Recovery Alphabet Soup – V, U or W?
Thankfully, there are signs that the curve is flattening in New York. Continued diligence over the next two months will still be needed to ensure that we tamp this out. Many are prognosticating on whether this will be a V or a U – Wall Street folks are hoping for a V and most CEOs are saying a U. I also propose a new one that is not being spoken about, the W.
Financial markets and some political leaders desperately want a V. Epidemiologists and early China results say this is unlikely. Continued volatility in financial markets will occur as expectations get ahead of reality. It does not appear that any public health or corporate leaders think this one is possible.
Many corporate leaders have indicated that they see a fairly extended transition back to full economic activity. The U is probably not descriptive here as it implies little change and then a hockey stick at some point. Most businesses believe that this is a misshapen U, with the right side slanting out significantly. Maybe a typographer can find something better for this.
There is a risk that we come out too quickly and/or fail to effectively test and trace new infections. The reoccurrence could lead to some kind of second shutdown, something everyone wants to avoid. In this case, the folks who desperately want a V could drag us into a W by moving too quickly to open up again. The other dynamic is a dramatic drop in business investment as companies conserve cash. This could deepen the recession we are in now (once confirmed with another quarter of data).
Our hope needs to be for an effective public health strategy to get people back out without risking a second wave of infections. Governor Cuomo has been advocating a strategy for many weeks that entails wide spread testing for antibodies accompanied by widely available immediate tests. There are sure to be challenges in implementing these and would be nice to see Washington get out in front of this at some point.
Look for next: How to incorporate recovery archetypes into a supply chain scenario planning approach.
Everyone stay safe and hearts go out for everyone impacted.
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