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Illustration: Eniola Odetunde/Axios

In its latest repricing of the economy, the market sees the now-expected global recession caused by the coronavirus outbreak morphing into an economic depression unlike any the world has seen in generations.

The big picture: Bankers and traders are looking to sell everything that isn't nailed down to boost cash positions and hunker down for the worst.

What they're saying: JPMorgan wrote down its expectations for global GDP to -1.1% in 2020, expecting the world's economic growth will reverse for the full year, including a second quarter contraction of -14% in the U.S. and -22% in the eurozone.

  • Deutsche Bank economists foresee a "severe global recession occurring in the first half of 2020 ... quarterly declines in GDP growth we anticipate substantially exceed anything previously recorded going back to at least World War II."
  • Both banks noted their forecasts are based on governments putting in place massive, yet-to-be-passed fiscal stimulus programs and fairly swift containment of the outbreak.
  • "It is easy to imagine a still worse outcome," DB analysts, led by head of economics research Peter Hooper and seven chief economists, wrote.

The most dire warning came from Pershing Square Capital Management CEO Bill Ackman, who went on CNBC to beg President Trump to shut down the U.S. economy for 30 days and put the country in a nationwide lockdown.

  • "Until a vaccine is manufactured, distributed and injected we will go through a Depression-era period in the country," Ackman said. "America will end as we know it unless we take this option."

What's happening: Even traditional safe havens were not seen as safe enough during Wednesday's selling.

  • Gold dropped by 3% and U.S. and German government debt, viewed as the safest bonds on earth, were sold despite a 5% decline on the S&P 500 and a rout that saw WTI crude oil prices fall 14% and crash below $22 a barrel.

The last word: "What people are doing is looking at things that they can sell to raise cash, and that’s part of the crisis market situation," Jim Caron, head of fixed income global macro strategies for Morgan Stanley Investment Management, told CNBC. "When these things happen, people sell what they can sell, not what they want to sell."

Go deeper: The coronavirus economic pain in the U.S. has begun

Go deeper

11 hours ago - Health

FDA advisory panel recommends Pfizer boosters for those 65 and older

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at the Key Biscayne Community Center on Aug. 24, 2021. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.

11 hours ago - World

France recalls ambassadors from U.S. and Australia over submarine deal

Secretary of State Antony Blinken (L), French Foreign Minister Jean-Yves Le Drian (C), and French ambassador to the U.S. Philippe Etienne. Photo: Nicholas Kamm/AFP via Getty Images

France has taken the extraordinary step of recalling its ambassadors to the U.S. and Australia after both countries blindsided their French allies with a new military pact and submarine contract, the French Foreign Ministry announced on Friday.

The backstory: While sealing an agreement with the U.S. and U.K. to acquire nuclear submarines, Australia ripped up an existing $90 billion submarine deal with France. That led senior French officials to accuse the U.S. of a "stab in the back."

Updated 12 hours ago - World

In reversal, Pentagon now says drone strike killed 10 Afghan civilians

Caskets for the dead are carried towards the gravesite as relatives and friends attend a mass funeral for members of a family that is said to have been killed in a U.S. drone airstrike, in Kabul on Aug. 30. Photo: Marcus Yam/Los Angeles Times via Getty Images

A U.S. drone strike launched on Aug. 29 killed 10 civilians in Afghanistan, including seven children, rather than the Islamic State extremists the Biden administration claimed it targeted, the Pentagon said Friday.

Why it matters: U.S. Central Command said at the time that officials "know" the drone strike "disrupted an imminent ISIS-K threat" to Kabul's airport, and that they were "confident we successfully hit the target."