A former Goldman Sachs Manager said that the impact of COVID-19 on the markets might be worse than the 2008 financial crisis according to Yahoo! Financial News.
A former macro fund manager said on Thursday that the economic impact of the coronavirus — which is shaving trillions off the stock market and exerting a domino effect on the world economy — might be even worse than the 2008 financial crisis.
Raoul Pal, a Goldman Sachs alum, previously co-managed GLG’s global macro fund, one of the largest in the world. Since retiring back in 2004, he now authors a research letter, The Global Macro Investor, which is read by some of the most influential hedge fund managers.
“The question is, how big of an event is this? Because if it’s as the president suggests, you know, ‘It’s going to bounce back and everything is fine,’” then investors should just continue to hold the line, Pal told “On the Move” on Thursday. (source)
I have been reporting on this virus for over a month now, and it is tiring because while much is said about the spread and it claims of being deadly in spite of many more serious killers already existing (for example, the spread of drug-resistant tuberculosis) in hospitals and other medical establishments, a lot of nothing is being said about the situation or the consequences.
The biggest impact this will have is going to be economic, as people react and overreact to the situation by mass closures and fighting over toilet paper, in spite of how toilet paper is made in the US.
If anything, the virus seems to be a demonstration of popular psychology and a test for the mind of the masses before it is something of a real issue more than other things.
Instead of overreacting, as I have said before, now is the time to stay slow and watch the situation. It will likely spread and worsen in the US, especially in reports, before anything gets better.
We have yet to see if this truly is a “case of the century”, because anything can happen.
If one can guarantee something, it is that the use of such language will only drive public insanity further, creating a perfect buying opportunity for a company like Goldman Sachs, which has a long history of exploiting crises and market manipulation.
Perhaps the virus is not so dangerous for one’s physical health as it is for one’s financial health, and specifically one’s stock portfolio.