So who will pick up the bill for the global recession??

If you haven't noticed by now, the world is clearly heading on the steep downward slope towards recession because of the COVID-19 pandemic. The duration of this recession and, very possibly global depression, will be heavily dependent on the longevity of this crisis. Also crucial to this war will be human endurance, decisive government policy and geopolitical relationships.

The measures taken by the United Kingdom and nations around the world to manage the COVID-19 pandemic: restricting travel, shuttering nonessential businesses and implementing universal social distancing policies are having severe economic consequences.

Financial and housing markets are collapsing, with retirement and sovereign funds worldwide hemorrhaging trillions of pounds. This is consistent with findings that negative market effects occur with bad news. In fact, negative and positive news have asymmetrical effects of equivalent magnitude in the market, and it disproportionately affects equity markets, as well as foreign exchange markets.

Unsurprisingly, we are witnessing a temporary, short-lived recovery in equity markets propped up by trillions of pounds in government stimulus packages, a dangerous and superficial way of reversing, or trying to contain, the economic havoc caused by the pandemic. These stimulus injections are simply not feasible to keep the economy afloat, should the COVID-19 crisis last longer than forecasted.

While the National Health Service is occupied with saving human lives, it is a serious oversight by governments worldwide to rely on stimulus packages to safeguard livelihoods from the current economic meltdown. Governments do not understand how their authoritarian and unilateral decision of shutting down entire economies, and attempting to salvage the fallout with stimulus until COVID-19 is no longer a threat, will pan out.

The massive government borrowings used to fund these stimulus packages are not free gifts. Who will repay this enormous debt, and how long will it take? The answer is clearly more bad news than governments are prepared to confront right now.

But, ultimately, taxpayers will be responsible for repayment, and it will take at least a decade, if not more.

Some forward-looking indicators are plummeting at an astounding speed.

Since the COVID-19 pandemic, UK consumer sentiments have plunged vertically with almost zero slope and no sign of turning around any time soon.

A cross-country, historical time series of sentiment data shows that at the end of March, South Korean consumers were the most pessimistic about the economic and financial market outlook, followed by Italy, France and others. Currently, China is leading the consumer index, indicating that its economy may see the light of recovery much faster than any other country.

With China lifting its 76-day lockdown of Wuhan on April 8, the country is certainly in a better position to recover economically compared with other nations, where the restrictive measures are only continuing to be in effect. China will take full advantage of this during the rebound.