Market Focus March 2020
The enemy within
“There is nothing fundamentally wrong with our economy. Quite the contrary, we are starting from a very strong position.” Sad to say, but Jay Powell just doesn’t get it. Covid-19 is merely the trigger event that has exposed the fragility and insecurity of the financial, economic and social systems of proud western democracies, not to mention emerging market kleptocracies. Coronavirus has merely accelerated our collective descent and brought forward the emergency responses that were already on the cards. Global credit conditions are tightening in defiance of central bank measures and governments are engaged in a race against time to deliver financial aid to citizens and businesses to prevent breach of contract on an immense scale. Bridging finance only works if there is a strong pillar on the other side of the ravine. Otherwise, it is a bridge to nowhere.
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