Topley’s Top Ten – March 10, 2020

1.It’s Not 2008…U.S. Financial Stress at 2011 Levels.

A lot of my incoming client conversations today are about the key question: “How bad is it?”. In other words, what is the net impact on the economy and corporate earnings of lower rates and a lower dollar versus lower equities and wider credit spreads? Tick-by-tick measures of financial conditions show that financial conditions are currently as tight as they were during the euro crisis in 2011. In other words, any recession and slowdown in earnings associated with the ongoing moves in markets will not be as bad as during the financial crisis in 2008/2009, see chart below and here.


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Torsten Sløk, Ph.D.
Chief Economist
Managing Director
Deutsche Bank Securities

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