Tuesday, 10 March 2020

black monday

Already jittery and fragile in the face of the evolving thread and response to the efforts to contain the spread of the novel coronavirus, world stock markets experienced a sharp, precipitous decline—a drop fast enough to trigger a breaker-switch that suspended trading on Wall Street for a quarter of an hour to give investors a chance to regroup, when the mood was yesterday exacerbated by an oil war that erupted once Russia and OPEC were unable to come to a consensus on the right production numbers to ensure fuel retain value as a commodity during a steep decline in demand due to disruptions in shipping, travel and manufacture over said pandemic.

Saudi Arabia signaled it would flood the market with cheap crude and undercut the competition from Russia and the US—whom both have large reserves but lack the refining capacity, constricting further the prospects where the market could move its money with the retreat en masse to bonds having reduced the yield to under one percent, raising the spectre of defaults and bankruptcy. Italy’s expansion of its quarantine measures nationwide and North Korean missile tests did nothing to elevate spirits. With interest rates at historic lows and many companies’ portfolios just a tick above junk status (a comfortable, low-effort place to be until it suddenly wasn’t) national banks nor advocate stakeholders have really been painted into a corner and can do little to intervene. Though the Trump regime is more interested in the stock market and how his reelection hinges on its performance, the government may be forced to entertain extending the basic right to workers of paid sick leave, though such reform probably smacks too much of creeping socialism to allow it to gain a foothold.