Coronavirus has lit the fuse on a time bomb in China’s economy: debt | South China Morning Post scmp.com/week-asia/opin…

Capitalism is built on the foundation of , rule of law, choice, free market and consequences. That foundation has now been dismantled. Cheer today but fear tomorrow.

There's "massive cognitive failure" in markets to process the extent of the damage to the global economy, bopinion's Mohamed A. El-Erian tells Jonathan Ferro trib.al/1mogIYg

the cycle was turning way before covid-19 - the virus crisis was a shock during the window of vulnerability period that has resulted in 2q depression

The United States economy has deteriorated at the fastest pace in recent history due to the lockdown. This dashboard by Bloomberg shows how quickly it weakened. Recovery will likely be faster than the EU or Rest of the World, but very complicated.

Wait, what? nbcchicago.com/news/national-…

I am genuinely appalled at Powell in Q&A saying The Fed is wilfully ignoring the financial bubbles they are creating. I thought after the 2001 NASDAQ and 2008 housing debacle they would have learnt that when these bubbles burst it makes the recession much worse. Utter morons

1/ My impression is that 99% of the people asking "where should I invest?" today are actually asking "where should I speculate?" They'll eventually discover that there's a difference.

It was difficult to see zombie companies surviving in the 1980s & 90s. High interest rates were a proper capitalist hurdle rate to clear the economy of excesses & zombies. As soon as Bernanke took over at the Fed & pushed rates to zero, the US started becoming more like Japan.

Sound familiar? Marc Cohodes The Friendly Bear .

May US retail sales report: MoM bulls be like 🥳 YoY bears be like 😱

Here’s your recovery. Enjoy!

“The stock mkt is not the economy.” Hear it all the time; don’t hold your breath. US lead indicators have explained 97% of the variability in equities over this entire business cycle, & currently they’re diverging by a record amount. In the end, macro fundamentals always matter.

Transmission mechanism clogged. Banks know there's massive credit risk in home loans that's frozen in forbearance. And they see unemployment has not come down (all-in on continuing and emergency claims 30.9M to 30.6M). Ergo, they see pent-up defaults & are demanding compensation.

The collapse in world trade is real, meaning economic activity is down significantly. Furthermore, the recovery might not be such a rapid V many Wall Street banks predicted in April and May. The stock market is disconnected because 7 tech companies make up 50% of Nasdaq.

“We used to think you could spend your way out of a recession & increase employment by cutting taxes & boosting govt spending. I tell you in all candour that option no longer exists" Jim Callaghan, 1976, UK PM (inflation >20% as he spoke) relearning old lessons is gonna hurt

Absolutely superb. Many congratulations to the Federal Reserve

"The Fed will have to monetize it. I believe it will have horrible implications for the dollar ... it's more likely than not within 15 years we lose reserve currency status," says legendary investor Stanley Druckenmiller.

"First, the idea that the panacea for debt is credit." #delusions From "A Bubble That Broke The World", 1932