[Mick]

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

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.

BC's right, re: public companies. Separately, and with respect to the economic crash, we have to realize the difference between a slowdown and a dead stop. We haven't had an economic dead stop (or close to it) before, America has never had to do so. Think of it this way. If an aircraft carrier is moving at 24 knots, and has to slow to 19 knots, it takes x energy to return to 24 knots. It takes a vast multiple of x to return to 24 knots from a dead stop, and I think most Americans don't understand that's the nature of returning the economy to normal. And in this massive return, we have to remember that a rich doctor, retired in Marin can afford to take two months off, but a house painter can't. The 34 million+ who are trying to survive after losing their employment won't all return at once. A larger-than-expected number won't return at all, particularly as businesses discover that they can live without those individuals. Let's face it, a fair percentage of that 34 million people will include employees that businesses would have fired if they could. Couple that phenomenon with the fact that we don't need all that much real estate and knowledge workers can and should work from home, and the fact that other businesses can be automated; well...we will have a much larger permanent underclass of unemployed people.

[Mick]

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

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.

BC's right, re: public companies. Separately, and with respect to the economic crash, we have to realize the difference between a slowdown and a dead stop. We haven't had an economic dead stop (or close to it) before, America has never had to do so. Think of it this way. If an aircraft carrier is moving at 24 knots, and has to slow to 19 knots, it takes x energy to return to 24 knots. It takes a vast multiple of x to return to 24 knots from a dead stop, and I think most Americans don't understand that's the nature of returning the economy to normal. And in this massive return, we have to remember that a rich doctor, retired in Marin can afford to take two months off, but a house painter can't. The 34 million+ who are trying to survive after losing their employment won't all return at once. A larger-than-expected number won't return at all, particularly as businesses discover that they can live without those individuals. Let's face it, a fair percentage of that 34 million people will include employees that businesses would have fired if they could. Couple that phenomenon with the fact that we don't need all that much real estate and knowledge workers can and should work from home, and the fact that other businesses can be automated; well...we will have a much larger permanent underclass of unemployed people.