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CoViD-19 and policymakers

Updated: Apr 2, 2020

In these uncertain times, everyone is looking at their governments to come to their rescue and the governments have stepped up to the plate, just like they did during the global financial crisis.

President Trump signed the largest ever US financial stimulus package work US$ 2Tn. The Eurozone is discussing a central bank program called Outright Monetary Transactions (OMT) and Spain has nationalized their private hospitals. I used to work in ABN which got acquired by RBS and I remember how UK nationalized RBS and several banks during the financial crisis.

The message is that when it comes to survival, policymakers will do whatever it takes to win the war.

In India too the govt in a first, of what I believe will be many, put into place a massive social security programme for 80 Crore people that is expected to cost Rs 1.7 lakh Crores. The following day RBI brought out its Bazooka with a host of measures aiming at minimising the damage caused by CoViD-19. The key measures include the highest interest rate cut in a decade, pledging to add Rs 3.7Tn in banking system liquidity and offering a 3-month moratorium on interest payments to all borrowers to help deal with the economic fallout of the coronavirus pandemic.

In all this mayhem, I'm sure all of our portfolios are bleeding. So what better time than to look at how the Oracle of Omaha is performing.

I saw this posted by Varinder Bansal in Twitter.

These are difficult times. But we must not lose hope.

As Albert Camus wrote in The Plague, ‘And indeed it could be said that once the faintest stirring of hope became possible, the dominion of the plague was ended.’

Source: Varinder Bansal, Moneycontrol, Economictimes & LiveMint

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