Much helps much

Short-time work, the slower the unemployment rate rises. Germany is probably the best example of this. On the other side of the spectrum are countries like the USA or Italy.

Their economies continue to groan under the effects of the corona pandemic. The latest labour market figures from Germany and the USA give an idea of how quickly the economic standstill has reached private households. The reaction on the labour markets will be very different. The simple rule applies, the more generously the system of the Kwo one must expect a strong rise in unemployment.

Contrary to the labour market, the government aid packages for companies in the countries are all very similar. There seems to be also no more borders concerning the size of the government measures. 1000 billion or 1 bio Euro or US Dollar has become a common size. In addition, central bank liquidity measures are of a similar magnitude.

This does not leave the capital markets unaffected. The first signs of an easing in the Corona pandemic were already sufficient to trigger a broad-based rally on the financial markets. All asset classes were able to benefit from this, although so far one can only guess how badly the corporate sector will be affected. But the government’s „whatever it takes“ is masking all concerns, at least for the time being. Certainly, there will always be setbacks here. But as long as governments and central banks give credible assurances that they will do everything to minimize the consequences of the crisis, the capital markets will be supported. For the time being, regulatory warning cries will fall on deaf ears.

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