By Gurbaksh Chahal
With Covid-19, we are dealing with two viruses: a viral infection and a financial infection. Both must be addressed concurrently. The latter will have a long-term effect on the financial and mental health for generations to come. Consumer confidence is at an all-time low, with the average investor losing much of his or her wealth over the last month.
Then there’s massive layoffs, especially in the travel, food and beverage, and hospitality industries, looming. This will, in all likelihood, be further exemplified in the US government’s department of labour’s weekly ‘jobless claims’ report this Thursday.
Unemployment claims are reportedly expected to rise 10-fold in one week — after last week saw a surge to 281,000 from 211,000 the previous week, this 70,000 week-to-week spike being sharper than anything during the 2008 financial crisis or since.
The US needs to front-load much more than the initial $1 trillion stimulus. The domino effect is going to be felt quickly, and badly. The next 90 days will dictate whether or not the US heads toward a depression-like era where unemployment rose towards 25%-plus. Many companies will go bankrupt. Small-to-midsize startups and businesses will be the biggest victims in the short