Goldman Sachs is predicting a sharp decline in Q2 GDP due to the coronavirus. Falling oil prices have also weighed on oil-related names like Halliburton (HAL). The stock is down over 70% Y/Y. It likely reflects a dismal economy as well as recent supply increases by Russia and Saudi Arabia. Demand destruction amid social distancing has punished oil-related names and retailers Victoria’s Secret and J.C. Penney. That demand may not return to previous levels after the pandemic is over.

In a press briefing last month President Trump alerted the public that the administration projects 240,000 deaths from the coronavirus. Policy makers are looking for new cases to peak before re-opening the country. Hopes of reopening the country in mid-April were dashed. Trump braced the American people for pain ahead over the next few weeks:

Faced with staggering projections that as many as 240,000 Americans will die from coronavirus, President Donald Trump largely abandoned his optimistic tone on Tuesday, telling the U.S. to brace for one of its toughest stretches as a nation.

His critics had said for weeks that Trump had been too blithe in his approach to the outbreak, frequently telling reporters that it would simply go away. A changed president addressed the nation on Tuesday, one who appeared rattled by the scope of death and suffering the government’s scientists foresee.

“This is going to be a painful two weeks,” Trump said. “Our strength will be tested, our endurance will be tried.”

“Pain Ahead” was a reference to Trump’s favorite book, Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead, by Ralph W. Baker, Jr. Shock Exchange predicted this recession and ways the government should combat it. It is the book Trump turns to when he wants to lobby for infrastructure investing or alert the public that the economy is worse than expected.

‘Shock Exchange’ – Most influential book on economics since the Great Depression

Will there be a V-shaped recovery? I doubt it. The public is likely shocked by the second bailout of corporate America in just over a decade. Former President Barack Obama bragged about “my progress” after he bailed out Wall Street. Now we are back to the drawing board with more bail outs and economic malaise. Why in the world would consumers spend if the only people who succeed are those individuals or corporations who can keep drinking from the government trough?

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