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BlogThe Real Damage of the LockdownsAlthough Initial Unemployment Claims, released at 5.245Mn, that was marginally under the estimated figure of 5.4Mn. Nevertheless, it pushed the total to over 22Mn. This number is still huge and now equals almost 13% of the entire US workforce.
We have already seen banks set aside billions in their Q1 results, in preparation for potential loan losses. Interesting that although China has reopened, the consumer has stayed away. People are fearful that either, this isn’t over or they do not wish to make provision never to be offside again. Irrespective of through the worst or has still to come, people feel vulnerable, unprepared and fearful. We even have the IMF stating - first the first time ever - there will be a fall in global GDP.
The broader US stock markets remain the best performing (S+P -13%, DAX -21%, FTSE -25%, NIK -18%) when comparing YTD numbers. However, when we do see the NFP, Growth and Trade numbers next month the reality will probably hit that there will be no V-shaped recovery anytime soon.
There is a serious underestimate of the damage. In Florida, where we have not been locked down, it is interesting that everywhere you go from the food store, office supply, or the post office, everyone has plastic sheets for cashier which you must stand behind. This will be a permanent reminder of what was done to society by Bill Gates and his co-conspirators insisting upon these lockdowns. We can see that Fauci insisting on the entire economy being shut down was severely damaging to the nation. There was no justification for the national lockdown. At the very best, there were some hot spots, but as Sweden has proven, they did not lockdown and their exposure rate was no worse than any other country which locked down. The virus peaked precisely on target that Socrates provided - the week of April 6th.
Bloomberg News interestingly reports that where the restaurants are open again in Wuhan China, people are not going out to eat. This is consistent with what we should expect. Although President Trump has come out and said the economy will be bigger and stronger, on that score, sorry Socrates does not agree.
The psychological damage to people is profound. From here on out people will be aware of any disease by mere close association that will be possible. This fear has been struck deep in the hearts of the public and that is not going to simply vanish easily.
Because the economy is 70% service in the United States, this is the sector that has been directly impacted. Last Christmas, online shopping exceeded mall shopping for the first time. People are getting used to having food delivered rather than going out. We should expect prolonged damage to the economy with sustained unemployment thanks to this draconian lockdown. It has already gone way too far and will have prolonged implications for the economy and employment going forward.
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