Economic crisis coming up?

[Fudotei]

I hate to cite a lot of Raoul Pal permabull types -- but I get the feeling this kind of event could be very big for increasingly thin-margin firms who're relying on good capital availability to stay in business. In recent times we've been seeing longer growth periods with significantly worse growth margins. I don't think COVID represents a one-off event, but rather a significant end to a growth period that has been largely propped up by good monetary/fiscal conditions.

So the rebound/recovery, if you can imagine that, will probably be even slower, more funded by central banks, and more prone to populist outrages than the post-08 recovery.

(FT had a really good graph of this -- average growth rate has decreased for each period of expansion, segmented by recessions, since WW2 -- but it is unfortunately not on this computer)

If there's anything the Marxists have a point on, we're headed towards a point where the real economy just doesn't grow faster than it can be held up.

"The slowdown in long run growth in the developed economies therefore seems to have become a permanent fact of life, rather than a temporary result of the financial crash that will disappear over time. But the actual path for GDP has fallen well below even the depressed long run equilibrium path since 2009." - Gavyn Davies, FT