Short Thoughts

On The Market vs The Economy


While everybody will go "Of course I know they're different", it is very easy to forget that. At the moment the market is up and down like a yo-yo, but that has absolutely nothing to do with the underlying economy, and everything to do with speculators trying to make a quick buck.
In the real world, the real economy, the layoffs have just started. (My numbers are American, but the principles apply mostly everywhere in the West.) An estimated 30 million people have now been laid off in the USA. (That is half the population of South Africa….) The current number of 6 million a week, is TEN TIMES that experienced during the Great Recession. In the meantime, on Wall Street, speculators (I consider myself a short-term trader, not a speculator, neither of which is necessarily bad) are jumping on every bit of news to see if they can make a quick profit. But these movements are in NO WAY indicative of the underlying health of the markets, whatever the pundits tell you. For the real economy to improve, it will first have to stop getting worse. And we do not even know yet when the Coronavirus epidemic will slow down. In the USA, new daily infections are still around 25000 a day, since the start of April. Deaths have been hovering up and down around 2000 a day for the last two weeks. That is nowhere near the levels where the economy can be re-opened. (Even though Georgia recklessly wants to open its economy….)
Hunker down, and byt vas
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