Vaccines And Senate Subsidies, Ls And Ks

In a sense, it’s being priced like a game of chicken. On the one side, there’s been vaccine-aphoria now combined with this week’s subsidy-mania driving narratives more than markets. Really not all that much higher in prices, certainly not anywhere in the neighborhood of the red-hot temperature of the rhetoric being used to describe these two particular developments.

Oil’s up modestly, as are stocks and bond yields. Why aren’t they up so much more? It seems there’s a bit more pause this time around. Given past hysterias, this one almost doesn’t qualify.

Because there’s another side to it. While everyone hopes that the Senate’s long-expected delivery of more aid combined with widespread rollout and delivery of various COVID vaccines fixes this economic mess, at the same time it has become crystal clear just how big of a mess needs to be fixed.

The summer slowdown is a real thing. And it is hindering the economy of today’s ability to do much more rebounding. That’s a huge problem because, obviously, the rebound hasn’t been all that much. Dead “V”, call it “K”, in truth “L” looms large over everything.

But, but, but, maybe the US Senate (or the European Union smothering Poland and Hungary) getting together with Pfizer, Moderna, and the entire clan of pharma can alter the intermediate future so as the big misses of today won’t matter (as much) in this better tomorrow. Not recovery tomorrow, but more “jobs saved” than otherwise could’ve been offered.

This is the game of chicken; in between the summer slowdown right now and the further future COVID-free, which set of factors will determine the winner?

Thus, the lack of full-throated euphoria in markets is striking because try as the media has (bond yields spike!!!! dollar crashes!!!!), you can’t so easily ignore the conditions right now in favor of a future best case that is fraught with compounded potential tragedies plumbed by all these summer slowdown indications.

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