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It could be, but there's also reason to believe it will recover very quickly. In 2008, the economy 'woke up' and realized that it was based on a huge amount of

by jariel 7y ago

It could be, but there's also reason to believe it will recover very quickly. In 2008, the economy 'woke up' and realized that it was based on a huge amount of false data. Imagine if every home in America was not worth the stated value. That's a lot. If we can move past coronavirus and get most people back to work, most economic interests will believe there's no reason we can't get back to the 'good times' quickly. It will be a bull ride. Companies will want to expand rapidly and there will be common agreement about that. So yes, there will be some dominos to pick up and some crazy problems with government debt - but if China is able to 'make stuff' most people are able to travel etc. then I feel it will be a 'v-shaped' recovery. Much quicker than 2008. This all depends on if restaurants, hotels, airlines, factories are able to get back moving again.

koolba 7y ago
It won’t be that easy because of two issues. Demand is not going to bounce back. People will rightfully be apprehensive of increasing spending and will want to build up a personal cushion. Tons of office workers who do little more than keep each other busy will be laid off and not find meaningful new work. This will cascade through their personal economies (spending patterns, defaulting on mortgages, etc).
- jariel 7y ago
  So those are both good points, but: a) People were confident before, they will again. Business 'demand' will be back, and consumer appetite for travel, food will shoot back I think. b) "Tons of office workers who do little more than keep each other busy" basically you're implying that companies know they have terrible inefficiencies, and used the coronavirus to dump their 'bad staff' and effectively won't re-hire. I'm not so sure companies are very good at determining who's crap and who's not nor are they good at fixing their processes. They will start hiring, thinking they're hiring 'better' but really they're just hiring back the same bag of workers. Before the coronavirus, unemployment was crazy low. Historically. The Fed actually was going to raise rates but noticed people coming back into the economy as they had stopped looking for jobs previously. Companies were literally starting to train people again (!) they were so desperate. I think we're going to get back to it fairly quickly. My prediction is several months of funny money zany economy, during which time we edge back to work. The coronavirus will hang over everything for 18 months and still kill a lot of people and keep doctors buys, but the economy will start moving. In 2 years we are in full recovery, almost back to previous employment levels. Stocks are not back yet but who cares. There will be a long term reckoning with the sizeable debt and garbage on the Fed's balance sheet but that won't stop the underlying economy from moving. The thing I fear the most is a huge second wave, particularly in poorer countries. So far they have been spared.
- lonelappde 7y ago
  > People will rightfully be apprehensive of increasing spending and will want to build up a personal cushion. For the majority, that's never happened before a probably won't happen ever.

by jariel 7y ago

koolba 7y ago

It won’t be that easy because of two issues. Demand is not going to bounce back. People will rightfully be apprehensive of increasing spending and will want to build up a personal cushion. Tons of office workers who do little more than keep each other busy will be laid off and not find meaningful new work. This will cascade through their personal economies (spending patterns, defaulting on mortgages, etc).

jariel 7y ago
So those are both good points, but: a) People were confident before, they will again. Business 'demand' will be back, and consumer appetite for travel, food will shoot back I think. b) "Tons of office workers who do little more than keep each other busy" basically you're implying that companies know they have terrible inefficiencies, and used the coronavirus to dump their 'bad staff' and effectively won't re-hire. I'm not so sure companies are very good at determining who's crap and who's not nor are they good at fixing their processes. They will start hiring, thinking they're hiring 'better' but really they're just hiring back the same bag of workers. Before the coronavirus, unemployment was crazy low. Historically. The Fed actually was going to raise rates but noticed people coming back into the economy as they had stopped looking for jobs previously. Companies were literally starting to train people again (!) they were so desperate. I think we're going to get back to it fairly quickly. My prediction is several months of funny money zany economy, during which time we edge back to work. The coronavirus will hang over everything for 18 months and still kill a lot of people and keep doctors buys, but the economy will start moving. In 2 years we are in full recovery, almost back to previous employment levels. Stocks are not back yet but who cares. There will be a long term reckoning with the sizeable debt and garbage on the Fed's balance sheet but that won't stop the underlying economy from moving. The thing I fear the most is a huge second wave, particularly in poorer countries. So far they have been spared.
lonelappde 7y ago
> People will rightfully be apprehensive of increasing spending and will want to build up a personal cushion. For the majority, that's never happened before a probably won't happen ever.