Back on January 8th, we reviewed credit market conditions in the wake of the killing of an Iranian general. Could this be the exogenous factor that sparks a Middle East war, and triggers a recession?
We concluded with the following observation: “Whether the Fed can continue mainlining enough liquidity all year to overcome any exogenous risks – bubbles or stickier stuff – remains to be seen.”
Well, stickier stuff arrived. Not sub-prime mortgages, tech, or leveraged loans, but a lethal virus from a seafood market in Wuhan, China.
Today that virus has upended global markets and captured worldwide attention in a way that nothing ever has. Did anyone notice North Korea’s three missile launches this week?
We have seen other dips that didn’t end in a recession. But this is different. As one strategist put it, “It affects the way people go about their lives.”…
▶︎ Read March 9 2020 newsletter: here
▶︎ Chart of the Week: here (by CBOE)