Daily Briefing – August 31, 2020

How is it that the real economy can be so weak while the asset markets continue to fly? Real Vision managing editor Ed Harrison explores this and more with senior editor Ash Bennington. Ed and Ash discuss the ever-widening chasm between Wall Street and Main Street and use Hyman Minsky’s “two-price model” as a framework to understand this dichotomy, and they analyze how asset markets have responded differently to interest rate cuts than the markets for goods and services. In that context, they explain how the sinking labor force participation rate reveals a hidden unemployment which will keep inflation subdued. In the intro, Ash and Jack Farley discuss Jack’s recent interview with Jason Buck on the Real Vision blog, and they also interpret the re-opening woes of airlines and colleges.