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Zorro

(15,691 posts)
Wed Apr 22, 2020, 04:48 PM Apr 2020

There's a growing possibility of a W-shaped economic recovery -- and it's scary

There’s growing consensus among economists and epidemiologists that the recovery period from the deadly coronavirus is going to be long — and bumpy.

Hopes of a quick bounce back for the economy — dubbed a V-shaped recovery — have faded. Even as parts of the nation reopen, many Americans will be afraid to venture out, and it looks increasingly likely that restaurants, stadiums and yoga classes are going to be operating at partial capacity, at best, for a while.

Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, put it this way when asked about when baseball stadiums will be filled again: “I cannot see a return this year to what we consider normal.”

What isn’t getting as much attention is the possibility of a W-shaped recovery, the scary scenario when the economy starts looking better and then there’s a second downturn later this year or next. The “W” could be triggered by reopening the economy too quickly and seeing a second spike in deaths from covid-19, the disease caused by the coronavirus. Businesses would have to shutter again, and people would be even more afraid to venture out until a vaccine is found.

Something else could also cause a “W” pattern: A wave of bankruptcies and defaults later this year. As companies go belly up, a domino effect ensues: Workers aren’t rehired, suppliers aren’t paid, and fear rises about who will be next to fall.

https://www.washingtonpost.com/business/2020/04/22/theres-growing-possibility-w-shaped-economic-recovery-its-scary/

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There's a growing possibility of a W-shaped economic recovery -- and it's scary (Original Post) Zorro Apr 2020 OP
I'm expecting a U shaped recover, maybe even L shaped kurtcagle Apr 2020 #1

kurtcagle

(1,601 posts)
1. I'm expecting a U shaped recover, maybe even L shaped
Wed Apr 22, 2020, 07:26 PM
Apr 2020

I think we're already seeing the first signs of systemic failure in the economic system, and appetite for bailouts will drop as it becomes obvious that they can't stimulate demand when no one can spend.

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