[Emil’s Summary] The 2020 economic recovery is shaping up to be the worse V since V, the 1980s American mini-series.

In the mid-80s parents allowed their children to watch an innocent-looking television program titled V thinking it was some kind of Sesame Street offshoot. Imagine little Johnny and Suzy Q’s horror when, instead of Reading Rainbow, they were watching a sci-fi melodrama about disguised reptilians. The Visitors, presenting themselves as competent, benevolent beings here to teach the backwards ape a few things, were hiding behind masks — including their beautiful smokeshow of a leader Diana — and had actually come to harvest Earth’s water and snack on humans. A sophisticated allegory about economists? Perhaps…

The mini-series had been the reigning champion of “Worst V of All Time” until the 2007-09 financial crisis, which sent the global economy off its post-World War Two trend. Unlike all downturns since 1945, this one was different in that a plurality of economies representing a majority of global gross domestic product never regained their pre-crisis trend growth. The V-shaped recovery that three generations had come to take for granted turned out to be a grossly misshapen, lizard-like L that was visible beneath the mask of positive numbers in all manner of broad economic accounts, including: global foreign direct investment, world merchandise trade, the 35-country Organisation for Economic Co-operation and Development industrial production index, etc.

In this eleventh episode of Making Sense, Jeff Snider, Chief Investment Officer of Alhambra Investments (and Resistance Leader) explains why 2020 may surpass the intergalactic reptiles AND dethrone 2007-09. We review the US Congressional Budget Office’s very un-V forecast through 2021, estimate in trillions the depth of the contraction in the US, put into context Washington D.C.’s inadequate-sized stimulus and review the Euro Area’s broad survey of economic confidence.

No iguanas were hurt in this episode.

Articles Discussed:

Getting A Sense of the Economy’s Current Hole and How the Government’s Measures To Fill It (Don’t) Add Up

The *Optimists* Have Some Terrible News For the ‘V’

What Would The Hole Be Without The ‘L’?

What Flood?