In evaluating COVID-19 and the financial crisis, Ronald Leven speaks both to the unprecedented nature that make predictions regarding world finances difficult to the economic principles that help us parse out what we do know.
- How "zombie businesses" are a concern and why the failure-and-launch dynamic powers the importance of emerging markets,
- Why one of his biggest concerns regarding our economics is a second wave of unemployment, and
- What are his thoughts on inflation possibilities and how to assess the stock market data.
Ronald Leven is the W.R. Huff Professor of the Practice in the Department of Economics at Duke University and author of the monthly Market Voice newsletter. Before coming to Duke, he worked as an international economist with the New York Federal Reserve and with a variety of financial intuitions before spending several years with Thompson Reuters.
In this podcast, he speaks to the U.S. economy as well as international markets and how emerging economies might look in the coming years.
He emphasizes his concern that we will see a second wave of layoffs. Furthermore, he's worried that this layoff round will not be met with much government support and fears the potential for an increase in our homeless population.
In addition, he discusses the effects of stimulus efforts and possibilities of inflation. In fact, he feels this is the first time in 30 years that we have a real risk of inflation because of this mismatch of artificial demand levels with supply constraints. He explains why this is a problem in more detail and gives his thoughts on how the Federal Reserve might respond regarding interest rates.
He also addresses how our economy may suffer for a while from the "zombie company" effect, which means that companies which shouldn't be able to survive are able to because of stimulus efforts. Meanwhile these companies take resources, such as bank loans, but really aren't a contributing force.
He explains how this makes for a weaker economy with less force and vigor. He also addresses how he evaluates the stock market numbers, what real estate seems to be doing, and what long-term impacts may exist in planning based on preparing for future COVID-like emergencies.
You can access his newsletter Market Voice through his LinkedIn sight after requesting access.
Available on Apple Podcasts: apple.co/2Os0myK