Do you believe we’ve “crossed the Rubicon” where that means policymakers are increasingly inclined to view the world through the lens of Modern Monetary Theory even if they insist they’re doing no such thing? If the answer is “yes,” you’ll be forgiven. The superfluous middleman notwithstanding, central banks are engaged in debt monetization. That’s been true for a long time, of course. What’s new is that the “match” between government borrowing and central bank bond-buying became so glaring following the pandemic that the charade was difficult to obscure, even in countries where the public isn’t exactly famous for its capacity to grasp nuance (e.g., the US). The figure (below) is about as straightforward as it can be.
One the many marvels of 2020 was the US corporate bond market, where borrowers were able to access cheap money in record amounts despite (or because of, depending on how you want to conceptualize things) the worst economic downturn in a century.
When the lockdowns began in March, credit markets convulsed. Spreads ballooned wider, CDX exhibited multi-standard deviation moves, outflows accelerated, and popular ETFs looked to be on the brink of “breaking,” as big discounts to NAV suggested the underlying liquidity mismatch in retail credit products was finally being exposed as an untenable flaw (figure below).
Ultimately, the Fed stepped in on March 23, and then, just days later, unveiled a backstop for fallen angels and high yield ETFs.
In the eighth annual Disruptor 50 list, CNBC identifies private companies whose breakthroughs are influencing business and market competition at an accelerated pace. They are poised to emerge from the coronavirus pandemic with tech platforms that have the power to dominate. The start-ups making the 2020 Disruptor list are at the epicenter of a world changing in previously unimaginable ways, turning ideas in cybersecurity, education, health IT, logistics/delivery, fintech and agriculture into a new wave of billion-dollar businesses.
A majority of them, in fact, already are billion-dollar businesses: 36 disruptors this year are unicorns that have already reached or passed the $1 billion valuation mark. Maybe more important this year: 37 have hired new employees since the pandemic began, and 19 have pivoted their products or launched new ones to meet the challenges of the pandemic.
The 50 companies selected using the proprietary Disruptor 50 methodology have raised over $74 billion in venture capital, according to PitchBook, at an implied Disruptor 50 list market valuation of near-$277 billion. Technology is already a major part of our daily lives and the public markets, and that will only increase on the other side of Covid-19, from the future of food supply to health-care diagnostics and the way we shop, study, work and pay.