Dr. Frankenstein worked to bring a human back to life by performing a series of operations and introducing a shock of electricity from lightning. The result was an uncontrol-lable life form that was subject to rage and destruction.
The measures that were taken to limit the spread of COVID-19 has created such a monster as Facebook, Alphabet, Apple and Amazon show that the previous quarter of closures were more than kind. The flipside of the regulations is the destruction of smaller competitors.
Have we created a monster that’ll serve to create higher market prices or will it end up consuming the entire system in an eventual bear market?
Now here’s the rest of the news:
The Economic “Rocket” Crashes according to John Persinos.
For the past several weeks, the optimists were assuring us that the beleaguered U.S. economy was poised to take off like “a rocket ship.” That seemed to be their favorite bullish metaphor.
Houston, we have a problem…
The U.S. Commerce Department reported Thursday that gross domestic product (GDP) plunged by a shocking 32.9% in the second quarter on an annualized basis, the worst quarterly decline ever (see chart).
Over the past 200 years, the U.S. has never witnessed an economic decline of this speed & magnitude. Neither the Great Depression nor the Great Recession saw this sort of contraction.
For context, the worst quarter during the financial crisis of 2008 was the 8.4% GDP drop in the fourth quarter of that year. In 1932, at the nadir of the depression, the economy shrank that year by 14% (the government didn’t start keeping quarterly GDP records until 1947).
Official pronouncements this year about the economy and the pandemic have been consistently wrong. Back in February, high-level policymakers were insisting that the coronavirus was contained and the economy was holding up nicely. Um, no.
Pandemic-induced business closures and quarantines will remain with us into the foreseeable future. America now faces the worst of both worlds: a surging coronavirus pandemic & a collapsing economy.
Here’s the good news: You should not exit the stock market. In fact, later in this article, John will pinpoint a way for you to not only stay invested but also reap outsized gains. Despite this unprecedented crisis, our savvy investing team can steer you toward money-making opportunities. But first, let’s take an unvarnished look at reality… [read complete article here!]
SAY OF THE DAY
“To improve is to change, to be perfect is to change often.” —Winston Churchill
July 31, 2019
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