In US, especially in New York City and New Jersey State, the human situation is tragic. This can prevent being perceived correctly in the current situation in the country. As the issue has already been covered in the world press, it will be tried to summarize the situation in US only with an economic perspective. In summary, the psychology of decision-makers who are influential on the economy, and a significant part of the public will be conveyed:
First of all, it is necessary to correct the wrong perception in the world about America. In US a tragic human situation is reflected, especially from two states such as New York and New Jersey. Yes, indeed, half of the human casualties in US are in New York City and New Jersey states. However, this situation is not considered important enough in the whole of US. Especially in large part of the base of Republicans and Democratic Party, such a thought “We are a big country. Why don’t we do our best to save these people?” is not dominant. Unfortunately, prevailing visibility is every tub must stand on its own bottom. Therefore, questioning as to whether capitalism, the American system, or the economy is collapsing, anxiety is not dominant here.
The general approach is: “The problem is basically in two states. In the rest of US, the number of deaths per state is around a thousand. This is a better performance than some exemplified Northern European countries …”
40 of 50 states will be opened in the next week in US. But everyone, from President Trump to the ordinary citizen, is curious about the consequences of this opening over the next three weeks. If there is a growth in virus-related problems within three weeks, there will be a great economic uncertainty process. Probably it will revive in some states, and a difficult period will begin. Probably hopes for the reelection of Trump’s for a new term will also disappear.
Data on general retail consumption, excluding food and basic necessities, were shared. According to the data published by NPD company; While the contraction in retail consumption was 30 percent in the last week of March, this contraction decreased to 4 percent in the last week of April. According to these data, consumption is much better than expected.
WHAT DO WE THINK AS MATCH CHAMBER?
So far, general psychology has been reflected, the data has been shared, so what do we think as the MATCH Chamber? Looking at US dollar and its bonds, the current economic system in the world, and the dominant role of US is not questioned here.
It is really difficult to accept the public’s approach to health and humanitarian situation. If a country that announced $ 2 trillion in support at one whack would spend a certain portion of these resources in urgent hospitals and saving people, the situation would have been very different.
If US quarantined states from other states in which the problem is happening, it would be more easily controlled. This is practically not possible for Constitutional reasons.
Unfortunately, opening 40 states will have a humanitarian cost to US. From an economic perspective, unless this price is so dramatic, US seems ready to pay the price. According to our estimate, the outcome will not be dramatic except in 1-2 states. Because according to the opinion of discreet experts; If the social distance is taken into consideration, the virus does not risk the lives of the elderly and those with low immunity in hot weather and small cities. Turkey, India is showing examples like this.
The economy will probably be in parallel with the statements of institutions such as the IMF and the World Bank in US. As it is the election year of Trump, the process may be slightly lighter with the additional supports he will provide.
