The coronavirus, its economic fallout, & the solutions are reminiscent of the GFC - who gets bailed out & how do we do it. The scrambling to contain, react & limit the economic & financial contagion tells u that, well, maybe people have reasons to doubt & worry about their future
Markets will gyrate now on the policy response @realDonaldTrump ), both fiscal & monetary to see if policy reaction will INSTILL PUBLIC CONFIDENCE that recovery around the corner.
Without this, markets'll look at the China worst than ever PMIs as a benchmark for global trends.
Without this, markets'll look at the China worst than ever PMIs as a benchmark for global trends.
Note after a strong rally overnight on HOPISM, today markets are sobering to help missing in action & nervously waiting for the ECB on what Legarde will do, fireworks and all, as the world increasingly look like China in February.
The blame game is not what people are looking for: they don't care who is to blame for markets decline, why they are scared and why they are fighting each other for toilet paper & soap.
That is symptomatic of being scared of uncertainty. So to help, leaders must respond to this.
That is symptomatic of being scared of uncertainty. So to help, leaders must respond to this.
In such an environment, when u don't know the future (high uncertainty) & you have LIMITED information, the sign of great leadership is someone who takes that and MAKE DECISIVE DECISIONS & one that leads people out of their worst instincts.
The payroll tax cuts were used by Pres Obama during the GFC & advocated by people like L Randall Wray. Yet, it is likely opposed by the Democrats b/c they also want to help but not too much as would help re-elect Trump. Hence markets gyrating w/o anchor:
ft.com/content/f22ef1…
ft.com/content/f22ef1…
Here is a good lecture & also u should read the paper I posted yesterday on why we're susceptible for another crisis - STABILITY IS DESTABILIZING.
The crisis is not behind us: financial institutions & spending cuts 👇🏻👇🏻👇🏻
The crisis is not behind us: financial institutions & spending cuts 👇🏻👇🏻👇🏻
Surprised this lecture has only 1,767 views since 2016. Highly recommend people spending time reading long-form papers on the GFC & impact & solutions.
We need to zoom out beyond the day to day gyration & think more structurally & to do that we need to listen to big thinkers.
We need to zoom out beyond the day to day gyration & think more structurally & to do that we need to listen to big thinkers.
Please send me everything you have read/listened to by replying below. Thanks!
What not to do: central bank buying ETFs (BOJ buying ETC so far this month already more than Abe's fiscal stimulus, which is pretty meh in size of the costs of the virus): The moral hazard of BOJ being the knife catcher is a plentiful & price still falls!
ft.com/content/255494…
ft.com/content/255494…
BOE & Fed slashed rates by 50bps so BOE only has 25bps left to cut while the Fed got 100bps for lower bound to be zero; ECB tomorrow - more slashing of deposit rate already negative + easing of regulation + $$ in terms of loans (lots of fireworks🎇🎆🧨).
Look at global rates 👇🏻
Look at global rates 👇🏻
Get ready for fireworks tomorrow: Christine Legard said:
Europe risks 2008-style crisis b/c of virus & will look at ALL TOOLS.
ALL TOOLS 🧨🎆🎇💥!!!
Europe risks 2008-style crisis b/c of virus & will look at ALL TOOLS.
ALL TOOLS 🧨🎆🎇💥!!!
