The Intelligence from The Economist Rises and false: markets v the economy
May 8, 2020
Join Anne Rowe, Obituaries editor at The Economist, as she remembers legendary rock climber Joe Brown, known for his innovative climbing routes. David Rennie, based in Beijing, shares insights on the struggles of documentary filmmakers in China, particularly the creative solutions they employ to bypass censorship. He highlights filmmaker Jiang Nengjie's decision to offer his grim documentary for free, shedding light on the harsh realities of illegal coal mining. Together, they explore the stark contrast between flourishing stock markets and the underlying economic challenges.
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Market Disconnect
- The stock market appears healthy despite a severe economic slump, with the S&P and Dow having their best month since 1987.
- This disconnect raises questions about the market's accuracy in reflecting the current economic reality.
Fed Intervention
- The Federal Reserve's intervention in the corporate bond market fueled investor optimism and prevented major company failures.
- This action allowed companies to raise money, easing investor fears.
Small Business Struggle
- While the Fed's actions benefited large corporations, small and medium-sized businesses face challenges accessing support.
- Their reliance on banks makes the process more complex and less effective.