Juggling Dynamite

Danielle was a guest with Jim Goddard on Talk Digital Network, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

Pandemic and sudden income loss have made people more aware of their vulnerability.  Even as interest rates have fallen again since March, loan demand is weak and cash savings in bank accounts have risen sharply.  These are financial-health-restoring-trends in the right direction for individuals; not so much for banks and other lenders.  See Deposit interest rates are taking a pandemic nosedive:

The average rate on savings accounts at U.S. banks stands at 0.08%, down from 0.1% in early spring, according to Bankrate.com, a personal-finance website.

But for many people, money stashed in a savings account represents an important protection against potential financial hardship. Easy access to that money outweighs the fact that they are being paid peanuts in interest.

Andrew Frisbie, executive vice president for consumer pricing at Novantas, said the pandemic had made many customers more interested in saving money for an emergency.

At the same time, demand for commercial and industrial loans is also weak, as shown below, courtesy of DailyShot.com, for small, medium and large firms.  When debt levels are already high and revenues/income/demand weak, more debt is not ‘stimulative’.

Some lucid observations in this segment…

Nouriel Roubini, professor of economics at New York University’s Stern School of Business and CEO of Roubini Macro Associates, joined Yahoo Finance Live to give his take on Bitcoin and his outlook for a de-globalizing economy and gridlocked US government.  Here is a direct video link.

Widening wealth gaps continue to increase social unrest:

“…suppose that you are permanently unemployed or you’re underemployed or you’re at risk of losing job, you’re also among the people that has almost no financial wealth. Just to give a number, 85% of all equity wealth in the United States is held by the top 10% of households. 51% of it is held by the top 1% of households. The bottom 50% of households has almost zero equity wealth, 0.5%. And the top 60 billionaires in United States have more wealth than the bottom 50% of the population that is 160 million people.”

As priced-for-perfection public markets rally on COVID vaccine optimism, virus experts are calling for realism and renewed containment efforts.  See Canada clamps down on businesses again in new virus wave and Developing a Coronavirus vaccine is just the first step–distribution presents a whole new challenge.

I posted an interview with infectious disease expert, Dr. Michael Osterholm, here in March.  This week, he was appointed as a coronavirus advisor to President-elect Biden and offered a sober update on the outlook in the interview below.  Worth a listen.

The coronavirus pandemic in the U.S. will face its darkest period so far over the next three to four months as cases continue to surge above 100,000 per day, a newly appointed coronavirus advisor to President-elect Joe Biden said on Monday.

“What America has to understand is that we are about to enter Covid hell,” Dr. Michael Osterholm, director of the Center of Infectious Disease Research and Policy at the University of Minnesota, told CNBC’s “Squawk Alley.” “It is happening.”  Here is a direct video link.