Two Sides of the Same Coin

Like everyone else, I’m hoping for two types of recovery. The first is health. To everyone who has been effected (affected?). To everyone who works in the medical field. Just an overall health recovery.

The second one is economic recovery. When I think about the economy, I’m trying to weigh out two sides of what comes next. On one hand, you have pent-up demand. If you’re anything like me, you are in need of a haircut, a teeth-cleaning, and the list goes on. These are things that I assume would pick back up fairly quickly. Treasury Secretary Mnuchin discussed pent-up demand in a recent discussion with Jim Kramer. According to Robin Brooks, managing director and chief economist at the Institute of International Finance, the return of consumer demand is a key component of recovery.

On the other hand, a recession may drag on, partly caused by consumers who have been laid-off, who can’t afford to resume all of their activities, and partly due to changes in our behavior. How long will it be before you are comfortable going to concerts, sporting events? Will you ever go on a cruise? Indeed, some areas of the economy may face a longer time to recover after a sustained period of stressed cash flow. Seattle Mayor Jenny Duncan says, “tourism and aviation have been devasted.” “The economic recovery will take much longer than the efforts to halt the virus outbreak.”

Two sides of the coin. Pent-up demand and a deep recession. We may actually get some of both.

Speaking of sports, is it possible to move college football to the spring? Oh my!

These are all very important trends that I’m following.