I wish you a happy and prosperous New Year. May 2021 bring you and your family good health and success.
Looking back, 2020 was a year that few will forget. From a markets point of view, it was a year in which “dumb money” (traders who chase trends) was the smart money. Global central bank intervention caused a “wall of money” to flow from one asset to another, resulting in a year when “everything went up”.
Market participants can notice a dangerous trend over the past 2 months.
The riskier an asset is and the less intrinsic value it has, the better the asset has performed since November. Moreover, this “wall of money” is not infinite, and is flowing into assets with smaller market caps.
To the Editor: Lauren R. Rublin did a wonderful job in assembling a truly diverse group of opinions from both icons and newcomers (“Imagining the Post-Covid World,” Cover Story, Dec. 4). And yes, while in her words I did “vehemently disagree” with some of them, it was still stimulating to see how people are viewing the post-Covid-19 world.
It would seem that CDC, which normally refers to the Centers for Disease Control and Prevention, should be redefined as Covid, Debt, China. Due to many of the innovations stimulated in reaction to Covid-19, the new normal will definitely be different from the pre-Covid-19 normal. Debt is a four-letter word. The enormous amounts of debt taken on by governments and corporations, if not dealt with, will strangle economic growth when interest rates rise and debt-service costs increase. As for China, the threats that it poses on so many levels give new meaning to the old Chinese saying, May you live in interesting times.