04-06-2020, 06:51 PM
Don't quote me on this, but the typical recession lasts 6-9 months. We were long overdue, but I don't think that means anything with regard to how long or how bad this gets.
Because things got slammed shut, there is a lot of pent-up demand that should lead to a quick and healthy rebound. But beware the double dip! What happens in a recession is you trim the fat and then emerge healthier, and so the pessimist would point out we haven't been able to go through that process. "Pent-up demand" is also kind of an artificial concept when people don't have a paycheck coming in.
My thinking is we will mostly get back to work soon, but social distancing will continue. That's still going to affect a lot of businesses. In the most optimistic of scenarios, travel/hotel will still take well over a year to recover. Restaurants and bars operating at maybe 50% capacity, if at all? I don't believe you can have a recovery or healthy economy with one or more entire sectors massively struggling.
I certainly hope this isn't another depression. But I'm afraid it's likely to be worse and longer than the Great Recession. The economic fallout will probably kill more people than the virus - I really hope that's wrong, and because of positive developments and not a death spiral.
Think of this more like a "pause" and so there's nothing overtly good/bad building up, and there's no real change to underlying fundamentals. So when we do finally get back to business as usual, whatever that looks like, expect that a recession will still be on the horizon.
Because things got slammed shut, there is a lot of pent-up demand that should lead to a quick and healthy rebound. But beware the double dip! What happens in a recession is you trim the fat and then emerge healthier, and so the pessimist would point out we haven't been able to go through that process. "Pent-up demand" is also kind of an artificial concept when people don't have a paycheck coming in.
My thinking is we will mostly get back to work soon, but social distancing will continue. That's still going to affect a lot of businesses. In the most optimistic of scenarios, travel/hotel will still take well over a year to recover. Restaurants and bars operating at maybe 50% capacity, if at all? I don't believe you can have a recovery or healthy economy with one or more entire sectors massively struggling.
I certainly hope this isn't another depression. But I'm afraid it's likely to be worse and longer than the Great Recession. The economic fallout will probably kill more people than the virus - I really hope that's wrong, and because of positive developments and not a death spiral.
Think of this more like a "pause" and so there's nothing overtly good/bad building up, and there's no real change to underlying fundamentals. So when we do finally get back to business as usual, whatever that looks like, expect that a recession will still be on the horizon.
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