Feb13th Viral Reality Update: “A Wake-Up Call to the World”
One viral picture – everything you need to know about the state of the economy
A popular picture on the web reflects conflicting data on the dynamics of the stock market and unemployment.
This can be considered a confirmation that financial markets have lost touch with the real economy..
IMF and WTO warn of gloomy outlook for global economy.
A popular photo has appeared on the Internet that capaciously reflects the current state of affairs in the United States, in particular, the gap between financial markets and the real economy..
Financial markets have traditionally been considered an indicator of the state of the real economy. Accordingly, they should rise and fall in response to actual macroeconomic factors, such as, for example, financial statements on corporate profits or data on employment..
Recently, however, this familiar correlation has been broken. This was confirmed by one frame that appeared on the network and quickly gained popularity..
Viral times, viral picture
The viral screenshot captured two radically contradictory facts that simultaneously appeared on the screens of those who watched CNBC’s Mad Money program. The first news reported that the Dow had its best week since 1938. The second talked about the fact that over the past 3 weeks more than 16 million Americans have lost their jobs..
The ruling class will never care about you. pic.twitter.com/H8tUQun1Bl
– jordan (@JordanUhl) April 10, 2020
Many analysts and market participants have repeatedly drawn attention to the fact that financial markets have become detached from the indicators of the real economy. For example, stocks rallied on March 26, despite a bleak report of better-than-expected growth in jobless claims..
It seems that instead of macroeconomic factors, the main driving force for the markets now is the ongoing unprecedented injection of liquidity into the traditional financial system by the US Federal Reserve and monetary authorities of other countries..
Economic outlook worsens
Meanwhile, the real economy, unlike financial markets, has no cause for joy. Recently, major international organizations have expressed increasing concern about its prospects..
Thus, according to the estimates of the World Trade Organization (WTO), in 2020 the volume of international trade may decrease by 13-32%. In turn, the head of the International Monetary Fund (IMF) called the current economic crisis the worst in the history of the organization. The IMF predicts, among other things, a serious fall in personal incomes of the population.
The likely timing of economic recovery is still shrouded in a fog of uncertainty. Equally unclear is the potential impact of the current development of events on the cryptocurrency market, which for the first time in their history faced such a crisis. So, if bitcoin moves in tandem with traditional assets, the digital asset market may face a new crypto winter, and the deteriorating financial situation of ordinary bitcoin hodlers may force them to start selling off their savings in coins..
However, some point out that this year the correlation between MTC dynamics and global market sentiment in relation to risk was not as strong as it was previously thought.. In addition, many participants in the cryptoindustry remind that world central banks continue to struggle with their last bit of ways to keep their national economies afloat. These measures can also boost cryptocurrency growth this year..
Perhaps, in conditions of total uncertainty, it makes sense to closely monitor the movement of funds between whale wallets and accounts on cryptocurrency exchanges. As we wrote recently, the withdrawal of money by whales to external wallets can serve as an indication of the confidence of large investors that cryptocurrencies will still be able to get out of the current crisis without losses..
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