A portfolio manager at one of Londons leading hedge funds has warned of a future haunted by a more soviet outcome from countries defending their economies from coronavirus.
Tim Bond, partner and portfolio manager at Odey Asset Management, told FN's sister title MarketWatch: Dog will no longer eat dog. Instead, all will run with the pack and for the pack in a post-recession period characterised by reduced dividends and buybacks and softer growth.
Bond has examined how thefinancial world will look post-coronavirusin countries faced with the burden of hefty economic rescue packages.
It is, perhaps, possible to imagine a more soviet outcome from the swing in the power pendulum, he said. An economic landscape haunted by zombie companies on permanent state aid support and national resources, allocated in accordance with whatever short-term objective might prolong a politicians period in office.
It is also plausible that global multinationals start to fragment into national parts, as a function of the requirement for nation state resilience. That will reverse much of the oligopolisation that has occurred over the past 30 years.
Odey Asset Management, which hasmore than$3bn funds under management, was established in 1991 by billionaire Crispin Odey.
Read:Crispin Odey almost doubled profits before fresh performance slump
Bond thinks it is vanishingly improbable that everything goes back to normal once the virus is contained.
Businesses have been caught over-levered and insufficiently reserved, he said. They will prioritise managing down debt burdens and building cash reserves in the wake of this crisis. Dividends and buybacks are going to fall much more than profits; both because of a higher corporate saving rate and because of government requirements.
Households, having experienced howjobs and income can vanish literally overnight, will want to save, he said, adding: When employment returnswe should expect that households will wish to save at a higher level than the pre-crisis average.
This would mean people spending less, meaning the overall fiscal cost of the crisis would dent gross domestic product.
These behavioural factors have led me to conclude, he said, that the post-recession period will be characterised by much softer growth than I had previously been thinking.
This virus will most likely terminate the laissez-faire globalised economic model. Since this model had already stopped working long before the crisis started, that is no bad thing. We should remember that the prevailing economic system had entered a self-reinforcing negative loop of declining productivity, slowing trend growth, stagnating real living standards and rising inequality a good 15 years ago.
The current crisis should therefore strongly reinforce the political pressure to ensure that economies are managed in a way that benefits most of their citizens.
Read: Marshall Wace builds short bets against UK stocks, while Odey pockets millions
He thinks, counter-intuitively, the world could see some positives for trend growth rates coming from a shift in power away from large business entities and back to the people. The effects would come from de-globalised labor markets forcinghigher rates of business investmentover the long term, boosting productivity growth.
Bond said we should bear in mind a happier post-1945 outcome: When the major economies experienced 25 years of exceptionally strong productivity and overall GDP growth, the benefits of which were disseminated very broadly across society.
This article was published by FN's sister titleMarketWatch
- Zombie films that teach us how to survive the apocalypse - 1428 Elm - May 26th, 2020
- Marvel Zombies & DCeased Have Another SCARY Similarity | CBR - CBR - Comic Book Resources - May 26th, 2020
- 'Zombie fires' spread across Siberia, unusual warmth is to blame - The Weather Network - May 26th, 2020
- Why dont the zombie media apologise and resign? - Spiked - May 26th, 2020
- Original Action-Horror Zombie Movie 'The Clearing' Takes a Bite Out of Crackle This June [Exclusive Trailer] - Bloody Disgusting - May 26th, 2020
- Watch: Park Shin Hye And Yoo Ah In Team Up For Survival In Upcoming Zombie Film #ALIVE - soompi - May 26th, 2020
- 4 Things To Know About 'Betaal', The Indian Zombie-Apocalypse Series That We Can't Wait To Watch - MensXP.com - May 26th, 2020
- Concern JobKeeper has created 'zombie firms' that will never recover from coronavirus shutdowns - SBS News - May 26th, 2020
- A zombie apocalypse, a surprise hook-up, and brutal deaths in the latest Legends of Tomorrow - SYFY WIRE - May 22nd, 2020
- Netflix Is on the Hunt for Zombie Accounts - Barron's - May 22nd, 2020
- DayZ cheats: Are there ways to cheat in the zombie apocalypse - GamesRadar+ - May 22nd, 2020
- [Image] Did You Catch the George A. Romero Tribute Zombie on "Legends of Tomorrow" This Week? - Bloody Disgusting - May 22nd, 2020
- Zombie Batman and More DC Comics Statues Arrive with Diamond - Bleeding Cool News - May 22nd, 2020
- With a zombie leader and an off-key message, the Conservatives are beating themselves - The Globe and Mail - May 22nd, 2020
- Once the crisis is over, we will need to let the zombie firms go - Financial Post - May 22nd, 2020
- An Indigenous People's Take on the Zombie Thriller, Celebrity Acid Trips, and a Wild Breakup: Your Weekly Roundup of New Movies - Willamette Week - May 22nd, 2020
- On the frontline against zombies - The Hindu - May 22nd, 2020
- Focus: Powell and Mnuchin testimonies and the fear of zombie companies - Arab News - May 22nd, 2020
- The View from Mudsock Heights: We don't yet know what the zombie spring is doing to us - Athens NEWS - May 22nd, 2020
- Zombie story haunts Betaal! Marathi writers allege that makers lifted the plot of their film Vetaal - Mid-Day - May 22nd, 2020
- Art, poetry and ... zombies? The surprising cultural contributions of the 1918 influenza pandemic - The World - May 22nd, 2020
- Rob Zombie the Sweetheart: Kristina Klebe Recalls Working on HALLOWEEN 2007 - Dread Central - May 22nd, 2020
- Flatbush Zombies Announce "Now More Than Ever" - HotNewHipHop - May 22nd, 2020
- Pandemic Prompts Fears About Viruses And Thawing Permafrost : Goats and Soda - NPR - May 19th, 2020
- How The Marvel Zombies Universe Ate Itself, TWICE | Screen Rant - Screen Rant - May 19th, 2020
- Rise of the zombie Redcoats - The Hindu - May 19th, 2020
- Watch these 10 zombie shows before Betaal - The Indian Express - May 19th, 2020
- The rise of the zombies - InvestorDaily - InvestorDaily - May 19th, 2020
- Grand Theft Auto 5 Zombie Mod RottenV Gives GTA An Undead Nightmare - Screen Rant - May 19th, 2020
- Art, poetry and ... zombies? The surprising cultural contributions of the 1918 influenza pandemic - WUWM - May 19th, 2020
- I Want That! Beavis & Butt-Head Do Rob Zombie's HOUSE OF 1000 CORPSES T-Shirt - Dread Central - May 19th, 2020
- The Walking Dead: 5 Ways The Show Improves The Zombie Genre (& 5 Ways It Doesn't) - Screen Rant - May 18th, 2020
- S. Korean adaptation of Hollywood zombie thriller to hit silver screens next month - Aju Business Daily - May 18th, 2020
- Top 10 zombie movies to watch before Betaal - The Indian Express - May 18th, 2020
- Zombie Gold on the Silver Screen - Gamereactor UK - May 18th, 2020
- Zombie Wolverine Shows The GROSSEST Part Of Metal Bones - Screen Rant - May 18th, 2020
- Hulk Once Killed A Marvel Legend With a Single BITE | Screen Rant - Screen Rant - May 18th, 2020
- Check out all the details of Zombie Army 4: Dead War - Gizmo Posts 24 - May 18th, 2020
- Train To Busan Peninsula: Release Date And Information On Its Story - Auto Freak - May 18th, 2020
- The Walking Dead Rick Grimes movies will track the human test subjects sacrificed to find cure for zombie v - The Sun - May 18th, 2020
- Zombies Are All Over in DCs Legends of Tomorrow Episode 5.12 Promo - Superherohype.com - May 15th, 2020
- Zombie Game Sale: Save On The Walking Dead, Dying Light, And More On PC - GameSpot - May 15th, 2020
- Letters: Relying on herd immunity would let the zombies loose - The Advocate - May 15th, 2020
- The Walking Dead: Here's What Caused The Zombies, According To Creator - GameSpot - May 15th, 2020
- The Walking Dead: 10 Romances We Could Have Done Without - WhatCulture - May 15th, 2020
- The Churn: Hope is a Thing with Zombies - SYFY WIRE - May 15th, 2020
- I Walked With A Zombie Is A Zombie Remake Of Jane Eyre - Screen Rant - May 15th, 2020
- Legends of Tomorrow Promo Puts the Heroes in a Zombie Apocalypse - CBR - Comic Book Resources - May 15th, 2020
- Probably negative reviews The Spectator - UWEC Spectator - May 15th, 2020
- 'DC's Legends of Tomorrow' Season 5 Episode 13: Did Astra cause the zombie apocalypse that trapped the team? - MEAWW - May 15th, 2020
- Massey University's Alison Brook on whether we are ready to leave lockdown, the chances of an Aussie summer holiday, wage subsidies and zombie... - May 15th, 2020
- REVIEW: The Kingdom of the Gods Brings a Zombie Apocalypse to Dynastic Korea - CBR - Comic Book Resources - May 13th, 2020
- The Internet Archive is warning users who click on coronavirus misinformation - The Verge - May 13th, 2020
- When Is 'Zombies 2' Coming to Disney+? - Decider - May 13th, 2020
- Iran Still Uses this Massive 'Zombie' Cannon (Made in America) - The National Interest - May 13th, 2020
- Blood Quantum bites back with a fresh, original perspective on zombies - Creative Loafing Tampa - May 13th, 2020
- DAY6 Achieves Personal Record On Realtime Charts With Zombie + Expresses Gratitude To Fans - soompi - May 13th, 2020
- Zombie Game Sale: Save Big On The Walking Dead, Dying Light, And More On PC - GameSpot - May 13th, 2020
- Time to kill scientific zombie that is 'Nature v Nurture' debate - Mirage News - May 13th, 2020
- Rob Zombie Posts A Heartbreaking Photo To Share His Longing For The Audience - Metalheadzone - May 13th, 2020
- LEGENDS OF TOMORROW: There Are Zombies In The New Promo & Photos For Season 5, Episode 13: "I Am Legends" - CBM (Comic Book Movie) - May 13th, 2020
- Everything the Resident Evil movies get wrong about the games - Looper - May 13th, 2020
- Zombie Games Owe Everything To This Cult '80s Horror Hit - TheGamer - May 13th, 2020
- How Zombies Happen: Walking Dead's Apocalypse Cause Revealed - GameSpot - May 13th, 2020
- DAY6 depict the harsh realities of life in 'Zombie' MV The latest kpop news and music - Officially Kmusic - May 13th, 2020
- 10 Zombie Movies To Watch If You Love Dead Rising | ScreenRant - Screen Rant - May 10th, 2020
- The Zombie Genre's Future May Be Grimmer Than You Think | CBR - CBR - Comic Book Resources - May 10th, 2020
- 7 Days to Die: Defense Base Building Tips and Tricks - Screen Rant - May 10th, 2020
- Zombies Ruined My Day Review - TheXboxHub - May 10th, 2020
- Rob Zombie Remembers The Special Show He Played With Rick Nielsen - MetalCastle - May 10th, 2020
- Go Goa Gone: As Saif Ali Khan & Kunal Kemmu starrer clocks 7 years, heres why zombie comedy is a must watch - PINKVILLA - May 10th, 2020
- Legends of Tomorrow Is About to Go Full-On Shaun of the Dead - CBR - Comic Book Resources - May 10th, 2020
- Zombie Army 4: Dead War- What does Critics & Gamers have to say about this Third person Shooter Game? ... - Gizmo Posts 24 - May 10th, 2020
- Edgar Wrights Shaun of the Dead Extras Went Full Zombie and Bit Him: Theyd Gone Feral - IndieWire - May 8th, 2020
- Zombie satellite hunter finds 53-year-old signal in the noise - Coast Reporter - May 8th, 2020
- George C. Romero is finally entering the zombie 'Deadverse' on his own terms - SYFY WIRE - May 8th, 2020
- Dear COVID-19, Kill The Zombie Phrase Don't Waste A Crisis - EDM Digest - May 8th, 2020
- The Walking Dead: Saints & Sinners Will Get New Content - UploadVR - May 8th, 2020
- Probably negative reviews - UWEC Spectator - May 6th, 2020
- 'Zombie hunters' stopped in car laden with bows and arrows, tear gas and other illegal weapons in Sweden - 9News - May 6th, 2020
Reviewed and Recommended by Erik Baquero