(Annie Massa) BlackRock chief executive officer Larry Fink predicted the economy will eventually recover from the coronavirus outbreak, though he said the crisis will reshape investor psychology, business practices and consumer habits.
by Annie Massa, March 31st, 2020
The pandemic that swept through nations across the globe this year is causing people to re-evaluate “just-in-time” supply chains and dependence on air travel, Fink wrote in his annual letter to shareholders.
“In my 44 years in finance, I have never experienced anything like this,” Fink wrote, adding that “as dramatic as this has been, I do believe that the economy will recover steadily, in part because this situation lacks some of the obstacles to recovery of a typical financial crisis.”
“People worldwide are fundamentally rethinking the way we work, shop, travel and gather. When we exit this crisis, the world will be different,” he said.
Fink and New York-based BlackRock are already playing a role responding to the economic pain brought on by the virus. The world’s largest asset manager is overseeing three separate debt-buying programs on behalf of the Federal Reserve. President Donald Trump also consulted on coronavirus-related aid for companies with Fink and other top Wall Street executives.
Central banks are moving quickly to address credit market troubles and governments are being aggressive with fiscal stimulus, Fink added, saying lessons learned during the global financial crisis will be helpful.
“The speed and the shape of these policies are deeply influenced by the world’s experience during the global financial crisis in 2008,” he said.
“I also believe their actions are likely to be more effective and work more quickly since they are not fighting against the same structural challenges as they were a decade ago.”
Fink said it was too early to call the bottom of the market, despite Wall Street bouncing back strongly last week, saying there were many challenges ahead for governments and businesses.
“That is not to say the world is without risk, nor to suggest that the market has reached its bottom,” he added. “It is impossible to know.”
“If governments are not careful in the design of their stimulus programs, the economic pain from the outbreak will fall disproportionately on the shoulders of the most economically vulnerable individuals.
Late last week, BlackRock told clients the market sell-off had created significant value for long-term investors and told clients it now favoured “rebalancing into risk assets.”
“The unprecedented actions represent the type of decisive policy response we have been calling for – and set the scene for an eventual economic recovery,” Jean Boivin, head of the BlackRock Investment Institute, said.
Stillness in the Storm Editor: Why did we post this?
The news is important to all people because it is where we come to know new things about the world, which leads to the development of more life goals that lead to life wisdom. The news also serves as a social connection tool, as we tend to relate to those who know about and believe the things we do. With the power of an open truth-seeking mind in hand, the individual can grow wise and the collective can prosper.
Not sure how to make sense of this? Want to learn how to discern like a pro? Read this essential guide to discernment, analysis of claims, and understanding the truth in a world of deception: 4 Key Steps of Discernment – Advanced Truth-Seeking Tools.
Stillness in the Storm Editor’s note: Did you find a spelling error or grammatical mistake? Send an email to firstname.lastname@example.org, with the error and suggested correction, along with the headline and url. Do you think this article needs an update? Or do you just have some feedback? Send us an email at email@example.com. Thank you for reading.