I have often wondered what it must have been like to have lived through moments in history that threatened the very fabric of our lives – my nan’s stories of the blitz, my mum’s of the Cuban Missile Crisis. Now I understand – Covid-19 is big history; when toilet paper becomes a precious commodity, you know events have taken a bewildering turn.
They have turned with disconcerting speed, too. In two unbelievable weeks we have swung from a general dismissal of the coronavirus threat and record US market highs, to lots of talk of dip buying, to utter market savagery that little has escaped, prompting coordinated government action to fend off not just recession but – and I hesitate over writing this, for fear of causing undue alarm – a high death toll and economic depression. It is the stuff of dystopian nightmares.
Hopefully, sensible policy means the former can be avoided. But there is still good reason to worry just how intense the economic pain may get. Just as it seems that many householders are preparing for the worst physical effects of Covid-19, so governments are pulling out all the stops to fend off economic collapse, to the extent that their responses themselves are adding to the alarm. Businesses around the world are being backstopped for a potentially long period of inactivity until the virus can be contained – the UK has promised £330bn to help the worst affected; worldwide stimulus exceeds $1 trillion… so far.
I say so far, because we currently have no idea how long the economic shut down may last – right now it feels like the bunkers are still being prepared rather than occupied. Covid-19 may then reach a natural peak and fade away over time. But it may not, and that means that economic activity could remain significantly curtailed for months. A feared ‘second wave’ could mean the whole shooting match starts all over again come winter.
The quest for a cure has, unsurprisingly, taken centre stage, as it does in this week’s magazine – beat the disease and economic normality may return. When that happens, and we must believe it will, there is likely to be an almighty stock market bounceback – remember that some of the strongest days in market history have come after some of the bleakest periods. But Covid-19 will always be a painful reminder of the fragility of mankind and the systems it has built, and a turning point – because in fixing them, much change lies ahead.