By Jim Hoft
The folks at the conservative website Grassfire put together their estimate for the costs of the shutdowns related to the coronavirus and the amount is staggering:
. Loss of Stock Market Valuation
At the end of February, reports indicated the stock market lost $6 trillion in valuation based on a drop of the Dow Jones Average from a high of 29,551 to 25,429 in the first wave of coronavirus crisis slides. Until we find a site that states the total loss due to the coronavirus crisis, based on the $6 trillion slide, we are estimating the total loss as of 3/31 (with the Dow at 18,591) to be:
Stock market loss in valuation: $10.5 TRILLION
They say those are “paper losses” and the market was “due for a correction.” Tell that to the retired couple depending on their stocks to live on during their retirement. Or the near-retirement age couple that just saw the goal of retirement fade away.
2. Direct Losses to the Economy (Lower GDP)
On March 20, Goldman Sachs drastically lowered its U.S. economic projections and is now expecting that that U.S. GDP will contract by 3.8% this year, as opposed to the projection at the outset of the year of 2% growth. It took America about three years to get back to the level of GDP output after the 2008-2009 recession. Based on this data, we project the LOSS in GDP due to the coronavirus crisis:
Direct Losses to U.S. Economy (GDP) $2.39 TRILLION