Worries about a retail investor-led speculative mania
I am in the middle of watching an entertaining interview of Mark Cuban by Larry McDonald on Real Vision right now. I haven't got to the part to which I assume the title refers: "Mark Cuban — This Feels a Lot Like the Internet Bubble". But,…
Positive sentiment, the oil price rally and re-opening
At the end of April, I wrote a bullish piece centered on an economic snapback after the re-opening, in large part because of pervasive bearish sentiment. I called it "Negative sentiment, the oil price collapse and re-opening business".…
Social unrest, economic fundamentals and the liquidity-driven rally
Shares are mixed in early trading today in the US after several days of positive performance. And while this might seem incongruous with the social unrest happening in the United States, there is no historical data supporting the notion…
The three crises facing the United States
Falling apart
I haven't posted in a week because I am trying to process what's happening in the United States right now. With the pandemic and 20-25% unemployment and cities torn by protest and violence, it really seems like the country is…
Why higher US savings won’t save the pandemic-hit economy
By Michael Pettis
This post was originally published at China Financial Markets at the Carnegie Endowment for International Peace website
According to a May 2020 CNN article, one consequence of the coronavirus pandemic is that “Americans…
The Escalating New Cold War
The New Cold War
I am going to have to get my hands on the new Pettis-Klein book that has come out recently. Here's how Yale University Press touts "Trade Wars are Class Wars":
A provocative look at how today’s trade conflicts are caused by…
Predicting post-coronavirus outcomes
Those of you who know my writing from days gone day, when Credit Writedowns was a blog, know that I gave up advocating for policy responses a long time ago. Not to be a defeatist, but the lesson I learned from the Great Financial Crisis was…
What about the virus?
In yesterday's post, I was mostly upbeat about near-term economic outcomes. The overall gist was that we are going to see a snapback recovery soon that makes this the shortest recession on record. But, the snapback won't get us to anywhere…
Re-calibrating forecasts and relative value in a post-lockdown world
Yesterday was a nice little rally in shares on the back of good news about a virus trial and stimulus support in the US and Europe. That saw us get well over the 61.8% retracement level for the S&P500, where there had been a lot of…
Policy errors during a balance sheet recession and 25% unemployment
I ended yesterday's post writing that the only thing one could predict with certainty was that there will be policy errors going forward. When faced with so much uncertainty on both the healthcare front and on economic policy, it's…