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The unemployment numbers are deceptive. >80% are furloughed and would have their jobs back as soon as lockdowns end and business picks back up.

netsharc 6y ago
But realistically business won't bounce back this year, will it. Big parties in packed bars? Even without any governmental restrictions, I think a lot of people will avoid these things; because they don't want to get sick. This will also affect e.g. numbers of Uber rides, as well as how much beer/food the bars/restaurants buy. Businesses connected to foreign markets will also be affected by lockdowns there; airbnb will still be in a world of pain, as well as travel-related businesses.
- TheBlight 6y ago
  Anecdotal evidence suggests maybe people are ready to get back to normal sooner than many might suspect? e.g. https://twitter.com/nick__puckett/status/1259541624389955584 https://twitter.com/nick__puckett/status/1259541624389955584
TheOtherHobbes 6y ago
They're partially deceptive at best. The economy wasn't exactly flying even before the virus. Consumer debt (nearly $14tn - around 2/3 of GDP) was stifling consumer demand. Corporate debt was around $10tn - half of GDP. When there's a major shock a lot of that debt will be written off, either be negotiation or by bankruptcy. So unless the Fed plans on making good on all of those debts there's going to be a big smoking hole where those obligations used to be, with corresponding losses to creditors. The Fed has no interest in Main St, and is perfectly happy to hand out free money to Wall St to keep the party going. But if the economy isn't operating normally, that money is going to turn into worthless paper because it can't be spent on the usual things the 1% spend money on. When that happens you get real inflation, because the face value of money becomes disconnected from real spending power. Even if everyone went back to work tomorrow, people will keep getting ill and dying and business won't be back to normal for at least six months - possibly twelve. If workers don't get generous government hand-outs to keep demand ticking over in the real economy, there are going to be mass bankruptcies, and the debt collapse cycle will have started.

netsharc 6y ago

But realistically business won't bounce back this year, will it. Big parties in packed bars? Even without any governmental restrictions, I think a lot of people will avoid these things; because they don't want to get sick. This will also affect e.g. numbers of Uber rides, as well as how much beer/food the bars/restaurants buy. Businesses connected to foreign markets will also be affected by lockdowns there; airbnb will still be in a world of pain, as well as travel-related businesses.

TheBlight 6y ago
Anecdotal evidence suggests maybe people are ready to get back to normal sooner than many might suspect? e.g. https://twitter.com/nick__puckett/status/1259541624389955584 https://twitter.com/nick__puckett/status/1259541624389955584

TheOtherHobbes 6y ago

They're partially deceptive at best. The economy wasn't exactly flying even before the virus. Consumer debt (nearly $14tn - around 2/3 of GDP) was stifling consumer demand. Corporate debt was around $10tn - half of GDP. When there's a major shock a lot of that debt will be written off, either be negotiation or by bankruptcy. So unless the Fed plans on making good on all of those debts there's going to be a big smoking hole where those obligations used to be, with corresponding losses to creditors. The Fed has no interest in Main St, and is perfectly happy to hand out free money to Wall St to keep the party going. But if the economy isn't operating normally, that money is going to turn into worthless paper because it can't be spent on the usual things the 1% spend money on. When that happens you get real inflation, because the face value of money becomes disconnected from real spending power. Even if everyone went back to work tomorrow, people will keep getting ill and dying and business won't be back to normal for at least six months - possibly twelve. If workers don't get generous government hand-outs to keep demand ticking over in the real economy, there are going to be mass bankruptcies, and the debt collapse cycle will have started.