In one fell swoop (several months), the global economy has ground to a halt; stock markets have crashed 30-50%, credit markets have frozen, commodities tanked, bankruptcies and bailouts seen, massive unemployment and worldwide GDP cratered.
Strict social distancing measures, mass quarantines, and travel bans across the world to combat the fast-spreading COVID-19 outbreak has been the reason why the global economy has crashed. At this very moment, more than a billion people are confined to their homes, some of the largest factory hubs are shuttered, and education systems are closed indefinitely.
JPMorgan Chase & Co. describes this moment as “the day the earth stood still.” Wall Street anxieties are growing by the day as a protracted shutdown of the global economy could trigger a depression.
To give you a worldly view, one from outer space, Bloomberg shares images from satellite company Planet Labs Inc.’s SkySat imaging orbiters that shows certain regions across the world that have ground to a halt:
Wuhan’s Yingwuzhou Yangtze River Bridge (before and after shutdown):
“The first image of Wuhan’s Yingwuzhou Yangtze River Bridge was taken Jan. 12, one day after Covid-19 took its first known life in China. By the time the second photo was taken, Wuhan was quarantined.” – Bloomberg
Great Mosque of Mecca, Islam’s holiest site (before and after shutdown):
“At the heart of the Great Mosque of Mecca, Islam’s holiest site, sits the Kaaba, the cubic structure that orients Muslims’ daily prayers around the world. At the peak of the pilgrimage called the Hajj in late-July and early August, some 2 million people from around the world make their way to the site at once.” – Bloomberg
Grand Canal channel in Venice, Italy (before and after shutdown):
“Italy’s Prime Minister Giuseppe Conte snapped Europe to attention on March 8 when he ordered a lockdown of the country’s northern region, which includes Venice. A day later, he extended the lockdown nationwide.” – Bloomberg
Epcot Center in Bay Lake, Florida (before and after shutdown):
“Epcot Center in Bay Lake, Florida was meant to be the realization of Walt Disney’s fundamentally optimistic vision of a technology-driven global future. On March 18, two days after The Walt Disney Co. temporarily suspended theme-park operations.” –Bloomberg
Volkswagen’s Tianjin, China factory (before and after shutdown):
“After Germany asked its largest carmakers to help make masks and ventilators to treat Covid-19 victims, Volkswagen began building up production capacity in China. The company’s Tianjin, China, plant is pictured here.” –Bloomberg
Miami Beach (before and after shutdown):
“Few places have struggled as vividly with coronavirus-related precautions as Miami Beach, where the disease arrived just as college students descended for spring break.” – Bloomberg
Even if the pandemic and economic fallout were brought under control in the months ahead, there are still tail risk events that could trigger financial Armageddon.
“…this is possibly the worst thing I have seen in my career… it’s hard to imagine a scenario in which you can contain the virus threat,” adding that “Europe and China are probably already in recession and US GDP will take a 1.5-2.0% hit.”
Guggenheim's Scott Minerd says the coronavirus crisis is possibly the worst thing he's ever seen in his career: "This has the potential to reel into something extremely serious" pic.twitter.com/xLhhNm3u7t
— Bloomberg TV (@BloombergTV) February 27, 2020
The views in this article may not reflect editorial policy of The Mind Unleashed.