Animal spirits are driving momentum across the economy, especially in capital markets. There’s hundreds of billions of dollars waiting to be invested via vehicles like SPACs. Valuations are extreme, yet they are justified by low interest rates. Meanwhile demand is exceeding supply in industries like semi-conductors, housing and transport. Companies are citing inflationary pressures. But the Fed and Treasury are united behind continued stimulus. “We have the tools to deal with that risk.”
Succinct Summary: The Great Recession of ’08 pales in comparison to the kind of recession that we have here. The UK just recorded the worst quarterly recession on record. The virus levels remain stubbornly high in many places. The hope comes from the modest recovery in some hard-hit industries.
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