Translation = Yield Curve Control with words of caution.
But first there's this from Niall Ferguson, one of your MesaZona blogger's favorite historians who answers his own questions provided by looking back at historical episodes.
He's mostly right except for the "second-wave" thing.
Politics & Policy
America Is on the Road to Relapse Not Recovery
The U.S. isn’t following the example of countries that have shown what a “smart reopening” entails.
By Niall Ferguson
"America is on the road. But is it on the road to economic recovery or a pandemic relapse?
Fans of “On the Road” — Jack Kerouac’s 1957 classic of beatnik literature — will recall that its giddy, low-punctuation style is sometimes a little hard to follow. The same might be said of the data Americans are currently generating, some of which undoubtedly points to a rapid (if not quite V-shaped) recovery, and some of which seems to indicate either a second wave of Covid-19 infections or simply the continuation of the first wave.
The two are not separate stories, but rather a single, intertwined narrative. The best title for this tale was devised by my Hoover Institution colleague, the economist John Cochrane. He called it “The Dumb Reopening.”
A smart reopening is the sort that has been possible in countries such as Taiwan and South Korea, which were so quick to ramp up testing and contact tracing that they didn’t need to do lockdowns in the first place.
Among European countries, Germany and Greece have also successfully adopted these methods, which ensure that any new outbreaks of Covid-19 can quickly be detected, so-called super-spreaders isolated, their recent contacts swiftly traced and tested, and the outbreaks snuffed. . .
. . perhaps the most useful mobility data for economists come from Google’s Community Mobility reports, which show how visits and length of stay at different places have changed relative to a Jan. 3-Feb. 6 baseline. By subdividing destinations into six categories — retail and recreation, grocery and pharmacy, parks, transit stations, workplaces and residential — the Google data help us zero in on what matters economically. . .
Eyeballing the latest data on confirmed cases, I see second waves in Arizona, Florida, Idaho, Nevada, Oklahoma, Oregon, Washington and Wyoming, as well as second ripples in Hawaii, Kansas and Montana. First waves continue in California, Mississippi, South Carolina, Tennessee, Texas and Utah. Trends in case numbers, positive tests and hospitalizations look especially worrisome in Arizona, Florida and Texas. . .
Hardly any leading academic economist believes in the V-shaped recovery story, where output snaps back as far and as fast as it has fallen.
The alternative, and I suspect more likely, scenario is that Americans carry on getting back to normal and tacitly accept further excess mortality as just a cost of doing business until a vaccine is available
. . .
As it happens, Kerouac’s “On the Road” was first published in 1957. The book’s second line is: “I had just gotten over a serious illness that I won’t bother to talk about.”
By the end of this year, the way things are going, several million Americans will be able to say those same words about Covid-19. Sadly, roughly 200,000 won’t be able to."
_________________________________________________________________________
By Niall Ferguson
"America is on the road. But is it on the road to economic recovery or a pandemic relapse?
Fans of “On the Road” — Jack Kerouac’s 1957 classic of beatnik literature — will recall that its giddy, low-punctuation style is sometimes a little hard to follow. The same might be said of the data Americans are currently generating, some of which undoubtedly points to a rapid (if not quite V-shaped) recovery, and some of which seems to indicate either a second wave of Covid-19 infections or simply the continuation of the first wave.
The two are not separate stories, but rather a single, intertwined narrative. The best title for this tale was devised by my Hoover Institution colleague, the economist John Cochrane. He called it “The Dumb Reopening.”
A smart reopening is the sort that has been possible in countries such as Taiwan and South Korea, which were so quick to ramp up testing and contact tracing that they didn’t need to do lockdowns in the first place.
Among European countries, Germany and Greece have also successfully adopted these methods, which ensure that any new outbreaks of Covid-19 can quickly be detected, so-called super-spreaders isolated, their recent contacts swiftly traced and tested, and the outbreaks snuffed. . .
. . perhaps the most useful mobility data for economists come from Google’s Community Mobility reports, which show how visits and length of stay at different places have changed relative to a Jan. 3-Feb. 6 baseline. By subdividing destinations into six categories — retail and recreation, grocery and pharmacy, parks, transit stations, workplaces and residential — the Google data help us zero in on what matters economically. . .
Eyeballing the latest data on confirmed cases, I see second waves in Arizona, Florida, Idaho, Nevada, Oklahoma, Oregon, Washington and Wyoming, as well as second ripples in Hawaii, Kansas and Montana. First waves continue in California, Mississippi, South Carolina, Tennessee, Texas and Utah. Trends in case numbers, positive tests and hospitalizations look especially worrisome in Arizona, Florida and Texas. . .
Hardly any leading academic economist believes in the V-shaped recovery story, where output snaps back as far and as fast as it has fallen.
The alternative, and I suspect more likely, scenario is that Americans carry on getting back to normal and tacitly accept further excess mortality as just a cost of doing business until a vaccine is available
. . .
As it happens, Kerouac’s “On the Road” was first published in 1957. The book’s second line is: “I had just gotten over a serious illness that I won’t bother to talk about.”
By the end of this year, the way things are going, several million Americans will be able to say those same words about Covid-19. Sadly, roughly 200,000 won’t be able to."
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
A ‘Buy Everything’ Rally Beckons in World of Yield Curve Control
"As central banks pump trillions into the world economy, investors are setting their sights on what could be the next big thing in global monetary policy: yield curve control.
The strategy, which involves using bond purchases to pin down yields on certain maturities to a specific target, was once deemed an extreme and unusual measure, . .
No longer. This year, the Reserve Bank of Australia adopted its own version. And despite officials’ attempts to cool it, speculation is rife that the U.S. Federal Reserve and Bank of England will follow later this year.
