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The pool and spa industry after COVID-19

By Steve Leslie

Pool and spa companies can expand their marketplace-even during a period of lockdown-through social media.
Pool and spa companies can expand their marketplace-even during a period of lockdown-through social media.

The world has become overwhelmed by the devastating coronavirus known as COVID-19, the stock market has crashed, and interest rates are at an all time low. Many people have been panic buying and hoarding essential items such as food and hand sanitizer. Further, everyone has been glued to their TVs watching the news for hourly updates. It sounds grim. It sounds hopeless. It sounds like some farfetched nightmare but no, this is very real.

In times like these, it is often believed there are two ways people can view these situations:

1) Observing all the information, only concentrating on the negative aspects, and coming to the conclusion that all hope is lost as the world is at a standstill.

2) Taking all of the information into consideration before realizing this will be the greatest opportunity to ever happen in their lifetime!

Before one dismisses the second method of thinking, it is important to consider the following: During the global financial crisis in 2008, when economies collapsed, did the pool and spa industry crumble along with it? Although many people lost a lot of money, the industry survived. In fact, some people thrived due to other people’s contraction in the marketplace. This is why it is essential that instead of panicking, companies must become creative and obsessed with expanding into the marketplace.

What the world economies are experiencing right now is not the result of a global pandemic, but rather something much bigger. For instance, back on September 16, 2019, the credit market froze for one day, but only those who really pay attention to the markets seemed to realize this. That is because the stock market is just one place that showcases the world economy. The credit market (or repo market) is even bigger. Here, “piles of cash and pools of securities meet, resulting in more than $3 trillion being financed each day.”

At this time, when the credit market froze for a day, the U.S. Federal Reserve (or Fed) started pumping money into the system. This was not just a few thousand dollars… this was billions every single day—$75 billion to be exact. Further, this plan was supposed to be in place for four days, but then was extended by the New York Federal Reserve Bank at an increased rate of $100 billion per day for approximately another three weeks. However, when these three weeks were up, the deadline was pushed back to November, and then January, and so on.

The reason the U.S. did not report the Fed doing this (until recently) was because only after it had reached a large enough amount per day in quantitative easing did this become a big enough concern to need the approval of Congress ($700 billion per day). Otherwise, they have the ability to initiate quantitative easing as they see fit, as long as they follow best practices. On top of this, toward the end of February—right before the coronavirus had really become a hot topic in North America—it was expected China was going to announce a decline in its economic growth, which was different than what was originally speculated in January, which would then impact global markets. This came after reporting losses the previous quarter as well. Associate professor of political science, Michael Beckley, reported in a Foreign Affairs article in October 2019: “To accumulate wealth, a country needs to increase its productivity—a measure that has actually dropped in China over the last decade. Practically all of China’s gross domestic product (GDP) growth has resulted in the government’s pumping capital into the economy. Subtract government stimulus spending, some economists argue, and China’s economy may not be growing at all Once the last week in February arrived, and China was set to announce a loss, that is when the stock market started dropping. That said, those expecting a quick economic recovery once the COVID-19 global pandemic is under control may be in for a rude awakening.

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