outlined the growing softness in the U.S. and world economies.  Most of the recent data is pre-virus, and are generally meaningless.  The numbers we will get for March will be awful, but the worst is yet to come.  An example of March’s data is from the Philly Fed.  The print of their Manufacturing Index was -12.7 for March, down a record amount from the +36.7 …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

The Potential Economic Impact Of The Reaction To The Coronavirus

Will You Catch Coronavirus? There is a minuscule chance of contracting the coronavirus if you live anywhere but in Hubei Province in China, and even less of a chance if you live in the U.S. The last time we had something like this (SARS), the public and business reaction wasn’t as extreme. It appears that social media has had a lot to do with this more intense and extreme reaction. SARS infected a …Read More

Holy Cow, Batman – 2! There Really Is Rampant Inflation!

The financial markets have displayed some volatility of late. The latest excuse was the on-shoring of the second case of China’s coronavirus in the U.S. And, no wonder, on a valuation basis, equities are at or near the highs of the dot-com era and similar to October 2018. Remember what happened next? As I’ve written before, equity prices are fueled by excess money creation. That is now well recognized by market commentators, but, we …Read More