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COVID-19 has forced the world to prostrate before it. As it continued spreading its terror affecting nearly 3 million people with 206,811 deaths, markets experienced volatility worse than the great depression of the 1930s and global financial crisis of 2008. Equities continue on a downward spiral too. To make matters worse, nations will not be able to support or care for the citizens who are at risk without a working economy. These risks can be either from novel coronavirus or sudden unemployment. This makes the grim situation looks like a chapter of a sci-fi novel where an external agent is on its way to dominating the planet. Economists believe it is pulling us towards the Great Depression of the 21st century. An unsettling aftertaste!

Last Tuesday saw all 11 S&P 500 sector indexes fell 1.6 percent or more. Due to government-imposed lockdown restrictions and ban on imports and exports, supply chain markets and its routes are also hampered. Meanwhile, global oil prices have collapsed to approximate 50%. This is due to a scuffle between Russia and Saudi Arabia along with sharp, dramatic drop-off in demand. With companies facing a shutdown and asked to provide salaries to employees, there is always a fearful possibility of workers being laid off or payment cuts, zero new recruitments, etc.

Further, the need to prioritize the production of essentials and deliver special healthcare measures to the public has put authorities in a mild standoff due to budgetary shortages. Despite witnessing a dead cat bounce in stock markets, recovery seems like a mirage now. Markets were already on their brewing stage, and coronavirus just acted as catalyzing vitriol. Investors are selling their most valuable assets in the face of a liquidity crunch.  Market panics are the worst thing that can happen in this period. On Friday, France's CAC 40 dropped 1.9% in early trading, Germany's DAX slipped by 1.8% while Dow industries reached a 0.3% low. In Japan and India, Nikkei 225 fell to 0.9%, and Sensex lost 0.5% respectively. Today dollar stock price opened at 124.80 while euro inched up to $1.0853 from $1.0747 on Thursday. The VIX, a.k.a. the fear index is at 42. VIX is an indicator of expected volatility in the S&P 500 Index over the next 30 days.

To avoid further degradation of the situation, the government must take immediate action to prevent unwanted loss of life. A sustainable response will be to coordinate and consider all the aspects of the economic hierarchy, floating population, investment in modern sciences, and surplus funding of research and innovation. Otherwise, the financial and human resources are going to suffer unrecoverable aggravated damage. Like USA president Donald Trump who had initially ridiculed the looming dangers of COVID-19, only to realize the harrowing effects it had on the stock market and blame it all on China by calling it a Chinese virus and unilaterally closing his nation's borders with the European Union.

While major central banks saved the day in the 2008 crisis caused by excessive leverage and reckless lending, bearing the weight currently may not be as simple as it was then. At that time Fed's aid propelled the stock market, yet unemployment deteriorated to one of its lowest. Due to loan relaxation and extended repay period, banks cannot recover their money, leading to less money in circulation. As time is ticking, markets' oscillation, direction, revival seems uncertain now as much as the hope of to flatten the pandemic curve. Yes, faith can move mountains, yet the avalanche of causalities make it challenging to see the silver lining.