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USA Road to Depression

Updated on June 27, 2020 at the 13th hour
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DISCLAIMER: Expressed views on this blog are my own.

  1. A proposed definition: from Wikipedia

  2. a decline in real GDP exceeding 10%, or
  3. a recession lasting 2 or more years.


Seeing lots of closures and the US government prop up businesses that would otherwise declare bankruptcy makes me wonder how long the recession is going to last.

USA has given up on controlling the spread given all the state re-openings. States saw numbers were declining economically, so screw it. The number of SARS COV2 cases did not decrease significantly enough to justify any re-openings. That's leads to only the economic and political factors that justified it.

We are back to April numbers. Ugh. The only countries that have sustained level of cases are the ones whose presidential leader deny it existed, has any impact, said it is under control and/or said to tough it out.

Businesses are not going to re-open nor mitigate job losses quickly enough and majority of people are not going to return to normal spend to stave off economic impact. Can't say I like the numbers that came out last quarter and I expect this quarter's reports to be worse. The recession started in February in the middle of a quarter. States did not lockdown until March. Q2 for some businesses ended in June, others in May, July, August. The reports are coming out during the next few weeks and I expect them to be brutal. I can't say the stock market will follow, but I should definitely offload a shit ton before the reports of my portfolio.

It is odd to see that there is no central leader in the US right now. Typically, the president is there as a unifying calming figure since he has no real power to do anything meaningful during a crisis. Drumpf instead looked towards pressuring states into reopening early because of the fear around election year. One would have expected hi to feed out information that he is hearing both good and bad, but put a spin on it. Not a good sign from the Federal Government of the US.

Yeah, numbers are up. Bars and other social activities are part of the reason. What do Americans want to do? If you believe the polls, you'll see majority want to keep it in lockdown. If you believe the flocks of people going to beaches, filled up bars then you'll believe that the lockdown is over and everything is great again. I'd imagine whatever one's preference that they will use either or to justify what they are doing. Fact is, if someone in your household gets it, you are all fucked. You'll die from severe complications, survive and lose your sense of taste and/or smell or have little to no symptoms but a good amount of damage from the virus. There are no long term studies of the virus therefore the best thing to do is prevention. I guess people need to learn the hard way.

We're only at the beginning of the Recession and I think it may fall into a Depression if many Americans can't get their act together and spend a summer indoors then unseat Drumpf and his garbage appointments. Only way to fight a Recession into Depression is national spirit for which this president does not inspire. I guess this is the experiment the US needs in order to learn about leadership for the future.

Consumers not wanting to spend is bad feedback for the economy. Lack of spending leads from/to job losses. Job losses lead to business slowdown. Business slowdown leads to regional slowdown. It is just feedback after feedback. Businesses that want to keep unneeded physical locations instead of taking the digital route will more than likely disappear over time. Majority of transactions should take place online while consumers should be able to pickup what they bought or have it shipped locally or with postal services. In general, rent should have been able to negotiated lower during a nationwide down period. Landlords that don't allow for this have suffered. Where are they going to get the tenants now? It is weird to me that landlords and businesses are religious about payments. I know, if I had a real estate company, I would just start cutting rents in order to keep business rather than lose it all. 🤪 If some can't pay at all then there are other ways to realize value.

Far as I see, If the vaccine for SARS COV2 is out next year then it'll take more than 2 years for a recovery. It'll take a long while for the vaccine to reach manufacturing targets. During that period, with no good heath care system in place I'd say at least 18 months to get a majority vaccinated. Costs will be the primary way to determine who gets vaccinated. How long does the immunization last? 1 or 2 years depending on mutation rate.

My conclusions? Affordable Care Act and its subsequent additives are here to stay. Trump is out. It is too bad it took threatening people's lives (COVID) to realize that healthcare needs to be affordable and the government needs a proper leader rather than the lack of it. Depression is 80% - 90% likely to be declared since there is no good way out of this self induced mess.


I'm still awaiting answers to my questions on my last recession related post back in March/April. The oil thing seems to abated.

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