Policymakers at the Federal Reserve, after some initial optimism that the Covid-19 slump would be deep but confined to the second quarter of this year, now seem braced for a more prolonged recession marked by high unemployment and a rising risk of corporate bankruptcies. Read More.

According to one expert, we are already in a depression which will last five years, and we are opening up to a very different world that will not recover from its economic, social, and psychological wounds for a generation.

Since the onset of the pandemic, the Fed has entered into the most aggressive monetary campaign. Its goal was to bolster asset markets to restore confidence in the financial system. However, the trap is the Fed is in a position where they can never stop QE as interest rates can’t rise ever again. Read More.

‘Just as these stocks pulled up the entire market, they can pull down the entire market by their sheer weight’. If it weren’t for the “Giant 5,” your money would have been better off sitting in cash than the stock market over the past few years, according to Wolf Richter of the Wolf Street blog. Read More.

‘I think we’ve got a second leg down and that’s very much reminiscent of what happened in the 1930s where people appreciate the depth of this recession and the disruption and how long it’s going to take to recover.’ That’s A. Gary Shilling, longtime economist and president of A. Gary Shilling & Co., again delivering a gloomy take on what’s next in a recent CNBC interview. Read More.

As the world economy desperately tries to navigate to a safe harbour, is it going be pulled down by the six-headed monster Scylla or the Charybdis whirlpool (Homer’s Odyssey). It seems likely that Scylla is now starting to swallow parts the world before Charybdis will finish it off. Read More.

With every passing day, the bizarre freakshow that was once known as the “market” gets even more bizarre. And we use the term “market” only in its loosest, legacy sense, one where it represented more than just the centrally-planned intentions of a few central bankers and politicians. Read More.

Second quarter 2020 came and went like a California wildfire. The economic devastation caused by the government lockdowns was swift, the destruction immense, and the damage lasting. But, nonetheless, in Q2, the major U.S. stock market indices rallied at a record pace. Read More.

Round about late March, we entered a Financial FantasyLand in which all the sins and excesses of rampant financialization were going to be painlessly washed away. Mever mind the entire U.S. economy is an inverted pyramid of balance-sheet “value” and debt resting on a shrinking foundation of collateral; everyone would be made whole in the Federal Reserve’s Financial FantasyLand. Read More.

I’ve argued that we’re in a new depression. The depth of the new depression is clear. What is unclear to most observers are the nature and timing of the recovery. Read More.

Is the worst of the economic collapse over? Not really. The economy is off the bottom, but that’s only to be expected after the historic collapse of March–May and the stock market crash in March and April. The question now is not whether we’re growing again. We are. The questions are how fast is that growth, and how long will it be before we return to 2019 levels of output? Read More.

“I think we’ve got a second leg down and that’s very much reminiscent of what happened in the 1930s where people appreciate the depth of this recession and the disruption and how long it’s going to take to recover,” Gary Shilling, the president of A. Gary Shilling & Co., told CNBC’s Elizabeth Schulze in an interview on Monday, referring to the possibility the stock market will tumble once investors realize the shape of the recovery is an “L” rather than the overhyped “V.” Read More.

Main Street is the real economy that exists far from Wall Street. It can be seen in the large areas of America where most of us live. After twelve long years of near or zero interest rates, massive government deficits, and watching tons of money and stimulus being poured into the economy we remain mired in slow growth. On top of this, we now are seeing covid-19 monkey hammering many sectors of the economy into submission. Read More:

It may come as a surprise to some, but just two weeks after JPMorgan said it was turning bullish on the US, officially upgrading US equities to Overweight after holding a missing the biggest equity rally in decades with a Neutral rating on US stocks, the bank appears to have had a change in heart, and overnight the bank’s chief equity strategist Mislav Matejka writes that looking ahead, much of his newly found optimism has vaporized and as a result, “risk-reward is unattractive for equities in 2H of 2020” and stocks are likely to lag bonds and cash again, as they did in 1H ‘20. Read More.

The measures implemented by governments in the eurozone have one common denominator: a massive increase in debt from governments and the private sector. Loans lead the stimulus packages from Germany to Spain. The objective is to give firms and families some leverage to pass the bad months of COVID lockdowns and allow the economy to recover strongly in the third and fourth quarters. This bet on a speedy recovery may put the troubled European banking sector in a difficult situation. Read More.

The COVID-19 pandemic has torn the veil off what we can now can call a “fiat market. It has stripped away all pretense of a true market. Governments and central banks now create both supply and demand. Bailouts and subsidies are handed down so that zombie corporations can produce on the one hand, while welfare, universal basic income, and other handouts are distributed so that citizens can buy the products. Strictly speaking, this is a type of socialism. Read More.

Financial analyst Gary Shilling says the stock market could be set for a big pullback similar to the decline in the 1930s during the Great Depression. He explains how the coronavirus pandemic will result in long-term structural changes in the economy. Read More.

It remains to be seen if the US economy even began anything that could realistically be called a “recovery” in June. After all, virus cases are surging, states are pausing or reversing reopening plans, and retail foot traffic has stalled. The “V-shaped recovery” hype in which jobs and economic growth will surge to 2019 levels ahead of the election is nothing more than propaganda hogwash from the Trump administration. Read More.