[OutsiderFan]

Those driving up equity values are like fleas who don't yet realize the market dog is dead.

This is a fact. Main Street businesses have no money to spend.  There is this - insane - notion that we'll all be back to normal soon, so all these companies will be riding high again. What these folks don't realize is pre-pandemic economic activity is not returning for a long time.  

I've used very simple data to come to this conclusion:
- Open Table reservations were down 50% the week before any government shutdowns in March
- Surveys have shown 70% of people don't want to attend live sports events until there is a vaccine
- Other surveys have shown heavy support for stay at home orders
 
This is short piece is instructive:
https://www.cnbc.com/2020/05/06/market-i...roach.html

The issue is that with the exception of fast food joints, most restaurants are not public companies in the stock markets.  Ditto major sports teams.  Obviously, reductions in the above will affect suppliers and upmarket producers, but the companies that are going to be most affected by COVID-19, apart from the travel industry, are by and large not publicly traded.

BC

The downstream impacts still matter. Think about housing and ability to collect rent. Commercial real estate that has been way over built is getting crushed. Main Street businesses aren't spending money on advertising. This is where the online ad companies make most of their money. I still don't think most people understand how bad the situation is. Mick seems to have some insight, however!

Let's not pretend the economy was healthy before this pandemic.  It wasn't.  It was built on debt and a supply-oriented mentality that relies on demand always materializing. When nobody has any savings and lives hand to mouth (not just many individuals, but many small businesses as well), any disruption is catastrophic. Many business owners already have their individual finances completely dedicated to them. You can say banks can lend them money because interest rates are so low, but who wants to take on additional risk in such uncertain times, or if banks will lend anyway?

It's not healthy have an entire economy crash if it can't handle being put on pause for two months. If you can't survive for two months without income, you couldn't afford to be operating as you did. Those who can't are mostly pushed over the ledge, no longer able to sustain themselves or ramp up again. Most people have no idea how difficult it is to start a business and keep it going without significant investment that is very difficult to obtain.

[OutsiderFan]

Those driving up equity values are like fleas who don't yet realize the market dog is dead.

This is a fact. Main Street businesses have no money to spend.  There is this - insane - notion that we'll all be back to normal soon, so all these companies will be riding high again. What these folks don't realize is pre-pandemic economic activity is not returning for a long time.  

I've used very simple data to come to this conclusion:
- Open Table reservations were down 50% the week before any government shutdowns in March
- Surveys have shown 70% of people don't want to attend live sports events until there is a vaccine
- Other surveys have shown heavy support for stay at home orders
 
This is short piece is instructive:
https://www.cnbc.com/2020/05/06/market-i...roach.html

The issue is that with the exception of fast food joints, most restaurants are not public companies in the stock markets.  Ditto major sports teams.  Obviously, reductions in the above will affect suppliers and upmarket producers, but the companies that are going to be most affected by COVID-19, apart from the travel industry, are by and large not publicly traded.

BC

The downstream impacts still matter. Think about housing and ability to collect rent. Commercial real estate that has been way over built is getting crushed. Main Street businesses aren't spending money on advertising. This is where the online ad companies make most of their money. I still don't think most people understand how bad the situation is. Mick seems to have some insight, however!

Let's not pretend the economy was healthy before this pandemic.  It wasn't.  It was built on debt and a supply-oriented mentality that relies on demand always materializing. When nobody has any savings and lives hand to mouth (not just many individuals, but many small businesses as well), any disruption is catastrophic. Many business owners already have their individual finances completely dedicated to them. You can say banks can lend them money because interest rates are so low, but who wants to take on additional risk in such uncertain times, or if banks will lend anyway?

It's not healthy have an entire economy crash if it can't handle being put on pause for two months. If you can't survive for two months without income, you couldn't afford to be operating as you did. Those who can't are mostly pushed over the ledge, no longer able to sustain themselves or ramp up again. Most people have no idea how difficult it is to start a business and keep it going without significant investment that is very difficult to obtain.