According to former U.S. Treasury Secretary Lawrence Summers and fellow Harvard University economist David Cutler the cost of the Covid-19 pandemic will exact a $16 trillion toll on the U.S.
To put this in perspective that figure is four times the cost of the Great Recession.
About half
of that amount is related to lost gross domestic product as a result of
economic shutdowns and the ongoing spread of the virus, while the other
half comes from health losses including premature death and mental and
long-term health impairment.
Willful blindness exacts a stiff price.
It didn't have to be this bad.
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But hey, those FAANG stocks are doing great! At some point when things calm down, people are going to ask how we let the FED chair blow up the balance sheet to fund junk Corporate bond buying.
ReplyDeletehttps://wallstreetonparade.com/2020/05/fed-chair-powell-has-upwards-of-11-6-million-invested-with-blackrock-the-firm-that-will-manage-a-750-billion-corporate-bond-bailout-program-for-the-fed/
The force that is driving the markets at the present is hope. With the election beginning to look less uncertain the markets are likely reflecting a ‘hope’ for a clean and fast resolution—and for another round of federal fiscal stimulus.
ReplyDeletePu another way - it will either be a $1.5-2.0 trillion stimulus passing in Q4, or it's +$2.5 trillion in Q1 2021. Wall Street is in a win-win situation.