Its not a black swan. This is a flock of black swans all at once. (actually a wedge but that sounds weird).
The worst pandemic in 100 years, demand shock, supply shock, supply chain disruption and the financial system collapsing in all sorts of weird and interesting ways.
Many people have just woken up to the fact we’re heading for a recession. Um… no this is a depression. The first deflationary depression since 1929-1932.
Even in the absolute depths of the 2008 financial crisis, we never had the sort of total economic shutdown that is happening now. Entire sectors of the economy are being shuttered indefinitely,￼ which collectively employ tens of millions of people – transportation, tourism, hospitality, food service, retail, movie + arts, etc.
Businesses have never faced a total collapse of revenue in 2 days like they are now, in some areas such as restaurant and movie theaters their revenue is going to near 0. In 2008 a restaurant for instance may have seen revenue collapse to 50% of their previous but not 0%. The lack of cash flow is going to bankrupt thousands of businesses within less than a month and even more if it goes 2 or 3 months which it almost certainly will.
We haven’t seen anything yet. We’ve only seen the stock market collapse, just wait until millions of workers are laid off, major corporations default, the junk bond market seizes up, it goes on and on. 70% of our economy is based on consumer spending. We’ve been thrown into a major recession and it will only continue as the financial crisis really gets underway.
In addition, the financial system is far more fragile than it ever was in 2008. Non-financial corporate debt is the highest in history. There are massive asset and credit bubbles everywhere you look. The Fed and central banks all over the world are out of monetary policy tools and are left with only a desperate attempt to maintain liquidity in specific parts of the financial markets. As I said, we haven’t seen anything yet, this will get so much worse.