No Return to Normal

US states are slowly lifting lockdown restrictions now, 

Countries in Europe are doing the same, with France lifting restrictions on May 11..

But then what?

In a May Day address, French president Emmanuel Macron warned that Life Won't Return to 'Normal' After Lockdown Ends

"May 11 will not be the passage to normal life. There will be a recovery that will need to be reorganised," Macron said in a speech at the presidential palace after a meeting with horticulturists.

French President Emmanuel Macron warned on Friday that the end of the national lockdown on May 11 would only be a first step as France looks to pull out of the crisis created by the coronavirus pandemic.

In a controversial move, Macron's government has decided that schools will gradually reopen from May 11, despite the reservations expressed by its scientific advisors.

The US should hear a similar from president Trump, but I doubt we do.

Back in France ...

Emergency Travel Quarantine Until July 24

Health Minister Olivier Véran announced France would extend its Covid-19 "state of health emergency" through July 24.

Kiss the French Travel industry goodbye until August as Travelers Face Quarantine for 12 more weeks. 

A bill to be put to parliament on Monday says plans this month to lift the public health emergency, which began on March 24, would "be premature" and "could see a risk of the outbreak" intensifying.

 "We are going to have to perform a long-distance run," Véran told a news conference, saying he was aware that the French people had already been asked for "colossal efforts" in the fight against the virus.

Travelers to France, including French citizens returning home, will face a compulsory two-week quarantine and possible isolation when they arrive in the country to help slow the spread of coronavirus, the health minister told a news conference.

French Tourism

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Daniel Lacalle commented on Twitter: "Tourism in France represents 9.7% of GDP and supports 2.9 million jobs (10.9% of employment)"

Rebounds Slow Everywhere

Rebounds will be slow across Europe and in the US as well. 

The finances of too many individuals and corporations have been wrecked. 

Many Scars

Bankruptcies and the drain on savings will leave permanent scars everywhere, even if there was an across-the-board lifting of all the lockdowns,

Don't Expect "Normal" for Years 

  1. Those struggling to make rent or payments will have had the scare of their lives. Attitudes about the need to save will change. More savings means less spending and lower profits for businesses. 
  2. Car buying, travel, dining out, etc. will not return to normal this year or next after this kind of economic hit. The wealth impact alone will take years if ever, given boomer retirement needs.
  3. On the corporate side, kiss goodbye just-in-time production strategies with dependencies on China and no inventories. This will lower corporate earnings.
  4. To reduce expenses, frequent business travel will give way to more teleconferencing. This mean lower hotel bills  and less air travel.
  5. More people will work at home permanently. This will lower gasoline usage and dining out.
  6. Even boomers who did not do much online shopping had to learn new tricks. Many will now be hooked on the convenience of Amazon and will not go back to their old ways. This is another kick in the teeth to struggling malls.

Slow, Choppy Rebound

All of these things point to a very slow, choppy rebound  with many struggling restaurants and businesses not surviving.

If the initial rebound is too fast, it won't hold. 

A double-dip recession may very well be in the cards.

Normal is not the way things were two months ago.

Mish

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