Actually not-so-much the FT but Bryce de Londres.
And he is more the layer of the foundation than even the messenger, so don't shoot him.
First up, and this is important, from Markets Now, May 26:
....Here’s Exane BNP Paribas to set out the argument in favour:
The recession has likely ended…
Our
high frequency indicators are turning higher. In Europe, toll traffic,
high street footfall, electricity usage and restaurant & AIRBNB
bookings have started normalising. In the US, driving and housing
activity has recovered, with nascent improvements in SME, restaurant and
bar spending. And in China, car and housing sales have normalised,
while hotel bookings remain subdued.
We study the experiences of
countries with lighter lockdowns and find that industrial activity could
return surprisingly quickly. However, the recovery in consumer spending
is likely to be more nuanced. Spending on Handsets, Cars and Housing
goods/ materials is likely to be the first to normalise. Spending in
Restaurants, Flights and Holidays will undoubtedly take longer to
recover.
Earnings could be back at 2019 levels quicker than we feared…
...
driven by 1) early signs from high frequency indicators; 2) our work
suggesting that fiscal stimulus (CARES, EU Green package etc) eventually
flows back to corporate profits; and 3) the easiest financial
conditions ever seen during a recession. The risk here is another wave
of lockdowns. But so far, EU countries that have eased restrictions
haven’t seen a spike in cases.
Investors have been reluctant to play the recovery trade
Cyclicals
vs defensives has been flat since the lows. However with the next batch
of data likely to hint towards sequential improvement, perhaps this
hesitance might change. We think Cap Goods, Construction, Mining, Semis
and Autos are likely to see a quicker normalisation in earnings.
The
upshot here is that driving volumes have normalised in the US, China
and early un-lockdowners like Germany and Austria. Online spending has
thundered back from March lows, housing activity’s been recovering in
most places, China’s coal consumption’s back on trend and in Germany
there’s improvement in olde-worlde metrics like high street footfall.
Yet equities have been dead money for a month:
Exane uses Oxford Uni’s lockdown stringency tracker
to guess at recovery times from here, using Sweden as the benchmark.
It’s all stewed into charts like these, for driving, industrial
production and both types of retail:
....
MUCH, MUCH MORE
I repeat, do not shoot Bryce, he's only the messenger.
If you are going to take potshots, aim your blunderbuss toward Boston and Harvard's Jason Furman.
From Politico:
The general election scenario that Democrats are dreading
In early April, Jason Furman, a top
economist in the Obama administration and now a professor at Harvard,
was speaking via Zoom to a large bipartisan group of top officials from
both parties. The economy had just been shut down, unemployment was
spiking and some policymakers were predicting an era worse than the
Great Depression. The economic carnage seemed likely to doom President
Donald Trump’s chances at reelection.
Furman, tapped to give the opening
presentation, looked into his screen of poorly lit boxes of frightened
wonks and made a startling claim.
“We are about to see the best economic data we’ve seen in the history of this country,” he said.
The
former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes
were confused, though some of the Republicans may have been newly
relieved and some of the Democrats suddenly concerned.
“Everyone
looked puzzled and thought I had misspoken,” Furman said in an
interview. Instead of forecasting a prolonged Depression-level economic
catastrophe, Furman laid out a detailed case for why the months
preceding the November election could offer Trump the chance to brag —
truthfully — about the most explosive monthly employment numbers and
gross domestic product growth ever.
Since
the Zoom call, Furman has been making the same case to anyone who will
listen, especially the close-knit network of Democratic wonks who have
traversed the Clinton and Obama administrations together, including top
members of the Biden campaign.
Furman’s counterintuitive pitch has caused some Democrats, especially
Obama alumni, around Washington to panic. “This is my big worry,” said a
former Obama White House official who is still close to the former
president. Asked about the level of concern among top party officials,
he said, “It’s high — high, high, high, high.”
And top
policy officials on the Biden campaign are preparing for a fall
economic debate that might look very different than the one predicted at
the start of the pandemic in March. “They are very much aware of this,”
said an informal adviser.
Furman’s
case begins with the premise that the 2020 pandemic-triggered economic
collapse is categorically different than the Great Depression or the
Great Recession, which both had slow, grinding recoveries.
Instead,
he believes, the way to think about the current economic drop-off, at
least in the first two phases, is more like what happens to a thriving
economy during and after a natural disaster: a quick and steep decline
in economic activity followed by a quick and steep rebound.
The
Covid-19 recession started with a sudden shuttering of many businesses,
a nationwide decline in consumption and massive increase in
unemployment. But starting around April 15, when economic reopening
started to spread but the overall numbers still looked grim, Furman
noticed some data that pointed to the kind of recovery that economists
often see after a hurricane or industrywide catastrophe like the Gulf of
Mexico oil spill....
....Furman noted that there is one major obvious caveat: “If there’s a
second wave of the virus and a really serious set of lockdowns, I
wouldn’t expect to see this. But I think the most likely case is the one
I just laid out.”....
As for how to bet:
It looks like we're going to have a second wave.
And perhaps Ruth Bader Ginsburg has to get deathly ill to mobilize the base.
And a market crash.
Hurricane season looks to be above average.
Maybe Iran is convinced it might help to shoot at something.
