With cities going into lockdown mode, it is starting to feel like governments of the world are putting economies into a temporal cryostat. So here's what I think could be a possible storyboard for the rest of the year.

Stage 1: Pandemic virus hits, people fall sick and die.

1Q 2020 is effectively a washout.

While healthcare systems around the world are dealing with the impact of the virus, government suspends international travels. Airlines, cruises, hotels and tourism sectors are hit. the whole of 1Q 2020 is basically a sh#tshow.

Lockdowns.

Home quarantine measures are put in place with some countries closing down mass gatherings and public gatherings. People go out less and therefore spend less, reducing domestic consumption. As large companies suffer, smaller companies face similar issues in terms of cash payments and some will inevitably go out of business.

Throwing money into the system to fight fire.

Governments have started to introduce monetary stimulus packages, except that this time unlike the 2008 financial crisis, money doesn't solve the problem because money doesn't heal people. Tax breaks and incentives only benefit companies that are profitable - the smaller mom and pop businesses that support domestic consumption gain nothing from this. With lockdowns, physical distancing and the extent of the virus, the general public is starting to lose confidence that things will revert back to the good old days.

It's gonna be a game of who's the last man standing.

As we enter into the third month of the pandemic, some businesses will have recorded close to zilch revenues while cash continues to burn through with fixed operating overheads. Some enhancements to the fiscal stimulus package such as discretionary cash payouts will help some companies in the short run but there will not be enough to go around for everyone.

Then comes the layoffs.

With reduced capacity, companies are forced out of businesses, jobs are lost and overall consumer spending suffer as disposable incomes drop. This compounds the already existing problems caused by the virus.

Economic recovery will be protracted because (i) a cure / vaccine on the virus has yet to be found; (ii) The lift on travel bans will be progressive and take some time; (iii) Life will never be the same again - there will be additional costs of doing businesses such as heightened business continuity procedures and increased sanitisation costs. Companies will need time to gradually adapt to this 'new normal'; (iv) We have now also become aware of how vulnerable we can be to an 'invisible enemy' that we still don't really know much about. Because of that, we are also unsure if there could be a similar 'relapse' taking place in the future. Unlike trade wars and armed conflict which can be negotiated and prevented, there is unfortunately no way to prepare or defend against this apart from maintaining / enforcing personal hygiene - and more importantly, executing this in a coordinated fashion on a global scale.

Global social infrastructure comes under pressure.

Studies have shown that social relationships have both short and long term effects on health and society as a whole. Prolonged periods from staying at home and/or being out of a job puts the psychological well-being of people at risk: The stress of losing income, the lack of interaction with friends and co-workers, and in many cases, feeling disgruntled with the inadequacy of elderly healthcare needs - will create tremendous emotional burden for people.

This recession is no longer just a liquidity crunch like in the 2008. This impacts not only jobs in financial services but the employment on a wider scale. In China, where it was said to be ground zero for the pandemic, default and late payment on consumer loans have just started. If that is any precedent, we are likely to see a similar trend of defaults happening in other economies starting as soon as Jun 2020. And if people can't keep the lights on at home, they are more likely to take to the streets.

Government financings first, then comes capital markets.

The stimulus packages from governments around the world will be the first of many financings to come. The longer it takes for spending to return, the more cash companies burn. Some businesses will default on loans, request for extensions and some will even tap the capital markets for equity capital - quite similar to the wave of rights issues undertaken by many large corporates after the 2008 financial crisis.

What the government giveth, the people must return.

A large gaping hole in the budget will form especially with some countries already starting to tap into their reserves. At some point of time, this has to be given back whether in the form of tax or government stakes in key industries. "I help you now, but you owe me one".

The most important thing for the situation today to improve is for the global economy and trade has to pick up and return consumer spending back to its normal levels.