I haven’t done a finance update in a bit, but I got a chance to listen to my favorite econ podcast while changing Thisbe — have to stand and leave her on the table for a bit to air out her butt, diaper rash sucks— so here’s what I gathered.
Things are freakin uneven. As economies across the world ‘reopen’ and central banks continue their bigass responses, some things are looking up. In the US, retail went through the roof in May and the housing market is very strong.
At the same time the stonks have been going up fueled, they say, by young retail day traders who don’t have sports to bet on anymore and started watching the stock market instead. The Fed is also just positively doping up the situation. Any bad news comes with fresh commitments to unlimited easing forever, zero rates forever, and facilities up the wazoo to loan to anyone and everyone, from corporate junk to municipalities to small businesses.
Of course the paycheck program is ending and the country just went through an intense uprising, so instead of being all “well if we pay the people they won’t want to work bar bar bar” electeds are talking up fiscal measures: big infrastructure projects! More paycheck protection! Free vacation money! Squeeee!
And so much of the business news cycle is the ruling class and their aspirants vamping those positive signals to get everyone feeling good. Announcement effect is in full effect.
But there’s a dark side to all this.
Three words: fear the virus. Beijing has its highest count in weeks and the US south and west are rising at pretty scary rates. Latin America and India are still facing the brunt of the pandemic’s first wave. Europe is...good?
Economically the problem is mismatches. Different countries have different risks and waves and rates. Different healthcare infrastructures and capacities to import and export. Different capacities to produce and distribute. The biggest mismatches are between production (low) and consumption (high) and imports and exports.
These things all appear to add up to inflationary trends but, really, no one really knows any god damn thing. Except maybe the Malaysian rubber glove companies who are making a killing on this whole health crisis, wow.
All in all, socialists should keep an eye on things. The formation is teetering. Precarious. If you plan a march or protest you might 20,000 instead of 20. You could get a statue removed or just throw it in the river, or maybe knock down the police budget a bit. And things are so fluid that broader demands on the power structure that racist cops enforce will probably land with 2 or 3 times the normal force as long as they’re framed in a critique of white supremacy, which was always going to be the jenga block that would shake up the downfall of American (and maybe global) capitalism.