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I'm not sure the economy is getting a hit as big as it looks, but it's rather on "pause". I think many of these workers are laid off so they can get unemployme

I'm not sure the economy is getting a hit as big as it looks, but it's rather on "pause". I think many of these workers are laid off so they can get unemployment benefits, and they'll be hired again by the same companies as soon as the quarantine ends - which should take a couple month if we look at what happened in China. Sure, some companies will die from losing all of their business during the quarantine, but the number of jobless claims is not representative of the workers who will still be out of a job after the quarantine.

01100011 7y ago
The million dollar question is, will this be a 'V shaped recovery', a.k.a. 'pause' or will it turn into something worse. I hear a lot about companies with cash flow problems which may not survive the hit. Is that true? Beats me. It seems credit is cheap right now. What about long term though? For many industries, it takes a while to spin things back up and see cash flow. Will the economic mitigation measures be enough to see those companies through? We may also be looking at permanent changes in behavior. Sure, there is a lot of pent up demand for getting out and socializing, but if people are being bled dry by meager stimulus checks, they're not going to rush to fill the restaurants and malls when this is over. Edit: Just saw this, an interview with El-Erian on liquidity issues, https://www.youtube.com/watch?v=MjzBKtVTdtQ https://www.youtube.com/watch?v=MjzBKtVTdtQ
- ta1234567890 7y ago
  Credit being cheap only works if you have a good plan and expectations that the business is going to survive. Most small businesses are not in that position (and even large businesses like Macy's, Cheesecake Factory and Subway). Shops that are not getting foot traffic now have no idea when they'll be able to reopen, getting a loan to pay their lease would probably be unpayable afterwards. Business owners also need to make a living, so they are looking into getting jobs or starting alternative businesses. Their original businesses are most likely not coming back. And there's no way the economy will fully reopen before at least a year. China is not a good comparison, because 1) the US did not follow the same approach as China in dealing with the virus, 2) China has been lying about their economy and number of cases and 3) even if China was fully open for business now, the biggest markets are not buying - Europe and the US are just beginning a huge recession, that in turn will hit China back and will affect the recovery of the world economy. A V shaped recovery is, in my opinion, a made up dream to keep people from panicking.
- jlokier 7y ago
  Credit is cheap right now if you can get it. But just like before, it's "subject to status". Which roughly means, if you really need it, the answer is no.
- ykevinator 7y ago
  It's a great point
greendave 7y ago
Unfortunately there is no evidence to suggest that the US will get out of this anywhere as quickly or efficiently as China. On the contrary, so far it appears US cases will peak much higher and later than in China, and a lack of resources at the state and local level will massively slow any subsequent recovery.
- nostromo 7y ago
  Nobody has any idea what is actually happening in China, and most of the numbers are more propagandistic than informative, so we should probably just stop speculating entirely. The best numbers I've seen for projecting US cases and deaths honestly seem to be pretty good: https://covid19.healthdata.org/projections https://covid19.healthdata.org/projections This projects less than 100k deaths in the US this year. Compare that to heart disease (largely preventable) at 650k a year. That'd also make it only about 5 times worse than a bad flu year. (Edit: thanks for the correction below; if correct, this would be only about 2 times worse than a bad flu year.)
  - StrangeDoctor 7y ago
    I also like this model but be careful with it. That’s just the first wave, and this assumes we adhere to strict social distancing in all states.
  - sundaeofshock 7y ago
    100,000 dead in three months is not “pretty good”. Honestly, I don’t understand the casualness that people seem to have around the number of deaths. “It’s not that bad” is such a callous take.
    - nostromo 7y ago
      Are you incapable of understanding relative terms? Compared to the millions of people dead in the US that many were projecting just a few days and weeks ago, this is indeed good -- in fact, very good, because it seems many fewer people will die.
wool_gather 7y ago
> they'll be hired again by the same companies as soon as the quarantine ends Hopefully, yes, although this turnaround has some unfortunate bureaucratic costs to both the employees and employers. I hope those small-medium business loans work for keeping a reasonable number of people on payrolls. While the administration of those loans has its own potential pitfalls, in some ways it seems like the better path than leaning on the unemployment insurance system.
anthonybsd 7y ago
>I think many of these workers are laid off so they can get unemployment benefits, and they'll be hired again by the same companies as soon as the quarantine end That is highly doubtful. Many companies can't survive even 2 months of inactivity and will fold. >which should take a couple month if we look at what happened in China. China is undergoing a second wave right now [1] due to unlocking quarantine too early. It's extremely likely that they will be undergoing a second lockdown. Anecdotally, speaking to a lot of my friends in NYC most everyone who is currently WFH (myself included) isn't planning on returning back to the offices until at least the end of the year. Realistically, I think we won't fully get rid of lockdowns until vaccine is available and 80% of the population is vaccinated. [1] https://www.bloomberg.com/news/articles/2020-04-02/chinese-county-back-under-lockdown-after-infection-re-emerges https://www.bloomberg.com/news/articles/2020-04-02/chinese-c...

01100011 7y ago

The million dollar question is, will this be a 'V shaped recovery', a.k.a. 'pause' or will it turn into something worse. I hear a lot about companies with cash flow problems which may not survive the hit. Is that true? Beats me. It seems credit is cheap right now. What about long term though? For many industries, it takes a while to spin things back up and see cash flow. Will the economic mitigation measures be enough to see those companies through? We may also be looking at permanent changes in behavior. Sure, there is a lot of pent up demand for getting out and socializing, but if people are being bled dry by meager stimulus checks, they're not going to rush to fill the restaurants and malls when this is over. Edit: Just saw this, an interview with El-Erian on liquidity issues, https://www.youtube.com/watch?v=MjzBKtVTdtQ https://www.youtube.com/watch?v=MjzBKtVTdtQ

ta1234567890 7y ago
Credit being cheap only works if you have a good plan and expectations that the business is going to survive. Most small businesses are not in that position (and even large businesses like Macy's, Cheesecake Factory and Subway). Shops that are not getting foot traffic now have no idea when they'll be able to reopen, getting a loan to pay their lease would probably be unpayable afterwards. Business owners also need to make a living, so they are looking into getting jobs or starting alternative businesses. Their original businesses are most likely not coming back. And there's no way the economy will fully reopen before at least a year. China is not a good comparison, because 1) the US did not follow the same approach as China in dealing with the virus, 2) China has been lying about their economy and number of cases and 3) even if China was fully open for business now, the biggest markets are not buying - Europe and the US are just beginning a huge recession, that in turn will hit China back and will affect the recovery of the world economy. A V shaped recovery is, in my opinion, a made up dream to keep people from panicking.
jlokier 7y ago
Credit is cheap right now if you can get it. But just like before, it's "subject to status". Which roughly means, if you really need it, the answer is no.
ykevinator 7y ago
It's a great point

greendave 7y ago

Unfortunately there is no evidence to suggest that the US will get out of this anywhere as quickly or efficiently as China. On the contrary, so far it appears US cases will peak much higher and later than in China, and a lack of resources at the state and local level will massively slow any subsequent recovery.

nostromo 7y ago
Nobody has any idea what is actually happening in China, and most of the numbers are more propagandistic than informative, so we should probably just stop speculating entirely. The best numbers I've seen for projecting US cases and deaths honestly seem to be pretty good: https://covid19.healthdata.org/projections https://covid19.healthdata.org/projections This projects less than 100k deaths in the US this year. Compare that to heart disease (largely preventable) at 650k a year. That'd also make it only about 5 times worse than a bad flu year. (Edit: thanks for the correction below; if correct, this would be only about 2 times worse than a bad flu year.)
- StrangeDoctor 7y ago
  I also like this model but be careful with it. That’s just the first wave, and this assumes we adhere to strict social distancing in all states.
- sundaeofshock 7y ago
  100,000 dead in three months is not “pretty good”. Honestly, I don’t understand the casualness that people seem to have around the number of deaths. “It’s not that bad” is such a callous take.
  - nostromo 7y ago
    Are you incapable of understanding relative terms? Compared to the millions of people dead in the US that many were projecting just a few days and weeks ago, this is indeed good -- in fact, very good, because it seems many fewer people will die.

wool_gather 7y ago

> they'll be hired again by the same companies as soon as the quarantine ends Hopefully, yes, although this turnaround has some unfortunate bureaucratic costs to both the employees and employers. I hope those small-medium business loans work for keeping a reasonable number of people on payrolls. While the administration of those loans has its own potential pitfalls, in some ways it seems like the better path than leaning on the unemployment insurance system.

anthonybsd 7y ago

>I think many of these workers are laid off so they can get unemployment benefits, and they'll be hired again by the same companies as soon as the quarantine end That is highly doubtful. Many companies can't survive even 2 months of inactivity and will fold. >which should take a couple month if we look at what happened in China. China is undergoing a second wave right now [1] due to unlocking quarantine too early. It's extremely likely that they will be undergoing a second lockdown. Anecdotally, speaking to a lot of my friends in NYC most everyone who is currently WFH (myself included) isn't planning on returning back to the offices until at least the end of the year. Realistically, I think we won't fully get rid of lockdowns until vaccine is available and 80% of the population is vaccinated. [1] https://www.bloomberg.com/news/articles/2020-04-02/chinese-county-back-under-lockdown-after-infection-re-emerges https://www.bloomberg.com/news/articles/2020-04-02/chinese-c...