I agree with your point about the underlying economy. Just weeks ago things were purring along nicely, then the black swan event happens. Perceptions are blown all to hell because was we know, the market hates uncertainty. But perceptions can change instantly, the underlying economy cannot. Bbut we don’t have to fix the underlying economy - just reduce the uncertainty, build confidence that we can handle the crisis, and the perceptions will change.
Maybe a poor analogy but it’s as if we’re driving along smoothly for hours, then hit a patch of black ice. The car is skidding out of control in an instant, a total reversal from just seconds before. The outcome could be very bad - or it could just be a matter of re-orienting the vehicle, taking a few deep breaths to calm down, and proceeding on. The problem is, you have no way to know which it’s going to be while it’s happening, and the natural response is fear and anxiety. But that perception will change as soon as some sense of normality returns.
But if we can push that aside and think logically, if the measures put in place indeed flatten the curve, if expanded testing properly allocates resources and drives good decisions, if the number of new cases start to taper off, and to be really optimistic, if an effective treatment emerges that speeds up the process, I can see recovery beginning faster than some of the experts I follow on Twitter think.
i do think your premise is based upon honesty. But I question if it is honest.