Well Doc, this AJ can see all the inter market relationships are out of whack.
I'm no much concerned about the debt issue, another way of saying there are bigger issues in ground zero being the credit market. Repo pump started in Sept 19 and it was considered incidental papered over by the Feds and equity market didnt think much of it. Bond holders are the smartest risk assessor. That repo pump is now over $1T. Bond market is selling off in sink to equity, completely out of whack. Bond dealers making the market are loaded to their eye balls unable to make bids hence Feds have to step in and buy out or provide loans to their collateral. The spreads of corporate BBB and above grade bonds have exploded up against the risk free ones.
Why is USD spiking? Entire world wants USD whether to trade or hoard. Feds had to provide more to ECB. China and Russia are unable to participate whether political or non floated currency. Chinese industry is coming back up so they will need USD to buy tgeir imports.
China, Italy, Spain, Austria (I think) are in lock down. NY state in lock down and California less stringent. US equity fallen 30% without a complete US lock down, there is more falls and only a matter of time US economic activity goes into a freeze. Ditto Oz.
Very optimistic to suggest it will bounce or V shape by this year.
CB globally are in panic and the massive stimulus will need a bigger one after a decade of debt leverage. During the first 2 weeks of sell off I was ignorant to the crisis, it was looking like a pullback. 30% fall in a month is not normal even by any historical measure. The more I read your type of contents, the more I see this is a millinial mindset having never experiencing recession or a GFC style rout. It confirms the bubble is huge.
There is a difference between an econ book and reality, better start lecturing your students that the credit markets drive economies and equity markets, not the other way around. There is complete stress in credit market as US shutdown. Watch the jobless claims next week for how bad it will be, some speculating 2M added. Good luck looking at a pullback.
P/s US Equity open strong last night Nd briefly rallied into the Feds mini bond buying. Then came Cuomo shutting down NY state and kaboom. A fore taste for the whole country.
