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Comment by legitster | Hacker News Reader

I'm a bit more optimistic about this crash - a significant portion is due to the (important) constraints on society - closing schools and restaurants. Meaning we can look forward to some pent up demand on the other side when those constraints are loosened.

On the other hand, if the US goes into lockdown for a month or more, there's a significant chance that we could be returning to a world very unlike today. The market does not like this kind of uncertainty, and an house of prevention would have been worth $10 trillion dollars of cure.

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Sorry to single you out, but the fact that people still don't understand that a 1 month+ long lockdown is a certainty means we are nowhere near the bottom. By April the US is going to look a lot like where Italy is at now.

Sorry to single you out, but the stock market usually trades in anticipation of recessions. It's not a proxy for the current GDP, it's an expectations market. The stock market could start a slow rise tomorrow and go until the end of the year and the entire year could be in a recession.

As a European it seems like the US markets are a step behind and seemed to trade pretty optimistically last week and especially the week before even though the situation was bad in Italy, for example.

? They were way off last week. If that is your definition of optimistic, I don't want to see pessimistic.

I think it's realistic that we could see some sort of easing within a month - like maybe restaurants and bars can reopen if they meet some stringent requirements. But would agree that it will be a long time before things return to "normal".

With the extreme measures taken in China, bars are still not open (in Shanghai where there are 300 reported cases).

I think there will be some pent up demand, but some parts of the economy don’t benefit from that —e.g. I’m not going to buy more lattes when things return to normal, I will just go back to my daily fix.

That's not all - some will forego, lose the habit then not re-uptake.

Also schools - how will additional schooling later on make up for the lost service & revenue (schools need students to get tax revenues)

> That's not all - some will forego, lose the habit then not re-uptake.

This is why I think the economy on the other side could look so radically different. What if every coffee shop and brewery went out of business... and had no reason to re-open? Could something completely different fill the void?

...but you might buy a coffee machine at home to satisfy that fix over the next 3 months.

A coffee machine's contribution to the economy is a fraction of one or two months of take-out coffee at a cafe/restaurant. If you factor in how much value is being generated in the US vs elsewhere (eg. China), the difference is even more pronounced.

I think it's showing all the cracks in the US system. A large part of the country scrapes by, have no savings, have no access to healthcare, etc.

For sure. But I don't think that's fundamentally different than any other crash in the US. But it may show that there is an economic benefit to having a stronger welfare net.

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