A Few Longer-Term Implications

I have given some thought to what I think some of the longer-term economic implications may be going forward.  These thoughts are offered with no political commentary intended.  We deal only with money and investments on this blog.  There are many other places for you to go if you need to get a political fix or need to post your opinions.  Here goes.

The urban chic that many cities have cultivated and consciously tried to develop have likely taken a significant hit from both the pandemic and the events of the past week.  Balancing all the cultural and entertainment opportunities that cities have to offer versus being locked up for weeks on end in tiny apartments or condos during a quarantine and then watching your neighborhood being vandalized and looted is likely going to weigh big on young people in the coming months.  This is especially true and  millennials and get-Xers start to have families or those with children find them reaching school age.

For good or ill many will have a hard time unseeing some of what has occurred this past week.

Taxes and expenses are going up next year, likely both individuals and corporations.  States and municipalities have seen their expenses soar and their revenues down significantly.

The Federal Reserve is going to continue injecting or maintaining liquidity in the system for an indefinite period of time.  There will be probably two more stimulus packages, de facto universal income.  Those becoming too negative on the market need to remember that fighting the Fed on monetary policy has never been much of a winning strategy.

Initially I thought the President might receive a bounce on his reelection chances given the violence over the weekend.  I think he will now run on a law and order campaign, deemphasizing somewhat the economy.  However, I think some of his actions these past few days may have deflated whatever bounce he may have initially received from this.

Back later in the week.