Can We Avoid A Hard Landing At All?

A little more than 10 years ago, when I started my last company Idea Couture, the world was just a little more than a year away from entering the Great Recession. People then were asking me what would happened next. We survived and came out as a strong global player 1O years later. The lesson of the 1930s did not offer much lesson other than the need to expand the money supply. The economy of the 1930s and 2008s were fundamentally very different from today's. Compared with the 1930s, the economy in 2008 was more interconnected in terms of global financial system.

Today everything is hyper-connected and you might say it is almost one economy and all accelerated by fast (blind) tech. And with emerging of China as a player in the system; the weaponization of trade and the political instability in the west, we are in unchartered waters. For the hospitality industry, this is worse than 911. This is the biggest crisis that the industry has ever faced in history. And it rapidly extends to every business large and small, global and regional. Whether this turns out to be a really deep, nasty V or U shaped correction or L-shaped slow recovery, nobody knows. The driver for that is simple, it all depends on how long before life becomes normal. The system might survive a three month shut down, a six or nine month shutdown will cause limited but permanent economic damage. If this lasts over nine months we might be pushing towards a depression.

Remember, we should not look at it as an economic crisis. This is a global pandemic crisis. This is not a market breakdown or an economic rebalance or pure liquidity issue. Until the pandemic is under control, then the market can begin to factor in the economic damages. And now I am just weeks away from launching my next company and I ask why there is always a recession follows? May be that's a good sign for me. Hope everyone stays safe.