Personally and based on my read of historical downturns, I believe it will be some time (on the order of months/yr) until the US economy is back to anything remotely normal in terms of growth/employment etc. There WILL be a re-opening of business from #COVID19 in May/June... 1/13

...but the knock-on effects of the closures/layoffs/financial strain/defaults/etc are likely to linger well beyond the passing of the immediate viral threat. In other words, the economic difficulties are unlikely to be resolved like the flip of a light switch... 2/13

...and re-starting the economy will NOT be like shutting it down. So while many of these 2nd order effects are unknown in their specificity at the moment, they will be profound nonetheless. It is as if we are still in the midst of a hurricane or similar natural disaster... 3/13

...and we cannot begin to assess the true level of damage until it safely subsides. Some businesses will reopen, many unfortunately will not. All will be cautious. And such caution means the pace of re-hiring of labor is unlikely to equal the rapidity of its drawdown. 4/13

Without a vaccine, continued concern about a potential resurgence of the viral threat, both now and/or in the change of coming seasons, is likely to hamper business and consumer spending. Coming defaults will likewise put pressure on landlords, property owners, etc,... 5/13

...which in turn will have corresponding impacts on banks and lenders in general. The monetary authorities and political bodies worldwide are making valiant attempts to stem the bleeding, but that is merely a first corrective step. The patient is still sick and needs rehab. 6/13

And it's not just about the local economy. The world is flat. Global trade flows matter greatly to modern economic growth, at the supply chain level & beyond. One country re-opening will NOT be enough if large portions of the world remain mired in an ongoing 'war'. 7/13

Humanity is truly in this as one and we should all be working to encourage and foster strong collaborative efforts at solutions. Partitioning blame, hoarding resources & credit, things of the like will only serve to prolong existing dislocations, economically and medically. 8/13

All of this is to say that we should be optimistic, but cautiously so about our resumption of economic activities. The acute phase of financial market turmoil is likely over, but once the severity of the data begins to reveal itself I suspect we continue to bleed lower... 9/13

...albeit at a more tepid rate. As a result valuations are likely to go lower over coming months, both physical assets (properties, capital etc) & financial. The mkt is a discounting mechanism so will turn prior to the economy, but it's premature to think that time is now. 10/13

There is likely to be a time for bargain hunters, but little need to be early. It's been over 10yrs since we've had a material economic contraction and while time itself is never a good argument for a prolonged downturn, the virus is likely to be the catalyst for this one...11/13

...revealing those who are swimming naked, those who have overleveraged themselves this cycle. And dominoes will fall triggering unrelated stresses. Historically speaking, in recent decades we've seen close to 2 contractions per 10yrs, we've had none since 2008/9 ... 12/13

Excesses have been built and are likely to be worked off now that the tide has gone out. And this takes time. So be patient. Be kind to your fellow humans. Lend a hand where you can (if only virtually this time). The sun will rise again and opportunity will spring anew. 13/13