April 2020 - A Lonely World Searches For Hope

This is what Crisis and Panic feel like. It’s not fun and it’s not pretty. It is a wild roller coaster ride, with no end in sight.

Things will get better…eventually, but it looks like it is going to be a while. A stricken world has hit the pause button and the damage is everywhere. Nothing seems normal.

We would like nothing more than to believe that the economy is going to snap back quickly from this situation, but that just does not seem logical. It is going to take a while for the economy to get to normal and there are just too many possible scenarios for the virus situation for us to feel confident that things are going to improve quickly.

Certainly, some industries may return to their previous levels more quickly and some industries are actually benefitting from the current disruption and may continue to benefit from it. But for most other companies and industries, there is going to be a long period of recovery needed before they feel normal. There is going to be a lot more pain and discomfort.

And for some industries, there will be permanent structural changes that occur from the events of 2020. Certain sectors of our economy and certain industries will be changed forever.

Most likely, 2020 is going to witness a generational and historic change in the way that many companies do business and this will lead to a lot of restructuring and reorganization. Many traditional products, services and processes are being disrupted, disjointed and reassembled in completely different ways. The form and fashion in which many industries were constructed is being deconstructed and disassembled, right before our very eyes.

How can this level of severe disruption NOT take years to put back together again?

The world and the economy are on pause, right now, recovering from an amazing and unforeseen series of events. The global economy had been likely sinking into a recession even before the Global Covid-19 Pandemic took us all down to our knees. But certainly now, much of the world is going to experience economic contraction throughout 2020, followed by a period of slow and steady reconstruction along changed parameters.

Things will get better in the economy eventually, but not in the same exact way. As we have started saying this week – things are never really going to be the same ever again. As Henry Kissinger said in a Wall Street Journal Op-Ed on April 3rd, “this Coronavirus Pandemic will usher in a new Epoch in human history. The world is going to be changed forever, people and countries will be changed forever” -- and the way that we transact business will be changed. The healthcare, travel and education industries are being forced to make groundbreaking and definitional changes to their business. Manufacturing and distribution businesses will be run differently. Commercial real estate and retail businesses are being altered and affected like never before. These changes will not be insignificant and things are not going to go back to the way that they used to be. It will take a long period of contraction and then a period of rebuilding to reflate and redefine the global economy.

There are still so many possible and varied outcomes to the spread of the virus and the length of the battle against the virus with multiple front lines and multiple scenarios. It is impossible to predict how long this period of economic contraction will last and how severe it will be. The only two things that I am convinced of is that the world will never be the same and that eventually, the U.S. economy will lead a global recovery and expansion. I just don’t know when.