Molson Hart

Lagarde is warning of a corona shock similar to the GFC, but the only thing this downturn has in common with the GFC is that share prices and oil are going down, and the economy rapidly slowing. In all other respects the analogy is entirely false.

You don’t think there is potential for financial contagion? So many different industries will have their incomes go to Zero. If any have debt it can set off a domino effect quite easily, just to name one means of similarity to CFC

There are risks for sure, but there are many different types of downturns/bear markets/crises, with different causal factors and potential vulnerabilities. Analogising the GFC is reductionist and the situation calls for greater nuance imo.

Ok. I get you now. Imho, this will certainly unfold differently and must be responded to differently but is of similar magnitude (if not wayyyyy bigger) and will also require (different) significant government intervention.

I think it's possibly bigger than GFC because 1. corporate debt bubble and 2. horrible companies were kept alive longer than in the past from this. There's a feedback loop if they all go out of business, people lose jobs/spending power, this crashes more marginal businesses, etc

Banks are also healthy and the exposure of the major US banks to oil industry for eg is less than 10pc of tangible book, and not all of these loans are zeros. People are gettinf carried away. A doomsday scenario is not impossible but its by no means likely.