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There Is Little Chance Of A Quick Recovery

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@taskmaster4450le
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The last couple months saw the global economy decimated. We saw the collapse of the economy at a pace never seen before.

Thus, while the stock market is flying high, we see the "on the street" situation reveal something completely different.

Parts of the economy are reopening which is giving people hope that things will turn quickly. While there are some areas that are still mandating the lockdown, others are anxious in trying to get things back to normal.

Unfortunately, early indications are that the normal we will see is new.

Retail is one of the main areas people are watching to see if there will be a return to normal. This sector watched its physical locations shut down completely due to the coronavirus. This meant that only those who had an online presence were able to weather the storm.

We already saw 3 retailers announce they are entering bankruptcy with a fourth, JCPenny, looking to join the list as early as this week.

To add more to their woes, it looks like the shopping mall business is not going to return anytime soon. Of those locations that have opened, traffic is scarce.

Naples, FL.

Tampa, FL.

Atlanta, GA.

Austin, TX.

Yuba, CA.

Franklin, TN. Photos Courtesy of Daily Mail

In the United States, the consumer makes up 70% of the economy. Through the end of 2019, online sales accounts for just 15% of the total. Considering the shut down, this percentage is increasing. However, there is still a large portion of the economy that simply is not quick to return as the nation reopens.

These malls show that a fair portion of the economy is still silent even though it is open for business.

This is a similar situation that occurred in China. Even though the country reopened, people were slow to return. While some might say that malls do not account for a large amount as a percentage of the total, it is an important barometer. We can imagine that people are not running out to visit dealerships to buy a car either.

Many highly intelligent people on Wall Street are starting to question the idea of a V-Shaped recovery. There are still a few who are holding out that it could happen.

Unfortunately, it is difficult to see this happening if the early indications from these malls is correct.

Of course, this is awful news for those stores who are dependent upon mall traffic such as Macy's.

It is not a pretty picture going forward.


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Posted Using LeoFinance