Pandemic gets worse, still no stimulus, recovery falters, European double dip recession, overvalued stock and credit markets crash, EM debt crisis, EZ debt crisis, no vaccine until 2H2021, more lockdowns, overrun hospitals….

A dark economic winter

As winter approaches, health experts are warning that the United States faces a dark COVID-19 winter. They should also be warning of a long and painful U.S. economic winter.

It is not simply that the economic recovery is at risk of faltering if the earlier easing of  COVID-19-related lockdowns is at least partially reversed and if a second  fiscal stimulus package is delayed until after January 20. It is also that the world’s overvalued equity and credit markets could be seriously unsettled by a double-dip European economic recession and by a serious emerging market debt crisis.

One need not be an epidemiologist to recognize that the U.S. is on the cusp of a second and more vicious wave in the health crisis. Even before the winter, the number of new daily infections in many states well exceeded its earlier summer peak. Worse yet, those infections are now increasing at an alarming fortnightly rate of around 40 percent, with little prospect of a comprehensive national plan to put a brake on the virus’s rapid spread and with little prospect of a widely distributed vaccine until the second half of next year.

To be sure, even if there were to be a major resurgence in infections, it is highly improbable that the U.S. would again go into a full economic lockdown of the sort that last spring plunged the country into its deepest economic recession in the past 90 years.

 

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h/t  mark000