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Coronavirus Bankruptcy Pandemic Continues

Coronavirus Bankruptcy Pandemic Continues

Hertz has now joined the ranks of filing for bankruptcy as this lockdown has caused car rentals to crash to virtually zero. Of course, Climate Change activists led by Bill Gates are celebrating. They cheer every bankruptcy they have managed to create with the absurd lockdowns were the first time in history you quarantine the entire population rather than just those who are sick.

The total economic destruction we have said is about $30 trillion in businesses. If we add real estate which cannot be sold, that is most likely $35-$45 trillion. Then add on top of that the coming wave of sovereign bond defaults which will include emerging markets that have witnessed their exports collapse. Global GDP is about $90 trillion. The global bond market is about $100 trillion.

Commercial Real Estate is worth about $32 trillion and Agricultural Real Estate about $27 trillion. Total residential Real Estate is about $170 trillion at the end of 2019. If we have to put a number of that we reach about $230 trillion.

The total world equity market at the end of 2019 was nearly $90 trillion.

Therefore, if we add up what I call Capital Formation, this is the combination of real estate, equities, and bonds. This number works out to be about $420 trillion.

Consequently, the economic contraction in just the current GDP of $90 trillion is about $30 trillion, and Capital Formation is probably about  $120 trillion illiquid out of $420 trillion if they even tried to sell.  Anyone who thinks that governments can possibly stimulate their way out of this or create hyperinflation by spending even $10 trillion are not taking into consideration the full scope of this economic collapse.

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