Phase II: Full Stop.

7 minutes

If you have been out this week, you've seen what an economy at full stop looks like: no traffic, no crowds, people quiet. This is the first time that we've ever seen our economy brought to a halt like this.

In looking back at out past financial crisis, it has been the market which first lead everything lower. Think of the Crash of 29 or 87 or even 08, markets crash, then economy slowed as liquidity was drained out of the financial system. And remember, the fundamental purpose of the financial markets is to provide that liquidity to the economy in general.

So, up until now, the pattern we've seen is first a market crash. That's Phase I. Then after a lag, comes Phase II the slowing economy. Perhaps the most egregious was the Great Depression, when markets crashed in 1929, but then for years the economy languished in Depression.

That's not happening now.

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