Wednesday, March 11, 2020

Time to Panic?

Maybe.  Fresh from arresting an uncle and a cousin on charges of plotting a coup, MBS roiled oil markets by launching a price war against Russia, exacerbating instability in a world economy already teetering from the impact of COVID-19.  Investment houses think recession is likely.

The manufacturing sector already is in recession from Tr*mp's trade war, global supply chains are a mess, and a virus is not especially susceptible to economic interventions.  However much money is pumped into the economy, it doesn't do much good if people won't go out and spend it: so whatever fiscal stimulus Congress comes up with probably won't make much difference.  The Fed will cut rates again, but interest rates already are so low that a further cut can't have significant impact.  The truth is that firms already have plenty of cash-on-hand were they interested in expansion — but who's interested in expansion while there's a pandemic going on?

I suspect the coronavirus may have done some good for "Grandpa Joe" in yesterday's primary contests: weird "Uncle Bernie" seems far too angry to offer much comfort and reassurance.  If the viral threat persists, of course, "Mean Boy Donald" fares even worse.

No comments: