COVID-19 Soundbite: A Vibrant, Economic Recovery in 2021


Date April 1, 2020

Episode Summary:

We see the current economic condition as, basically, frozen. Work stoppages in travel and leisure, out-of-home entertainment and in-person services will lead to further layoffs. Non-essential businesses are closing their physical doors, leaving some business models unaffected, others strained and some broken. We see this as COVID-19 holding the world up for a multi-trillion dollar ransom. Those with deep pockets will have to bridge the world to the other side: governments, large companies, equity owners, lenders and landlords. Companies are drawing down billions from asset-based lenders who are seeing their outstandings jump up just at a time when their underlying liquidation models are temporarily null and void. Companies are prioritizing payroll, holding rent and getting relief from lenders to avoid bankruptcies.

Keep in mind, the underlying global economic activity was sound, albeit long in the tooth, prior to COVID-19. We believe there will be a vibrant economic recovery in 2021. Government and central bank stimulus, bailouts and deferred regulation will mitigate some of the most severe damage in the meantime. While some of the forced paradigm shift will accelerate bankruptcies for some companies in the short term and change business models for others in the long term, this shift was already well underway in many sectors.

Host: Ken Frieze, CEO