Comment by chii 5 hours ago
car manufacturers, right at the beginning of covid, started cutting orders of components from their suppliers, thinking that demand is going to drop due to covid induced recession.
Guess what happened next?
A coronavirus causing a global pandemic at some point was even more expected though.
And even the erratic government reactions to the pandemic was not entirely unpredictable either to be fair.
True. It must be added, that theres two wrenches in the machinery that transforms information into action currently.
Firstly - The average market behavior is average.
From experience, most people could not imagine anything of what was predicted, would come true. There is a large … debt of intellectual work that is being underwritten, allowing people to sell narratives which do not correspond to reality.
This is a direct result of a captured, unfair information environment.
As a result, the average behavior of the market is not pricing in these things, even if the plans were made clear.
> Covid was a black swan event
I beg to differ. Epidemiologists and public health planners always knew such a pandemic would happen eventually. In fact, it wasn't even surprising that it came from a coronavirus as this virus group was the most likely contender with the influenza family.
The only open question was when. We dodged the bullet several times over the past two decades with SRAS, H5N1, MERS and H1N1 (notice, two influenza and two coronaviruses), but one virus slipping through was definitely the most likely outcome.
And I can confidently tell you: it will happen again.
A gigantic contracyclic fiscal policy was adopted to sustain demand.
Do you think Trump and the GOP will do that anytime soon?
At least until such time as his polling stumbles the GOP will do absolutely anything he says. And Trump will do whatever it takes to keep the grease coming in, I really think him turning on the printing presses is a long from the least likely scenario.
Would the GOP have to eat large quantities of excrement, yes. Have they become used to doing that (cf Epstein), yes.
Covid was a black swan event. Unless we see something like the MBS collapse, the underlying economic weakness isn’t due to a such an acute root cause.
Not sure how comparable they are.