People have to realize that for most everyone this is just a big inconvenience. Yes some will lose jobs and others will see retirement savings decrease but for the vast majority life will be back to "normal" within a month or so. Now compare our current situation to a time when we were going through a world war. Then millions of people were dying and food and goods were rationed for years. That was a time of real suffering.
Of course, the current situation is not as bad as a world war.
But, I do fear that the economic impact could be worse than people expect.
Some folks use the stock market as a barometer of how well the economy is doing. But the stock market is not the metric for the economy, its GDP. In 2019, the GDP returned to levels in the same range as pre-2016.
And, from the market's perspective,
corporate buy backs were responsible for a pretty large chunk of the market's growth. So, looking beyond the impact of corporate buybacks which acted as a bit of a sugar high, the other thing that's important is that between 40 - 50% of people are not even in the market.
There's a couple of other things to keep in mind. Interest rates were low, so given a climate of general consumer confidence, companies borrowed money. At the same time, U.S. debt increased by 1 trillion dollars. Many economists questioned adding a trillion dollars of debt to an economy that was doing well e.g. keep the fed powder dry for when stimulus was needed. A lot of economists use the level or ratio of a country's debt in relation to GDP as a warning bell. The alarm bells were sounding for a lot of economists before all of these recent events.
The bailouts that have been announced already equal another trillion dollars, and most financial experts expect another round of measures.
Companies that are leveraged will struggle mightily and I think we'll see a lot of companies go bankrupt (service industries, etc.). Lay-offs will increase, unemployment will go up, and the GDP growth will decrease, while the countries debt will significantly increase. The consumer has been the biggest driver of the economy in North America. If a lot of people aren't working, there won't be the same kind of spending levels from the consumer.
Most financial experts are now expecting a recession. Countries with 0% (or negative interest rates) have been in recessions for 10+ years e.g., Japan.
And, back to the stock market, it took markets 2 years on average to recover from the downturns in 1987, 1990, 2002 & 2008 (all large recent market downturns). So, I'm not sure there will be a quick recovery as some are expecting.
Anyhow, hope all of the above doesn't happen in a type of worse case scenario, but it certainly could happen. Hoping for the best.
