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Sunday, June 21, 2020

2020-06-21

COVID-19 notes

The head of the World Health Organization warned Friday that humanity is facing "a new and dangerous phase" of the coronavirus crisis.

"The pandemic is accelerating," said WHO Director-General Tedros Adhanom Ghebreyesus.

 

NYT: Florida Coronavirus Map and Case Count


NOT because testing is going up: More Infectious than COVID-19

number of tests has certainly increased over time. But it hasn’t increased much recently, if at all. It’s been nearly a month since a sizeable increase in the average daily testing. Most of those tests came back negative, which is why the graph of negative tests looks a lot like the graph of total tests

 

of course, its not just Florida:

      

Yaneer Bar-Yam: Good news: Canada has strong decline in Ontario, joining Quebec.

 

‘Recovered’ COVID-19 patients suffer major ongoing physical, cognitive problems

Memory loss, psychological issues, profound fatigue, phantom pain, along with lungs that won’t heal, discovered months after recovery, even among those who had only mild symptoms

 

New England Journal of Medicine: Challenges of “Return to Work” in an Ongoing Pandemic

                                                 

What lockdowns do and what they don’t do


When Will Life Return to Normal?

Today’s graphic uses data from New York Times’ interviews of 511 epidemiologists and infectious disease specialists from the U.S. and Canada, and visualizes their opinions on when they might expect to resume a range of typical activities. Specifically, this group of epidemiologists were asked when they might personally begin engaging in 20 common daily activities again.


A warning from South Korea: the ‘fantasy’ of returning to normal life

It is more than three months since South Korea’s coronavirus infection rate peaked. In that time political leaders and health experts around the world have credited the government of President Moon Jae-in for teaching important lessons in the swift deployment of mass testing and aggressive contact tracing to counter what was for a time the worst Covid-19 outbreak outside of China.

Seoul’s continued difficulty in controlling new outbreaks demonstrates that governments need a persistent state of vigilance and a willingness to change tack as they attempt to reopen their societies — a state of affairs that many people could find every bit as difficult as the lockdown itself.

 

 

Regular Related Fare:

8 Reasons Why COVID-19 Damage To The Economy Will Be Deep And Lasting

Too many people who should know better are taking a big bounce in retail sales as a sign that an economic recovery is well underway. It is, but only in the sense that going from the ICU to a hospital bed could also be defined as a recovery. In keeping, the Atlanta Fed’s GDPNow forecast for the second quarter has improved from negative 52.8% to a sunny negative 45.5%.

Needless to say, a rebound from the lockdowns was inevitable. All sorts of activities like dentist appointments on hold (and dentistry personnel accounted for 10% of the job gains), and so there’s pent up demand for medical procedures and treatments, as well as more mundane services that many regard as critical, like haircuts.

Nevertheless, stock indices rising to new highs looks remarkably out of touch in light of the baked-in and certain-to-continue-for-long-enough-to-matter damage. The true believers are in “Central banks are on the case and will save us” mode. Perhaps they need to heed the warning, “Past results are no guarantee of future performance.”

Multiple factors are working together to bias observers to underestimate the severity of Covid-19 economic damage. The first is that it has hit parts of the economy that are relatively removed from media coverage: low income service workers and small business owners….

(Worth reading the list at the link)

 

American homeowners are struggling to make ends meet during the pandemic

More than half of American homeowners reached out to family or friends for money in order to make mortgage payments and ease their financial burden in the face of the COVID-19 pandemic, according to new research. The study, which polled 2,000 American homeowners, found 35% of homeowners have skipped or missed a mortgage payment. And the uncertainty that the COVID-19 pandemic has brought is only complicating things for financially insecure homeowners, as 35% have worried about losing their home. The study conducted by OnePoll in conjunction with the National Association of REALTORS® aimed to uncover the financial struggles of current homeowners and discovered more than 8 out of 10 respondents - 81% - say the COVID-19 pandemic has caused them unexpected financial distress.

Over half (56%) of those surveyed say they've had to cut back on their expenses just to afford their mortgage.

Since the pandemic began, nearly half (47%) of homeowners have sought out alternative ways of making money.

In an effort to generate additional income, almost two-thirds of respondents (64%) started a side project while 53% sold personal items.

Given the financial impact of the COVID-19 pandemic, over half (52%) say they are routinely concerned about making their mortgage payments and nearly half (47%) say they've considered selling their home because they're unable to afford the mortgage payments.


James K. Galbraith: The Illusion of a Rapid US Recovery


This *Isn’t* About Stock Prices

now the second week in June! – at still an historic pace. Initial claims have improved, certainly, as have continued claims. But “improve” is absolutely a relative condition, a term of art being purposefully used to obfuscate this particular situation. This is not meaningful improvement;

… Far more troubling, initial claims totaled just over 1.5 million for the week of June 13 (last week). Only a slight drop from the previous week, and while the trajectory looks good on the [1st] chart [below] you have to truly appreciate that gigantic number in the wider context.

After three months of this, a full quarter (13 weeks), initial claims continue to show up at unbelievable levels; so far above what has been experienced in prior contractions, even compared to the previous worst periods, such as 1981-82 as well as 2008-09’s Great “Recession.” It demonstrates ongoing levels of labor market undress for economic purposes that are so far out of line and character that it’s difficult to process.

During the worst 13 weeks of the Great “Recession”, January to April 2009, 8.4 million Americans, former workers, filed initial unemployment claims. In the last thirteen up to and including the latest one, more than five times as many have. Five times as many as the worst since the Great Depression. The latest week continues to be more than double the prior record.


Federal Tax Receipts Show A Record Plunge In May, Raising More Doubts About Employment Data Accuracy

Household employment data is based on a sample of 60,000 households out of a total household population of 125 million.   Federal tax receipts are unambiguous. They reflect withheld income taxes taken directly from 30 million business establishments employing over 150 million workers before the pandemic.  Which data series--reported household employment or withheld taxes---do you think offers a more accurate picture of the current employment situation

 

Millions of Job Losses Are at Risk of Becoming Permanent

 

 

Freight Index Has Little Improvement in May

 


Retail Sales Bounce, But Consumers Are Tapped Out.


Something to consider for those who didn’t think ZIRP likely then and don’t think NIRP likely now

Attention All “V” People

Around the same time Lehman Brothers and AIG became headline news in the middle of September 2008, none of the mainstream econometric models thought it was possible for the US economy to suffer so severe a shock that it would induce monetary policymakers to unleash ZIRP. Worse, the models all predicted that it would be impossible for anything to force the Fed down to zero and keep the central bank there for two years. … Trying to figure out what had been missed, several of the Federal Reserve’s researchers wrote a paper that instead perfectly demonstrates the absurdity of the entire discipline. The models, to put it bluntly, didn’t model reality. For one thing, confirmation and recency bias was rampant. … most models incorporate only static assumptions that are rarely revisited, and as a result they almost always overstate the upside compared to any departures downward…. But it wasn’t just underestimating the probability of reaching the ZLB, though. As the authors also conclude, the major error was in how the US economy stayed in that weak state for far longer than anyone had thought, and calculated, possible….

You aren’t supposed to be forced down to zero and get stuck there. Japan was judged to be the outlier, not the base case.…

We are entering the window of gigantic positives – all of them leaving us instead with an enormous economic disaster on our hands.…

And yet, all of these projections are being put together by the mainstream econometric models, those which we know for a fact are… overly pessimistic? No. They are, time and again, proved to be wildly over-optimistic.

As I’ve written too many times lately, the best case is downright atrocious.…

That’s nearly the same length of time as the Great “Recession” and its false recovery, the very same one which had confounded the optimistic projections the last time we did this. In other words, the current base case is as long and much deeper than 2008-09. Let me repeat that: the best case is an economic hole as long and much deeper than the economy of GFC1. And that’s assuming everything goes perfectly, including 3.6% real GDP growth not just in 2021 but also 2022 and into 2023. What are the chances of that happening?

 

Crescat Capital:

Dear Investors: The US stock market should not be trading anywhere close to the multiples it is today given the enormity of the macro events that have already unfolded this year: …

   

Markets driven by euphoria never end well. The US stock market today is in la-la land. It is discounting a new expansion phase of the economy at the same time as a major recession has only just begun. Since the March lows, investors have turned overwhelmingly bullish. They are trusting that central banks’ liquidity will miraculously create economic growth rather than just temporarily ease the pain of declining gross domestic incomes and crushing debt burdens. This delusional thinking is induced by the intense but short acting dopamine response to Fed money printing but completely ignores how business cycles work. Government money printing has failed miserably, repeatedly, throughout history at eliminating recessions and frequently coincides with some of the worst downturns. Today, it is a major symptom of a severe recession if not a depression.


Market Holds 200-DMA, Bulls Remain In Control…For Now 06-19-20

Our portfolio management meeting Friday morning started with “This is nuts.” ….

As markets get overly bullish, extended, and exuberant, Wall Street tends to come up with new ways to “sucker,” I mean “rationalize,” investors into taking on additional risk. One thing I had hoped for in 2018-2019 is that we would get a correction large enough to revert some of the excessive valuation levels which existed. Such would provide higher future rates of return over the next decade, allowing investors to reach their investment goals. Instead, through the Fed’s actions, the correction was halted, and the “clearing process” was not allowed to occur. The outcome has been even higher levels of corporate leverage, and valuations remain grossly elevated on many different levels.

So, how does Wall Street justify “buying stocks” in the current environment of recessionary economic growth, high unemployment, and collapsing earnings? Easy, you just tell uneducated investors to use earnings estimates 2-years in the future. There are significant problems with this analysis. The first is that even based on 24-month estimates, stocks are still historically expensive. Secondly, Wall Street is terrible at estimating forward earnings. Historically, forward estimates are about 33% too high before they are ratcheted sharply lower.


From: Stocks only go up


and from: BofA: There Is Just One Bull Market To Short … And The Fed Won’t Let You


Chris Whelan: Sizing The Commercial Real Estate Bust

So how big is the impending commercial real estate bust in the US? Bigger than the residential mortgage bust of the 2000s and also bigger than the commercial real estate wipeout of the 1990s, including the aftermath of the Texas oil boom of the late 1970s and 1980s.

This particular bust in commercial property is very different from the 1990s, but in common with that era also includes a large energy component. The difference is that, due to COVID19 and the more recent looting in major cities, the valuation of once solid urban commercial and residential properties held by equity REITs is now very in much question.

The Scope of the Damage: The state of the equity REITs casts a pall over the rest of the $5.2 trillion commercial mortgage segment. Once seen as top commercial credits, these equity REITs now face an enormous change in how businesses and consumers view urban commercial office and multifamily residential assets. As usage falls, so too do valuations and tax revenues for the localities. Projects that a year ago might have made sense as long-term bets on the future of cities like New York have no economic rationale today. And the loans and mortgage bonds that support these buildings no longer make any financial sense.

 

Arthur Berman: U.S. Oil Dominance Is Coming To An End


Berman: Expect oil prices to move down, then up, then WAY up. Slide deck here.

 

 

Regular Fare:

I searched to dig up this post I read awhile ago and linked to earlier, for MK in particular: The incoherence of yield curve control

 

The Government Can Afford Anything It Wants

Where does money come from, and what does it do? MMT argues that money is a legal and political construct and that limits to government spending are not monetary and only mildly economic; they are primarily political. “MMT clarifies what is economically possible,” Kelton writes, “and thus shifts the terrain of policy debates that get hamstrung over questions of financial feasibility.” The book combats the limiting myths of economic reality, including the pervasive idea of a tax-funded federal government that can or can’t “afford” things.

 

RealVision interview with Steve Keen: We need a private debt jubilee.


 

QE Fare:

About our team’s discussion about QE and how it translates to an equivalence in terms of interest rate changes:

just because the size of the Fed’s balance sheet has gone up phenomenally doesn’t necessarily mean that it is equivalent to 200 or 300 or x bps of interest rate cuts… not if it is impotent in terms of impact on the real economy; even rate cuts themselves may be less potent than in the past, but, inarguably, lower rates throughout the economy, particularly a highly debt-burdened economy, lowers debt-servicing costs throughout the economy, and allows consumers/businesses to reduce debt service costs out of their income, whatever that might be, and is thereby stimulative; QE may not have any such impact, except to the extent that it too lowers interest rates, and its easily arguable that interest rates are as low as they are simply because of economic fundamentals (low growth and disinflation)… and, further, it is even arguable that QE, through its presumptive impact on sentiment, has kept rates from falling even lower (if market participants deem that QE will be helpful thru whatever channel to the economy, they will be less bearish about the economic outlook, and, as such, rates won’t fall as much as they might have otherwise)

 

One Bank Explains Why QE No Longer Stimulates The Economy And Only Leads To Higher Stock Prices

the marginal utility of every new QE is now declining to the point where soon virtually none of the money created by the Fed out of thin air will enter the economy and instead will be stuck in capital markets, resulting in hyperinflation for asset prices even as the broader economy collapses.

Or, as BMO's Daniel Krieter writes, "QE has fed through to the real economy in a slower manner than previous QE campaigns" and for each dollar the Fed's balance sheet has grown, M1 money supply has increased about $0.32, compared to $0.96 and $0.74 in QE1 and QE2. "The expansionary policy thus far has mostly resulted in increased asset prices", BMO writes concluding what had been obvious to us since 2009. Only now we are 10 years closer to what is the inevitable endgame, one where the Fed has no impact on M1. …

Traditionally, as BMO explains, we analyze the business cycle from a classical economic perspective where monetary authorities are more passive and “the invisible hand” guides economies (this used to be the case before the Fed went all Politburo on the USSA and decided to nationalize capital markets, crushing any "signal" the bond market may have). In this context, we look at interest rates, which can theoretically be defined as the rate that makes the consumer indifferent between consumption today and consumption tomorrow. R* is the (unknowable) natural rate of interest that supports full employment and stable interest rates. In theory, if r<r*, then consumption today is preferable and the economy is expanding. If r>r*, consumption saving is preferable and the economy is contracting.

In an expansionary phase, prices and consumption are increasing. Because prices and investment opportunities are high, demand for money among consumers/businesses is high, and interest rates (r) increase alongside borrowing. When r rises to the rate of r*, consumption slows, earnings fall, and a recession ensues. R* falls as uncertainty and risk aversion grow. This is a “business cycle” recession (and as long as the Fed is around, we will never have one of those again as the Fed has now also killed the business cycle).

However, a recession can also be caused by some external shock to the economy that produced further declines in r*. This is because r* is reactive to uncertainty with a strong negative correlation. The greater the uncertainty, the lower r* falls.

In recession, r falls as consumption remains low as long as it is greater than r*. Defaults accelerate the drop in r. With the passage of time, r* rises slowly as the uncertainty/risk aversion surrounding the shock and/or end of business cycle fades. However the longer firms go without earnings due to low consumption, the more defaults are realized and the more r drops. At some point, the combination of falling r and rising r* results in r <= r*. Once this happens,  consumption/ investment picks up and the economy enters recovery.

In addition to accelerating declines in r, defaults experienced during recession also lower the cost of labor and capital goods as the resources of failed companies are returned to the economy. In addition, barriers to entry in certain industries fall as “old guard” firms go out of business. Thus, as the economy enters recovery, this combination of cheaper labor/capital goods and lower barriers to entry leads to strong business investment and increases growth potential during the ensuing expansion.

This is how the world works in theory. Unfortunately, since 1913, theory has not worked due to the intervention of the Fed.  So now let’s look at how all this works in reality, and introduce an active central bank with a wider range of monetary policy tools at its disposal.

As the economy cools, the central bank lowers r in an attempt to spur consumption by forcing r<r*. Consumption increases in response, and recession/defaults are avoided. But business resources aren’t returned to the economy. Recovery will be less robust due to fewer relative attractive investment opportunities. As per Krieter, this was the experience of 2001.

Now in 2008, a shock in the form of subprime mortgages hits the economy and uncertainty skyrockets. R* moves into negative territory as shown in a recent San Francisco Fed study. The Fed moves rates lower, but is constrained by the zero bound. In order to further “lower r", the Fed embarks on asset purchases during QE and is successful in spurring consumption, as evidenced by the strong correlation between increases in excess reserves and increases in M1. M1 is the most basic measure of money supply and includes essentially only cash and checking/demand bank accounts. The theory is that for a good or service to be consumed, it must be paid for out of M1. Therefore, the increase in M1 following QE is a measure of the degree to which QE results in actual consumption.

Note "lower r" in quotation marks in the previous bullet because r is at the zero bound and cannot (at least in the United States) be lowered further. Therefore QE increases money supply which is meant to spur consumption, which is the same desired effect of lower interest rates. In a sense, money supply increases are synthetic interest rate decreases.

The combination of QE-driven consumption (r falling) and fading uncertainty after a trillion dollar fiscal stimulus package (r* rising) ultimately pulls the economy out of recession. However, the pace of response in 08/09 was slower. QE was not announced until late November 2008, after large defaults were already experienced. Fiscal stimulus in the form of the ARRA package didn’t arrive until February 2009 with an additional lag in implementation that featured incremental defaults. In the end, almost a trillion dollars’ worth of debt was affected by default in 2008/09, but QE certainly prevented actual defaults from being likely exponentially greater. BMO notes however that defaults avoided were once again economic resources that were not returned to the economy and barriers to entry that are not lowered. This argues that attractive investment opportunities following the financial crisis were not as abundant as the depth of recession would suggest.

As a result, the recovery was slow, ultimately prompting the Fed to embark on additional rounds of quantitative easing in an attempt to spur increased consumption.

Which brings us to the seeds of the Fed's own demise: the problem is that QE appears to be experiencing diminishing returns, as evidenced by a falling correlation between excess reserves and M1 in successive episodes of QE following the financial crisis. As QE leads to a direct increase in bank reserves, only a fraction is translated into money supply growth, and thus potentially consumption and investment. QE1 was highly effective and an important factor behind pulling the economy out of recession. QE2 had a marginally lower, but still high, follow through of .735 indicating that on average, $0.74 of each dollar of QE translated to increased money supply. We observe elevated inflation and personal consumption rates during the period of QE2 as evidence of its effectiveness. However, during Q3, the correlation fell to just $0.28 and resulted in very little inflation of GDP growth. Through this lens, the impact of QE on the real economy has diminished over time.

How does BMO explain the diminishing impact of QE?

·       Diminishing marginal utility of consumption: QE (and monetary policy) is often referred to as "borrowing from the future". However, there is only a limited amount of future consumption that can be pulled into the current period via monetary policy. This could apply to consumption of durable goods: as rates have been relatively low for a long period of time, demand for credit no longer increases at the same rate with incrementally lower interest rates. At some point, consumption does not bring sufficient to utility no matter how long prices or interest rates are.

·       Wealth disparity: Wealth disparity exacerbates the impact of diminishing marginal utility of consumption. For reasons discussed in further detail below, QE tends to inflate the price of financial assets, making those who own the assets more wealthy. A large percentage of QE money ends up in the hands of the wealthy, whose consumption patterns are unlikely to change in response to a near term increase in wealth.

·       Inflation expectations: Finally, the crux of monetary policy plays on expectations. Inflation is self reinforcing as demonstrated by a very high correlation between inflation and inflation expectations. Around the introduction of QE, there was an expectation that it could spawn runaway inflation. Having been through multiple rounds of QE without a large increase in inflation, people have likely generally come to understand that QE is not likely to result inflation, therefore there is marginally less impetus to consume now.

Following five years of no QE in the United States, it appears the utility of current QE has increased modestly in comparison to QE3. However, the follow through to consumption still remains well below levels experienced between Q1 and Q2. It is likely then that current QE is unlikely spurring much consumption as r isn’t influenced lower (via money supply increase) as much as in the past and likely remains well above r*.

Worse, as we discussed last week, one can argue that r* is likely lower now than potentially any point in history, and according to Deutsche Bank it is at an all time low of -1%.

 

Not only is uncertainty extremely high, but the impact of COVID-19 arguably directly lowers r*. Recall r can be defined as the rate of interest that makes consumption today indifferent to consumption in the future. In all economic models, r is assumed to be positive. But when people are afraid to their leave their house for fear of infection, future consumption actually is more attractive than current consumption. So r* is arguably negative for fundamental reasons for the first time. Greatly heightened uncertainty only pushes it even further negative.

When money supply goes up, but consumption fails to be generated (because r remains well above r*), then savings rates mathematically increase. Therefore, the prices of financial assets increase generally.

During times of risk aversion, bond prices increase first, but supply of safe assets is limited, especially as the Fed buys a substantial portion of the Treasury market. Investors are therefore pushed into riskier assets. But as long as r remains below r*, the more savings go up, the greater the mechanical move in financial asset prices relative to real economic activity.

This, according to BMO, is what’s driving the paradoxical relationship between bond and equity prices in recent weeks, and explains why stocks are performing so well despite the outlook for the greater economy. Money supply that doesn't translate into consumption must result in higher financial asset prices until defaults result in wealth destruction.  What does this mean for the recovery? The central bank is displaying reduced capacity to further generate real economic activity as a result of accommodative policy over the past twenty years. This means that recovery is unlikely until r* increases significantly, which only happens alongside fading virus uncertainty. This will take a long time.

During that time, one of two things will happen. Either the government will continue to assist companies in avoiding bankruptcy, or it will not. If it does, confidence (and r*) will likely return relatively more quickly at a huge cost to the government. However, there will not be a large return of economic resources at the end of this recession and the ensuing recovery will be disappointing given the degree of economic pain currently being felt.

If it does not, defaults could potentially reach historic proportions, and the recession will be long and painful. However, using the "ripping the bandaid" analogy, this scenario would result in likely the largest return of economic resources in the history of the country and lead to a very powerful economic expansion in the wake of the current recession.

Ultimately, the truth likely lies in the middle. The government will continue to provide relief, though not likely in scale large enough to save all businesses. Defaults and downgrades will be staggering, but this will increase the capacity of growth in the ensuing economic recovery.

What does this mean for risk assets? It means that risk assets are being technically supported by stimulus measures so far, particularly QE that is no longer as effective as it was. However, a large wave of defaults is unavoidable without an unlikely near-term (and complete) solution to COVID-19. Heavy defaults, the kinds described in "Biblical" Wave Of Bankruptcies Is About To Flood The US, will likely bring about another wave of risk asset price weakness as wealth is destroyed and technical upward pressure on financial asset prices and a higher percentage of savings demand is met with safe haven assets (Figure 3).

This also explains why the Fed was compelled to enter the bond market, as absent a direct intervention in the secondary market, bond prices would crater and trigger a self-fulfilling doom-loop, where lower bond prices lead to higher defaults, lead to even lower prices and so on. For now, the Fed has managed to delay this process but there is only so much Powell can do to offset the collapse in fundamentals which will lead to continued ratings erosion, and the eventual defaults of countless companies, many of which the Fed will be directly invested in. At that point, the Fed's action in the "market" will become the topic of non-stop Congressional hearings, and will culminate with doubts emerging about the viability of the dollar as a reserve currency.


Geopolitical (War)Fare:

With Stones and Iron Rods, India-China Border Clash Turns Deadly

Egypt & Ethiopia Are On Verge Of War Over Water As Nile Crisis Escalates

Sisi's 'Declaration Of War' Puts Egypt & Turkey On War Footing Over Libya

 

 

(not just) for the ESG crowd:

The Myth of America’s Green Growth

In other words, what looks like “green growth” is really just an artifact of globalization. Given how much the U.S. economy relies on offshored production, McAfee’s data cannot be legitimately compared to U.S. GDP, and cannot be used to make claims about dematerialization.

 

Can the World Get Along Without Natural Resources?

… Take, as an example, the need to fight climate change. If you ask a climate scientist, they’ll likely say that climate change poses a dire threat to humanity. Their reasoning is simple. Climate change could potentially make farming impossible in much of the world. So if we want to avoid mass starvation, we’d best curb our fossil fuel habit.

In contrast, if you ask a neoclassical economist about fighting climate change, you’ll get a very different answer. Climate change, they’ll likely say, isn’t much of a problem. True, it may cause much of our arable land to become barren … but don’t worry. Agriculture, they’ll observe, is a tiny part of GDP. So even if we destroy our ability to farm, ‘economic output’ will remain virtually unchanged.

Given its absurdity, you might think that I’m making this reasoning up. But I’m not. William Nordhaus — whose work on the economics of climate change has been enormously influential — uses the same reasoning to downplay the impact of global warming. …

 

The stranded asset write downs begin

 

COVID-19 is the quiz, climate change the final exam

While coping with an ongoing pandemic and a coronavirus 'pop quiz,' the lesson to 'listen to the scientists' looms large in an inevitable climate change 'final exam.'

 

Quote(s) of the Week:

Jeremy Grantham: "this is becoming the fourth real McCoy bubble of my career."

From: Investing Legend Jeremy Grantham Is "Amazed" At This Unprecedented Stock Bubble

“The Covid-19 pandemic “should have generated enhanced respect for risk and it hasn’t. It has caused quite the reverse,” Grantham told the Financial Times. He noted that trailing price-earnings multiples in the US stock market were “in the top 10 per cent of its history” while the US economy “is in its worst 10 per cent, perhaps even the worst 1 per cent”, echoing what he said in his quarterly letter.

 

Albert Edwards: “I am genuinely appalled at Powell in Q&A saying The Fed is wilfully ignoring the financial bubbles they are creating. I thought after the 2001 NASDAQ and 2008 housing debacle they would have learnt that when these bubbles burst it makes the recession much worse. Utter morons”

 

"I’m not trying to scare anyone, but this is real and it spreads quickly and easily and people need to know," said one person who knows some of the Phillies personnel who have tested positive.

 

Tweet of the Week:

COVID 19 is the worst disease process I’ve ever worked with in my 8 years as an ICU nurse. When they say “recovered” they don’t tell you that that means you may need a lung transplant. Or that you may come back after d/c with a massive heart attack or stroke bc COVID makes your blood thick as hell. Or that you may have to be on oxygen for the rest of your life. COVID is designed to kill. It is a highly intelligent virus and it attacks everything. We will run out of resources if we don’t continue to flatten the curve.


Pic of the Week:

Outdoor yoga in a dome pop-up coming to Toronto



EXTRA (not exactly investment related) FARE:

Irrelevant Fun Fare:

Moose And Her Calves Decide To Spend A Day In This Family’s Backyard, Man Documents How It Went

 

(red pill) Political Fare:

Ben Norton: To celebrate Obama Day, here are Barack’s greatest hits (wars, coups, slavery, sanctions, al-Qaeda, colonialism)

 

(fun) Political Fare:

The New Yorker: Suggested slogans for the Biden campaign

Much more at the link

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