Friday , September 25 2020
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Will write soon on the real economy

Summary:
What is happening to the real economy right now is straightforward from the perspective of the supply and demand for labor and capital.  This perspective shows how the real-economy costs are massive, and largely unnecessary, especially to the extent that they continue more than a week or two.  (I discussed the political economy of this here). This perspective shows how the recovery will look. This perspective shows why equities are so much cheaper, beyond what is "justified" by reductions in the future dividend stream (hint: Irving Fisher, but as I have written in the past, do not interpret "interest rate" as the yield on Treasury Bills or Fed Funds but rather as the profit rate on real capital).  I will write up the details soon.

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What is happening to the real economy right now is straightforward from the perspective of the supply and demand for labor and capital.  This perspective shows how the real-economy costs are massive, and largely unnecessary, especially to the extent that they continue more than a week or two.  (I discussed the political economy of this here).

This perspective shows how the recovery will look.

This perspective shows why equities are so much cheaper, beyond what is "justified" by reductions in the future dividend stream (hint: Irving Fisher, but as I have written in the past, do not interpret "interest rate" as the yield on Treasury Bills or Fed Funds but rather as the profit rate on real capital). 

I will write up the details soon.

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