Financial investment giant Morgan Stanley sees U.S. GDP plunging by 30 percent in the second quarter (April-June) of 2020, according to Bloomberg News. Druing the Great Depression, which lasted 49 months, U.S. GDP was -12 percent. If Morgan Stanley is right; and, there is unfortunately, little reason to doubt their forecast, we are about to experience something that has never happened in the history of the United States. No one remotely suspects we’ll be in for a 49-month depression. And once we get past the virus in about 10-12 weeks, the fiscal stimulus will provide a tailwind to economic growth. And, although I hear all the pundits saying that things will never be the same and we’ll work from home more and conduct less business travel — hopefully, people will see it as their patriotic duty to travel and support local businesses. In the meantime, there has already been financial carnage, as many 401k plans for retirement have seen 40 percent drops or worse. Everyone talks about investing for the long term; but, the baby boomer generation doesn’t have that kind of time as they are alreay well into their 60s. Many, will not be able to recover, and bankrupticies are certain to surge. As Thomas Paine wrote during the darkets time of the Revolutionary War: “These are the times that try men’s souls.”
I also fear the anxiety, depression and stress that will build over the coming days and weeks until we have safe passage beyond this insidious disease. We must help and reach out to others — even if we have to do it remotely or from Skype. We have to grab on to the positive; and, find meaning in helping others cope and navigate through this most trying time. When the U.S. came out of the Great Depression — America ended up birthing the Greatest Generation, excising the world of the scourge of Nazism and liberating Europe and to an extent — Asia. Robert Louis Stevenson once wrote that “Sooner or later, we all sit down to a banquet of consequences.” We need to find self-woth and meaning in helping others. But, buckle up. No one promised you a ‘rose garden.’ RCP, fortunascorner.com
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