by MonteQuest » Wed 29 Apr 2020, 10:02:01
$this->bbcode_second_pass_quote('REAL Green', 'W')ell I am a doomer "lite" so when I say U shaped recovery it is a recovery back to something less. I am also hedging there saying "if" becuase nobody knows at this point if everything will click into place to recover at all. That is just the general feeling and feelings are emotional. I don't see a collapse. This has never happened before not even in 08. That was a Minsky moment of systematic financial failure not a demand shock. Demand was appearing to shut down but after a few months of central bank servicing the crisis a new bubble was inflated.
Oh, I agree that no one knows how this will end or what degree of recovery there will be or when. But as economist Mark Thornton points out, “The coronavirus did not cause the economic crisis; it merely triggered it, causing it to occur earlier than it would have. Despite stellar numbers in the stock market and an all-time low unemployment rate, the US economy was already headed for an economic crisis; we could clearly see that many consumers could barely pay their bills and had virtually no savings to rely on. The viral pandemic merely triggered or revealed what was ultimately going to happen.”
“Too many people are focused on the pin and are ignoring the bubble that the pin pricked. You know, before the COVID-19 shutdown, the economy was long overdue for a severe recession, and the US stock market was long overdue for a bear market. So, I think the COVID virus simply accelerated the onset of both. … So I would not get excited about this rally. I think we still have a long way to go on the downside. And the economy, I think, is going to be even worse.”—Economist Peter Schiff
I don't see any way that this bubble can be reinflated, thus a L-shaped recovery at best.
A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."