Situational awareness: At least one homebuyer found by the L.A. Times managed to get a 30-year mortgage this week at a rate of 2.75% with just 3.5% down. No wonder there's a refinancing boom going on.
In this week's issue, I talk about how coronavirus is a much bigger deal than anything going on in the markets, no matter what President Trump thinks; I also compare Jack Welch with Jack Dorsey, and wonder whether anybody would be interested in buying Robinhood any more. And I answer the question: Before the financial crisis, when was the last time that the world saw a quarter of negative GDP growth?
Illustration: Sarah Grillo/Axios
We're not in a financial crisis, which means we don't need the full arsenal of weaponry a financial crisis requires.
The big picture: With stocks whipsawing wildly and yields on Treasury bonds hitting new all-time lows, it's easy for policymakers to find themselves fighting the last war — to react to the current emergency in much the same way as they did to the financial crisis.
Why it matters: Political capital is finite, and fighting the virus directly has to be the top priority of any government. If and when the virus can be brought under control, then there's a good chance of a V-shaped recovery in which markets will take care of themselves.
IMF chief Kristalina Georgieva has laid out the priorities facing any government fighting coronavirus. First is to "protect people’s wellbeing, take care of the sick, and slow the spread of the virus." Second is fiscal policy, targeted at the hardest-hit sectors and households.
The bottom line: Broken markets were a large part of the cause of the financial crisis, and fixing those broken markets was a large part of the necessary policy response. Neither of those things is true this time around.
For anyone who gets their economic news from cable TV, we're in the craziest period of the Trump presidency so far.
How it works: The Trump administration explicitly uses the stock market as a barometer of its success, and the coronavirus was a large part of the reason for the recent stock-market volatility. Those factors explain why Treasury Secretary Steven Mnuchin and National Economic Council director Larry Kudlow were appointed to the government's coronavirus task force.
The bottom line: So long as the stock market remains volatile, expect Trump to fixate much more on the Dow than he does on CDC mortality reports.
Here's how serious coronavirus is: With the exception of the global financial crisis, the last time that the world saw a quarter of negative GDP growth was in 1982.
By the numbers: Thanks in large part to a massive slowdown in China, the OECD sees global GDP shrinking at a 0.5% pace this quarter.
Yes, but: All of these forecasts have much higher error bars than usual. There's a very good chance that the OECD's forecast will turn out to have been far too optimistic or pessimistic. We just have no idea which one it will be.
Photo illustration: Aïda Amer/Axios. Photos: Mike Coppola/Getty Staff, Phillip Faraone/Stringer
Jack Dorsey is, in some strange way, the modern-day Jack Welch. Dorsey, the embattled yet sensitive founder and CEO of Twitter and Square, has almost nothing in common with Welch, the corporation man who led GE as it became the largest company in the America. Yet Dorsey exemplifies today's West Coast leaders just as Welch helped to define the celebrity CEO of the 1980s and '90s.
Welch obsessively managed GE's quarterly earnings and achieved much of his success through financial engineering, creating billions of dollars of profit from the GE Capital subsidiary that almost blew up the entire company during the financial crisis.
Illustration: Sarah Grillo/Axios
It was a bad week for buzzy fintechs, as Libra retreated from its grand cryptocurrency plans and decided instead to wait for countries to issue their own digital currencies. (Don't hold your breath.)
The biggest loser, however, was Robinhood, the fast-growing stock-trading app that somehow contrived to go down for all of Monday and two hours on Tuesday.
Our thought bubble, from Axios' Dan Primack: "Robinhood does now have a target on its back, but the archers are more likely to be lawyers than potential acquirers."
The big picture: Robinhood has screwed up before, more than once. Any sober acquirer would want to impose a lot more layers of compliance and quality assurance — but trying to impose those layers would surely kill the very spirit they were attempting to buy.
An apology: Last week I had Robinhood and Reddit message boards in mind as I was writing about losses exceeding gains in the stock market, even when it was flat on the month. I expressed myself badly, however, and I'm grateful to everybody who wrote in to tell me, quite rightly, that every trade has both a buyer and a seller.
Go deeper: Expect lawyers to take aim at Robinhood
Photo: Alex Wroblewski/Getty Images
Wells Fargo's new CEO, Charlie Scharf, will testify before Congress on Tuesday, Axios' Courtenay Brown writes. Betsy Duke, the bank's chair, will appear with fellow board member James Quigley the following day.
Why it matters: It's the fifth time the bank will try to defend itself in front of lawmakers since news of its 2016 fake accounts scandal. Bank leadership will now have to respond to a new congressional report from House Democrats that alleges the company was lax in complying with regulator demands.
Henry Cobb, who died this week at the age of 93, was a master of the understated skyscraper. When Goldman Sachs wanted to build a new headquarters in 2005, he was a natural choice — this is a bank, after all, that doesn’t even display its name in the lobby of its headquarters, let alone on the exterior.
What they're saying: Paul Goldberger reviewed Cobb's design in the New Yorker in 2010, and he's worth quoting at length:
"The new headquarters is architecture as a well-tailored suit. From a distance, the building looks utterly unexceptional, but as you get closer your eye picks up signs of quality — the drape, as it were, and the stitching. Cobb’s façade of clear, colorless glass and bands of shiny steel is completely flat, and this two-dimensionality might have been dull were it not for the subtle shift of proportions in the quiet plaid pattern of the steel grid as it ascends. By the time you are close enough to touch this architectural garment, you can tell that a lot of money has been spent."