It's all seems far to likely given the shutdown of so many economies but are we really heading down this track or can we restart on queue. Press PLAY if you will? Or are we destined to a drawn out recession?
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Hey, guys so how are you? So is a post coronavirus recession inevitable? I think you know this is one of the interesting questions because you know we're gonna really break it into we're going to look at what is now are we in recession now technically. Are we in you know likely to get a recession later and I'll answer them in two different parts because I think that it's important to understand effectively what's going on right now.
Anyway, guys if you haven't already make sure you subscribe and any comments right in the thing. Happy to answer back happy record videos, and you know to respond. And get anyone any discussion going because obviously what I'm trying to do is make these things as simple as possible so everybody can understand them, yeah I'm you know studying university economics but the reality is is that you know I like to keep it really simple.
So let's get into it so, first of all, let's address the elephant in the room which is that the inflation our sorry recession is two-quarters of negative economic growth. Actually the elephant in the room is probably the bunny ears for Easter this weekend. If you haven't remembered it is Easter this weekend so you might want to actually think about going out and getting some chocolate if you are allowed. I don't know whether you're allowed right now wherever you are watching this but if you are then you might want to go grab some chocolate for you kids. We've been out certainly a watered-down version of Easter this year.
Anyway back to the elephant in the room two-quarters of negative economic growth, now the reality is we haven't had long enough with coronavirus to do two quarters so technically we're not in recession anywhere. However, never before that I've ever seen and that I've ever heard have we pressed pause on an economy like we have and we're you know so many people have been money made unemployed and this sorts of thing depending on the country you're in. You know if you're in the US huge unemployment and even worse there are so many businesses that are furloughed or stopped and we just don't know right now so we don't just don't have the economic data to be able to say recession. But what I will say is this it is likely that a lot of countries will go into recession during this time. We probably won't know until the third quarter the second or third quarter I mean we're in the second quarter now we probably won't know until the end of the second quarter whether they have gone into recession just because the economic figures are just not there. I mean people are so focused on other things you know it's gonna be potentially a bloodbath around the thing now where I say bloodbath I that it will vary between countries because not all countries are predicting a recession which is you know quite an interesting thing.
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You know you've got to look at what is the recession now while things are closed down and you know in some ways that's a bit of an artificial recession. Actually there is still an economy going on when I say pause you know the assumption might be that everything has closed down. Actually I've got businesses that are totally closed down they're not really doing anything and other businesses that are hugely busy you know. And so you know I mean and I'm saying that is also part of the strategy as being an entrepreneur which is that I have multiple streams of income you know that aren't you know maybe you're affected here in different industries and things like that. Hopefully, as an entrepreneur, you've got multiple streams of income and you know you sitting there and you're okay and I hope everyone's okay certainly in the UK they've done a lot towards that.
Let's move into so talking about are we likely or isn't it inevitable to go into recession. Look I think we have most likely dipped into recession and you know certainly in the first quarter. We probably had a good January not so good February you know that's still okay March was a washout yeah April realistically I mean if you look at Q1 realistically January China was the only one affected. And we were able to actually distance ourselves and say you know it's a Chinese thing in actual fact it wasn't you know and we should have known that we should have seen it coming. We should have a share you know holding shares and things that we should have seen that coming. But we just didn't know we didn't know enough of the virus and so lots of people were caught unaware. When you've got Trump out the front saying you know it's 15 now we'll be zero in a few days. I mean look at how silly that guy looks I mean he is probably the stupidest person on earth right now. Although everyone that he's just making billions out of this and whether he's not doing it now he's making sure that you know he's in it for himself.
Anyway Asia you know at the end the day towards the end of January things started to slow down you know whereas Europe probably had January fine even February fine and it wasn't till March that it really hit. I mean obviously Italy and if through those early countries in Europe got hit hard in February so they're likely to have a really bad quarter one and then potentially the UK in that quarter two is you know gonna be right up because if you think about most places are locked down now most things you know so a lot of that economic activity will have been dropping off. What we're likely to find is April dead maim you may see some lockdown easing but it'll be very conservative even June I think you know we still gonna see lockdowns there's still be some things you know people will still be wearing masks around people will still be social distancing and all that sorts stuff. I mean and this potentially could become the new norm okay but look so that's Q1 and Q2 which I think will be in recession.
Really when we're talking about now is the recovery or post corona and what I'm talking about then is Q3, Q4 and Q1 next year Q2 and then that whether they will be negative. Because potentially that could happen. Look the best-case scenario is that we press play you know government you know manages that really well and we get on with it. I don't think that's necessarily gonna happen certainly not in the US. The US is likely to have issues because of just the sheer unemployment rate. They are really struggling we just heard that a third of people didn't pay their rent on April for the April rent you know which is that's a huge you know huge loss of income for you know agents like you us, I mean not that I'm in the US market. It's massive and if that is vibrating all around the or reverberating around the whole UK a US economy Wow. UK you know I mean it hasn't been so bad you know we've actually seen because of the government stimulus actually it's been I might say good because nothing's good in this sort of thing but it's certainly been a lot better than it potentially could have been. It could have been a bloodbath as well. But you know the interesting thing is whether China is sorry China whether the US okay I know I'm getting confused a bit even though these communist countries you know China and the US I mean the US isn't communist but the reality is that they're treating their people as if you know the stereotype we might have for China which is appalling but anyway.
The bottom line is what's going on in the US is you know they're gonna take some time and then potentially they normally you know we'd say they go they coughed the world got a cold not so much anymore but that could still happen and they are the largest consumers still. But you know what they may get knocked off their perch pretty soon I mean that the statistics have been that within the next 10 years they will but in actual fact, you may see that it's in the next three or four years they get knocked off their perch because of the sheer arrogance of Trump and his enablers.
Anyway so Q3 I think recovery but very cautious recovery. So I don't think we're gonna see this V-shaped bang straight out I think potentially now having seen what's happened it's gonna be much more people are gonna be a lot less likely to spend money. They're gonna want to keep the money close to them and then you know Q4 I think what will either happen is really you know we're in a recession and we'll know by then what's happened you know and then we're you know scrambling or you know we're recovery mode and but it'll still be returning to the new norm and I think the new norm is what we have. So business is not travelling as much business is using virtual online meetings and things like that, which isn't good for the transport industry or the holiday industry and those sorts of things.
Q1 next year is gonna be an interesting one because actually I think what we'll start to see by they're not opening up but potentially you could at some point over that period have a second wave. I mean if they do find the vaccine and they're not likely to have the vaccine by Q1 next year you know we're talking potentially Q3, Q4 2021 then potentially we're gonna get a second wave and when that second my hits will probably be more prepared I think this time I hope you know just you just never know do you.
Factors to watch out for I think this is what's going to determine it yeah realistically lockdown restrictions length the longer they go on the more chance of a recession because things are just going to slow down and grind to a halt and people are just going to give up and not have the cash reserves to survive. And so you know they're just going to need more assistance and more support the governments may just go you know what enough we're prepared to do this much but not this much. We'll see. But also the stimulus withdrawal so when it becomes time to go right we need to press play again how do governments handle that withdrawal of the stimulus. Have we become dependent upon it and really we were floating people that you know perhaps shouldn't have been floated or businesses that wouldn't have been floated now that will come to potential roost when we go to re-ignite the economy.
Then also the big thing I think really is the unemployment levels and whether entrepreneurs who may be a furloughed staff have to get rid of stuff and if that happens then we have rising unemployment then we have all the negative aspects of that and potentially there.
So you know are we likely to get it? Look nothing is certain in this respect you just don't know you know in economics there is no absolute certainty. I'll tell you what there is a lot of there's a lot of tricks that the central banks had which they've already used. There's a lot of tricks which the governments have that have already used so their bag of tricks is fast running out but that's not to say that you know there's not some innovative things. The very fact that they have given money directly to individuals and direct to small businesses has been a massive I mean you can't understate the impact of that yeah last recession in 2008 - tomorrow I've got another chat about this specific thing. Differences between the 2008 recession you know GFC and now why I think it's a massive difference because governments around the world have accepted they need to get the money to the individual's hands. And the best way to do that is to keep the small businesses afloat which keeps the unemployment rate and keep people in jobs. Which helps their self-esteem helps a sense of community all these sorts of things it's an amazing time to be actually doing that and if that actually may save us from a recession and you know we'll just see how far they're willing to go with that.
In the UK they're doing an amazing job at doing that and it's fantastic in fact Australia's doing it, the Scandinavia is actually they faired pretty well I mean even Sweden I was reading about Sweden the other night and you know they have it locked down and it is a big social experiment but they've actually kept it relatively under control. There are good positive cases of how to deal with coronavirus and you know as much as Trump how to go up to Sweden and I said oh no it's not working actually it is you know reading about it, it is working.
So look you know the reality is a recession is not a certainty their posts Corona recession is not a certainty you know we just don't know it's Ontario uncharted territory. I think we will go into recession lots of people will go into recession lots countries will go into a session but that doesn't necessarily mean that they're gonna have the recession coming out of it. But I have to say one country is going to go into recession and is more likely that would be America in a massive way just because their response has been absolutely pathetic I mean at every level it's appalling what they've done to their people. It really is a 1984 Hunger Games scenario over there and chatting to my mates over there just the things that are going on it's just appalling. The fact that they can't get the loan money they can't get that you know they're just knocking people off they're just putting them to unemployment and that's not good you know that's not good for an economy because that takes a long time to pick up that slack and get it back to growth.
Anyway I've said enough about that so recession I'm still you know not saying 100% foregone conclusion I think certainly we will see some recession figures coming out. But it doesn't mean that's prolonged the recession I think that's the important point we are likely to be in a recession now and the next quarter but I think to be fair after that it depends on how well we as business owners and entrepreneurs and how well you and you know as employees and all that sort of things and you know and how the government how we all respond to this. And I think if we all really focus in on getting into recovery I think potentially we can starve off a recession scenario.
All right guys have a great Easter obviously nobody's going away in your own home but yeah stay safe stay healthy and I remember any questions you know put them in the comments and be sure to subscribe alright guys see you later bye