Covid 19 is like a neutron bomb

Covid 19 is the economic equivalent of a neutron bomb.

Covid 19 is the economic equivalent of a neutron bomb. A neutron bomb is a nuclear warhead that produces a lighter explosion than a conventional nuclear bomb but results in huge radiation output. This radiation kills people but leaves the equipment and infrastructure standing. The now late Jack Welch had a nickname in his early years at GE viz neutron jack. Because when he was done restructuring the people were gone but the assets remained The pandemic has gridlocked the world. As asset heavy businesses like hotels, cruise liners and airlines shut their operations trillions of dollars of assets are standing idle , their staff retrenched. No firm maintains enough cash to survive a crunch like this. Many of these firms will never emerge from closure. But their assets will not simply disappear. There is going to be an explosion of refinancing and takeover activity post this crisis. Assets will be going cheap. Those blessed with a cash pile will do well for the next few years the world will be asset rich but cash poor.

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