This is not just a recession waiting around the corner.
Cancel all events and stay at home.
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What is a recession?
A recession is a period in the business cycle when economic activities are in a general decline, typically accompanied by elevated unemployment, falling income and consumer spending, rising business failures, and falling stock markets…
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The length of a recession could range from a few months to several years before economic growth picks up again…
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The stock market typically declines sharply before a recession is officially called, as many macroeconomic indicators would have turned south already, signaling investors to expect trouble ahead. For the same reason, markets tend to bottom and start bouncing back around the time a recession is officially called, as investors look forward to a subsequent recovery.
Joachim Fels, global economic advisor at PIMCO, told clients on Sunday that he now sees a “distinct possibility” of a recession in the United States and Europe during the first half of the year, followed by a recovery in the second half. Japan, he said, “is very likely already in recession.”
“In our view, the worst for the economy is still to come over the next several months,” Fels said.
https://edition.cnn.com/2020/03/09/economy/global-recession-coronavirus/index.html
Roubini, once known in media circles “Dr. Doom,” is again living up to his nickname. On Monday, he tweeted that plunging oil prices would tip the world into global recession. Roubini also predicted that a financial crisis resulting from a one-two punch of the coronavirus and a sharp drop in oil prices would be worse than the credit crunch of late 2015, which caused dozens of oil and gas drillers to go bankrupt. “Not just about energy but also other leveraged sectors; the COVID economic shock is real rather than a fear,” Roubini tweeted. “Recession/crisis ahead.”
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First, the bad. According to Goldman Sachs chief global equity strategist Peter Oppenheimer, “event-driven” bear markets, on average, result in 29% declines.
That’s bad because, at the moment, this isn’t a bear market. Though Tuesday’s close, the S&P 500 SPX, -4.88% has dropped about 15% from its record high on Feb. 19. A bear market is typically defined as a 20% drop from a high.
“We’ve never before entered a bear market because of a viral outbreak. But if you believe we haven’t hit the trough and we are in fact headed for bear territory, it’s useful to look to the history of bear markets to get a sense of their duration and intensity,” Oppenheimer said in an interview sent out by the bank to its clients.
The good news, however, is that bear markets triggered by exogenous shocks typically regain their previous levels within 15 months.
Not all bear markets are created equally. Goldman Sachs analyzed bear markets going back to 1835, and then classified them as structural, cyclical or event-driven.
Structural bear markets, on average, see drops of 57%, and cyclical bear markets see drops of 31%. Goldman defines structural bear markets as those created by imbalances and financial bubbles, very often followed by a price shock like deflation. Cyclical bear markets are typically a function of the economic cycle, marked by rising interest rates, impending recessions and falls in profits.
“Event driven” refers to things like the war, oil price shock or an emerging-market crisis.
Oppenheimer does see differences, however, between the current situation and other “event-driven” declines.
“They’re all different, but typically it has been market driven, so a monetary response has often been more effective, whereas this time it’s not clear that it will be. This is partly because interest-rate cuts may not be very effective in an environment of fear where consumers are forced, or just inclined, to stay at home,” he said.
The starting point of already-low interest rates is another difference.
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We’ve entered the tunnel.
“If you stick around long enough, you’ll see everything in markets,” Buffett said. “And it may have taken me to 89 years of age to throw this one into the experience, but the markets, if you have to be open second by second, they react to news in a big time way.”
In an interview with the Berkshire Hathaway (BRK-A, BRK-B) CEO in his Omaha headquarters on Tuesday, Buffett called the recent market shock “a one-two punch” with coronavirus and the plunge in oil prices, but indicated that the October crash of 1987 which he called a “financial panic” was worse.
As for the market collapse in the the fall of 2008, he said that was “much more scary, by far, than anything that happened yesterday [Monday of this week.]”
Source - Warren Buffett reacts to the stock market rout, oil crash amid the coronavirus outbreak
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My thesis used to be that we were entering a recession, I now think however that we may be entering a particularly deep one that may turn out in a depression, unless government and central banks start aggressively ramping up targeted fiscal spending and taking the precautionary measures we know are necessary immediately. We have a demand and supply shock simultaneously for the first time since the 1930s and policymakers seem to believe as if we can go on with another interest rate cut, stimulus packages and keep the economies moving with the bare minimum of fiscal support. What will quickly become apparent is that we are going find the global economy on life support itself despite these measures. As for markets I think we’ve seen time and again they simply are never ready for these kind of shocks and we should prepare for them to sink further when economic indicators and other data start to come out and are below estimates (as yourself for example if Italian bourses are pricing in, say, 10% GDP contraction? This article clearly shows affected sectors account for at least 18% of the economy. UBS meanwhile is forecasting just 0.8% contraction for the year as it’s worst case, and I think that’s telling as to what stage of denial we are still at.)
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If things remain as they are right now, the US stocks are effectively in the bear market.
Nasdaq is -8% over 5 days after a 9% gain today. Not a bear market any more for now.
Lasted a day 
Non-banks and their balance sheets
Today banks are safer. Their common equity Tier 1 capital ratios have more than doubled, according to the Financial Stability Board. Lenders have reined in proprietary trading and have less exposure to hedge funds. That means they are less likely to curtail lending. Indeed, authorities are using banks’ excess capital to help cushion the shock. The U.S. Federal Reserve, the Bank of England and European Central Bank will all allow lenders to dip into existing buffers.
But while banks are healthier, companies are weaker. A decade of low interest rates and bond-buying by central banks has encouraged many large corporations to crank up leverage. Analysts at Société Générale reckon that U.S. companies with investment-grade ratings have pushed debt to around 40% of assets, higher than during the 2009 recession, or the aftermath of the internet bubble in 2002. Analysts at Bank of America Merrill Lynch reckon that around 8% of the constituents of the STOXX 600 index of European companies do not earn enough operating profit to cover their interest bill.
AND WORSE
Companies are therefore ill-prepared to absorb the economic shock caused by the virus. As activity grinds to a halt, fragile businesses will be under pressure to rein in spending and cut costs. While banks can provide some flexibility on lending, companies that depend on the bond market for funding have less ability to quickly renegotiate payments.
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Corporate bond markets are also arguably more dependent on credit ratings than during the last global crisis. CreditSights reckons that companies rated BBB now account for half of U.S. investment-grade debt indexes. The risk is that as those companies are downgraded to “junk” status, funds that follow those benchmarks will be forced to sell. Collateralised loan obligations, which hold over $820 billion of loans to private equity-owned companies, are another new area of vulnerability. These funds can be forced to shut down when too many of their assets are downgraded.
The way we’ve been going it’ll be quite a short ride…but possibly to the same place…
Have to monitor lagging indicators such as monthly jobless claims, employment numbers, productivity etc. The numbers from April will start painting this picture.
Morgan Stanley’s team, led by Chetan Ahya, said a worldwide recession is now its “base case,” with growth expected to fall to 0.9% this year. At Goldman Sachs, Jan Hatzius and colleagues predict a weakening of growth to 1.25%. S&P Global added its voice to the chorus with a report expecting that growth would range 1% to 1.5%.
Such slumps would not be as painful as the 0.8% contraction of 2009, as measured by the International Monetary Fund, but they would be worse than the downturns of 2001 and the early 1990s. Both Morgan Stanley and Goldman Sachs anticipate a rebound in the second half, but warn that the risk remains of even greater economic pain.
A good comp would be the previous forecasts.
Haven’t seen it yet, no doubt during the day we will get clearer numbers and from across the USA - but I doubt it’ll be much rosier.
Worst I read on Twitter was when people got let go from hotel chains, but not officially terminated but put on zero contract hours, so they can’t even claim unemployment and are left without health insurance.
USA, the land of opportunity. 
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There’s more numbers on Coronavirus storyline #10: unemployment from many more states.
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