Today ends month four of 2020. I barely remember 2019. In just four months, 2020 has multiple asterisks. The postponed summer olympics are billed as 2020ne.
The financial markets created some of the asterisks. A March 23 CNBC headline: “This was the fastest 30% sell-off ever, exceeding the pace of declines during the Great Depression.” A March 24 Jason Hall article at Motley Fool: “Since the peak on Feb. 19, the S&P 500has cratered, losing 34% of its value through March 23.”
An immediate 27% rebound brought another asterisk, which CNN called “the biggest 15-day rally in 87 years.” Ho-hum. The S&P 500 index closed yesterday at 2939.51, up 31.4% in 26 days from a March 23 close at 2238.40.
The Financial Times summarized the divergence between the market and the economy: “(W)e’re heading into a Q2 real GDP drop of 35 per cent or thereabouts … with US unemployment nudging a postwar record of 15 per cent. Goldman (Sachs) explains it all with the simple transfer of money from the state to the private sector.”
The financial markets are in a “V-shape” recovery. Most corporate leaders and many economists expect a slower “U-shape” economic recovery. I agree with Rob Sechan of UBS, who said yesterday on CNBC’s Halftime Report: “The progression in diagnostics, therapeutics and ultimately a vaccine will create levels of optimism. … But it is really the impact of the lockdown that will allow us to see whether the V-shape recovery in the market is mirrored by a V-shape recovery in the economy. … we’re probably 12 weeks out from knowing if that’s going to be the case. … Right now, I think, from a markets perspective, we’re a little ahead of ourselves.”
“The Heisenberg” is one of my favorite financial writers. On Saturday morning the cover of the April 13 New Yorker caught his attention.
“It’s a piece by Pascal Campion called ‘Lifeline.’ In it, a worker delivering something essential (food, probably) stands under a lighted awning amid towering high-rises and rings the buzzer. Just a few feet away, his bicycle rests precariously against a light pole. It’s raining. It’s dark. The streets are deserted.
“The visual is, to quote Françoise Mouly, who interviewed Campion, ‘a nod’ to the essential worker ‘and to his place in a silenced metropolis.’
“Describing the cover, Campion told Mouly the following:
“‘I started not with the feel of the city but with my own emotions. I felt dark, lonely, a little scared, and I built a city—based on New York—out of that feeling. Instead of choosing shapes, I chose lights and shadows. I worked on textures first and added details later. Eventually, I got to a point where all I needed was a small visual anchor to make the image representative rather than abstract. In this case, the delivery man became the recipient (and embodiment) of my emotions.'”
The Heisenberg described his sense of dystopia. “Staring at the cover I felt suddenly out of place in the world … experienced by the millions upon millions of people living through the most acute public health crisis in a century. …(T)he total economic and societal collapse is as new to me as it is to the rest of you.”
Tomorrow: Some reflections about the financial markets.
The Hubble Telescope, launched April 24, 1990, helps us understand our Universe. The Space Telescope Science Institute in Baltimore,released some photos Friday in honor of Hubble’s 30th anniversary. So, we have a glimpse of some new neighbors.
Dennis Overbye wrote in the New York Times: “As shown in a new picture of stormy star birth in a nearby galaxy, captured by the Hubble Space Telescope, the cosmos is keeping up the tradition of both birth and death. Stars are being born out of the ashes of old ones, forever refreshing the universe.”
As we strategize how to maintain safe distances, buy groceries and avoid touching our faces, it helps to be reminded of our “family of origin” and our home, the Universe. This new image from Hubble reminds us that space and time are relative. The red nebula (NGC 2014) and its smaller blue neighbor (NGC 2020) are part of the large Magellanic Cloud in the Milky Way, about 163,000 light years away.
America, the beautiful is America, the messy. Messiness is part of our beauty. The Constitutional Congress created a citizen-executive strong enough to lead, while designing accountability and limits to executive power. We’re still working things out.
During April I’ve observed how Tennessee’s leaders have dealt with the virus. There has been political posturing and tension among judicatories. The state has one set of reopening rules for 89 counties, and a different set of rules for their six most urban counties.
COVID-19 has demonstrated that we’re led by amateurs. That isn’t a criticism. It’s just a fact. Almost all of us are amateurs when it comes to the intricacies of infectious disease control–though many of us have learned more than we ever wanted to know.
The United Methodist bishop in this area oversees congregations in east Tennessee and small sections of Virginia and Georgia. I believe she has one congregation in West Virginia and their annual conference is held each year in North Carolina. I learned yesterday that Virginia’s governor has extended their “stay at home” order through June 10.
Citizen-led, amateur government has been on display daily in White House COVID-19 briefings. Because we have free speech, if a leader says something foolish, it isn’t redacted by a government censor. Russia is led by a pro, an autocrat. Rules are clear. No dissent. No mess. I’m thankful for our messy freedom of speech and for our sometimes messy citizen-leaders.
Thursday’s post introduced Saikrishna Prakash’s book The Living Presidency, which argues that some of the Constitution’s checks and balances have been lost. He’s a non-partisan constitutional scholar who is critical of overreach by all recent presidents, and from time to time by Congress and the courts. Prakash’s book goes beyond personalities to vital issues–a focus we urgently need.
Prakash helped me understand a shift in the nation’s thinking between the 1776 Declaration of Independence and the 1787 framing of the Constitution. In that decade, we suffered from an absence of central leadership and a weak Continental Congress. The political scene was dominated by raucous state legislatures. Some people advocated an American monarchy, an idea that horrified George Washington and was rejected by the Founders. The presidency they created had sufficient strength to function, tempered by clear restraints that Prakash argues have eroded over time.
While I have issues with the current president, they are issues, around which vigorous debate is essential for the health of the Republic. I wish Mr. Trump a happy and speedy retirement. For the next 191 days, I plan to lean on Prakash to remind me that it’s nothing personal.
Here’s a happy story you may have read or heard from Europe–at the Denmark/German border, which is closed due to COVID-19.
On most days, Tüchsen Hansen, 89, rides his electric bicycle from his home in the north of Germany. Inga Rasmussen, 85, rides in her Toyota Yaris from her home in the south of Denmark.
She brings coffee and a table. He brings schnapps and chairs. They say they practice appropriate social distancing. Mr. Hansen is a retired farmer. He told New York Times reporter Patrick Kingsley that “love is the best thing in the world.”
Ms. Rasmussen, a former caterer, met Mr. Hansen two summers ago at a strawberry stand near a traffic circle. He was on his way to deliver some flowers to a Danish widow he had known for many years. Apparently it was a good conversation at the strawberry stand, because he gave the flowers instead to Ms. Rasmussen.
The story has been picked up by numerous media outlets, including the BBC and the Daily Mail.
In 1973, Arthur M. Schlesinger, Jr. (1917-2007) wrote The Imperial Presidency, which focused on the creeping escalation of a U.S. president’s war powers. His well-crafted title has given focus to a much-needed discussion about the broader issue of growing presidential power.
In the Introduction, Prakash says the modern presidency “is a funhouse-mirror version of the Founders’ presidency, except in our reality the carnival version is the lived experience.” He cuts across partisan lines and has plenty to say about Congress, “where useless speeches are occasionally punctuated by pointless votes,” and the courts, which “offer sporadic resistance, but not nearly enough to redirect the trend.”
The U.S. Court of Appeals for the D.C. Circuit will soon hear two important cases that George Will says could “help recage” the executive lion. Prakash’s book is a timely contribution to the important conversation Arthur Schlesinger began in 1973–regardless of who wins the upcoming election.
In an unexpected global health crisis, unintended consequences abound. Most are unwelcomed. On Saturday morning, I spent a few minutes asking, “What are the welcomed unintended consequences of this pandemic?”
The absence of humans in state and national parks has extended the habitat of wild animals. With fewer vehicles on the road and fewer humans roaming the wilds, the animals have made themselves at home. On this Earth Day I’m reflecting on Earth as the garden planet of the Universe, the home we share with all creation.
We could use Moses about now. He represents the biblical theme of freedom because he led Israel out of slavery. He represents the biblical theme of responsibility because he was Israel’s lawgiver.
As we debate when and how to relax stay at home edicts, I’m trying to take responsibility for distance, hygiene, mask and gloves. There’s much about this virus that we do not yet know and I don’t see a quick fix. That’s the consensus of those who operate from science/medicine.
I trust science more than politics, but I understand the political pressures that may lead to some unwise (and I would argue unethical) decisions. Our nation has enjoyed abundance for a long time. Scarcity is painful. We’re seeing the stirrings of social unrest that won’t be pretty.
I saw desperation in the face of a protester who said, “I need to work.” As one who is privileged to be retired, I must respect the pain expressed by the newly vulnerable as well as those who have been living on the margins.
This economic crisis reminds me how I felt when I received a Medicare card. As one privileged to receive government-sponsored health insurance, I vowed to never oppose universal healthcare for others.