Author Topic: Crystal ball predictions for how long impact of coronavirus on economy will last  (Read 6583 times)

Much Fishing to Do

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On some level, for our lifetime or more?

9-11 certainly changed how we do things today (I don't remember standing in security lines at large events before that, and I used to park in govt building garages I'm sure I cold never get into today without being an employee). 

And maybe in the end the impact will even start to trend positive?  Maybe those annoying security lines have prevented other disasters from occurring.  Maybe the TSA has provided a lot of good jobs.  Maybe the focus on people washing their hands and restaurants and retail stores continuously dissenfecting will take hold and save millions over time from the seasonal flu.

I'm not comparing the two other than just to say any big thing can have unforeseen/unexpected consequences for a long time.

CarolinaGirl

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I'm not sure how much I buy into the "it'll die down in summer" theory.  It *is* summer on half the Earth right now.  Well, Autumn starting next week.  But late summer is still plenty warm.  By the time the northern hemisphere is full on summer, it'll be full on winter in the southern hemisphere.

This!!  ^^^

Arrian

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I'm hoping that we've already hit the bottom.  I don't expect a V-shape recovery, but a slow climb with many more drops along the way.

I have a feeling "we ain't seen nothing yet." DJIA Futures were limit down within hours of the Fed rate cut.

runbikerun

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This is, I suspect, going to be a long and gruelling road.

A lot of people are going to die. For the people on the thread talking about the regular flu: Italy went into lockdown almost a week ago, and the daily death toll from coronavirus has already overtaken the daily death toll from the flu despite those measures, from a standing start. Coronavirus is more easily transmissible, and considerably more lethal. Countries that went into lockdown early and hard will minimise deaths; countries that have been slow to do so will suffer the same fate as Lombardy, as the virus sweeps through a desperately overloaded hospital system and the mortality rate climbs to almost 10%. The UK is projected to lose somewhere between 0.5% and 1% of its population; I don't think Italy even has a clear answer for that question.

A lot of small businesses are going to be wiped out; they simply don't have enough of a cash buffer for the owners to survive two or three months of little to no trading. And make no mistake; it's going to be a while before things get back to anything resembling normal. Chinese cases are starting to reduce, but that's happening while the lockdown is still in effect; we don't know yet how long it will take for the threat to recede enough for us to restart normal daily life.

A lot of medium-to-large businesses are going to be wiped out; they issued bonds to fuel growth which is now dead in the water. There are going to be a lot of firms becoming insolvent as those bonds fall due and it gets progressively harder to find buyers for new bonds in a crashing market.

A lot of tech companies will be in serious trouble; they built business models on the back of a growing economy and an exit plan that involved either an IPO or a sale to a larger buyer. Huge numbers of businesses have no roadmap to profitability, and while they might have sold out eventually to a company seeking a specific acquisition, that kind of purchase is likely to become a lot rarer. Venture capitalists too will be getting very leery of pumping more money into these firms.

The post-lockdown recovery, too, will be built on a very different set of foundations to what we're used to. Just-in-time production, reliance on Chinese manufacturing, and long supply chains will be viewed with severe suspicion for a long time. One potential engine of recovery, I suspect, could end up being a gigantic fiscal stimulus from governments around the world; the pandemic may put a permanent end to the idea that small government is a good thing in and of itself.

Linea_Norway

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This is, I suspect, going to be a long and gruelling road.

A lot of people are going to die. For the people on the thread talking about the regular flu: Italy went into lockdown almost a week ago, and the daily death toll from coronavirus has already overtaken the daily death toll from the flu despite those measures, from a standing start. Coronavirus is more easily transmissible, and considerably more lethal. Countries that went into lockdown early and hard will minimise deaths; countries that have been slow to do so will suffer the same fate as Lombardy, as the virus sweeps through a desperately overloaded hospital system and the mortality rate climbs to almost 10%. The UK is projected to lose somewhere between 0.5% and 1% of its population; I don't think Italy even has a clear answer for that question.

A lot of small businesses are going to be wiped out; they simply don't have enough of a cash buffer for the owners to survive two or three months of little to no trading. And make no mistake; it's going to be a while before things get back to anything resembling normal. Chinese cases are starting to reduce, but that's happening while the lockdown is still in effect; we don't know yet how long it will take for the threat to recede enough for us to restart normal daily life.

A lot of medium-to-large businesses are going to be wiped out; they issued bonds to fuel growth which is now dead in the water. There are going to be a lot of firms becoming insolvent as those bonds fall due and it gets progressively harder to find buyers for new bonds in a crashing market.

A lot of tech companies will be in serious trouble; they built business models on the back of a growing economy and an exit plan that involved either an IPO or a sale to a larger buyer. Huge numbers of businesses have no roadmap to profitability, and while they might have sold out eventually to a company seeking a specific acquisition, that kind of purchase is likely to become a lot rarer. Venture capitalists too will be getting very leery of pumping more money into these firms.

The post-lockdown recovery, too, will be built on a very different set of foundations to what we're used to. Just-in-time production, reliance on Chinese manufacturing, and long supply chains will be viewed with severe suspicion for a long time. One potential engine of recovery, I suspect, could end up being a gigantic fiscal stimulus from governments around the world; the pandemic may put a permanent end to the idea that small government is a good thing in and of itself.

I agree with your future outline in that this might be a very long event, until we have a vaccine available for all. If there is hope again, the stock market might climb back.

DH was thinking yesterday of selling his stocks, cashing the profit he still has. It fell from 20% profit to 6%, earned in three years. I had just heard a podcast that says most people sell stocks during a downfall for that readon, and forget to buy back before it goes up. The buy back when the stocks are expensive again. The podcast says that if you plan to have stocks for 10 years at least, then don't sell during a big crunsh.

We will in July receive all the cash for our house and hope that the stock market then is still low, what I expect. And the it won't plumet further by then. It was good that we had some cash left when we FIREd at the beginning of this year. And stupid that I didn't listen to my own hunch and sold the stocks when they were really high at the end of February. At least, we sold just in time. Now everyone stopped going to home viewings.