The Recovery We Won’t See :: By Edwin Tan

About a week ago, I got in touch with a buddy of mine from high-school days. He recently retired from the banking industry. Before proceeding to chat about happier moments in our youth, he alluded to the state of affairs where equity markets were concerned – specifically pinpointing stocks in the aviation sector. These were indeed at historic lows, but he cautioned any hasty move – citing further downside possibilities. But the old-timer was fairly optimistic in the longer term, indicating good prospects in five years’ time where handsome profits mattered. Second-guessing that this topic took on the rhythm of a lullaby, he switched to pertinent nostalgia.

His second-guessing during the WhatsApp phone conversation was quite off the mark. I was analyzing his line of argument quite closely, and what struck me was the ‘whale of a time’ half a decade would be, especially in the context of the breakneck speed by which things were capable of evolving. Only, around the end of the Lunar New Year festivities, the notion of a full-blown pandemic buffeting North America sounded like the beat of distant drums. But within a couple of months, the picture was drastically altered!

Given the very strong likelihood that quite a lot of happenings could account for headline news during this time frame, my buddy could still be spot on. But getting there would definitely not be a textbook, plain-sailing journey. On the contrary, it would take the form of a multiplicity of rough and excruciatingly painful moments.

Prior to the present-day trauma, it was more than business as usual. Ever since the financial debacle caused by the collapse of AIG plus Lehmann Brothers, nothing novel was ingrained in the psyche of the markets. Quantitative easing by major central banks, including the Fed, was primarily a tool to stabilize the situation which was meant to stave off a horrendous meltdown. But somehow, it was misread by a bullishly exuberant mindset that prevailed amongst the wider investment community. So the principal markets around the world tested record highs where their indices mattered. Stock valuations soared in tune with overrated optimism.

The seemingly unending gravy train seemed to perpetuate a one-sided view of things, especially that which was material. For a lot of people, prosperity that looked unshakeable meant there was space for designer labels from top to toe – coupled with every other thing associated with high living. More malls, more retailers with every conceivable facet of sophistication and certainly higher stakes when the going was great. Market projections were more than rosy; more hotels, a larger car rental fleet, more aircraft, the same said for cruises and even larger casinos! All of it was based on demand that was nothing more than a mirage!

Without doubt, the corona virus scourge can be considered as one of mankind’s harshest reality checks. A string of unthinkables became a matter of hard facts. International as well as domestic air travel suddenly became risky business. Scores of aircraft were on the ground, and the ripple effect did not waste any time in rearing its horrible head. Hotels racked up sky-high vacancies, travel agencies were bled dry with a flurry of cancellations, and rental vehicles idled in congested lots. As this hemorrhaging got worst, job losses mounted. Recently, Rolls Royce announced layoffs to the tune of nearly nine thousand because of reduced air traffic, while long-established Hertz Car Rental filed for bankruptcy.

Would it not be just a passing trend but could it be the tip of the iceberg? With lockdowns across the continents aggravating the inherent fragility of the global economy, there is only scope for further gloom and doom. This is the result of decades of mindless excesses in the leading economies. The ultimate price is yet to be paid, so what we are seeing is perhaps the initial down payment!

The possibility of a V-shaped recovery looks very unlikely, and the same could be the case for a U-shaped one. L is the alphabet to be the shape of an eventual turnaround. This translates into many hurdles to scale before any modest inkling of better days appear on the horizon. In the meantime, there will be an unimaginable pack of ‘too big to fail’ casualties amidst an epic unemployment tsunami. Supply chains could go haywire, resulting in food shortages that could translate into famine.

It would amount to an ‘end of the world’ sense of despondency, while there a reasonable number of folks who would cling to a straw in this overwhelming torrent of hopelessness. Anyone or anything that would be their saviour would do, regardless of the repercussions. They would happily take it, even if it were hook, line and sinker!

It might be the case that those howls of desperation would not fall on deaf ears. Someone would not just hear it but be more than gladdened by it. It is the cue to announce to a sickly planet his timely arrival as the Mr. Fix it!

This guy would make things happen through a slew of lying wonders that make it have that ‘too good to be true’ feeling. Recovery would then be a reality; wealth would once more be flowing through the veins of the earth. Enough to make him like a super hero worthy of worship! The symbol of worship would take the form of a mark of acceptance and adherence.

“Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead” (Revelation 13:16). From reading this piece of Scripture closely, it is obvious that there is a social class – the existence of wealthy individuals which says that prosperous times have returned.

But this is as good as history repeating itself. There would a period of upheaval likened to twilight of the last Kaiser ahead of a turnaround that was spearheaded by an art school dropout. In spite of this man’s lowly credentials, he managed to mesmerize many German people to believe that he had answers through awe-inspiring rhetoric. They believed everything he said and somehow he delivered, albeit for a limited period of time. Feels like this could happen again, except that whoever is part and parcel of the Bride will be long gone when all this unfolds.

“For God has not destined us for wrath, but to obtain salvation through our Lord Jesus Christ” (1 Thessalonians 5:9).