I read a piece by @LauBooneEco about the longer-term economic cure:
We may have to prepare for a longer coronavirus crisis ft.com/content/a8d313… via @FinancialTimes
Here are three key things she says (and my response):
1. "Because of this uncertainty, markets are unable to price risks or economic expectations" says @LauBooneEco.
She is completely right. The old adage "Share prices follow earnings" is a conundrum now. EPS and P/E ratio data is likely out of date. What are the prices following?
2. "An outbreak lasting more than a few months raises questions about how short-term, targeted responses, designed for a temporary shock, must be amended or strengthened" says @LauBooneEco.
Again, I agree with her. In Ireland, I think people are asking the wrong question about how to fund the @EnterInnov @welfare_ie 12-week €3.7b stimulus. The question is what's needed to follow it and where is the funding for that going to come from.
Speaking of which...
3. "The next steps demand enhanced co-ordination of fiscal and monetary policy." says @LauBooneEco
This is the real one to watch. Neither the EU nor ECB was set up for fiscal matters. How Europe will end up helping economies fiscally will predict its own respective next phase.
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