credit economy Markets

This Is No Lehman. Meet Me At Dave & Buster’s!

There's talk of "lockdowns 2.0," which I suppose is market parlance for politicians' latest efforts to craft a response to rising virus caseloads that doesn't entail the kind of sweeping, stay-at-home orders and business closures that plunged the world into a mini-depression earlier this year. One thing that stood out last week as big bank earnings rolled in was the extent to which the worst-case scenario in terms of losses, delinquencies, and other types of pandemic-related credit events didn't materialize. I can already hear the pushback: "Well, no, because consumers and households benefited from cushions built thanks to government assistance in Q2, while deferral programs and other sorts of relief during the worst days of the lockdowns helped consumers build a small safety net to help them make it through the third quarter." That's all true, and you could scarcely find anyone who's spent more time warning about the long-term, structural damage than me. Even in the near-term, consumers and households are likely to face severe economic challenges in the absence of additional fiscal support. Of course, severe economic challenges have a way of metamorphosing into other types of "
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8 comments on “This Is No Lehman. Meet Me At Dave & Buster’s!

  1. Emptynester says:

    I drove 1,000 miles (each way) last week to visit parents. First time I have spent a night in a hotel since early February. I was shocked at the number of people out at restaurants and bars in Kansas City MO. The outdoor shopping and eating area was crowded. I do not think this is an isolated situation- people eating and drinking in close proximity all around the country- without masks, obviously.
    I got carryout (my first Shake Shack burger—which was delicious) and ate on a park bench.

    • Tom Swift says:

      Never underestimate the power of human stupidity.

      • Exactly. This is why the US can’t keep a lid on COVID and it’s the same unwillingness to engage with science, facts, and reality that makes America vulnerable to foreign misinformation campaigns, unwilling to commit to combatting climate change in a serious way, and so on, and so forth. The country, on aggregate, seems to get more undereducated and misinformed by the year — in some cases on purpose. Not that you shouldn’t go visit your parents or eat a burger. I’m talking about the crowded restaurants with no masks.

  2. John3D says:

    Haven’t heard anyone opine about the effect of no new stimulus on holiday sales. For some retail businesses, this season is the bulk of their sales. With no new checks in the mail added to a Covid spike, it could get ugly.

  3. Vlad is Mad says:

    if you look inside the ADP there is a good amount of dynamism and hiring in the small business area, say 1-49 less in big companies. Also, in surveys of capital expenditure they are surging, which post election ought to mean more investment, particular in tech or intellectual property type stuff…and then there is the general disruption—I worry less about the economy and more about the fragility of asset prices which jump around wildly, which seems a warning sign of something that is about to break

  4. Darkstar says:

    Is it just me, or does “half a Lehman” still sound pretty bad? After Lehman, just about everybody was suffering. Now we have a K-shaped “recovery,” where roughly 50% of the country is suffering (you know, the folks who don’t own equities). Now the 3rd wave is here (or is it really just part of the first wave, which never ended?), and Nancy and Steve and Mitch are playing politics – it’s painfully obvious that they care more about playing to their base and the effect a stimulus bill will have on the upcoming election than they do about the folks lining up for hours at food banks (I live in one of the wealthiest counties in the country, and our local food bank is overwhelmed). They should remember that although the folks who are suffering now don’t make political contributions, or summer in the Hamptons or Nantucket, they DO vote…

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