• Facebook
  • Twitter
Coronavirus is set to plunge the world into its biggest peacetime slump since the era of the Great Depression, according to alarming new forecasts.

The brutal recession triggered by the Covid-19 outbreak is likely to shrink the world economy by at least 4pc this year, the Centre for Economics and Business Research has warned.

Such a decline would represent some $3.6 trillion (£3trn) in lost output. If the CEBR’s forecast is correct – and it cautions there is a “huge margin of error” – the fall would represent the worst year for global growth since 1931 outside of wartime according to the think-tank.”

https://www.telegraph.co.uk/business/2020/03/22/warning-biggest-peacetime-economic-slump-since-great-depression/


  • Facebook
  • Twitter
As the coronavirus continues to spread, there is no question the U.S. economy is taking a major hit.

“Economists at Goldman Sachs warn GDP will collapse at a 24% rate… “We are in a global recession,” Allianz’s Mohamed El-Erian said on Yahoo Finance’s On The Move. “We’re in a global recession because of what economic sudden stops do.””

https://finance.yahoo.com/news/coronavirus-us-gdp-recession-economists-forecast-140600768.html


  • Facebook
  • Twitter
“We went from full throttle to 90% revenue loss in three weeks,’’ said CEO David Seelinger. “We’ve been through 9/11. We’ve seen recessions. We’ve never seen anything like this.’

“Seelinger spent last Sunday laying off 750 of his 900 employees.”

https://www.nytimes.com/aponline/2020/03/22/business/ap-us-virus-outbreak-economic-whiplash.html


  • Facebook
  • Twitter
Trump: “”WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”

“With so much economic carnage and the risk of financial dislocations causing a severe and permanent impact on the world economy, these are distressing times for central banks and governments everywhere.”

https://www.forexlive.com/news/!/us-president-trump-we-cannot-let-the-cure-be-worse-than-the-problem-itself-20200323


  • Facebook
  • Twitter
NB: The UK was teetering on the brink of recession with 0% GDP growth in Q4 of 2019 before the pandemic:

The coronavirus outbreak could drag the UK into a recession even more severe than the financial crash of 2008, according to new forecasts published today.”

https://www.cityam.com/coronavirus-could-drag-uk-to-recession-worse-than-2008-financial-crash/


  • Facebook
  • Twitter
As was Germany:

…the German government forecast that the coronavirus pandemic would lead to the biggest output contraction in more than a decade while it grappled with how to prevent containment efforts tearing at the social fabric.”

https://www.bloomberg.com/news/articles/2020-03-22/germany-expects-gdp-to-shrink-by-5-this-year-bild-says


  • Facebook
  • Twitter
Italian Prime Minister Giuseppe Conte, whose country now has the most deaths from COVID-19, is asking the European Union to use its bailout rescue fund to mitigate the economic impact of the pandemic.”

https://www.cnbc.com/2020/03/20/italy-conte-calls-for-eu-crisis-fund-as-coronavirus-death-toll-rises.html


Covid-19 has created not just a health emergency but a financial crisis. It could not have come at a worse time for India, already in the middle of a slowdown… Covid-19 is pushing an already battered Indian economy into the ICU…”

https://economictimes.indiatimes.com/news/economy/finance/covid-19-crisis-how-the-deadly-virus-hints-at-a-looming-financial-crisis/articleshow/74752200.cms


  • Facebook
  • Twitter
The oil price collapse of the last two weeks has reached near-record territory, according to World Oil’s analysis of historical prices in constant dollars.”

http://www.worldoil.com/news/2020/3/20/world-oil-analysis-research-shows-current-oil-price-collapse-near-record-proportions


The current price war in oil markets will only hasten the moment when the unsustainable nature of Gulf economies faces a brutal reckoning…”

https://www.bloomberg.com/opinion/articles/2020-03-22/saudi-russia-oil-price-war-heralds-end-to-gulf-luxury-lifestyle


  • Facebook
  • Twitter
Shanghai copper prices dropped to their lowest in nearly 11 years on Monday as more shutdowns and restrictions imposed to curb the coronavirus outbreak deepened worries about a slowdown in global economic growth.”

https://uk.reuters.com/article/global-metals/metals-shanghai-copper-drops-to-lowest-since-2009-on-demand-concerns-idUKL4N2BG105


Canada has become the first country to warn that it won’t send its athletes to the Tokyo Olympics unless they are postponed for a year, as pressure builds to delay the Games due to the coronavirus pandemic. The Canadian Olympic Committee said holding the Games as planned would threaten the health of its athletes…”

https://www.theguardian.com/sport/2020/mar/23/tokyo-2020-olympics-in-doubt-as-canada-becomes-first-team-to-pull-out-over-coronavirus


  • Facebook
  • Twitter
Asian shares sank on Monday as a rising tide of national lockdowns threatened to overwhelm policymakers’ frantic efforts to cushion what is likely to be a deep global recession.

““Further deterioration in the COVID-19 outbreak is severely damaging the global economy,” warned analyst at Morgan Stanley.”

https://www.reuters.com/article/global-markets/global-markets-stocks-stagger-as-more-nations-self-isolate-against-virus-idUSL4N2BG0TL


The most brutal stretch for global markets since the financial crisis likely isn’t over yet, say investors and analysts who believe it is too early to assess the possible scale of economic damage from the coronavirus. In just a few weeks, U.S. stocks have lost roughly a third of their value…”

https://www.wsj.com/articles/the-worst-of-the-global-selloff-isnt-here-yet-banks-and-investors-warn-11584877018


  • Facebook
  • Twitter
Central banks have offered trillions of dollars of support to markets in recent days to keep them from freezing up, as investors worried about the economic damage from the coronavirus and made a chaotic dash for the exits.”

https://www.reuters.com/article/us-health-coronavirus-markets-liquidity/central-banks-deploy-record-sums-to-break-financial-logjam-but-may-need-more-idUSKBN21A0EQ


  • Facebook
  • Twitter
This week has seen an unprecedented 39 interest rate cuts globally, with monetary-policy heavyweights like the Federal Reserve and the Bank of England to more peripheral central banks in Mongolia and Trinidad and Tobago slashing their benchmarks in emergency moves aimed at combating the economic meltdown from the coronavirus pandemic.”

https://finance.yahoo.com/news/week-central-bank-superlatives-sees-092639712.html


  • Facebook
  • Twitter
a sustained, epochal downturn lies in wait. And a depression would mean an almost exact repeat of the same period one hundred years ago, when a deeply divided society and soaring stock markets during the 1920s gave way to a tortuously slow return to economic health during the 1930s in the wake of the 1929 stock market crash.”

https://www.theguardian.com/business/2020/mar/21/100-years-on-another-great-depression-coronavirus-fiscal-response


  • Facebook
  • Twitter
“…History offers us another alternative in such situations: a debt jubilee.

“This slate-cleaning, balance-restoring step recognizes the fundamental truth that when debts grow too large to be paid without reducing debtors to poverty, the way to hold society together and restore balance is simply to cancel the bad debts.”

https://www.washingtonpost.com/opinions/2020/03/21/debt-jubilee-is-only-way-avoid-depression/


Read the previous ‘Economic’ thread here and visit my Patreon page here.

Share This

Share this post with your friends!