In our January 8th 2020 commentary, “Of Bubbles and Gum”, we reviewed credit market conditions in the wake of the assassination of Iranian General Suleimani. Could this be the exogenous factor that sparks a Middle East war, and triggers a recession? Or will it fade quickly like so many other candidates?

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.”

Little did we know, and as happens with these things, no one predicted, that the risk had already surfaced four weeks earlier. Not from mortgages, oil, high-tech, or leveraged loans, but a lethal virus originating in 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?