What we’re reading (9/3)
“Stock Market Bloodbath: Dow And Nasdaq Plummet In The Worst Day Since June” (CNN). Yesterday in our August 2020 monthly performance update, I articulated why, by just looking at the base rates, you shouldn’t extrapolate the market’s +6 percent performance in August into the future. That prediction was prescient, it turns out, at least for today.
“‘We Could Have Another 10% Fall, Easily,’ El-Erian Warns After Big Sell-Off” (CNBC). “Wall Street could be headed for correction territory if there is a shift in investor attitude, Allianz’s chief economist [formerly of the IMF and PIMCO] Mohamed El-Erian said after the biggest market decline in months. Investors have taken a liquidity approach to the market and buying the dips, thanks to stimulus action from the Federal Reserve. That mindset will be tested in the coming days as market fundamentals come into play, he said in an interview on CNBC.”
“A Furniture Maker’s Five-Month Struggle With Covid. ‘You Can’t Really Have A Plan.” (Wall Street Journal). A microcosm for the entire economy right now: “[e]fficient production—the usual standard—took a back seat to virus-resistant production. ‘You can’t really have a plan,’ said Alex Shuford III, Century’s chief executive. ‘You wake up the next day and try to do the right thing.’”
“The Economy Needs Help” (Dealbook). The Dealbook crew at the Times provides the low-down on the economic policy discussions happening in Washington right now.
“Economists Warn Americans That Money Withering To Ash In Their Hands Could Be Sign Of Recession” (The Onion). “‘We found that numerous $5 bills suddenly turning into a powdery residue that slips through your fingers may be one of the strongest indicator that our country is heading toward a significant period of decline,’ said lead researcher Kevin White, who recommended that Americans prepare for what may be looming ahead by attempting to fruitlessly grab at the charred remains of their savings as it blows away with the wind and spirals off into the horizon.”
