The Limits of DFTF?
Non-economist, non-MBA here. If we stipulate that the real economy is worsening and will continue to worsen, with or without the obviously-necessary and delayed shutdowns (I AM a healthcare provider), I would like to ask for some clarification regarding the notion of DFTF: might the bulls be missing the point that, yes, federal largesse in its many forms might, in various ways, inflate asset prices...but if the economy continues to re-crater, it might be propping up still disastrously-low prices? Put more clearly, rather than seeing continued increases in major indexes, the stock market will still crash...just less than it otherwise might. Instead of American Airlines being $1/share, it’ll be $2/share. Instead of the SPX going to 1,200, it’ll go to 2,100. No cause for exuberance, irrational or otherwise. Am I missing something here? For the record, I actually think it is time to accept that this isn’t a one-off, weird shutdown-induced recession, but rather now a regular, soon-to-be-cascading economic sh*tstorm and with that, we should allow failed businesses to die and give unemployment insurance to folks to prevent a lived Depression. Romer said last week that we should stop the stimulus until the virus is under control; to me seems like pissing into the wind at this point—except the piss is hydrochloric acid that will cripple the economy in the longer run. Thoughts?