This article is brought to you by a Russian Telegram channel "Antihype on money," an analytical channel about all economic hype trends and their triggers.
What happened: Financial markets quickly took the bait and believed promises of coordinated support measures from G7, as well as an emergency cut in the Fed rate by 50 points two weeks before the scheduled meeting. The magnitude of the epidemic impact is such that even the Fed, which knows more than many, does not hide fears of the coronavirus. This is an obvious sign that markets will continue to fall.
What really happened: The joint communiqué after the conference call of the ministers of finance and the heads of the Central Bank of the G7 countries, as well as an unscheduled rate cut, is a way to calm markets that "suddenly" turned their attention to the coronavirus problem. Soros described such market behavior in the theory of reflexivity, which states that human behavior (market behavior in our case) is determined not by reality, but by subjective ideas about it. Now the markets have dashed with confidence that the situation will quickly recover, to a state close to a panic attack.
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