It’s time for investors to start saying the D-word — this economic damage could be double 2008 – by David Rosenberg (Financial Post – March 23, 2020)

David Rosenberg: We are dealing with a health shock, a self-imposed economic shock and a financial shock all at once

I find it fascinating that so many pundits are willing to tell their clients to stay the course after more than a 30-per-cent market meltdown. They have been saying the same thing the whole way through, and my wager is that they will tell you the same claptrap through the next 30 per cent decrease.

It’s amazing to me that these people never seem to be accountable. At least bears will help you preserve your capital; the bulls will only destroy your capital.

We have to start thinking of the current situation as morphing into a state of economic depression. Someone put that bug in the ear of U.S. Secretary of the Treasury Steven Munchin last week: without policy stimulus, the unemployment rate will hit 20 per cent. That hasn’t happened since 1932 when real GDP contracted 13 per cent.

I’m sensing that the damage to the U.S. and global economy will be twice as bad this year as it was at the 2008 peak of the Great Recession. That would mean a GDP contraction of five per cent for 2020, which hasn’t happened in the post-Second World War era.

Across the world, restaurant activity has already collapsed 50 per cent from a year ago. Box office receipts have all but evaporated — the movie theatres are shut. Air travel is down 30 per cent and the decline is accelerating as planes get grounded. All public venues are closed in most places on the planet.

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