• Consumption drives economies, especially in the United States, but also in Europe, and consumption underpins the hope for growth in China. That is why a strictly monetary response is of limited help. All countries are creating massive fiscal stimuli directed at first containing Covid-19, but also at driving demand and consumption. Over the next few months, effective government policy will have to be directed at reducing the fear factor and providing enough economic security so that once Covid-19 is contained, people will go out, and start rebuilding and consuming again. We’re in a demand/consumption-driven slowdown, and so we believe effective fiscal responses must be geared toward consumption policies.
  
• High equities’ correlations create opportunities for active investors. Most investments—equities, fixed income, commodities, etc.—are highly correlated during panic selling (with the great exception of government securities, as investors generally move toward their perceived safety). High correlations between equities have continued as investors sell their holdings in passive vehicles, which in turn, has resulted in selling of all stocks proportionately.

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