While one curve bends, the unemployment curve surges: 26.5 million Americans have filed for unemployment insurance as we inch closer to Great Depression figures.
The economic devastation brought on by the COVID19 outbreak has been dramatic. Healthcare systems across the world are undergoing stress that they have not witnessed in our lifetimes. The economic devastation is also startling as 26.5 million Americans have now filed for unemployment insurance dwarfing anything we saw during the Great Recession. This is a troubling time for Americans both on a healthcare front and an economic front. Yet the stark reality is that as a nation, the majority of our country was living one paycheck away from economic devastation. And here we are, with the economy essentially shut down and paychecks not coming through. While we may be bending the curve when it comes to COVID19, the economic damage curve is not going to recover for a very long time.
Read MoreThe COVID19 Depression: 22 million file for unemployment insurance as unemployment rate is now fully in double-digits.
For many years we have talked about how many Americans were living paycheck to paycheck. One troubling statistic that came to mind, even before the COVID19 outbreak, was that half of Americans were one paycheck away from financial disaster. What the COVID19 outbreak has shown is how frail the economic situation was for many Americans and how disconnected Wall Street was from the lives of millions of Americans. Even in the last two weeks, the stock market has rallied in the face of 22 million people filing for unemployment in a span of one month. This is an insane number and never in our history have we seen so much economic carnage in such a short period of time. But the reality is, the entire system has shut down and people now need to start thinking what the next phase of all of this is.
Read MoreThe Novel Depression: How the US is going to see Great Depression Unemployment in Record Time.
The unemployment report today was widely acknowledged as being incorrect even by the mainstream media when “only†700,000 jobs were reported lost last month. We already have data that approximately 10 million people have filed for unemployment benefits in the last couple of weeks. This upcoming recession, the Novel Recession, is largely one that is being brought on by a global shutdown to prevent the spread of the COVID-19 outbreak. Yet the speed in which this recession is coming just goes to show how fragile our economy really was and how many Americans were already living on the financial edge.
Read MoreA surge of unemployment claims is coming from the COVID-19 outbreak: A record 2 million plus people have filed for unemployment.
The COVID-19 outbreak has jarred an 11-year bull market into a sudden downturn and what looks to be a recession. What is more startling is that we are now anticipating a record number of unemployment claims hitting the system that even dwarfs what was seen during the Great Depression. Various reports show that unemployment claims will surge by more than two million in what amounts to be a relatively short period of time (one or two weeks). The sudden closure of schools, restaurants, retail locations, and essentially non-essential functions has ground the economy to a halt. Even the Great Recession did not hit with such sudden force. The Dow was inching close to 30,000 when now it is below 20,000. This incredible drop is what happens when you shut down an economy that is built for consumption yet there is limited consuming when we need to be practicing social distancing.
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