A near total collapse in economic activity

Much like the collapse in employment, the collapse in GDP numbers is unprecedented.
Obviously GDP is not the best measurement of an economy, but it's the only one that everyone uses.

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The bank lowered its first-quarter GDP forecast to -3.4% from -2.4% and its second-quarter GDP forecast to -38% from -30%. "We expect the U.S. economic recovery will be more drawn out than previously anticipated, marked by a deeper drop into recession and slower climb out," the economists said. Its third-quarter GDP estimate of 20.7% growth implies that the level of real GDP in the third quarter will recover back only 35% of the lost output in the first half of the year. On an annual average basis, Morgan Stanley expects real GDP contracting 5.5% in 2020, the steepest annual drop in growth since 1946.

This should terrify you.
Morgan Stanley is not an outlier. Goldman Sachs forecast a second-quarter GDP of -34%.

For the full year, Goldman forecasts a 6.2% decline in GDP, which also would be worse than anything the nation has seen going back to the Great Depression.

If you are under the impression that it's just the banks, so we can ignore them, think again. The CBO has similar projections, with an expected decline by more than 7 percent during the second quarter. The decline in the annualized growth rate reported by the Bureau of Economic Analysis would exceed 28 percent.

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The US Manufacturing survey data is weeks old, but it still points toward something bad.

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WoodsDweller's picture

may call it "Depression".
I'm thinking we could call it "Trump's Depression". Obviously caused by the "Trump Virus". Every day the news could report "Trump's Death Count".
And he'll still beat Biden.

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25 users have voted.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Albert Bartlett

Cassiodorus's picture

@WoodsDweller that Joe Biden is a special individual.

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7 users have voted.

"To ask how capitalism puts natures of all kinds to work is also to recognize capitalism’s pathology – and its exterminism." -- Jason W. Moore

enhydra lutris's picture

@Cassiodorus

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

Cassiodorus's picture

@enhydra lutris But he's exceptionally good at not meeting people's standards for his behavior. And yet all sorts of nice folks think he'd make a great President.

Take this woman Alyssa Milano. She's an actress who has appeared in all sorts of vacuous nonsense like Melrose Place and Charmed, and for some reason this gives her the ego to tell Bernie Sanders he's "intellectually bankrupt." Maybe Joe Biden meets her standards, for the time being. But don't tell this to Joe -- he'll think of some new and innovative way of failing Alyssa Milano.

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2 users have voted.

"To ask how capitalism puts natures of all kinds to work is also to recognize capitalism’s pathology – and its exterminism." -- Jason W. Moore

ggersh's picture

The total incompetence along w/the total thievery won't work this time.

With 60 million people basically uninsured it's going to get ugly, very ugly.

3 fucking patients.....UFB

https://twitter.com/KathleenKatfox/status/1246046648578555904

https://www.commondreams.org/news/2020/04/03/its-not-we-have-massive-rec...

It's all artificial....smfh

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14 users have voted.

tRump amerika's last president

voting in ameriKa is an illusion

I'm fairly sure that the R's have finally figured out
that the D's are no longer necessary

you can't afford it. Move along.

@ggersh

USNS Comfort Hospital Ship Was Supposed to Aid New York. It Has 3 Patients.
https://twitter.com/KathleenKatfox/status/1246046648578555904

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6 users have voted.

I don't want Trump to win, but I do want the establishment Dems to lose due to their cheating and undemocratic practices in the primary. And I will do whatever I can to help that happen.

For those who missed the Netflix series Zeitgeist, the idea was we don't need economic activity. We don't need property ownership. We can all get by just fine if we have our food delivered on an automated system and we live where we will. Do what we want.

Not saying I agree with this utopian view. Ignores human nature IMO. But there is one basic tenet that is true at least for a short term: If we ban rent collection and keep the food flowing, GDP, the Stock Market and all that other crap doesn't mean jack diddly in the short term. Say a year.

We just suspend money for one year, keep the food flowing (and the toilet paper) and the homes free and we could weather this with no economic catastrophe.

Of course, then the elites would have no profits.

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Raggedy Ann's picture

and will fail. A complete reboot is in order and it will come.

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"The secret of change is to focus all your energy, not on fighting the old, but on building the new." Socrates (469-399 BC)

ggersh's picture

@Raggedy Ann https://www.siliconinvestor.com/readmsg.aspx?msgid=32653900

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12 users have voted.

tRump amerika's last president

voting in ameriKa is an illusion

I'm fairly sure that the R's have finally figured out
that the D's are no longer necessary

Granma's picture

@Raggedy Ann at this time is going to be a good thing. I have a horrid suspicion that the people who will hurt the most, and the soonest, are the least informed and best armed. On top of that, they tend to like Trump and are unlikely to fix blame for this situation where it belongs. There could be an awful outcome.

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12 users have voted.
ggersh's picture

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3 users have voted.

tRump amerika's last president

voting in ameriKa is an illusion

I'm fairly sure that the R's have finally figured out
that the D's are no longer necessary

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2 users have voted.

That's July, August and September. We will be seeing the potential full impact by them. 70% of the US population total infection, that's 231 million vs. 1/4 million today. How many will have died? Looking at the range of numbers today it's hard to tell. WHO predicts 3.4%, other people are thinking 1%. It depends a lot on the case rate at the hospitals, which is looking really grim in New York. EMTs are doing triage inplace right now. That's a range of 7.9 million to 2.3 million. What's the economic cost of that?

If we slow down the pandemic with serious methods, then the numbers are smaller, but the period is extended and the economy will not be able to get back to work. More draconian methods mean 100% isolation/quarantine. How do you run an economy? Governor Cuomo keeps talking about an "apex" in the curve of infections in two or three weeks and then it dies out. Incredible fantasy. It's beginning to appear that there is a serious threshold of countermeasures required before the rate of infection shows an inflection. Social distancing seems way too weak medicine. The really, really bad information on face masks has been a major driver in increasing the infection rate. Everyone needs to be wearing an N95 mask, or equivalent, when out of your secure isolation area, 100% of the time. You have to assume that everything new in your isolation area is contaminated and has to be disinfected.

In this environment how does the GDP grow? A much better question is - how can we survive as a society as we reach the bottom of the economic depression? Our desperate attempts to keep the GDP from falling now will only make our tasks much harder later on. Then how do we grow out of it eventually? What kind of a society will we be? Take a look at FDR's Second Bill of Rights, there are some hints in there.

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6 users have voted.

Capitalism has always been the rule of the people by the oligarchs. You only have two choices, eliminate them or restrict their power.

enhydra lutris's picture

@The Wizard

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3 users have voted.

That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --