This has been a year to remember……. or perhaps, forget. With a raging coronavirus, civil unrest, and rampant political demagoguery, finding the truth has proved challenging. Regardless, there is much we do know and with that, here are some thoughts on what has transpired and what may lie ahead. Specifically, we will discuss the virus known as Covid-19, the economy, and the financial markets.
SARS-CoV-2, the virus that causes Covid-19, is completely new. As such, the learning curve was steep (and still is), which provided an ideal environment for those intent on spreading disinformation. Early on, there were no effective treatments for the virus, which partly accounts for the high death tolls in New York, New Jersey and other northeastern states. There was also a scramble to understand ‘exactly’ how the virus was spread; implement proper safeguards (PPG, masks, etc.); and discover existing drugs that may help. We also needed to understand how the pandemic would affect American workers and which industries would require financial assistance. When the Federal government and the Federal Reserve injected a massive amount of stimulus into the economy thru the C.A.R.E. Act, there was a question of efficiency. More to the point, the federal government hasn’t been the most efficient operation at times. Nonetheless, we can now say that the initial stimulus was highly effective in avoiding a more catastrophic economic result.
During this episode, there has been a tug-o-war between the health of individuals and the health of the economy. Although individuals matter most, the health of many would have suffered had we had fallen into a depression. Nonetheless, this dichotomy exacerbated an already polarized nation with President Trump favoring reopening the economy as soon as possible and democrats being