‘Difficult Tradeoffs’
Markets were displeased for most of Monday, as US lawmakers struggled to come to an agreement on $2 trillion in stimulus for a US economy that, by almost all accounts, is about to drive straight through a "closed road" sign and crash into a depression, Clark Griswold style.
Democrats rejected Mitch McConnell's plan for a second time in a vote Chuck Schumer called "irrelevant" as he negotiates "continuously" with Steve Mnuchin. The two men were close to an agreement as of Monday afternoon.
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If the federal govt decides to let the virus run through the population in order to protect the economy, it will create interesting tensions with the states, and between the states with lots of cases and those without..
Knee-jerk positive for market initially, then investors will realize some states might be left continuing the virus suppression effort but without the necessary federal aid, while others might stop (or not start) suppression efforts and see a surge of cases forcing a disorderly resumption of suppression, while US case numbers shoot through 100K, 250K, 500K and/or the government declares case counts classified information and forces the CDC to conceal the info – recipe for things to get worse.
Everything Trump touches gets worse.
There won’t be any states without, soon. Maybe Alaska and Wyoming.
“where the US morphs into a giant version of Italy”: it is already morphing, in a couple of days US will reach Italy in terms of number of cases. Deaths follows with a average 8 days delay. Meanwhile Italy is perhaps passing now through “peak virus”, two weeks after the lockdown was enforced; two weeks ago, Italy had 9172 cases and 463 deaths, now is at 64000 and 6000. It doesnt require a Wall Street analist to imagine where the US will be in two weeks. Giant version of Italy, without pasta.
One can only pray that Trump rallies will ramp up ASAP, so that we can all argue about science and facts