The Capital Spectator

The value of cash as an asset class had its moment in the sun in March as coronavirus blowback cut deeply into markets around the world. Posting the only gain among the major asset classes in last month’s tsunami of losses, the S&P US T-Bill 0-3 Month Index exemplified its role as a port in the storm with a 0.2% gain. Par for the course for cash returns of late, but oh-so-welcome in an otherwise miserable month for risk assets. Beyond cash, red ink infected every corner of the...

White House issues stark prediction for US coronavirus outlook: CNBC Fed rolls out new lending program for foreign central banks: WSJ CDC considers broader use of masks to contain spread of coronavirus: NY Times Eurozone manufacturing contracted sharply in March: IHS Markit UK manufacturing in March fell at quickest rate since 2012: IHS Markit Companies sold a record amount of debt in Q1: Bloomberg US Consumer Confidence Index fell sharply in March: AP Chicago PMI remains below...

Every recession is different, born of unique conditions that conspire to push an expanding economy into contraction. That’s certainly true for the deep decline in output that’s widely expected from the coronavirus fallout. As recessions go in the modern era, the one that’s arrived is a one-of-a-kind gut punch that few, if any economists expected as a recently as a month ago. The macro devastation will reorder recession-risk modeling and, in time, spawn new econometric tools. In...

Congress considers additional steps after passing $2.2 trillion stimulus: Reuters The grand experiment: putting the global economy into an induced coma: WSJ Coronavirus will leave millions in poverty, the World Bank warns: BBC US retail sector shedding workers at alarming pace: NY Times Will coronavirus fallout lead to civil disorder? Reason China Mfg PMI rebounds in March from depressed Feb print: Reuters Eurozone inflation falls sharply in March: MW...

The major asset classes posted widespread gains last week, but the reprieve may be brief as the world continues to grapple with coronavirus risk. But for the trading week ended Friday, Mar. 27, broad-based gains prevailed, based on a set of exchange-traded funds. US real estate investment trusts (REITs) posted the biggest bounce for the major asset classes. Vanguard Real Estate (VNQ) surged 17.4% for the week just passed. That’s an extraordinary gain, although it follows even greater...

Trumps extends social distancing guidelines to April 30: CNN Strict containment in Washington state appears useful in slowing Covid-19: NYT Eurozone economic sentiment posts largest monthly decline on record: MW This week’s March payrolls report will only show partial impact from Covid-19: WSJ What will keep a stock market rebound going amid coronavirus fallout? CNBC Oil falls to 17-year low: CNBC Oil demand appears set to fall by 20 million barrels a day in April: CNBC VIX Index (US...

Revised data for CapitalSpectator.com’s coronavirus (Covid-19) forecast, based on an 8-model combination, still points to a rise in the number of global reported cases (via the median point forecast). At some point, when the reported cases reflect a tendency to print below the median forecast, the downside bias will be welcome news since it suggests that the trend is peaking. Unfortunately, there’s no sign of the apex yet using this framework. Today’s projection indicates that...

● Capital Wars: The Rise of Global Liquidity By Michael J. HowellSummary via publisher (Palgrave Macmillan) Economic cycles are driven by financial flows, namely quantities of savings and credits, and not by high street inflation or interest rates. Their sweeping destructive powers are expressed through Global Liquidity, a $130 trillion pool of footloose cash. Global Liquidity describes the gross flows of credit and international capital feeding through the world’s banking systems...

Government Equity Investments in Coronavirus Rescues: Why, How, When? William L. Megginson (U. of Oklahoma) and Veljko Fotak (SUNY at Buffalo)March 25, 2020The coronavirus pandemic has led to a “great shutdown” whose ultimate impact on the US economy is hard to predict. What is already clear is that government intervention at an unprecedented scale is forthcoming. A rescue/stimulus package worth $2 trillion, or 10% of US GDP, is being approved at the time of writing. We argue that...

US now leads world in reported coronavirus cases: WSJ Massive coronavirus relief bill awaits approval in House today: Reuters Who will get stimulus checks in the $2 trillion bill awaiting approval? USA Today US national debt is set to soar: NY Times US dollar on track for worst week since 2009: Bloomberg Endless quantitative easing is crushing traditional bond strategies: BBG Short-covering and rebalancing may explain this week’s rebound in stocks: MW US jobless claims posted massive...