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IMF Says Great Lockdown Recession Likely Worst Since Depression

bloomberg.com

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Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#11

Post by coldtea »

jordanpg wrote: post #10

On the other hand, new streams of revenue as well as increases in existing revenue streams are emerging as a result of the lockdowns. The question is, will these increases fully offset the permanent loss of existing revenues + the cascading costs of disruption due to things like job losses.

>On the other hand, new streams of revenue as well as increases in existing revenue streams are emerging as a result of the lockdowns.

For extremely fewer people...

>The question is, will these increases fully offset the permanent loss of existing revenues + the cascading costs of disruption due to things like job losses.

It wont even be close...

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#12

Post by eli »

OscarCunningham wrote: post #8

The important question is whether the recession due to the lockdown (which is at least useful for stopping the virus) will continue after the virus has passed and the lockdown is lifted.

Of course. Many businesses that have closed will not reopen.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#13

Post by coldtea »

anilshanbhag wrote: post #3

Stock market doesn't seem to agree with this conclusion.

Shame people can't have stocks without actual jobs and salaries to buy them in the first place, and even that after they first need to feed and shelter themselves...

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#15

Post by tyingq »

eli wrote: post #12
OscarCunningham wrote: post #8

The important question is whether the recession due to the lockdown (which is at least useful for stopping the virus) will continue after the virus has passed and the lockdown is lifted.

Of course. Many businesses that have closed will not reopen.

I'm curious about the effects of all the consolidation. The top 5 retail giants will, for example, absorb more market share.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#16

Post by quietbritishjim »

coldtea wrote: post #13
anilshanbhag wrote: post #3

Stock market doesn't seem to agree with this conclusion.

Shame people can't have stocks without actual jobs and salaries to buy them in the first place, and even that after they first need to feed and shelter themselves...

I don't think parent comment means "why don't all these poor people just sell a few of their shares, they'll be fine". They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline.

(I'm not saying that I think the stock market is a good indicator of future economic growth and actually even the parent comment didn't explicitly say that.)

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#17

Post by WJW »

fallingfrog wrote: post #14
baq wrote: post #9

Earlier quoted context omitted.

trillions of dollars injected into it may have that effect.

Gotta reinflate the bubble at any cost

It pays for pensions and old people vote a lot. So you can see why it might be a priority for politicians.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#18

Post by fallingfrog »

The economy is basically a big network of relationships; employee relationships, business relationships, etc. Unfortunately such relationships tend to break quickly and in a self reinforcing cascade but can only be rebuilt slowly as businesses find that there is enough profit margin and demand to bring new people in, one at a time. That’s why recessions happen quickly and recovery time is proportional to how many people lose their jobs. You look at unemployment data for the last 50 years and the pattern is very simple: a rapid increase in unemployment and a steady recovery. The higher the spike, the longer the recovery. That being the case I would guess that the recovery from this shock will take a decade or more.

https://www.whitehouse.gov/wp-content/uploads/2019/05/April-...

Edit: I can’t make new posts. Someone has suggested that people will just be re-hired; historically, that has never happened. Not saying it’s impossible but this would be the first time. You can’t put a broken egg back together; entropy doesn’t go in reverse. The old jobs don’t come back, new ones are created, that’s just the way it works.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#19

Post by coldtea »

quietbritishjim wrote: post #16
coldtea wrote: post #13

Earlier quoted context omitted.

Shame people can't have stocks without actual jobs and salaries to buy them in the first place, and even that after they first need to feed and shelter themselves...

I don't think parent comment means "why don't all these poor people just sell a few of their shares, they'll be fine". They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline. (I'm not saying that I think the stock market is a good indicator of future economic gro…

>They're saying that the stock market value reflects traders' view of the future economy based on current information and that it is not as low as it would be if those traders all agreed with the current headline.

I'd say the stock market value reflects traders' short term opportunistic view of what they can make in the stock market - especially with a huge stimulus package landing. So basically a bet on companies, not on working people income.

Whether millions will be added to the jobless and new poor, is not much of a concern for such a bet.

Re: IMF Says Great Lockdown Recession Likely Worst Since Depression

#20

Post by arbuge »

OscarCunningham wrote: post #8

The important question is whether the recession due to the lockdown (which is at least useful for stopping the virus) will continue after the virus has passed and the lockdown is lifted.

That is one of the questions.

The most important one though is how long the lockdowns will last.

The answer to your question actually depends on how long lockdowns last. The longer businesses are shut down, the harder it is to restart them.

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