It wasn’t that long ago – approximately 1 week – that I saw the JRE podcast featuring Michael Osterholm stating matter-of-factly that we need to embrace for a Coronavirus winter, not a few weeks of inconvinent pain… Hearing the take, I thought it was alot more severe than the consensus at the time, to the point that I even thought it was a bit of an overly gloomy…. yet in one week, how things have changed. The public perception is that this will get materially worse, especially given that the states in the US are only now responding with a semi-draconian approach that was needed much earlier. It may even be the case that even the precautions and measures taken now is still insufficient to really abate the worsening of the virus…
So just how much worse will this get? What is my outlook? I don’t know… but lured by being a contrarian, I think a possible scenario is that even after the virus abates and contraction declines, you will still see sluggish global economy. the repercussions of the contractions will last for an undetermined months after the virus has officially relinquished its sway on the world population… and at the conclusion of the virus spill, emerging economies will underperform and developed economies will relatively outperform. US, with its delusions and bias for equities, will probably come back strong…. Europe probably won’t do as well. China and South Korea will probably do ok coming out of it.
Short europe is probably the best thing to do for now. EUR/USD short. ECB will have to cut interest rates after USD just cut twice within a week. what a dick move … doesn’t really signal strength but ECB Will have to walk in lock-step… short EUR to the USD.
Horrible technical set up. shorting on a bullish outside bar. but I got my stop loss at the top of the wick of the buob. if it does’t work, we shall try again…
