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olle
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Economical recovery after Corona

Wed Sep 16, 2020 5:51 am

How will the world recover economically after corona?

The forecast is that Sweden will have a pretty V shaped recovery with most economy back as before corona in 2021; It seems like Sweden even with terrible numbers only will have 1 negative Quarter in 2020.

Actual Q3 Q4 Q1 Q2 Q3 2021
GDP Growth Rate (%) -8.30 2.4 1.5 1.4 1.1 0.9
GDP Annual Growth Rate (%) -7.70 -7.2 -5.8 -2.2 7.5 6.2

https://tradingeconomics.com/sweden/forecast
 
tommy1808
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Re: Economical recovery after Corona

Wed Sep 16, 2020 6:15 am

olle wrote:
How will the world recover economically after corona?


isn´t it recovery with corona still rampant?

It seems like Sweden even with terrible numbers only will have 1 negative Quarter in 2020


same expectation here for Germany...
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best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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casinterest
Posts: 12463
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Re: Economical recovery after Corona

Tue Oct 06, 2020 8:25 pm

Trump just trashed the dow by over 700 points by seeking to stop negotiating with the Democrats in the US,

Meanwhile the real layoffs are starting.

https://www.businessinsider.com/coronav ... ctober-1-4



Goldman Sachs has announced the US recovery will be faster with the democrats taking charge.

https://www.cnn.com/2020/10/06/business ... index.html
Goldman Sachs wrote that a blue wave would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. The bank also cited Biden's longer-term spending plans on infrastructure, climate, health care and education.
Taken together, this spending "would at least match the likely longer-term tax increases on corporations and upper-income earnings," Goldman Sachs wrote.
"It would likely result in substantially easier US fiscal policy, a reduced risk of renewed trade escalation, and a firmer global growth outlook," the report said.
Where ever you go, there you are.
 
Ken777
Posts: 10148
Joined: Thu Mar 11, 2004 5:39 am

Re: Economical recovery after Corona

Tue Oct 06, 2020 8:44 pm

We are still in the early stage of Covid-19. There is no evidence related to long term complications, if any. There is no real indication of how fast we wiil see second and/or third generations of vaccine will be developed.

We do know that moving too fast may cause unintended problems - especially when Trump is trying to grab medical decisions from the medical professionals - all because he wants to get re-elected.

Economic growth will continue to surprise economists because of the internet market. That infrastructure will not bring the millions of retail jobs and the malls will recently face financial "challenges". How many have you walked through, looking at the empty stores, and which ones will you bet will never reopen?
 
Tiredofhumanity
Posts: 63
Joined: Sat Sep 19, 2020 9:27 pm

Re: Economical recovery after Corona

Tue Oct 06, 2020 8:52 pm

casinterest wrote:
Trump just trashed the dow by over 700 points by seeking to stop negotiating with the Democrats in the US,

Meanwhile the real layoffs are starting.

https://www.businessinsider.com/coronav ... ctober-1-4


Goldman Sachs has announced the US recovery will be faster with the democrats taking charge.

https://www.cnn.com/2020/10/06/business ... index.html
Goldman Sachs wrote that a blue wave would "sharply raise the probability" of a fiscal stimulus package of at least $2 trillion shortly after the January 20 inauguration. The bank also cited Biden's longer-term spending plans on infrastructure, climate, health care and education.
Taken together, this spending "would at least match the likely longer-term tax increases on corporations and upper-income earnings," Goldman Sachs wrote.
"It would likely result in substantially easier US fiscal policy, a reduced risk of renewed trade escalation, and a firmer global growth outlook," the report said.



I wonder if he will do another 180 in a few days and then take credit for the stimulus?
 
olle
Topic Author
Posts: 2658
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Re: Economical recovery after Corona

Wed Oct 07, 2020 8:34 am

It seems like Sweden will be back to 0 during 2021...

Danske Bank predicts that Swedish economy will be -3% in 2020 and will have growth of 4% in 2021.

https://www.aktiespararna.se/nyheter/da ... np-30-2020

DANSKE BANK: NOT AS BAD AS FEARED, SWEDISH GDP -3.0% 2020
STOCKHOLM (Direct) It did not go as badly as feared. The Swedish economy recovered strongly during the third quarter and in the future the recovery is expected to continue, albeit at a slower pace.

This is what Danske Bank writes in its Nordic Outlook, which was presented on Tuesday.

"The recovery seems to be much faster than we expected," writes Danske Bank.

Sweden's GDP is expected to fall by 3.0 per cent this year and then grow by 4.0 per cent in 2021. In its latest forecast, in June, Danske Bank expected Sweden's GDP to fall by 3.9 per cent this year and then grow. by 3.8 percent in 2021.

The bank notes that after the second quarter crash, there was a sharp rebound again during the third quarter where, surprisingly, it seems to be consumption that is the driving force.

"Private consumption has been quite resilient given the conditions. Retail sales were actually higher this summer than in December 2019, with non-durable goods and home-related goods being the most important driving forces," writes Danske Bank.

The Covid-19 pandemic sent activity back in some service industries, such as restaurants, more than 40 years back in time during the second quarter. There are now indications of a recovery even in the hardest hit sectors, such as restaurants, hotels, transport and travel.

Another sign of optimism among households is the sharp rise in the housing market, which causes Danske Bank to change its earlier forecast of falling house prices this year to an increase of 5 per cent this year and then a further 3 per cent in 2021.

In other parts of the economy, it is clear that trade in goods is recovering, where exports have been particularly strong. Other data also show a recovery for the Swedish industry, including early signs of a turnaround for machine investments. However, service production is more subdued, especially for more consumer-oriented segments.

In the labor market, Danske Bank sees many signs of stabilization after the spring corona shock. Redundancies have decreased, as has the use of short-term work and the Swedish Public Employment Service's statistics indicate that there are now more people who go from unemployment to work than who register as unemployed.

Danske Bank expects unemployment to continue to rise slightly to peak in the fourth quarter and then gradually fall back in 2021.

The recently resumed wage negotiations are expected to result in a wage agreement of around 2 percent, probably in a short one-year agreement given the great uncertainty. With a virtually non-existent wage drift, this means that wage increases, which are the main driver of domestic inflation, will remain subdued.

In combination with a stable krona, this means that inflation will be closer to 1 than 2 per cent in the coming years. The Riksbank is also expected to continue to cope with low inflation via asset purchases rather than interest rate cuts.

"The Riksbank is expected to keep the repo rate unchanged for years to come," writes Danske Bank.
 
Sokes
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Re: Economical recovery after Corona

Thu Oct 08, 2020 7:50 am

The Indian newspaper "Economic times" reports earnings of companies or demand for cars like 90% of same month last year. But if I ask shopkeepers or somebody working in an industrial estate, they tell me business is around 70% down.

I never believed inflation numbers. Now I don't believe even other news any more.
Why can't the world be a little bit more autistic?
 
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c933103
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Re: Economical recovery after Corona

Thu Oct 08, 2020 6:23 pm

Japan just announced that, from March to September, they have "least" companies filing bankrupt when comparing to record from past 30 years.
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prebennorholm
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Re: Economical recovery after Corona

Sat Oct 10, 2020 10:14 pm

c933103 wrote:
Japan just announced that, from March to September, they have "least" companies filing bankrupt when comparing to record from past 30 years.

It's the same here in Denmark. As soon as you declare a company bankrupt the Covid-19 support from the state is ended. Therefore record few bankrupties.
Always keep your number of landings equal to your number of take-offs
 
N583JB
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Re: Economical recovery after Corona

Sat Oct 10, 2020 10:46 pm

What are the long-term implications of another huge stimulus bill? For the record, I am for a large stimulus bill that includes help for state and local governments. I'm just curious about how that will impact us 10, 15, 20 years down the road.
 
Ken777
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Re: Economical recovery after Corona

Sun Oct 11, 2020 7:57 pm

N583JB wrote:
What are the long-term implications of another huge stimulus bill? For the record, I am for a large stimulus bill that includes help for state and local governments. I'm just curious about how that will impact us 10, 15, 20 years down the road.


Local and state governments need support, but only if the money is put to use as additional funds. There will be a temptation to use those new funds to lower existing tax on the top 1%.

A stimulus bill should, IMO, first go to people who will be spending 100% of what they receive, which basically means the poor, those facing large medical bills, etc. Because spent stimulus cash eventually end as paid taxes at all levels of government it basically refreshes treasury funds, making them available for more government spending. Sales taxes are a great example of this refresh. We have around 9% sales tax rate so someone spending $1,200 stimulus money will have paid over 100 in sales tax dollars to state and local treasuries. Stimulus cash paid to the rich will probably go to accounts that generate no tax revenues.

Personally I would poke to see the initial payment be a cash drop to everyone and then following payments made monthly to those who actually spend the money. $1,000 to $1,200 per month would force employers to add staff to handle increased sales, or uncreased production activity, The local and state governments would also receive revenues that all ow for infrastructure growth or maintenance as well as additional funding for health and education.

Growth in social security and military/VA payments would also add stability to those areas. SS has suffered from pathetic interest rates that have weakened the Fund. Same with military pay and the VA payments.

Because the wealthy receive more support from investments they will benefit from the increased profitability of increased spending. Looking at their investments in companies that have failed easily shows that a long term stimulus that results in long term increases in spending benefit them in terms of dividends and/or share growth.

The speed of recovery will, IMO, depend on how the stimulus funds are dispersed, how large they are and how long they last. I have zero confidence in the GOP to deliver what is needed - they simply hate to spend money and their wealthiest members dob't really need small payments.
 
prebennorholm
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Re: Economical recovery after Corona

Tue Oct 13, 2020 1:33 am

olle wrote:
How will the world recover economically after corona?

It won't.

Ever wondered why it is called COVID-19 (COrona VIrus Disease of year 2019) and not just COVID?

New world order: Expect COVID-21, COVID-22, COVID-23 etc. to be treated the same way as COVID-19. That means continuous and ever deepened economic crisis with no recovery in sight.
Always keep your number of landings equal to your number of take-offs
 
olle
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Re: Economical recovery after Corona

Tue Oct 13, 2020 7:07 am

What we see now is that northern Europe change the way we work and live.

If we will not work in office more then let say 2 days per week soon companies will downsize office floor space. How will this affect construction?

In countries like Spain we see a rush for be able to rent and live in houses because the experience of having small kids locked into a small flat has been a trauma.

Energy usage of coal and oil going down while energy output of wind and solar is still increasing.

I have the sensation that 2019 will be considered as a turning page in the history books of economics like 1929 and 1933 has become.
 
Waterbomber2
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Re: Economical recovery after Corona

Tue Oct 13, 2020 7:26 am

2I give credit to the OP for writing recovery after Covid.

Most financial news outlets are already talking about the "ongoing recovery" .
There is no recovery until we put Covid behind us and until then, the economies will suffer and suffer and suffer.

What we saw in Q3 is not a recovery but respite. The strong measures taken at the end of Q1 have resulted in a very bad Q2 but they could harvest the fruit of the efforts in a much better Q3.
The problem is now that the economies were reckless and short-sighted again in Q3 cf. "the China-virus will disappear during the summer" so we're going to get another dip into Q4 and early Q1 2021 as we go back to restrictions.
 
Waterbomber2
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Re: Economical recovery after Corona

Tue Oct 13, 2020 8:04 am

So yes, Covid will end some day in 2021 if we're lucky, more likely this will drag on into 2022 and if we're really unlucky we may have to wait until 2023.
At that moment I expect a recovery, but the longer this drags on, the more likely it is that we're going to see a changed world order by then and most probably a deep depression.
Most banks might end up being owned by central banks.
The good news is that we will be at the deepest point the day this crisis resolves and that means that it can only go up from there.
The bad news is that politicians want to cheat their economies into forced recoveries and are contributing to make the health crisis worse and hence the economy worse.

Negative tax system for businesses
I think that the best way for governments to move forward is to stop taking on corporate debt, stop capitalising stock markets and instead work solely with a tax-based system.
Instead of calling it and structuring it as stimulus, they revise the system to include negative taxes.
If a company makes money, they keep paying taxes just like pre-pandemic.
If a company loses money, they pay a negative tax, perhaps to rates and percentages mirroring the positive tax.
The caveat is that you can't deduct your losses in future years when you do start making a profit again and there is also the condition that you have to forfeit previous losses so that poorly run businesses don't get a blank check.
This system stimulates spending and consumption by businesses even during periods of shutdown or reduced activity.

As for individuals, I would say that a basic income sufficient to cover basic necessities and a bit of wiggle room should be guaranteed to all.
In some countries in Europe, the income gap between unemployed and employed can be quite small in the lower wage categories dominating the job market.
Quite frankly, the best solution is to put everyone in the lower wage classes on temporary unemployment, as most of those jobs can not be done remotely.
The higher wage categories will keep working because they are more likely to be able to work remotely and also the income gap between unemployment and their income is big enough to motivate them to keep working.
 
olle
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Re: Economical recovery after Corona

Tue Oct 13, 2020 10:00 am

We even before saw a shift from Oil dominated economy to non Oil economy. This shift seems to be accelerated by the covid and the change in behavior.

I can only see to myself. Not drivning into office 4/5 days per week that in long term will be 3/5 days per week from home will change the cost that I have for driving a lot.

I consider that I propably use 80 to 160 Euros less per month in Diesel. This will have 2 effects. Government will probably loose half of this and the oil industry half.

The overall effect might be that we have reached peak oil. Special if this go on for 2-3 years and many consumer not even drive as much and more and more change over to electric or hybrid I see that oil industry special expensive ones in Canada, North sea etc will have problem.

Low cost like ME; USA and Russia will survive but like Saudi and Russia build its economy on it will not be possible.

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