You gotta love the Trump Administration. At least they’re consistent. On Sunday, Treasury Secretary Stephen Mnuchin (where’s Henry Paulson and Ben Bernanke when we need them?) announced that he didn’t expect the coronavirus pandemic to cause a recession. Never mind that no one can go anywhere to spend any money, our economy was safe. Really? The very same day Goldman Sachs reported that their analysts predicted a 5% drop in GDP in the second quarter. Another quarter like that (which would begin July 1---and who knows what our country will look like then?) and the economy would meet the definition of a recession….
So, who do you believe? Who do YOU believe? Who do you BELIEVE? One of Trump’s trusted minions who spins tales like Vanna White spins "Wheel of Fortune" letters, or Goldman Sachs, probably the premier former-investment-bank-that-is-now-a-commercial-bank-because-of-the-last financial-crisis?
Well, it’s Monday morning, and at the opening the markets dropped like the New Year’s Eve ball drops, straight down, only stopping when it hit bottom. And you know those pictures that you see that show floor brokers or traders holding their heads in their hands and rubbing their temples because they see the world coming to an end right in front of their very eyes? They were doing that before 10:00 New Yawk time
Oil traders? Not happy. Gold and silver traders? Confused, frustrated, and trying to lock in any gains they have before they disappear into the coronavirus abyss. Other commodity traders? This pandemic is a take-no-prisoners affliction. Yes, commodities dropped too.
By 10:15 this morning the Dow was down over 2300 points, or over 10%, the S&P 500 shed more than 272 points, or over 10%, the NASDAQ dropped 10% as did the Russell 20000. The drops triggered circuit breakers, as the markets appear to signal to us what the current administration is failing to realize.
Apocalypse Now!
(Aside from being a nationally-ranked Juniors Tennis Player, Wharton School graduate Neal Abrams was a licensed investment advisor for more than 35 years. With Nadal, Djokovic, Serena and Coco on COVID-19 hiatus, he's going to look at the markets instead of the rackets).