The Recession Arrived Suddenly & With A Vengeance: Notes On The Ongoing Financial Market Chaos

The Recession Arrived Suddenly & With A Vengeance: Notes On The Ongoing Financial Market Chaos

recession vengeance notes ongoing financial
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The Recession Arrived Suddenly & With A Vengeance: Notes On The Ongoing Financial Market Chaos

Initial jobless claims for the week ending March 14 (281k) were up 33% from the prior week.. It shouldn't be a surprise to anyone that the Recession started this month, March.. The depth and duration of this Recession is going to depend on infection control.. The Fed cut the Fed Funds rate essentially to 0% in an emergency FOMC meeting on Sunday, March 15.. Panic selling of mutual funds and ETFs had a similar impact.. Are some data: Investment grade bond funds saw $35.6 billion in redemptions this past week, handily beating the $7.3 billion previous record set the prior week.. Safe havens, like Treasuries, had to be sold to meet the record redemptions (that no one was prepared for).. The table below uses the 30-Year Treasury Bond (the "Long" Bond) behavior to show initial levels, panic levels, and the ultimate level after the panic had passed.. It should be noted that the table shows the impact of such panics on the Treasury Long Bond.. It's up to the Fed to calm the credit markets, and they initially tried to do that by moving the Fed Funds rate to 0%.. The yield on the Long Bond was targeted at 2.50%;…

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