From FT Alphaville:
The Zimbabwification of Wall St
Here’s one theory on why stock indices have performed so well these past few weeks, just as the real global economy has gone into a virus-induced tailspin.....MORE
Subconsciously or otherwise, investors are buying insurance against inflation.
Back in June 2008, when the ZSE All Share on the Zimbabwe Stock Exchange started to rise exponentially, some onlookers were confused. Mugabe was losing his marbles, there was death on the streets and ordinary people were in crisis. Business and the local economy reflected all that. So why should the share prices go up?...
Not yet but something to keep in mind.
In the U.S. the annualized decline in GDP is running about $4 trillion with the deficit stimulus approximately the same. So no net increase, yet.
Possibly more important than the numbers is who is raising the issue.
Mr. Murphy, in addition to founding FT Alphaville, has been watching the markets for longer than some of our readers have been alive.
And he knows more than most practitioners. In fact he could forget half of what he knows about markets and still know more than most practitioners.
So we'll take this heads-up seriously.
