Tuesday, December 8, 2020

Too much optimism in economy 2020

If we see just the grahps, the different index graphs, we can see there was some turbulence on march but that it has ben recovered fully from it.

However, I don´t think we are actually in the same economy pace as we were before the covid started, however the markets seems that are counting as all economy is at full pace or will be at full pace soon.

To be honest, does not seems we will be at full pace as before covid in 1, 2 or 3 months ahead. Already many discretionary jobs has been lost, most of them are tourism related business that were not able to aford their monthly expenses at went to bankruptcy (it they do not declare bankrupty yet, they could be close to it).

So what`s the real unemployment percentage in U.S. or Europe? Many unemployed people is out of the numbers because of the stimulus checks they are having. How much time, those stimulus can move ahead into the future?


All is counted in the markets as if we will be at maximum pace in few months, any obstacle in the middle, could mve the market down. 

November was the biggest increase in many years in one month period on markets, due to central bank help and the covid vaccine optimism. 

The real economy effect most probably will emerge when covid phase is finished, central banks move their monthly debt purchases to previous to covid numbers and all the unemployed people is counted as it is. We will be able to see then the real unemployed percentage. Meanwhile, try to estimate it and bet on it.

*Country debt increase
*Central bank debt purchases increase
*Possible country default and external investment risk (stop external investment)
*High Inflation (real inflation) due to stimulus
*Corporate and private debt defaults if economy does not recover at proper pace

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