Have you ever seen a child whose parents make nothing but empty threats? Shock, horror, the cold figures it out pretty quickly and those threats lose any value.

Have you ever seen a child whose parents make nothing but empty threats? Shock, horror, the cold figures it out pretty quickly and those threats lose any value. So there are no consequences. I feel like this is the situation financial markets are in now. Bailout after bailout. So markets have learned that they can take big risks (the bigger the better) because they can enjoy the rewards without any of the risk. Now there are special circumstances here but there are always special circumstances. Post-1989 Japan should’ve taught people you have to let banks fail when they’re insolvent. Some companies made what turned out to be bad decisions would otherwise fail. This argument that not bailing them out will make the recession worse gets pet tired after you hear it for the 100th time. Whatever the case, I’d bet money on the stock market dropping significantly over the next two weeks irrespective of these prop ups s as the reality sets in that you just can’t contain a disease where the contagious routinely are asymptomatic and the number of cases continues to climb. Some will point to China’s ability to flatten the curve in Wuhan and but they do this by essentially combining everyone to their homes in a way that’s simply not possible in the US.