Now i don’t mean to spread any FUD here, even though the title may suggest it. So i'm going to try and offer a few perspectives here that might glean some insight into what is POSSIBLY coming.

Back in 2007/8 it was clear to a number of people that the world, more specifically the US, would be heading into an economic downturn, the system would collapse if it mathematically continued in the way it had been heading for many years previous. And it did, but not really in the way that had been anticipated. The government caught wind of the severity of the incident. Because as humans we are typically afraid of losing that which we have, we are afraid of losing our way of life and our routine. And when this was recognised at a higher level, the governments stepped in to preserve that way of life as much as they could.

Now, back a few months ago, the entire would economy lost its mind, everyone sold everything. Sell orders for days on end with no sign of stopping...

That is until the governments around the world announced their quantitative easing plan and buying initiatives. This soothed the markets, relaxed many and seems to have “fixed” the problem. Except...it hasn’t.

Because in every healthy market, you cannot consistently have rising value, increased growth, more profit quarter on quarter. You can only really get that from constant innovation, which we haven’t really had.

This time is different because we all collectively know that we won’t be able to return back to work in the same capacity before, and those that do will have a much different lifestyle than before. Pubs/clubs/theaters/gathering events will all suffer greatly, and that’s just the entertainment sector. Many business models will not work with this new rule set, and will see their cash drained month on month as they pay for their rent, workers, current models of spending and all while seeing lower return rates.

I expect to see many more business loans, or existing ones being extended for the next few years until this becomes the new norm and businesses can adapt. And even then, when they adapt, the problem is volume, if on average workers aren’t getting paid the same because of pay cuts/furlough/joblessness then who will do the spending? I expect to see more and more fire fighting attempts at keeping the economy afloat during this time, which will only extend the recovery time further as we keep the week hands in the game with bailouts.

As this becomes more and more apparent quarter on quarter i expect to see a tumbling of stocks and share prices following a correlation of company earnings. Those affected most by this new government imposed restriction on working will either be hung out to dry or propped up by governments spending and quantitative easing. I unfortunately believe it will be the latter, as we are all afraid of losing our current way of life.

The S&P 500, log monthly

The chart above shows barely a blip in terms of economic drawback. but how? the majority are sat at home not working, monthly earnings on average are taking a huge hit and every single government is printing record amounts to fire fight this mess that we are all collectively in. so why do the stocks and shares markets look so peachy. because we've chosen to temporarily ignore the economic pain were all feeling in the vain hopes of carrying on life as normal. But this will catch up to us, it'll have to, because we can't hide our mistakes forever.

TLDR