02-27-2020, 11:00 PM
The coronavirus is at most a pretext for this weeks' decline in the stock market. It was only a matter of time:
![[Image: 960x0.jpg?fit=scale]](https://specials-images.forbesimg.com/imageserve/5e55e08e7a009800073441bd/960x0.jpg?fit=scale)
It's our old pal, Mr. Inverted Yield Curve! In good times for business prospects, short-term yields are decidedly lower than long-term yields. Business entities that most need to borrow (like firms on life support and highly-speculative activities) find themselves in deep trouble.
I'm guessing that savings are low in contrast to overall debt... maybe real wages are low. Workers who get paid adequately save. Speculators and companies on life support borrow profusely until they can no longer do so. Companies that cannot justify their leverage... fail. People working for such entities lose their jobs, and consumer spending plummets. Bad debts become commonplace.
It's our old pal, Mr. Inverted Yield Curve! In good times for business prospects, short-term yields are decidedly lower than long-term yields. Business entities that most need to borrow (like firms on life support and highly-speculative activities) find themselves in deep trouble.
I'm guessing that savings are low in contrast to overall debt... maybe real wages are low. Workers who get paid adequately save. Speculators and companies on life support borrow profusely until they can no longer do so. Companies that cannot justify their leverage... fail. People working for such entities lose their jobs, and consumer spending plummets. Bad debts become commonplace.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.
