Coronavirus and the economy

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  • Fri, Mar 27, 2020 - 08:46pm

    #1
    westcoastdog

    westcoastdog

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    Coronavirus and the economy

As we all know, this coronavirus has not only halted production around the world but also has destroyed trillions in dollars of wealth. Production depends on consumption. The “wealth effect” refers to the premise that consumers tend to spend more when there is a bull market in widely-held assets like real estate or stocks, because rising asset prices make them feel wealthy. The notion that the wealth effect spurs personal consumption makes sense intuitively.

The opposite is also true. Because people will feel poorer, they will consume less, perhaps significantly less, especially persons near retirement age who saw their investments shrivel by a third. Seniors will be saving more.

During the next two months, the economic impact of the virus will be obvious to all. Hopefully, with the warmer weather, the virus can be controlled and eliminated. However, the stock market will not return to its highs, and may even fall further if consumption and production do not revive. One prediction: real estate prices will soften, especially at the high end.  Someone who has lost millions will not be generous.

Nouriel Roubini has written an excellent discussion of the economic crash (yes, that’s the truth) .

https://www.theguardian.com/business/2020/mar/25/coronavirus-pandemic-has-delivered-the-fastest-deepest-economic-shock-in-history

  • Sun, Mar 29, 2020 - 02:20pm

    #2
    nancybeck

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    Excellent interview with Robert Reich re. the protecting people vs. Wall Street

 

Interviewed by Astra Taylor on City Arts & Lectures – KQED- San Francisco





  • Mon, Mar 30, 2020 - 07:29am

    #3
    ozzy43

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    Coronavirus and the economy

Superb article – thanks for posting, Dog.

  • Fri, Apr 03, 2020 - 05:39pm

    #4
    westcoastdog

    westcoastdog

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    First bank failure

A small bank in West Virginia has become the first institution to fail during the coronavirus crisis, the Federal Deposit Insurance Corp. announced Friday. The First State Bank of Barboursville with $152 million in total assets was closed Friday by the West Virginia Division of Financial Institutions.

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