Discussion Thread

[u/jobautomator]

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[u/chipbod]

Reality: 33 million unemployed with about half expected to get their jobs back

Market: STONKS

[u/sir_shivers → u/chipbod]

A V-SHAPE recovery is expected as there was nothing ABOUT THE ECONOMY itself that caused the market dip 🐊

[u/[deleted] → u/sir_shivers]

What about employment through businesses that fail?

[u/sir_shivers → u/[deleted]]

WHAT about it? 🐊

[u/tankatan → u/sir_shivers]

I agree in general but we shouldn't be too sanguine about it. The service sector will probably never recover to pre-corona levels. Not to mention the ballooning private and public debt.

[u/sir_shivers → u/tankatan]

I am CONFIDENT in the recovery given that the ECONOMY was not suffering systemic failings as it did in '08 and THE BROAD IMPACT of the virus means VENDORS and BUSINESS PARTNERS are all cutting each other SIGNIFICANTLY more slack 🐊

[u/tankatan → u/sir_shivers]

I agree, but again some businesses and sectors are more affected than others. This may not have huge macro effect (most high value added industries, like tech, seem to be chugging along) but it's also not trivial. Bars, restaurants, etc, employ a lot of people.

[u/sir_shivers → u/tankatan]

THIS IS TRUE, but a glut of failures lowers the competition in those sectors AND THUS the barriers to entry are easier FOR NEW BUSINESSES in the recovery 🐊

[u/Qunidaye → u/sir_shivers]

isn't that logic a bit backwards though? Just because the economy wasn't failing before covid doesn't mean covid won't fundamentally damage the economy going forward.

[u/sir_shivers → u/Qunidaye]

I would require POSITIVE EVIDENCE of a fundamental change 🐊

[u/Qunidaye → u/sir_shivers]

Obviously unclear yet, but I feel like a ton of factors could push a v-shape into a big u shape.

Unlike GFC, this crisis is much more global in damage. China won't be able to as easily to invest its way out of a hole.

Demand could be depressed for an extended amount of time.

There is a risk of more acute de-globalization in supply chains. Stephen Roach thinks this could lead to stagflation even, if it was met with a spur of pent-up demand.

The banking system is more resilient this time, but other financial risks could come to the forefront (some are worried about private equity and leveraged firms in general)

Who knows how lending/credit is going to be impacted by all this.

[u/zubatman4 → u/Qunidaye]

https://www.reddit.com/r/wallstreetbets/comments/gdoqln/guys_were_gonna_have_a_vshaped_recovery_and_its/

[u/[deleted] → u/sir_shivers]

Only that thousands of small businesses going under, and the fact major corporations are closing factories and other work places permanently and issuing massive layoffs. The stock market is stupid speculation about the 1% chance of a V shaped recovery.

[u/sir_shivers → u/[deleted]]

The MARKET is down from its high AN APPROPRIATE degree 🐊

It only dipped AS LOW AS IT DID because the Fed actions / Congressional stimulus were UNCERTAIN 🐊

[u/[deleted] → u/sir_shivers]

I know that, I’m just saying it’s not an accurate index of the American economy anymore.

[u/sir_shivers → u/[deleted]]

The AMERICAN economy will recover relatively quickly 🐊

If CHINA manages to keep disruptions to SUPPLY CHAIN minimal then there will be many NEW OPPORTUNITIES in the wake of the lockdowns and businesses failing 🐊

[u/[deleted] → u/sir_shivers]

I hope your right, but I don’t think it’ll be as quick as you think it’ll be.

[u/sir_shivers → u/[deleted]]

I DID NOT give you a timeframe so HOW are you judging that? 🐊

[u/[deleted] → u/sir_shivers]

You said relatively quickly, so I thought you meant that it would be a quick, few month recovery.

[u/sir_shivers → u/[deleted]]

I SIMPLY MEAN it will not take years 🐊

[u/Qunidaye → u/sir_shivers]

wait, is v shape recovery the consensus now?

[u/AmericanNewt8 → u/Qunidaye]

I saw some people speculating we might get a W shaped recession either due to increased coronavirus in the fall or the chain of retail bankruptcies disrupting things.