Since the last time I wrote, financial markets seem to have returned to a calmer state, certainly when compared to the moves in March.
Having said this, there is nothing calm about what is going on:
- We now have confirmation that we are facing the greatest economic contraction since the Great Depression (1929-1933): in the past 3 weeks alone, more jobs have been lost than were created in the last 10 years.
- The human race is facing the worse pandemic since the Spanish Flu (As a Spaniard, I should point out that the 1918 pandemic is forever associated with Spain, but this strain of H1-N1 was discovered earlier in Germany and France. However, like the response to first cases of COVID-19 in Wuhan, China, First World War censors buried or underplayed those reports).
- Crude Oil price experienced the steepest decline since David Beaty first discovered it at his home in Warren, Pennsylvania back in 1875. For the first time ever, WTI Oil traded at negative prices.
- The greatest central bank/government intervention of all time has just started (more on this later in this note).
Read the whole note here.
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