Unfortunately, I nearly guarantee you that we're h

Unfortunately, I nearly guarantee you that we're heading for global recession. That doesn't mean the end of the financial world as we know it, but it shouldn't be dismissed so quickly.

You have to disconnect what we currently think we know about the virus (possibly very contagious but probably not that lethal for most people) from the scale of the responses from governments and the behavior of consumers. Was China's quarantining response overdone? Possibly. Does it matter to the economy whether it was overdone? No, it only matters that it occurred and continues to occur. The Chinese economy is essentially frozen, creating massive supply chain shocks for companies across the globe while simultaneously cratering domestic demand that many multinational corporations rely on heavily. You won't see the full impact of the supply chain shocks until they start showing up in earnings reports, and that will most likely drag well into 2Q earnings at this point as well. On the other hand, you can see certain things: domestic airlines cutting flights and furloughing employees, tons of conferences and events being canceled (empty hotel rooms, lost dining and entertainment revenue for local businesses, etc.). These things hit main street. Real businesses losing real revenue. Wait til the mayor of NYC recommends quarantine, or casinos in Vegas shut like they did in Macau. Whether or not the response is appropriate is another story and I won't opine there, what matters to the economy is that the responses are occurring. And that's undeniable. It's in the news every day.

When you layer on the completely unrelated oil price war that popped up this weekend, we have major issues to contend with from an economic standpoint. We can talk market liquidity, credit spreads, leveraged lending markets, anything you like. The causes are real, and unfortunately the impacts are going to be felt.

It's not 2008 most likely, but it's going to be pretty ugly. And whether we like it or not, it actually has little to do with how bad/dangerous the virus actually turns out to be. Bright side is that if the leveraged lending market can manage not to implode, I think we have a reasonable chance of a relatively quick recovery. Key word: relatively.

I take little pleasure in bringing these things up, but I'd strongly suggest that if you care about such things (some people don't), then I'd look beyond medical data from coronavirus when prognosticating on economic impacts. That's my PSA for the day.