As we move into the new year, I find my financial optimism much greater than most. Yeah, I know there is still a Senate run off, but it’s really not as big an issue as one would think. One word as to why.... Joe Manchin. If you don’t know who he is.... Google it. Tough old bird from WV who aint gonna go with the radicals no matter what the party platform is....I’m pretty sure for the next 2 years we will have divided government and that’s usually a good thing. Especially from a tax policy standpoint with an economic recovery.
On the Coronavirus front.....Having a father who is in a memory care nursing home, I completely understand the depth and voracity of this menace. It preys on the elderly and infirm and is relentless. That’s a given. We have 20 clients who had confirmed cases of the virus. Varying degrees of impact, but all survived. All these are background, BUT there is major reason for optimism. The devil in the details that the media chooses not to dwell on....The MRna technology being used in the first two vaccines is truly ground breaking. If you haven’t read the facts on how it works, I would suggest you do so. It’s a process that has far reaching applications in other virus fights as well as general medicine. As I said in the last rant, we would have multiple vaccines before year end..... and we do.
Looking forward, the massive amount of pent up demand in the economy is staggering. Local politicians and the media may be able to scare people into isolation in the short term, but not forever. As the vaccines roll out in mid-December, and the spectre of death comes off the table, life will emerge. Yeah, I know the guy on CNN said it would take forever but getting the high-risk population will happen in 60 days. Florida has a very public plan of their process and has 5 distribution hubs established along with the millions of syringes and consumables to do the first wave of rollout. While the media bickers, the logistics people do their planning. I’m on the side of the logistics folks.
Last but not least on the optimism train is the accommodative stance of not just the US monetary folks, but all of the central bankers across the globe. Central banks have made the cost of money essentially free. Interest rate raises and tightening of policy is a long way off. Biden’s new Treasury chief (Janet Yellen) is about as solid a pick as one could hope for. Looking ahead, as we come out of our caves in the late winter, the liquidity will fuel not only consumer spending, but the new business spend as we re-boot the business side.
To wrap it up, and let you get back to your life, good riddance to 2020. Stay positive as we round the corner to the new year and the “old normal”. Can’t come soon enough !!
Ed Stiles