Into the darkness we go

The other shoe has not dropped. There will be no recovery…

Until rental evictions are lifted we won’t know how many people will be living on the street — then the economy won’t grow until they’re settled.

Until consumer credit loosens there will be no consumer-led economic growth.

Until mortgage forbearance is removed we won’t know how much residential or commercial property debt will survive — then the economy won’t grow until the borrowers complete their bankruptcies and real estate re-prices.

Until the Fed stops micro-managing market liquidity, the invisible hand of capitalism will remain shackled to political favoritism and short-term thinking.

Sorry, I’m making this too complicated. Not until a sh*t load of debt has defaulted or re-priced can the economy recover.

Misconceptions that won’t go away. 1) That economies can grow back as fast as they shrink; 2) That low interest rates won’t save millions from going bankrupt anyway, trying to pay back principal of devalued assets; 3) That politicians won’t wait to the last minute to make financial decisions that, being last minute, will cause violence; 4) That eviction moratoriums and mortgage forbearance won’t lead to more homelessness, not less; 5) That voting against someone (like “Hillary”) will be enough to pacify tens of millions of bankrupt and angry Americans; 6) That Asia isn’t a significant threat to the U.S. Dollar; 7) That wide scale violence in the U.S. isn’t worth worrying about.

Sunny interlude again! The young don’t mind if most businesses close They have their cell phones, PC gaming rigs, energy drinks and recreational drugs. There’s plenty of food. The pandemic has changed the world almost completely. But not so much you can’t enjoy Fortnite (or whatever game people play now) and a choice vape. Perhaps civilization can be content staying home for years on end.

Storm clouds come back

Occupy Wall Street, MeToo, LGBTQ, Black Lives Matter — all inarticulate fads that will become footnotes in the historical record once the big themes take center-stage.

Everyone is waiting for the Fed to print them some money until the pandemic passes.

In looking at my past essays to link here I realize I’ve even written this essay already. Monetizing a Financial Crisis’ Incubation Period.

I can’t predict when, but I explain why the stock market is not perturbed by 30+ million unemployed Americans. Why Stocks Haven’t Crashed Yet.

If I would correct one misconception it would be notion that a recovery is on the horizon. An Economy At Rest, Stays At Rest.

My favorite prediction, which makes me a contrarian, in on the subject of interest rates. I believe they have to rise to price in credit risk. I admire the Fed’s gambit. But Mr. Market can’t be pacified by cheap credit forever. Coming Credit Panic Post Pandemic.

One of my most read articles, A Hong Kong Proxy War in the Making. Things have changed in HK…nothing has changed.

The fundamental differences between the West and China. If Real Estate Crumbles Will China And The West Get Along.