Investor Howard Marks paints grim view of economic outlook: stimulus alone won't cure 'down-cycle'

[marmar]

(MarketWatch) The U.S. stock market has rebounded mightily in recent months but Howard Marks cautions investors to brace for a tough slog in the economy, and that’s even if a fresh fiscal stimulus package can be passed by Congress to help heal the coronavirus-stricken business climate.

“Thus, this down-cycle cannot be fully cured merely through the application of economic stimulus,” the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide, wrote in a lengthy screed, reflecting on the current state of the economy and the market, published on Tuesday.

“Rather, the root cause has to be repaired, and that means the disease has to be brought under control,” he wrote.

Marks says that even with the illness that has infected more than 37 million people globally, economic stimulus alone isn’t likely to reverse the damage that the U.S., and economies across the globe, face. ...........(more)

https://www.marketwatch.com/story/billionaire-investor-howard-marks-paints-grim-view-of-economic-outlook-stimulus-alone-wont-cure-down-cycle-11602619585?mod=home-page

[Warpy]

1. Nope. Raising the minimum wage and putting people back to work on decaying infrastructure

are the only proven ways to do this, and that means much higher taxes on extreme wealth and corporations. It also means a transaction tax on Wall Street.

Failing that, the economy is just going to keep spiraling down, with extreme unemployment and underemployment as businesses go under for lack of demand for goods and services.

Drop in the bucket one time handouts with dollars off a printing press are going to do no good at all, especially since so much will be skimmed off the top and used for things like corporate stock buybacks.

Republicans and "fiscal conservative" Democrats have never been able to run the economy anywhere but straight into the ground.

[marmar]

2. This.