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2021-11-23

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Markets Have Overreacted Wildly to the Fed Leadership Drama

There’s no reason to believe that Jerome Powell will be more hawkish than Lael Brainard would have b

Markets Have Overreacted Wildly to the Fed Leadership Drama

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{"i18n":{"language":"zh_CN"},"data":{"magic":2,"id":875657249,"tweetId":"875657249","gmtCreate":1637648782317,"gmtModify":1637648782317,"author":{"id":3576665118703921,"authorId":3576665118703921,"authorIdStr":"3576665118703921","name":"283f4d0e","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":1,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":2,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Tell me your opinion about this news...</body></html>","htmlText":"<html><head></head><body>Tell me your opinion about this news...</body></html>","text":"Tell me your opinion about this news...","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/875657249","repostId":1190077312,"repostType":4,"repost":{"id":"1190077312","pubTimestamp":1637647250,"share":"https://www.laohu8.com/m/news/1190077312?lang=&edition=full","pubTime":"2021-11-23 14:00","market":"us","language":"en","title":"Markets Have Overreacted Wildly to the Fed Leadership Drama","url":"https://stock-news.laohu8.com/highlight/detail?id=1190077312","media":"Bloomberg","summary":"There’s no reason to believe that Jerome Powell will be more hawkish than Lael Brainard would have b","content":"There’s no reason to believe that Jerome Powell will be more hawkish than Lael Brainard would have been.\n<img src=\"https://static.tigerbbs.com/71558efd21e8f5e97bee82b9cdb2831f\" tg-width=\"2000\" tg-height=\"1333\" width=\"100%\" height=\"auto\">Peas in a pod? Photographer: Zach Gibson/Bloomberg\nJerome? O.K., Jerome\nSo now we know.President Biden has chosen&nbsp;Jerome Powell&nbsp;for another four-year term as chair&nbsp;of the Federal Reserve, while Lael Brainard will be nominated to serve as his vice chair. Somewhat surprisingly, she wasn’t given a souped-up version of the post to include responsibility for banking supervision, and that role remains to be filled.\nWhat did the markets make of it? They plainly think that Powell will be far more hawkish than Brainard would have been, for reasons that elude me. The following chart shows the number of hikes priced in by the fed funds futures market for each meeting of the Federal Open Market&nbsp;Committee between now and February 2023. The bars show market expectations on Sept. 1, before the current inflation scare took hold;&nbsp;Nov. 9, the day when news that Brainard had been interviewed for the top job came out;&nbsp;last Friday;&nbsp;and this Monday. Compared to “Brainard Day,”&nbsp;less than two weeks ago, the market has priced in one whole extra hike by February&nbsp;2023. It was ready for two hikes when Brainard was in contention, and is now prepared for three:\n<img src=\"https://static.tigerbbs.com/a9f6b686bc4b684ecd11dc6d911ae1ba\" tg-width=\"957\" tg-height=\"535\" width=\"100%\" height=\"auto\">\nThis strikes me as a wild&nbsp;overreaction. Unlike Powell, Brainard is a card-carrying Democrat, but she had gone along with the majority in every FOMC vote since joining the committee seven years ago. With inflation-fighting now an imperative, and with the market likely to test any new chair, this looks like a mispricing.\nHowever, it does at least suggest that Brainard may have been part of the explanation for the remarkably low real yields of late. This is how 10-year real yields have moved over the last month. I ringed the publication of the Brainard interview news, the release of the shocking October CPI numbers, and news of the Powell nomination. Somehow, real yields have risen 25 basis points&nbsp;since the initial shock at the inflation numbers:\n<img src=\"https://static.tigerbbs.com/c5be0f2c4d69ebebc9a89292a0c1baf1\" tg-width=\"1200\" tg-height=\"675\" width=\"100%\" height=\"auto\">\nWill the Fed really have to hike three times over the next year? That at present looks like something of a worst-case scenario. Supply-chain pressures should ease by the end of next year, and commodity price base effects will help move inflation lower. As I’ve been arguing, the labor market and the progress of rents will probably determine whether inflation is still elevated or rising 12 months from now. Three hikes does seem unduly aggressive. Next month we will get a new adjustment of “dots” to see where Fed governors think base rates will go, and quite possibly an announcement that bond purchases will be tapered&nbsp;more quickly than the current schedule to allow hikes to happen earlier. Until we have that evidence, the newly found hawkishness of the Powell Fed has been amply priced in.\nThere is plenty of great&nbsp;commentary&nbsp;on the Fed elsewhere on this site, and also&nbsp;elsewhere&nbsp;around&nbsp;the&nbsp;internet. The significance of the decision can be&nbsp;overstated, and it’s fair to say that Biden made the&nbsp;safer&nbsp;choice. That was probably sensible. This is a dangerous situation, the chance of a policy error or market accident is high, and it was doubtful that it was worth adding the risk of a new chair having a miscommunication with the market (which always seems to happen in the first year of a new Fed head). Given the situation, Biden looks to have made the right choice.Much reporting suggests&nbsp;that re-nominating Powell was necessary&nbsp;to ensure support from Democratic centrists like Senator Joe Manchin of West Virginia, so this was politically as well as economically less risky. Brainard might not have won confirmation.\nYou can find my own post-Powell column&nbsp;here. My greatest concern is that the Fed is now without any question the most powerful economic entity on the planet, the decisions it makes&nbsp;on inflation are of vast importance to everyone, and therefore it needs far greater democratic or political legitimacy than it currently has. And yet the actual question of what the Fed should do about inflation seems to have been close to irrelevant to the decision, much though it matters to the president’s political fortunes, and to voters. This just isn’t a good way to choose the leadership of such an important body.\nCentral bankers themselves are worried that they lack the legitimacy needed to perform the role now required of them. I quote Sir Paul Tucker, a former deputy governor of the Bank of England, who started his post-Bank career by authoring a massive philosophical tome called&nbsp;Unelected Power. In it he suggested a series of principles for delegating power to bodies, like central banks, that would then of necessity have wide freedom of action. Without impinging on central bank independence, the president and Congress could set the Fed a set of ranked priorities or clear targets. You can hear an interview I did with him back in 2018 for my old employers&nbsp;here.\nDistrust in vital institutions is reaching frightening levels. The University of Michigan’s latest consumer sentiment report included an update on&nbsp;the Fed, which it asks about periodically. The chart, produced by BCA Research Inc., shows that confidence is slipping:\n<img src=\"https://static.tigerbbs.com/7d31a91845e0ebe6ddb4e4ada86dd68e\" tg-width=\"523\" tg-height=\"334\" width=\"100%\" height=\"auto\">\nAs ever, political polarization has a lot to do with this. The Michigan report states:\n<blockquote>\n partisan identification was a significant correlate of consumer assessments of the Federal Reserve, treating the Fed as part of the administration rather than an independent body. Less trust in the Fed was reported in 2021 more frequently by Republicans than Democrats (67% versus 27%), while in the first year of the Trump administration, less trust in the Fed was reported by Democrats than Republicans (41% versus 30%).\n</blockquote>\nBear in mind that Republican trust in the Fed has dropped this year even though it is still led by a man appointed by President Trump. Democrats’ faith in the Fed fell in 2017 even though it was still being run by Obama-appointee Janet Yellen. Further, there is a correlation between confidence in the Fed and general consumer confidence. That’s not surprising, but the gap has widened:\n<img src=\"https://static.tigerbbs.com/3b0a032885e49ae88b82e724437190a5\" tg-width=\"545\" tg-height=\"325\" width=\"100%\" height=\"auto\">\nMeanwhile, as you might expect, searches for the word “inflation” have reached a high for the year, both in the U.S. and in the world as a whole. Powell’s job is an intimidatingly difficult and important one:\n<img src=\"https://static.tigerbbs.com/500ab9d237206c3ed88318b73ae2839c\" tg-width=\"964\" tg-height=\"535\" width=\"100%\" height=\"auto\">\nLooking back to the dawn of the Google Trends service in 2004, it appears the world is more concerned about rising prices now than at any time this century:\n<img src=\"https://static.tigerbbs.com/17a7fda3f7a2fb79716fb1cb346d3bb1\" tg-width=\"953\" tg-height=\"535\" width=\"100%\" height=\"auto\">\nThere are reasons why politicians haven’t paused to re-examine the role of central banks in the last year. There have been many other things to do. But the democratic legitimacy of central banks is tenuous enough as it is. For a generation they have succeeded in the core task of keeping inflation under wraps. It’s not pleasant to think about the consequences should that cease to be the case over the next few years.\nOn the Subject of Inflation…\nThe latest Inflation Indicators are out, and they suggest there is a challenge ahead for Powell, Brainard and their colleagues. You can find them&nbsp;here. There is little change since the last update, but one intriguing move is the latest rally in&nbsp;lumber futures. I included these in the original indicators because they appeared an obvious example of a transitory pandemic effect. The hope was that lumber prices would recede before other prices began to pick up. They did, but now they are rising again:\n<img src=\"https://static.tigerbbs.com/07569b299031bfcba30b8f7b1470af7a\" tg-width=\"1200\" tg-height=\"675\" width=\"100%\" height=\"auto\">\nThere’s nothing much that the Fed can do to contain gyrations like this, but the discomfiting fact is that the pandemic’s transitory effects don’t seem to be over. Lumber prices are still up 22% over 12 months, and have doubled since the beginning of 2020&nbsp;—&nbsp;even if they are still less than half the manic spike from earlier this year that helped to ignite concerns about inflation in the first place.\nMeanwhile….\nIf anything has more power over the world economy than the Fed, it might just be our old friend the coronavirus. Real-time indicators suggest the global economy has sprung back to life nicely in the last few weeks. However, the MSCI World index of hotels, restaurants and leisure stocks has just dropped to a 16-month low relative to the broader MSCI World. The leisure sector has barely made up any of the ground&nbsp;lost during the Covid-19 shutdown in spring last year:\n<img src=\"https://static.tigerbbs.com/5942ca5ec1a96b1abb0ff47bbc92fbbd\" tg-width=\"1200\" tg-height=\"675\" width=\"100%\" height=\"auto\">\nWe can all at this point guess that the coronavirus has something to do with it. The fact that European countries are resorting to lockdowns again, something politicians surely didn’t want, is hard to ignore. There’s room for&nbsp;argument about whether lockdowns are necessary or wise, and there are plenty of other places to discuss that; what we can agree on is that in the short term, lockdowns are bad for the economy.\nLooking at the official count of EU&nbsp;versus U.S.&nbsp;cases, you can see that this latest wave is a big one —&nbsp;at least in terms of infections. The chart that follows is of new infections per five days. I multiplied the U.S. number by 1.37 to give the number of cases there would have been if it had the same population as the EU. The basic message is clear enough:\n<img src=\"https://static.tigerbbs.com/e1afb39a79ecdd334b9d42788c372b0a\" tg-width=\"963\" tg-height=\"546\" width=\"100%\" height=\"auto\">\nSomehow, the EU is now in its worst wave of the pandemic, which is approaching the severity of the winter wave in the U.S. Meanwhile, infections in the U.S. appear to have begun rising&nbsp;again.\nThere will doubtless be an argument over whether this means that everyone should now be vaccinated, or that there was no point vaccinating anyone in the first place. And it’s also critical to see whether widespread vaccination has indeed reduced the disease’s lethality as hoped. But for now it’s very worrying, and it amply explains why money is rushing into the U.S. and the dollar. Remarkably, European stocks have hit a new low for the Covid era relative to the S&amp;P 500:\n<img src=\"https://static.tigerbbs.com/eff5a716b79b446b382ba2bcae3c34af\" tg-width=\"1200\" tg-height=\"675\" width=\"100%\" height=\"auto\">\nFlows out of the Europe and into the U.S. help to strengthen the dollar and act as a de facto tightening of liquidity for much of the world. So there is a gruesome sense in which the virus is now helping to tighten financial conditions. That could change if the lockdowns spread, and economic problems prompt central banks to slow down plans for attempting to return to normal. Not good.\nSurvival Tips\nI’m going to outsource this tip to Boris Johnson, the U.K.’s prime minister, who suggests that everyone should go to&nbsp;Peppa Pig World, a theme park in England’s New Forest devoted to the children’s cartoon. New branches are soon coming&nbsp;to the U.S.He made this tip in the middle of a speech to the Confederation of British Industry, the country’s biggest organization for employers. You can see clips&nbsp;here.&nbsp; It’s beyond parody, and very amusing.","source":"lsy1584095487587","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Markets Have Overreacted Wildly to the Fed Leadership Drama</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nMarkets Have Overreacted Wildly to the Fed Leadership Drama\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-11-23 14:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.bloomberg.com/opinion/articles/2021-11-23/markets-have-overreacted-wildly-to-the-powell-brainard-fed-drama?srnd=premium-asia>Bloomberg</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nThere’s no reason to believe that Jerome Powell will be more hawkish than Lael Brainard would have been.\nPeas in a pod? Photographer: Zach Gibson/Bloomberg\nJerome? O.K., Jerome\nSo now we know....\n\n<a href=\"https://www.bloomberg.com/opinion/articles/2021-11-23/markets-have-overreacted-wildly-to-the-powell-brainard-fed-drama?srnd=premium-asia\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{".DJI":"道琼斯",".SPX":"S&P 500 Index",".IXIC":"NASDAQ Composite"},"source_url":"https://www.bloomberg.com/opinion/articles/2021-11-23/markets-have-overreacted-wildly-to-the-powell-brainard-fed-drama?srnd=premium-asia","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1190077312","content_text":"There’s no reason to believe that Jerome Powell will be more hawkish than Lael Brainard would have been.\nPeas in a pod? Photographer: Zach Gibson/Bloomberg\nJerome? O.K., Jerome\nSo now we know.President Biden has chosen Jerome Powell for another four-year term as chair of the Federal Reserve, while Lael Brainard will be nominated to serve as his vice chair. Somewhat surprisingly, she wasn’t given a souped-up version of the post to include responsibility for banking supervision, and that role remains to be filled.\nWhat did the markets make of it? They plainly think that Powell will be far more hawkish than Brainard would have been, for reasons that elude me. The following chart shows the number of hikes priced in by the fed funds futures market for each meeting of the Federal Open Market Committee between now and February 2023. The bars show market expectations on Sept. 1, before the current inflation scare took hold; Nov. 9, the day when news that Brainard had been interviewed for the top job came out; last Friday; and this Monday. Compared to “Brainard Day,” less than two weeks ago, the market has priced in one whole extra hike by February 2023. It was ready for two hikes when Brainard was in contention, and is now prepared for three:\n\nThis strikes me as a wild overreaction. Unlike Powell, Brainard is a card-carrying Democrat, but she had gone along with the majority in every FOMC vote since joining the committee seven years ago. With inflation-fighting now an imperative, and with the market likely to test any new chair, this looks like a mispricing.\nHowever, it does at least suggest that Brainard may have been part of the explanation for the remarkably low real yields of late. This is how 10-year real yields have moved over the last month. I ringed the publication of the Brainard interview news, the release of the shocking October CPI numbers, and news of the Powell nomination. Somehow, real yields have risen 25 basis points since the initial shock at the inflation numbers:\n\nWill the Fed really have to hike three times over the next year? That at present looks like something of a worst-case scenario. Supply-chain pressures should ease by the end of next year, and commodity price base effects will help move inflation lower. As I’ve been arguing, the labor market and the progress of rents will probably determine whether inflation is still elevated or rising 12 months from now. Three hikes does seem unduly aggressive. Next month we will get a new adjustment of “dots” to see where Fed governors think base rates will go, and quite possibly an announcement that bond purchases will be tapered more quickly than the current schedule to allow hikes to happen earlier. Until we have that evidence, the newly found hawkishness of the Powell Fed has been amply priced in.\nThere is plenty of great commentary on the Fed elsewhere on this site, and also elsewhere around the internet. The significance of the decision can be overstated, and it’s fair to say that Biden made the safer choice. That was probably sensible. This is a dangerous situation, the chance of a policy error or market accident is high, and it was doubtful that it was worth adding the risk of a new chair having a miscommunication with the market (which always seems to happen in the first year of a new Fed head). Given the situation, Biden looks to have made the right choice.Much reporting suggests that re-nominating Powell was necessary to ensure support from Democratic centrists like Senator Joe Manchin of West Virginia, so this was politically as well as economically less risky. Brainard might not have won confirmation.\nYou can find my own post-Powell column here. My greatest concern is that the Fed is now without any question the most powerful economic entity on the planet, the decisions it makes on inflation are of vast importance to everyone, and therefore it needs far greater democratic or political legitimacy than it currently has. And yet the actual question of what the Fed should do about inflation seems to have been close to irrelevant to the decision, much though it matters to the president’s political fortunes, and to voters. This just isn’t a good way to choose the leadership of such an important body.\nCentral bankers themselves are worried that they lack the legitimacy needed to perform the role now required of them. I quote Sir Paul Tucker, a former deputy governor of the Bank of England, who started his post-Bank career by authoring a massive philosophical tome called Unelected Power. In it he suggested a series of principles for delegating power to bodies, like central banks, that would then of necessity have wide freedom of action. Without impinging on central bank independence, the president and Congress could set the Fed a set of ranked priorities or clear targets. You can hear an interview I did with him back in 2018 for my old employers here.\nDistrust in vital institutions is reaching frightening levels. The University of Michigan’s latest consumer sentiment report included an update on the Fed, which it asks about periodically. The chart, produced by BCA Research Inc., shows that confidence is slipping:\n\nAs ever, political polarization has a lot to do with this. The Michigan report states:\n\npartisan identification was a significant correlate of consumer assessments of the Federal Reserve, treating the Fed as part of the administration rather than an independent body. Less trust in the Fed was reported in 2021 more frequently by Republicans than Democrats (67% versus 27%), while in the first year of the Trump administration, less trust in the Fed was reported by Democrats than Republicans (41% versus 30%).\n\nBear in mind that Republican trust in the Fed has dropped this year even though it is still led by a man appointed by President Trump. Democrats’ faith in the Fed fell in 2017 even though it was still being run by Obama-appointee Janet Yellen. Further, there is a correlation between confidence in the Fed and general consumer confidence. That’s not surprising, but the gap has widened:\n\nMeanwhile, as you might expect, searches for the word “inflation” have reached a high for the year, both in the U.S. and in the world as a whole. Powell’s job is an intimidatingly difficult and important one:\n\nLooking back to the dawn of the Google Trends service in 2004, it appears the world is more concerned about rising prices now than at any time this century:\n\nThere are reasons why politicians haven’t paused to re-examine the role of central banks in the last year. There have been many other things to do. But the democratic legitimacy of central banks is tenuous enough as it is. For a generation they have succeeded in the core task of keeping inflation under wraps. It’s not pleasant to think about the consequences should that cease to be the case over the next few years.\nOn the Subject of Inflation…\nThe latest Inflation Indicators are out, and they suggest there is a challenge ahead for Powell, Brainard and their colleagues. You can find them here. There is little change since the last update, but one intriguing move is the latest rally in lumber futures. I included these in the original indicators because they appeared an obvious example of a transitory pandemic effect. The hope was that lumber prices would recede before other prices began to pick up. They did, but now they are rising again:\n\nThere’s nothing much that the Fed can do to contain gyrations like this, but the discomfiting fact is that the pandemic’s transitory effects don’t seem to be over. Lumber prices are still up 22% over 12 months, and have doubled since the beginning of 2020 — even if they are still less than half the manic spike from earlier this year that helped to ignite concerns about inflation in the first place.\nMeanwhile….\nIf anything has more power over the world economy than the Fed, it might just be our old friend the coronavirus. Real-time indicators suggest the global economy has sprung back to life nicely in the last few weeks. However, the MSCI World index of hotels, restaurants and leisure stocks has just dropped to a 16-month low relative to the broader MSCI World. The leisure sector has barely made up any of the ground lost during the Covid-19 shutdown in spring last year:\n\nWe can all at this point guess that the coronavirus has something to do with it. The fact that European countries are resorting to lockdowns again, something politicians surely didn’t want, is hard to ignore. There’s room for argument about whether lockdowns are necessary or wise, and there are plenty of other places to discuss that; what we can agree on is that in the short term, lockdowns are bad for the economy.\nLooking at the official count of EU versus U.S. cases, you can see that this latest wave is a big one — at least in terms of infections. The chart that follows is of new infections per five days. I multiplied the U.S. number by 1.37 to give the number of cases there would have been if it had the same population as the EU. The basic message is clear enough:\n\nSomehow, the EU is now in its worst wave of the pandemic, which is approaching the severity of the winter wave in the U.S. Meanwhile, infections in the U.S. appear to have begun rising again.\nThere will doubtless be an argument over whether this means that everyone should now be vaccinated, or that there was no point vaccinating anyone in the first place. And it’s also critical to see whether widespread vaccination has indeed reduced the disease’s lethality as hoped. But for now it’s very worrying, and it amply explains why money is rushing into the U.S. and the dollar. Remarkably, European stocks have hit a new low for the Covid era relative to the S&P 500:\n\nFlows out of the Europe and into the U.S. help to strengthen the dollar and act as a de facto tightening of liquidity for much of the world. So there is a gruesome sense in which the virus is now helping to tighten financial conditions. That could change if the lockdowns spread, and economic problems prompt central banks to slow down plans for attempting to return to normal. Not good.\nSurvival Tips\nI’m going to outsource this tip to Boris Johnson, the U.K.’s prime minister, who suggests that everyone should go to Peppa Pig World, a theme park in England’s New Forest devoted to the children’s cartoon. New branches are soon coming to the U.S.He made this tip in the middle of a speech to the Confederation of British Industry, the country’s biggest organization for employers. You can see clips here.  It’s beyond parody, and very amusing.","news_type":1},"isVote":1,"tweetType":1,"viewCount":567,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"upFlag":false,"length":33,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"hasMoreComment":false,"orderType":2}