Stocks, gold, oil, bitcoin, ethereum and pretty much all other assets have turned red today as the market becomes a bit jittery.
This broad sell-off is a rare sight, with it unclear where exactly all this money is escaping to, except the dollar has risen a bit.
It’s not a large sell off. Dow is down only 3%, while FTSE is minus about 4% as Borisov does his best to make a mess out of the United Kingdom with what so far has been the worst negotiation in history.
Yet it’s a clear sign that the market is worried. They worried about whether the airlines can be bailed out. Train companies. The shipping industry.
For now everyone has been paid whether they working or not, but that’s paid with borrowed money. It’s not spending powers as Powell said.
In addition it’s not clear for just how much longer this borrowed money can bail out the entire economy.
Airline layoffs are expected to come and in the entire transport industry. Plenty of hotels must be on the brink of collapse. Pubs have opened, but not really. You have to stay in your seat and can’t even order at the bar.
That can then have knock on effects. People would shop less either because they don’t have as much as they did or expected, or because they want to save for the months ahead.
Just what the real bill will be for the spring lockdown and whether America or much of Europe can afford it, is not clear, but now they want a second one.
Thousands protested in Berlin this Sunday against the current restrictions. Any further restrictions, let alone a full on lockdown, would be a very risky endeavor without significant objective persuasion of its absolute necessity.
But although this speculation about another lockdown might be one reason for this red Monday, you’d think the market is more worried about the bill of the last lockdown as it’s all gone add up.
The FinCEN files may have added to it, but that can have a silver lining as it could be a pretext to effectively order banks to lend at low interest rates.
Powell is now to speak again on Thursday and that may well be the primary reason for this sell off as the market is clearly worried about what he is going to say after the atrocious speech last Thursday.