That is the big question these days. When can I have my life back? When can I go back to work? Will the kids be back in school for this term? The question might even be will students get back to physical classrooms in 2020? We have so many new acronyms and terms these days including ‘the new normal’. When will life get back to normal? Many will suggest that you will never see the past ‘normal’ again.
Never say never, but it will likely take a few years to get back to any kind of normal. And perhaps and mostly likely life is changed (as we knew it) forever moving forward. Perhaps wearing masks will be the norm. Those plexiglass barriers that protect cashiers and bank tellers and customers are not coming down any time soon. We are likely to practice our own versions of social distancing for quite some time. Companies may allow employees to work at home more often. We might travel less for business and for pleasure.
Business is forever changed. Commerce is forever changed. The political landscape is forever changed. And behind it all is fear has created an environment in which our attitudes have changed. We will all become more protectionist – as individuals and as societies.
The new normal, coming soon?
The beginnings of the new normal might be coming soon. But the new release at the movie theatres is well off in the distance. In a theater galaxy far, far away. Would you got to a movie next week if they opened the doors? Would you go to a crowded restaurant to be welcomed by a masked host. The gloved and masked waitress or waiter then comes to your table to take your order. They might be wearing a surgical mask. Perhaps they are allowed to wear the full plastic shield.
When a restaurant patron sneezes or coughs, it will have the same effect as a gunshot going off in a Godfather movie restaurant scene. Duck. No, I’m not describing what’s on the menu.
I know, I know, thanks or painting such a rosy picture eh? Apologies, I’m just trying the set the table, so that you might know what we are likely ‘in for’.
When will we start to open up the economy?
I’ve been spending way too much time writing and researching a larger piece for Seeking Alpha. When can we start to open up the economy? How fast can we open up the economy? What sectors go first? At what rate can we release that economic valve? How long will the full process take to get to the point where we are back to work and the economy can function as best as possible?
To some of these questions we can take a good and educated guess. In some areas we will only know when we get there, or get close. No one knows how long this process will take. It depends upon COVID-19.
The most dangerous economic experiment in history.
Usually (but not exclusively) economic growth is not linked to death and human suffering on a mass scale. Certainly there is a link between certain types or work and early death and disease. There is a link between global warming and economic output. We’ll save those for another day. But certainly, the link between economic growth and human death and suffering is unique and magnified today. We’ve never been in this type of conundrum. Not even close.
We have not stopped or defeated COVID-19. That’s even true for the countries that have largely shut down new cases. In North America even if we get to the point where we have ‘flattened the curve’ that is not victory, that is a stall or delay.
The pandemic is a car racing down the hill. With social distancing and shelter in place and quarantines we have put the brake on COVID-19 infection rates. But guess what happens when you take your foot off of the brake? The COVID Express, thanks to gravity begins to accelerate, again.
Are we there yet?
And that said, the new cases (orange line) is not yet offering a shape that we’d like to see. We are a ways away from thinking about that economic restart in Canada.
We might also use the analogy of releasing steam from a valve. We’ll need to release that steam (economic activity) while inflicting an acceptable amount of pain – deaths and infections. The key is to keep infection rates to a level so that the healthcare system is not overwhelmed. Death rates increase greatly when the critically ill cannot be put on a ventilator.
Writer Tomas Pueyo calls this stage and process The Dance.
Here’s The Hammer and The Dance.
Of course today we are still at the top of that hill. We have a ways to go before we can allow increased economic activity and the virus to dance.
Care to dance?
We may be several weeks away from dropping the needle on that dance music. Many will suggest that the entire process will take 12 to 18 months or more – the long dance. Heck they’re going to set a Guinness World Record.
The wildcard is a vaccine. And it will take a miracle development to change the timing of above. Bill Gates is funding many projects where he sees promise. Last night he offered a timeline of late 2021 for a vaccine. But mostly (from health officials and epidemiologists) we see projections of 12 months to 18 for a vaccine that will be in circulation.
To bring up another COVIDISM of the day, we might have to rely on that ‘herd immunity’. We might have to build up our immunity to COVID-19 the old fashioned way. That said, and it’s a scary thought, there is no conclusive proof that we humans build immunity.
Countries in Asia are beginning the dance. We will watch. Sweden embraced limited restrictions from the get-go. They are now experiencing a recent uptick in cases and deaths. But they are managing the dance quite well.
As per that article link above and that war reference some States in the US will storm the beaches without any air cover or any weaponry. They will walk straight into the firestorm. With an aggressive opening of the economy it is near impossible to keep social distancing practices in place. It may be very dangerous to take the foot off the brake in a meaningful way before we have a vaccine.
We will watch their experiments, we will learn from their experiments.
A well-choreographed dance.
We need a smart and very well-choreographed dance. It will also take an incredible amount of COVID-19 testing and tracking. That capacity is not yet available in North America. And mostly as we do this dance we have to remember the waltz and the jitterbug – we need to protect our most vulnerable in long-term care and retirement homes.
We can and will get back to more ‘normal’ lives. From my readings and study, it will take longer than is largely expected. And of course there are economic consequences. We could have a mild recession, or perhaps a long and drawn out recession. Many feel that the recession will be Depression-like. Of course initial numbers and economic projections support that notion.
No one knows where the markets will go, but I would think (and guess) that the stock markets will eventually start to weigh the company financials and economic realities.
On Seeking Alpha I had penned on why the stock markets might go much lower.
On investing I also offered how my US Dividend Achievers skims are holding up much better than market, and better than the total index fund
More Weekend Reads.
For Globe subscribers Andrew Coyne looks at the topic du jour …
On findependencehub Jonathan Chevreau goes over why retired advisor Warren Baldwin took his CPP at age 66. Jonathan also decided to take his CPP at 66 due to survivorship concerns.
On The Dividend Guy blog Mike goes over recent dividend cuts in the Canadian market.
On Stocktrades writer Mathieu Litalien is also keeping a list of total dividend cuts for the Canadian market.
On myownadvisor Mark Seed provides his March dividend update. So far, only one div cut for Mark.
And this week, Mathew at All About The Dividends reports some good news. Dividend increase #14 of 2020. We also own Johnson & Johnson, a staple defensive holding.
And Rob at passivecanadianincome is adding to one of his Telco’s, Telus.
On MoneySense Bryan Borzykowski goes over what the recent stock market gains really mean. It is a bit ‘curious’ that we have Depression-like projections and a new ‘bull market’.
In Vanity Fair, more on that economic experiment in Sweden.
I’d strongly suggest that you watch the Ray Dalio interview within this post. As you may know Mr. Dalio is a philanthropist and successful hedge fund manager. He is a smart dude in the ways of politics, human and societal behaviour, economics, investing and how they all intermingle.
Going to California for that dance, fiPhysician critiques the plan to restart the economy of California. Great post!
And on A Wealth of Common Sense Ben Carlson says ‘Stocks Just Took The Elevator Up And The Elevator Down’. Ben Suggests this looks more like the stock markets of the 1930’s.
Thanks for reading. Please be safe. Be kind. Be generous.
Offer your thoughts in the comment section. When will life get back to normal? What will your new normal look like?
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