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On My Mind - Tuesday, March 3, 2020

Updated: Mar 20

The Novel Coronavirus Epidemic and the Selloff in Financial Markets

Despite (or perhaps because of) a 50 basis-point Fed Funds rate cut, US equity markets fell almost 3%. Volatility continues to be the order of the day, as nobody knows exactly how long the coronavirus epidemic will last or how severe its adverse economic effects will be. Despite today's plunge, the Dow Industrials, S&P 500, and NASDAQ indicies are still higher than the lows reached last Thursday. But will there be a plunge as significant as that started by the Great Financial Crisis in September of 2008? It depends on how extensively the virus spreads, especially if it becomes a pandemic that shuts down large portions of the US economy as well as the economies of other major American trading partners. Much more important, however, is the human suffering in all the nations affected by the coronavirus.

Democratic Party Primaries

It's Super Tuesday! The U.S. is awaiting the results of primaries in fifteen states and territories (as well as Democrats overseas) that together comprise about one third of delegates to the 2020 Democratic Party convention. With the field of candidates for the Democratic nomination for President narrowing, the stakes for the remaining hopefuls is rising.

There are basically four remaining major contenders. Former Vice President Joe Biden and former NYC Mayor Mike Bloomberg are the two moderates, while Senators Bernie Sanders and Elizabeth Warren are the two progressives. After four state caucuses and primaries (Iowa, New Hampshire, Nevada, and South Carolina), Sanders is the front runner at 60 pledged delegates, with Biden a close second with 54, according to Politico. Warren is far behind with 8 pledged delegates. Bloomberg has not had the opportunity to earn delegates until today, which marks the first primaries in which he is on the ballot.

Former Mayor Pete Buttigieg, Senator Amy Klobuchar, and Tom Steyer recently ended their campaigns. Buttigieg and Klobuchar, along with former U.S. Representative Beto O'Rourke, an earlier dropout, endorsed Biden. Steyer has not yet endorsed anyone. If their endorsements are honored, Buttigieg and Klobuchar have given Biden 33 more delegates and put him in the lead.