Tags: paul tudor jones | depression | lockdown | virus | economy

Paul Tudor Jones: 'Second Depression' If Lockdown Lingers

By    |   Monday, 11 May 2020 12:50 PM EDT

Billionaire hedge fund investor Paul Tudor Jones predicts the economy would be in a “Second Depression” if the coronavirus pandemic doesn’t get contained for another year.

“If a year from now, we are still in the same situation, we would be called a Second Depression,” Jones said on CNBC. “Just depends on whether unfortunately this goes to a year with this kind of a lockdown,” he said.

Jones, the founder and chief executive officer at Tudor Investment Corp, said because of how America feels about individual freedoms, the country may have trouble following contact tracing and other methods used by other countries to contain the virus quickly, such as China and South Korea, CNBC explained.

“Americans are too different. I don’t think we would be able to come together and do that,” Jones said. “I think America’s biggest strength is individualism, its love of freedom. In the case of the pandemic, it’s also our biggest weakness. If you look at the Asian countries that are succeeding and beating this, they are doing it because they place a much greater emphasis on society values than they do on individual rights,” he said.

“I think this part of the bounce was easy to forecast, I think what happens from here again depends a lot on Covid stuff. There’ll be a shift in focus from liquidity issues somewhere down the line to solvency issues.If we don’t find a vaccine or a cure, if we don’t find a much better way of testing at scale ... then I think the market’s going to have a much more difficult time,” Jones said.

Meanwhile, White House trade adviser Peter Navarro slammed weekend reports about the nation's record job losses from the coronavirus pandemic as a "pity party" and insisted that the current economic crisis is "not the Great Depression."

"Anybody who thinks this is the Great Depression doesn't understand either history or economics," Navarro said on Fox News' "Fox and Friends." "The Great Depression pity party stuff I saw yesterday, this ain't fact."

Over the weekend, two of President Donald Trump's key economic advisers told news programs that the unemployment rates are at least at 20% to 25%. Treasury Secretary Steven Mnuchin told Fox News' Chris Wallace that the true unemployment rate could be as high as 25%, and Kevin Hassett, Trump's senior economic adviser, told CNN that the unemployment rate will likely be at 20% in the next report.

National Economic Council Director Larry Kudlow argued on ABC News that there is a "glimmer of hope" under the unemployment reports, as "80% was furloughs and temporary layoffs."

"The Great Depression was a 10-year process that came out of the end of World War I, went through inflation, and then a deflation cycle, accompanied by catastrophic applications of currency trade, fiscal and monetary policy and it lasted a very, very long time," said Navarro.

"President Donald Trump built up the strongest most beautiful economy in 3.5 years before the Chinese Communist Party dropped the virus on the world and in 60 days temporarily shut us down. What we all need to do here is focus on the mission, the original mission."

Trump was bringing manufacturing onshore, he added, and if the American people start "making things, we will move forward in a way where we will rebound ... we need to focus on what's in the future here and it's a bright future."

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Billionaire hedge fund investor Paul Tudor Jones predicts the economy would be in a “Second Depression” if the coronavirus pandemic doesn’t get contained for another year.
paul tudor jones, depression, lockdown, virus, economy
Monday, 11 May 2020 12:50 PM
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