[dcolkitt]

> I just don't see how these closures

It almost certainly will. But there's a reason virtually every macro-economist is forecasting a rapid V-shaped recovery after the quarantine eventually ends.

At the end of the day, 90% of the population will still be working through the quarantine. And most of the rest will still receive unemployment benefits. Think about all those people collecting a paycheck, and just sitting at home. Now what happens when the quarantine ends?

They take all that money they've built up, and unleash it all at once. All those big-ticket purchases, vacations, and events, that got deferred happen in a short burst. All those people cooped up at home, will flood into restaurants, stores, and concerts. Think Chicago on the first warm day of spring. It's likely to be the greatest one-time surge in consumer spending in all of recorded history.

That's virtually guaranteed to jump-start the economy near instantaneously. And unlike 2008, the chance of systemic financial contagion is extremely low in today's environment. Banks are extremely well capitalized, and the vast majority of risky investment has been moved to non-bank entities, like corporate debt markets, private equity funds, and CLOs.

[stkdump]

What if businesses realize that they can do without a lot of business travel? Won't that have a permanent impact on airlines at least?

[dcolkitt]

Sure, but business travel only accounts for 1.5% of GDP. And it's pretty unlikely that it permanently falls by more than 50%. Then you have the fact that if company's spend less on business travel, they'll have more to spend on other things. In particular expect to see products like Zoom and Slack get much more spending as virtual meetings become the norm.

Finally even if business travel falls, expect consumers to make up a lot of the reduction in demand. The capacity exists and isn't going anywhere. Those airline seats and hotel rooms aren't going to sit empty. The price may fall, but tourists will take more trips when given discounts on the prices they're used to.

In general you can extend this reasoning to most of the pessimistic scenarios. First, real productive capacity will still be the same after the quarantine as it was before. Second, money spent in some sector isn't just going to get thrown into a hole if people stop consuming those products. One industry's loss is almost always another industry's gain. Finally, when demand contracts that means falling prices. When prices fall that enables new consumers and business models in the market.

[stkdump]

In Europe many industries, including air travel are at or over capacity. Airlines operate at razer thin margins. We might see some consolidation in the market which could decrease the overhead costs, but not by much. There is simply no room to decrease prices that much. And there is not much evidence that the demand is very price-elastic either. Air travel has more competition by other forms of travel with less safety restrictions, less climate impact stigma, etc.

[borkt]

An impact that is long overdue. There is nothing wrong with adapting to a new normal.

[allovernow]

Detuche Bank is inching toward bankruptcy.[0]

All indications are that this virus will take more than two months to deal with - you should carefully monitor China for the next few weeks because their self reported recovery may not be genuine.

How long can businesses hold out? What's stopping authoritarianism from taking hold, left and/or right, if this drags on for 3-6 months? We don't even know if you build lasting immunity to this virus yet. It could become endemic.

0. https://www.macroaxis.com/invest/ratio/DB--Probability-Of-Ba...

[eternalban]

> What's stopping authoritarianism from taking hold, left and/or right, if this drags on for 3-6 months?

On a different planet this topic would be discussed, at length, along with measures to contain the virus. Once we're in lockdown mode worldwide with only the shiny screen to tell us what is going on, it is game over, and rather too late to discuss and set the ground rules for "emergency" regimes.