The MMT that will be launched after the next financial crisis, and which will see the Fed directly monetize US debt issuance from the Treasury until the dollar finally loses its reserve currency status, is now factored in.
Consistent with the notion of a negative liquidity premium, whereby more liquid markets like the S&P are ironically more vulnerable to fragility shocks, selling vol on markets with worse fundamentals has perversely become a better investment than selling US large caps vol...
Strip it out, and the critical factor for general prices remains the absolute disconnect between high stock prices relative to corporate earnings (lacklustre), oil prices (tumbling), commodity prices (low) and growth (anaemic).
"If it were to spread internationally, for example, panicked investors would likely reduce speculative activity, meaning less interest in non-traditional assets such as Bitcoin..."
While travel restrictions have been put in place, it could be too late. The worst may yet to come despite the best efforts by the Chinese authorities to contain the virus.
"...he told investors that the fund employed a risk management strategy involving safeguards to prevent losses of more than 8%, when in fact no such safeguards limited losses..."
In 2000, the draining of liquidity sank the equity markets. In 2020, it could well be that the inflow of liquidity from policies became too concentrated that the equity market fell under its own excess weight
"Risk appetite is unlikely to improve until we start getting news that the virus is under control. For now, the lack of positive news flow is likely to keep investors on the defensive."
Oddly, the rejection didn’t argue the law, but instead claimed that the controller couldn’t locate a single one of the 49 million bills she paid last year...
Is far too early to tell what effect the coronavirus may have on the global/US economy, but markets are increasingly assuming the economic effects of this public health crisis will inform US central bank policy...
