Expect the unexpected


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There is just no way to “unwind” a Pandemic gracefully.  Such an unprecedented experience tends to be replete with unintended consequences. Due to the modification of human behavior, we might should adapt to expecting the unexpected.

For example, the Federal Reserve Bank of New York reported that 59% of U.S. households made a “large purchase” during the first four months of this year. A large purchase in this context is defined as an automobile, furniture and/or home repairs. That is the highest percentage reported in 5 years. People are spending money.

On the other hand, the Department of Commerce noted that personal savings rate in the first quarter of this year was 21%. Compare that to the same number in the first quarter of 2001: 5%. So, what’s going on here? There is a lot of money floating around thanks to the government stimulus checks. Also, spending is more difficult when you are afraid and have been in a lockdown mode. The pent-up demand we’ve discussed for about a year now is being unleashed – some of it resulting in spending, some of it still being hoarded, some of it being invested.



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