OPINION27 July 2020

Facts stranger than fiction

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Covid-19 Impact Opinion

Lorna Tilbian looks at Covid-19’s impact on the financial markets and the wider economy.


We have seen things happen during this pandemic that would have been impossible to imagine in our wildest dreams.

  1. The longest 11-year bull market in history has (so far) been followed by the shortest 33-day bear market. From a market peak on 19 February to a trough on 23 March, the longest stock market boom seemingly paved the way for the shortest bust.
  2. Historically, investors lent their capital or property in return for interest, dividends or rent. Now governments can borrow for less than nothing, companies are taking advantage of the crisis to reduce or cancel dividends and paying the rent seems to have become an optional extra.
  3. Central banks responded to the viral and economic shock with unseen levels ($8tn) of stimulus, with the Federal Reserve cutting its funds rate to zero and even buying junk bonds. Similarly, the Bank of England reduced the base rate to 0.1% and the UK government raised £3.25bn of debt at 0.2%, which was over-subscribed, before issuing its first negative ...