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Prospects for the American economy
Aug. 4th, 2020 07:07 amI remain cautious because I fear that equity markets are overpriced. I made a little money on CACI after buying some mid-July and selling it yesterday but generally I have been moving further toward being cashed out at this time, next planning to sell my remaining Apple and Microsoft stock, though I did buy some Intel after their recent drop. Incidentally, I once had a day-long meeting at a CACI facility, they had a nice coffee machine.
What scares me is that I do not understand the optimism. Here in Scotland we have now had eighteen days without a COVID-19 death but many American states are demonstrating how not to manage a pandemic, thanks in part to those who deny reality and the many whom their posturing deceives. US consumer spending is down and I would expect it to be seriously wounded now the additional unemployment benefit has expired, smaller businesses and the hospitality industry are running out of money, lockdown easing is having to be paused, and state governments have to balance their budgets despite higher spending and lower revenues.
My impression is that months of unemployment, bankrupt businesses, disrupted education, etc. have a lasting effect so GDP does not return to where it would have been without. Whatever the prospect of effective vaccines next year, the economic impact is severe and will change many people's lives ongoingly. Yet, US stock prices have recovered to where they were at the start of the calendar year. Institutional investors back most of the money and they have expert consultants. Am I too pessimistic about the currently unfolding damage and the likelihood of a near-complete recovery?
What scares me is that I do not understand the optimism. Here in Scotland we have now had eighteen days without a COVID-19 death but many American states are demonstrating how not to manage a pandemic, thanks in part to those who deny reality and the many whom their posturing deceives. US consumer spending is down and I would expect it to be seriously wounded now the additional unemployment benefit has expired, smaller businesses and the hospitality industry are running out of money, lockdown easing is having to be paused, and state governments have to balance their budgets despite higher spending and lower revenues.
My impression is that months of unemployment, bankrupt businesses, disrupted education, etc. have a lasting effect so GDP does not return to where it would have been without. Whatever the prospect of effective vaccines next year, the economic impact is severe and will change many people's lives ongoingly. Yet, US stock prices have recovered to where they were at the start of the calendar year. Institutional investors back most of the money and they have expert consultants. Am I too pessimistic about the currently unfolding damage and the likelihood of a near-complete recovery?
