The case of riots in Minneapolis is not stranger to covid19 crisis. The pandemic that hit globally in 2020 has a resounding impact on the ground, less so in high towers. Indeed, the crisis is ripping through the poorer classes at the junction of combined weaker points.
First, they tend to work in direct contact with the crowds, at a higher contamination rate. Secondly, they are more prone to work for the gig economy, among those who have been furloughed until further notice. Lastly, they tend not to have suitable health cover and no safety money on the side when the stuff hits the fan.
This might well be in retrospect the tipping point of the widening wealth gap that we’ve seen over the past 10 years. While it is no surprise that the current unrest mostly impacts under-privileged black communities, it is however a shock that it happens in Minneapolis, Minnesota – ranking in the top third of wealthiest metropolitan areas and States. What could be cooking elsewhere?
As seen from the high tower, there is a consensus that the worst is over and a recovery would take place. Weakly-enough, we just don’t agree on how and when. Now, what we also know is that the recovery won’t benefit everyone the same way. A large part of the furlough will turn into hard unemployment, and poorer people will tip into misery. The market reflects exactly that.
Massive stimulus programs worldwide so far have efficiently injected money from the ground up, through direct checks to households and loan programs to smaller businesses. This is arguably setting a floor but is in no way an attempt at bridging the gap. As in 2008-2009, it is highly likely that massive monetary injection will cause the wealth gap to widen again, with flaring-up tensions that could hit back on market valuations.
360 Advisory – Markets