11 ms·

Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Have underlying fundamentals changed longer term? South Korea

by Reedx 7y ago

Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Have underlying fundamentals changed longer term? South Korea, China, Singapore are encouraging and seeing a return back to (almost) normal life. Granted, we're not dealing with this nearly as effectively and there may be a 2nd wave to come. But at this point they seem to make the case for optimism.

seanmcdirmid 7y ago
A lot of ventures that were hanging on by threads will be ruined by this, so the pandemic is likely to clear out a lot of the weaker businesses as any good recession or crash is apt to. It will take a while for the marker to grow around that loss (though good in the long term, there is pain in the short). It could also trigger a housing correction, which has ripple effects on the construction industry, and those people are no longer eating at restaurants, and so on. Think of busts being inevitable anyways, and a crisis is merely the way into one.
- adamc 7y ago
  "apt to" -- presented in the hopes it is useful.
  - alasdair_ 7y ago
    >"apt to" -- presented in the hopes it is useful. "apt get" -- automatically update your Debian machine.
- jdhn 7y ago
  >It could also trigger a housing correction What would a housing correction look like? Demand still outstrip supply in hot markets, so the worst thing that'll happen is that the housing prices will have a slight dip, and that's it. Also, with the Fed lowering interest rates to zero and possibly lower, that'll continue to inflate the value of assets such as houses.
  - harambae 7y ago
    If it gets bad enough (and I don't want to seem insensitive here) a bunch of elderly people die and their houses are on the market.
  - seanmcdirmid 7y ago
    The same was true up until the 2008 crash. If it happens, it will be a cliff, not a gently sloping down fall.
anonuser123456 7y ago
There is a very large amount of corp debt on shaky ground. A lot of people are _very_ concerned that this debt is going to blow up in a very similar way to MBS in 2008.
cshenoy 7y ago
Not OP but I don't think we'll bounce back as quickly due to the lack of urgency coming from the Federal government. I suspect we'll fall into a vicious cycle of business layoffs, corresponding dip in consumer spending, reduction in r&d/business investment as we are now and after cases taper off which now seems even further away than what it could've been had the CDC/FDA/WH been on top of this earlier. Some countries took the threat seriously and immediately took care of things.
- gotoeleven 7y ago
  What lack of urgency are you talking about?
  - vngzs 7y ago
    The US lags just about every developed country on testing for Covid-19 disease.[0] ‘It’s Just Everywhere Already’: How Delays in Testing Set Back the U.S. Coronavirus Response[1] [0]: https://www.vox.com/science-and-health/2020/3/12/21175034/coronavirus-covid-19-testing-usa https://www.vox.com/science-and-health/2020/3/12/21175034/co... [1]: https://www.nytimes.com/2020/03/10/us/coronavirus-testing-delays.html https://www.nytimes.com/2020/03/10/us/coronavirus-testing-de...
    - buboard 7y ago
      as a non-US person, the US can do much more than testing, (which is what most other countries can do). A cure, or a quick vaccine is what matters, testing is just a measure of how bad you are performing. Containment measures are necessary, and they work, but eventually we ll all get the virus, in a vaccine or not
    - makomk 7y ago
      The person described in that Vox article - upper respiratory symptoms, no direct contact with someone with confirmed Covid-19 - wouldn't meet the criteria for testing anywhere that I know of off-hand. Certainly not in the UK or Australia, probably not in South Korea (though they allow people who don't qualify to buy testing out of pocket), not in a whole bunch of EU states, and Italy has much bigger things to worry about. Maybe in the more urban parts of China?
joe_the_user 7y ago
South Korea and China itself are the best models for countries that have (sort of) bounced back. And they leveraged a variety of mass mobilizations the US hasn't started with. So basically we're in for a LOT of pain in dealing this. Exogenous shocks usually don't provoke recessions but is going to be like a planet-wide tidal wave. Things are going to be very different at the end. Huge, efficient enterprises may well end up even stronger but would the market for a given medium sized enterprise even make sense? We don't know.
- dnautics 7y ago
  The assumption is that mass mobilization is 1) effective and 2) necessary. We simply don't have enough data to know one way or another. Not saying self-isolating isn't prudent, but you can't really make reliable long term economic forecasts assuming any particular disease profile. Full disclosure: I've been short term short the market for the last three weeks.
  - aguyfromnb 7y ago
    >Full disclosure: I've been short term short the market for the last three weeks You hit the exact peak of the market before deciding to short? Wow. Can you share with us your prognostications on just how "short-term" you expect this to be, or will you update us with hindsight on that, too? "I've been short the market" after a 30% draw-down is the new version of all prisoners claiming they're innocent. It's never "I started to get defensive 6 months ago" or "I went to half cash expecting a crash near-term". Top tick and went short. Every forum, every time. This is where /r/wallstreetbets has it right: if you aren't going to post your trade in advance or verify it, don't talk about it.
    - alasdair_ 7y ago
      Or, in my case, I was short (and on margin!) Boeing just before the market crashed. I just don't tell people that I chickened out and covered on the first rally... (or that I then put it all into GLD...)
svara 7y ago
Singapore is an interesting one. Their outbreak looks really benign, but actually they are on an exponential trajectory as well. The rate is just much lower, something like 7% daily. It doesn't register compared to the countries with fast growth, but if it stays like that, they will reach high numbers too. It translates to 10x per month. See https://studylib.net/coronavirus-growth https://studylib.net/coronavirus-growth
- tomrod 7y ago
  The have flattened the curve
- 9nGQluzmnq3M 7y ago
  The majority of Singapore's cases for the past week plus have been imported, not local transmission. They already imposed mandatory 14 day quarantines on most visitors a few days ago, plus Malaysia just unilaterally sealed the only land border, so those will go down soon.
radiator 7y ago
Longer term, nothing of the underlying fundamentals has changed. This is why the collapse is inevitable.
JohnJamesRambo 7y ago
A crash of this magnitude was overdue without coronavirus. The market can't just go up and up forever, that's not how markets work. Super long 11-year irrational raging bull market with blowoff top had to unwind and still does after coronavirus is a memory. The underlying financial factors will still be the same and probably even worse because we (mostly the president) keep trying to prop up the stock market like the guys in Weekend at Bernie's. Best to just tell the truth that Bernie is a dead guy, so the adults can put the pieces back together to the economy.
samsonradu 7y ago
I wouldn't underestimate the effectiveness and ability to respond of highly developed (and small) states like Singapore, Hong Kong or Taiwan. They have very good control of their borders and the (medical) resources to act in case of trouble. Not only that but I think they have learned a few lessons after the 2002-2004 SARS outbreak. Anecdotal, but while in Hong Kong (2014) there were a few things that stood out: - they had thermal screening for ALL passengers - while walking towards customs an agent asked me to take my hat off and pointed to the thermal cameras. In contrast, at Bucharest's airport they were set up 3 weeks ago. As of 2019, there were 1.2M Romanian citizens living in Italy, about 600k in the northern part. - banners against spitting in the trash bin - coming with a big fine. More generally speaking, a general state of cleanliness which can't be found in many EU capitals. - no toilets in the subway - might be sources of contamination. And when you finally found a public toilet, they were as clean as they can be. I think there are better odds of finding a cure fast than for Europe to contain this. Note, the evening before the Milan area lockdown people were rushing to the train stations - Schenghen area is borderless.
- neuronic 7y ago
  Western cities are extremely disgusting and dirty compared to Singapore, Tokyo or Taipeh. The moment I step out of a train arriving at central station it smells like piss and a bunch of drunk homeless people perform a spitting contest.
  - dls2016 7y ago
    True as this may be, it’s not the homeless people spreading this thing across national boarders. Here in Pennsylvania the initial confirmed cases all appeared in the five or six wealthiest counties first.
abraxas 7y ago
This is probably a wave of margin calls forcing a lot of funds to liquidate. This contraction will reduce the money supply and scare this generation of investors.
cm2187 7y ago
Looking at Europe (but the US seems to be taking the same direction). All restaurants, shops, entertainment, tourist industry are closing, and will remain closed for several months. Large businesses will fire people (see airlines now), small businesses will go bust. If these health policies undershoot their targets in term of number of people infected, then we may have to deal with this virus again next fall/winter, so add a few more months of similar pain. I just don't see how this will not have lasting effects. Even in Dec 2008, at the very worst of the crisis, you had deep discounts in shops, but at least you could consume. But here all malls will be basically closed.
- sovnade 7y ago
  There's not even any indication that this is seasonal. It's spreading pretty well in Australia/India which are extremely hot right now. It will probably continue to spread in Europe/NA all throughout summer. Our state and many others have closed schools, made all restaurants take-out/delivery only, barred gatherings of > 10 people, etc. I don't know how the small businesses are going to survive more than a couple weeks of this.
dev-ns8 7y ago
I look at it this way. Your essentially buying a companies future earnings by buying their stock. For some time here, corporate earnings are going to take a hit. B2C probably the hardest, but B2B will also feel the effects, ripple effect if you will. The strain these quarantines are putting on Small business owners will also ripple into the larger corporate companies that the market is composed off because these SBO are the consumers too. I don't have a full understanding of the Repo market, but I do get it at a moderate level. I understand that it acts as the "lube" to our financial system and It's obvious it's not functioning correctly. What effect will this happen on the growing corporate debt that's out there? What effect will the lower revenues have on the ability for business' to pay back the debt and interest? These are questions I have, but don't necessarily have factual answers for. However I don't feel good about the answers to them and for that reason do think were in for a recession.
- raincom 7y ago
  repo markets don't help corporate debt at all, as long as the federal reserve don't accept the commercial paper (corporate debt, in other words). The moment the fed accepts commercial paper as collateral, yes, it does. However, this will lead to a bigger problem. If S&P drops ratings for many companies, many banks will end up holding bags; in which case, the fed will come to rescue these banks.
  - dev-ns8 7y ago
    > "repo markets don't help corporate debt at all" I'm not sure I agree with this statement. The repo market may not help or hinder corp debt directly, but I think it very much so effects corporate debt. Corporations presumably get their loans from banks. What facilitates banks to make these loans? The Repo market. What happens if the repo market collapses / shrinks / endures instability? Banks most likely, would not be able to make as many loans and the rate for future loans would increase due to lower supply and higher demand. On top of future loans, this could have a negative impact to current outstanding loans held by corps. I'm not 100% sure the terms of corporate loans, but if they have variable rate loans with banks, this shrinking of loan supply coupled with increased demand for liquidity would surely hurt some of these corporations.
endorphone 7y ago
There is going to be a wave of airline bankruptcies. There is going to be a wave of retail bankruptcies. Add in cruise lines, tourism, restaurants, etc. Now add the secondary effects and most indicators are flashing red. A significant cause for the massive drop today is that indicators out of China are that the disruption is much, much larger than anyone accounted for. A few days ago there was a guy talking about refinancing his house and putting 20% of the value into the market[1]. He asked whether it was a bad time. I said it was a bad time -- not that it was going up or down but that there is enormous uncertainty and a long way to drop -- and got moderated down to the gray. The non-gray comments were all that this is a great time. Buy 'em on sale is a claim that has been foolishly made again and again. No, it isn't a great time. Anyone deluding themselves that there is a market "bottom" that it is bouncing off of has been proven wrong repeatedly. Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend. They have essentially nothing left. And here we are, staring into the abyss. Things will improve, and at one point we'll laugh about this and consider it all an overreaction, etc. But there's a lot of downside between now and then. And if history is any example, once we bottom out we'll hang around for a while. [1] Oh add that we have historic debt levels, bubbled house prices in some areas, and the simple idea of financing the current, elevated value of a house seems risky.
- pbourke 7y ago
  > Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend. One minor point the Federal Reserve has pulled all of their levers to keep credit moving. The Federal Government has yet to do any fiscal stimulus, which is what's really needed here. If the US government decided to go into $2T+ of debt over the next few weeks and directed that spending at individuals instead of industry bailouts, then I predict the economic consequences of this event would be much shallower than it would be otherwise. They can borrow this money at damn near zero interest right now. > And here we are, staring into the abyss. Just in the Seattle area, we've had 10's of restaurant closures announced. The Tom Douglas restaurant group has laid off a good portion of its 800 employees. So the Seattle area alone has probably lost >2,000 jobs already. That's probably seriously on the low side. I truly think we're looking at a staggering number of unemployed in this country within a few months. Like, great depression staggering. The GFC was terrible, but every neighbourhood service business did not suddenly have 75% of their business disappear or were forced to close. This is much, much different. These jobs will go away in a flood and come back in a trickle. Without a vaccine, we will need to hold some level of countermeasures for up to 18 months - nobody will go out to eat, etc.
dntbnmpls 7y ago
> Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Of course. Do you think people will stop working, going out, watching movies, buying cars, etc forever? Every market decline, people think the world is going to end. But the world just keeps chugging along. During the 2008 financial crisis, people were predicting the end of the world, bank runs, financial collapse, etc. The most recent ebola scare, people were talking about pandemic, every hospital being at capacity, death rate, triage and the end of the world. In a few years, we'll do this all over again. The markets will be reinflated, the markets will decline, we'll have another crisis, the news will feed panic for ad money and people will go out of their minds. Then things will return to normal.

by Reedx 7y ago

seanmcdirmid 7y ago

A lot of ventures that were hanging on by threads will be ruined by this, so the pandemic is likely to clear out a lot of the weaker businesses as any good recession or crash is apt to. It will take a while for the marker to grow around that loss (though good in the long term, there is pain in the short). It could also trigger a housing correction, which has ripple effects on the construction industry, and those people are no longer eating at restaurants, and so on. Think of busts being inevitable anyways, and a crisis is merely the way into one.

adamc 7y ago
"apt to" -- presented in the hopes it is useful.
- alasdair_ 7y ago
  >"apt to" -- presented in the hopes it is useful. "apt get" -- automatically update your Debian machine.
jdhn 7y ago
>It could also trigger a housing correction What would a housing correction look like? Demand still outstrip supply in hot markets, so the worst thing that'll happen is that the housing prices will have a slight dip, and that's it. Also, with the Fed lowering interest rates to zero and possibly lower, that'll continue to inflate the value of assets such as houses.
- harambae 7y ago
  If it gets bad enough (and I don't want to seem insensitive here) a bunch of elderly people die and their houses are on the market.
- seanmcdirmid 7y ago
  The same was true up until the 2008 crash. If it happens, it will be a cliff, not a gently sloping down fall.

anonuser123456 7y ago

There is a very large amount of corp debt on shaky ground. A lot of people are _very_ concerned that this debt is going to blow up in a very similar way to MBS in 2008.

cshenoy 7y ago

Not OP but I don't think we'll bounce back as quickly due to the lack of urgency coming from the Federal government. I suspect we'll fall into a vicious cycle of business layoffs, corresponding dip in consumer spending, reduction in r&d/business investment as we are now and after cases taper off which now seems even further away than what it could've been had the CDC/FDA/WH been on top of this earlier. Some countries took the threat seriously and immediately took care of things.

gotoeleven 7y ago
What lack of urgency are you talking about?
- vngzs 7y ago
  The US lags just about every developed country on testing for Covid-19 disease.[0] ‘It’s Just Everywhere Already’: How Delays in Testing Set Back the U.S. Coronavirus Response[1] [0]: https://www.vox.com/science-and-health/2020/3/12/21175034/coronavirus-covid-19-testing-usa https://www.vox.com/science-and-health/2020/3/12/21175034/co... [1]: https://www.nytimes.com/2020/03/10/us/coronavirus-testing-delays.html https://www.nytimes.com/2020/03/10/us/coronavirus-testing-de...
  - buboard 7y ago
    as a non-US person, the US can do much more than testing, (which is what most other countries can do). A cure, or a quick vaccine is what matters, testing is just a measure of how bad you are performing. Containment measures are necessary, and they work, but eventually we ll all get the virus, in a vaccine or not
  - makomk 7y ago
    The person described in that Vox article - upper respiratory symptoms, no direct contact with someone with confirmed Covid-19 - wouldn't meet the criteria for testing anywhere that I know of off-hand. Certainly not in the UK or Australia, probably not in South Korea (though they allow people who don't qualify to buy testing out of pocket), not in a whole bunch of EU states, and Italy has much bigger things to worry about. Maybe in the more urban parts of China?

joe_the_user 7y ago

South Korea and China itself are the best models for countries that have (sort of) bounced back. And they leveraged a variety of mass mobilizations the US hasn't started with. So basically we're in for a LOT of pain in dealing this. Exogenous shocks usually don't provoke recessions but is going to be like a planet-wide tidal wave. Things are going to be very different at the end. Huge, efficient enterprises may well end up even stronger but would the market for a given medium sized enterprise even make sense? We don't know.

dnautics 7y ago
The assumption is that mass mobilization is 1) effective and 2) necessary. We simply don't have enough data to know one way or another. Not saying self-isolating isn't prudent, but you can't really make reliable long term economic forecasts assuming any particular disease profile. Full disclosure: I've been short term short the market for the last three weeks.
- aguyfromnb 7y ago
  >Full disclosure: I've been short term short the market for the last three weeks You hit the exact peak of the market before deciding to short? Wow. Can you share with us your prognostications on just how "short-term" you expect this to be, or will you update us with hindsight on that, too? "I've been short the market" after a 30% draw-down is the new version of all prisoners claiming they're innocent. It's never "I started to get defensive 6 months ago" or "I went to half cash expecting a crash near-term". Top tick and went short. Every forum, every time. This is where /r/wallstreetbets has it right: if you aren't going to post your trade in advance or verify it, don't talk about it.
  - alasdair_ 7y ago
    Or, in my case, I was short (and on margin!) Boeing just before the market crashed. I just don't tell people that I chickened out and covered on the first rally... (or that I then put it all into GLD...)

svara 7y ago

Singapore is an interesting one. Their outbreak looks really benign, but actually they are on an exponential trajectory as well. The rate is just much lower, something like 7% daily. It doesn't register compared to the countries with fast growth, but if it stays like that, they will reach high numbers too. It translates to 10x per month. See https://studylib.net/coronavirus-growth https://studylib.net/coronavirus-growth

tomrod 7y ago
The have flattened the curve
9nGQluzmnq3M 7y ago
The majority of Singapore's cases for the past week plus have been imported, not local transmission. They already imposed mandatory 14 day quarantines on most visitors a few days ago, plus Malaysia just unilaterally sealed the only land border, so those will go down soon.

radiator 7y ago

Longer term, nothing of the underlying fundamentals has changed. This is why the collapse is inevitable.

JohnJamesRambo 7y ago

A crash of this magnitude was overdue without coronavirus. The market can't just go up and up forever, that's not how markets work. Super long 11-year irrational raging bull market with blowoff top had to unwind and still does after coronavirus is a memory. The underlying financial factors will still be the same and probably even worse because we (mostly the president) keep trying to prop up the stock market like the guys in Weekend at Bernie's. Best to just tell the truth that Bernie is a dead guy, so the adults can put the pieces back together to the economy.

samsonradu 7y ago

I wouldn't underestimate the effectiveness and ability to respond of highly developed (and small) states like Singapore, Hong Kong or Taiwan. They have very good control of their borders and the (medical) resources to act in case of trouble. Not only that but I think they have learned a few lessons after the 2002-2004 SARS outbreak. Anecdotal, but while in Hong Kong (2014) there were a few things that stood out: - they had thermal screening for ALL passengers - while walking towards customs an agent asked me to take my hat off and pointed to the thermal cameras. In contrast, at Bucharest's airport they were set up 3 weeks ago. As of 2019, there were 1.2M Romanian citizens living in Italy, about 600k in the northern part. - banners against spitting in the trash bin - coming with a big fine. More generally speaking, a general state of cleanliness which can't be found in many EU capitals. - no toilets in the subway - might be sources of contamination. And when you finally found a public toilet, they were as clean as they can be. I think there are better odds of finding a cure fast than for Europe to contain this. Note, the evening before the Milan area lockdown people were rushing to the train stations - Schenghen area is borderless.

neuronic 7y ago
Western cities are extremely disgusting and dirty compared to Singapore, Tokyo or Taipeh. The moment I step out of a train arriving at central station it smells like piss and a bunch of drunk homeless people perform a spitting contest.
- dls2016 7y ago
  True as this may be, it’s not the homeless people spreading this thing across national boarders. Here in Pennsylvania the initial confirmed cases all appeared in the five or six wealthiest counties first.

abraxas 7y ago

This is probably a wave of margin calls forcing a lot of funds to liquidate. This contraction will reduce the money supply and scare this generation of investors.

cm2187 7y ago

Looking at Europe (but the US seems to be taking the same direction). All restaurants, shops, entertainment, tourist industry are closing, and will remain closed for several months. Large businesses will fire people (see airlines now), small businesses will go bust. If these health policies undershoot their targets in term of number of people infected, then we may have to deal with this virus again next fall/winter, so add a few more months of similar pain. I just don't see how this will not have lasting effects. Even in Dec 2008, at the very worst of the crisis, you had deep discounts in shops, but at least you could consume. But here all malls will be basically closed.

sovnade 7y ago
There's not even any indication that this is seasonal. It's spreading pretty well in Australia/India which are extremely hot right now. It will probably continue to spread in Europe/NA all throughout summer. Our state and many others have closed schools, made all restaurants take-out/delivery only, barred gatherings of > 10 people, etc. I don't know how the small businesses are going to survive more than a couple weeks of this.

dev-ns8 7y ago

I look at it this way. Your essentially buying a companies future earnings by buying their stock. For some time here, corporate earnings are going to take a hit. B2C probably the hardest, but B2B will also feel the effects, ripple effect if you will. The strain these quarantines are putting on Small business owners will also ripple into the larger corporate companies that the market is composed off because these SBO are the consumers too. I don't have a full understanding of the Repo market, but I do get it at a moderate level. I understand that it acts as the "lube" to our financial system and It's obvious it's not functioning correctly. What effect will this happen on the growing corporate debt that's out there? What effect will the lower revenues have on the ability for business' to pay back the debt and interest? These are questions I have, but don't necessarily have factual answers for. However I don't feel good about the answers to them and for that reason do think were in for a recession.

raincom 7y ago
repo markets don't help corporate debt at all, as long as the federal reserve don't accept the commercial paper (corporate debt, in other words). The moment the fed accepts commercial paper as collateral, yes, it does. However, this will lead to a bigger problem. If S&P drops ratings for many companies, many banks will end up holding bags; in which case, the fed will come to rescue these banks.
- dev-ns8 7y ago
  > "repo markets don't help corporate debt at all" I'm not sure I agree with this statement. The repo market may not help or hinder corp debt directly, but I think it very much so effects corporate debt. Corporations presumably get their loans from banks. What facilitates banks to make these loans? The Repo market. What happens if the repo market collapses / shrinks / endures instability? Banks most likely, would not be able to make as many loans and the rate for future loans would increase due to lower supply and higher demand. On top of future loans, this could have a negative impact to current outstanding loans held by corps. I'm not 100% sure the terms of corporate loans, but if they have variable rate loans with banks, this shrinking of loan supply coupled with increased demand for liquidity would surely hurt some of these corporations.

endorphone 7y ago

There is going to be a wave of airline bankruptcies. There is going to be a wave of retail bankruptcies. Add in cruise lines, tourism, restaurants, etc. Now add the secondary effects and most indicators are flashing red. A significant cause for the massive drop today is that indicators out of China are that the disruption is much, much larger than anyone accounted for. A few days ago there was a guy talking about refinancing his house and putting 20% of the value into the market[1]. He asked whether it was a bad time. I said it was a bad time -- not that it was going up or down but that there is enormous uncertainty and a long way to drop -- and got moderated down to the gray. The non-gray comments were all that this is a great time. Buy 'em on sale is a claim that has been foolishly made again and again. No, it isn't a great time. Anyone deluding themselves that there is a market "bottom" that it is bouncing off of has been proven wrong repeatedly. Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend. They have essentially nothing left. And here we are, staring into the abyss. Things will improve, and at one point we'll laugh about this and consider it all an overreaction, etc. But there's a lot of downside between now and then. And if history is any example, once we bottom out we'll hang around for a while. [1] Oh add that we have historic debt levels, bubbled house prices in some areas, and the simple idea of financing the current, elevated value of a house seems risky.

pbourke 7y ago
> Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend. One minor point the Federal Reserve has pulled all of their levers to keep credit moving. The Federal Government has yet to do any fiscal stimulus, which is what's really needed here. If the US government decided to go into $2T+ of debt over the next few weeks and directed that spending at individuals instead of industry bailouts, then I predict the economic consequences of this event would be much shallower than it would be otherwise. They can borrow this money at damn near zero interest right now. > And here we are, staring into the abyss. Just in the Seattle area, we've had 10's of restaurant closures announced. The Tom Douglas restaurant group has laid off a good portion of its 800 employees. So the Seattle area alone has probably lost >2,000 jobs already. That's probably seriously on the low side. I truly think we're looking at a staggering number of unemployed in this country within a few months. Like, great depression staggering. The GFC was terrible, but every neighbourhood service business did not suddenly have 75% of their business disappear or were forced to close. This is much, much different. These jobs will go away in a flood and come back in a trickle. Without a vaccine, we will need to hold some level of countermeasures for up to 18 months - nobody will go out to eat, etc.

dntbnmpls 7y ago

> Maybe, but why don't you think the markets will bounce back once we're on the other side of this? Of course. Do you think people will stop working, going out, watching movies, buying cars, etc forever? Every market decline, people think the world is going to end. But the world just keeps chugging along. During the 2008 financial crisis, people were predicting the end of the world, bank runs, financial collapse, etc. The most recent ebola scare, people were talking about pandemic, every hospital being at capacity, death rate, triage and the end of the world. In a few years, we'll do this all over again. The markets will be reinflated, the markets will decline, we'll have another crisis, the news will feed panic for ad money and people will go out of their minds. Then things will return to normal.