If you read the financial or economic news these days, so much of it is focused on what the world's stock markets are doing in response to the coronovirus. However, the stock markets might not be the biggest story that can be legitimately associated with the economic impact of the virus. Looming just around the corner is the prospect of what the virus might mean in economic terms to the masses of people.
For instance, over 40% of Americans would find it extremely difficult to meet an out-of-the-blue $400 expense. Four hundred dollars is peanuts, but over 40% of Americans would be incapable of coming up with such a small sum of money without borrowing it from friends, family, or institutions. Now given that fact, reflect for a moment on what it will mean to those people if they -- or a breadwinner in their family -- are put out of work for even just a few days by the virus. Then multiply that effect millions of times. Perhaps you can get a sense or feel for what could -- for most people -- be the economic costs of the virus.
For decades now, the performance of the stock markets have been decoupled from the economic well-being of average people to a surprising degree. But this virus threatens to have consequences that could rival major moves in the markets, such as the 2008 Great Recession. Movements of that size affect even ordinary people.
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And now, a tune...
For instance, over 40% of Americans would find it extremely difficult to meet an out-of-the-blue $400 expense. Four hundred dollars is peanuts, but over 40% of Americans would be incapable of coming up with such a small sum of money without borrowing it from friends, family, or institutions. Now given that fact, reflect for a moment on what it will mean to those people if they -- or a breadwinner in their family -- are put out of work for even just a few days by the virus. Then multiply that effect millions of times. Perhaps you can get a sense or feel for what could -- for most people -- be the economic costs of the virus.
For decades now, the performance of the stock markets have been decoupled from the economic well-being of average people to a surprising degree. But this virus threatens to have consequences that could rival major moves in the markets, such as the 2008 Great Recession. Movements of that size affect even ordinary people.
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And now, a tune...