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It was surprising that so many people had comments about the movie Doom and out of all of them I am yet to meet someone who actually saw the flick. Everybody heard from somebody who heard from somebody. I have a nagging feeling that so far, one person watched it and the chain reaction is continuing until this day.
The game "Doom" and its sequels were always shy on plot. The focus was on terribly garish monsters and outrageously powerful weapons for its players. It's a pure adrenaline rush and the movie aims to keep that in mind.
As I explained in my management book, stock price is made up of three parts: the book value of a company, the present value of its dividend stream, and the speculation component. The latter is huge, especially after the deregulation of derivative securities that was one of the factors that allegedly caused the 2008 debacle (If you don't know what I refer to, I invite you to watch the movie "Inside Job"). But ignoring the speculation aspect for a minute, we need one more piece of theory that addresses the question: "what is the expected return of the market"? What is the "investor" after? Well if GICs or T-bills that have zero risk pay say 3%, then theory expects the market to deliver 4% more than that, or 7%. Why? Because why would investors risk (gamble) their money if the payoff was any less? Today GICs pay no more than 1%. But if inflation increases to 5%, and the Central Bank raises interest rates accordingly to fight it, so that the T-Bill rate then rises to perhaps 6%, then the stock market would have to deliver a minimum of 10% (6% risk free T-Bill return plus an extra 4% to make the risk worthwhile). Would have to deliver 10%. As in every company, on average (not just Apple, Microsoft, Amazon... every company would be measured against this). That is not likely for many companies. So people would pull off their stocks and look for something else. Which would lower stock prices.
Public Transit will go down in utilization, and Traffic Congestion will go up. Even as city mayors are busy muscling executives to make employees return to the workplace, in the hope that the employees will come lunchtime go out and stimulate the local economy, we still need to be mindful of social distancing. Buses and subways used to be packed with people at rush hour. "No more room, wait for the next bus" crowding isn't a thing anymore. If a bus is nominally taking 30 cars off the road, what does a socially distanced, half utilized bus do to traffic? It puts 15 cars back onto the road. Which would explain why roads are choking in traffic while folks are yet to get back to the office en masse. Half the ridership means half the income to public transit. To governments, this is going to be a problem. Taxes will be increased to cover operating deficits.
Discretionary, impulse shopping will decrease. Or to phrase another way, Consumerism will decrease. This will have profound impact on businesses, and in aggregate on the economy. The lockdown forced many of us to spend a LOT of time in our homes. Many of us had days on end to do what we normally do when our parents die or downsize residences: assess what there is and whether it is worth keeping. Not surprising in an economy based on consumerism, our homes have become a storage of stuff, the destination of our high producing factories and door crasher sales. The money we have spent on shelves, bins to store stuff we don't use... the valuable space in our homes we use to store stuff we don't use... I have spent hours uncounted throwing out, selling, donating and recycling stuff from my house during the pandemic. And I still have too much. Gathering stuff is no different than eating peanuts... do you know how many peanuts are in a bag? If you have not watched George Carlin's classic treatise on "Stuff", here it is =MvgN5gCuLac . (Cards on the table: a reviewer of this article assures me that there will be plenty of shopping after lockdown, as a celebratory "this ended!" thing - which means I could be quite wrong and that's ok)
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