Wednesday June 24, 2020
130 Days until the election on November 3rd
210 Days until the Inauguration on January 20, 2021
We are in strange economic times. The economy has gone down the tubes, yet the stock market looks good. Why? I mean why does the stock market look good? Seems odd. I suspect that the Fed is propping up the market. However, I read a piece today that argued that isn’t true, if you do the math. I haven’t followed the argument completely. I also read an article that said England’s central bank nearly collapsed at the beginning of the Covid pandemic.
The article that said the Fed isn’t propping up the markets also said the banks aren’t loaning out the money they were given by the Fed. In Econ 101 the whole point of the Fed giving money to banks during a crisis is so the banks can loan out the money so as to stop the credit squeeze. However, banks never do this. They never loan in tough economic times. The system doesn’t work, yet, we keep doing the same old stuff.
Banks and hospitals seem to work the same way. During regular times they do okay, when you really need them they can’t cope. Maybe, we should have a discussion about doing something differently?
PS Ce n’est pas un récipient de stockage de nourriture
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