Let's look at this from a 30,000ft economic POV. Businesses increased inventories last year to get ahead of the China tariffs. That's one reason why you are not seeing massive shortages. China is now coming back online with reports showing 80-100% production back in most places.
Companies are drawing down their inventories. Those will need to be replenished, especially with a concern that a second wave of the china virus may hit next fall/winter.
So we had less imports this qrt but our exports weren't impacted much.
So we had less imports this qrt but our exports weren't impacted much.
Exports should increase now as China can offload food stuff and other goods. Consumers are being forced to go and buy supplies because of the panic. Supplies they normally wouldn't buy at this time of year. They won't stop buying the normal stuff. So what businesses are impacted?
Well depending on how severe the outbreak gets, we could see eating out take a hit, hotels, vacation industries, airlines. The drop in oil will help the airlines since one of their major costs just dropped by 20%. Low gas prices will probably mean more car travel this summer as
..people avoid airplanes and public transportation. RV and auto sales might actually increase as it will be a "safe" form of vacation/transportation where you can get away and not interact with many people. Amusement parks might take a hit.
In other words, (again depending on how bad the outbreak gets) we might not be seeing a drop in economic activity but a shift of that activity. Businesses building inventory, people taking different types of vacations, eating at home more. Certain industries will be hit hard
....others will see a boom. Supply chains might shift and expand to several places instead of one central place like China. Border controls might strengthen which would mean more people vacation/travel, do business, etc within the borders.
People will still need to buy food, farmers will still grow food, people will still buy gasoline & autos maybe less but it won't go to zero. People will spend more on home hobbies, video games, streaming services. Hollywood and movie industry will take a hit.
The possibilities are endless. The stock market is basically pricing in a total shutdown of the economy on every industry and company. It's an over reaction. I would not be surprised if the promised "recession" never shows up. Since a recession needs a drop in economic activity
...not a shift. There are 20 days left in the 1st Quarter for GDP. The Atlanta Fed's GDPnow is forecasting a 3.1% GDP for the 1st qrt as of Mar 6. The 2nd qrt might take a hit, depending on how bad the outbreak gets but most think by May/June we should be out of the worst of it
There is a good chance a large part of whatever economic activity we lose in Arp/May will be "made up" in June/July/Aug/Sept bringing a positive 3rd qrt GDP. A recession is defined as two consecutive quarters of negative economic growth as measured by a country's (GDP)
So IF we have a positive 1st quarter which looks very, very likely and we have a bad 2nd qrt(very up in the air atm) and we then have a positive 3rd qrt. that means no recession.
You all might have caught that this thread has a lot of "mights", "Ifs", "buts", "shoulds" and "coulds". That was on purpose because the media are using the exact same type of words to paint a horror picture that has as much if not less chance of happening as the picture I just
...painted. As always with my threads believe/think as you will. However, I've always found it's better to have different POV's instead of blindly following and promoting the same talking points. I wish our fake media thought so as well.
In life, I've also found people tend to almost always push the best case scenarios or the worst case scenarios but 99.999/100 times neither ever happen. It's almost always somewhere in the infinite space between those two points. So the above is my attempt to show one of
....those possible in between scenarios based on some known facts, some educated estimations & some guess work.
Now wouldn't it be nice if the media would tell you their narratives are created the same way but most of those are short on facts and lean towards worst case?
Now wouldn't it be nice if the media would tell you their narratives are created the same way but most of those are short on facts and lean towards worst case?
