Economic implications of a SARS/Coronavirus outbreak

[Garpal Gumnut]

Oh yeah? Well, my expert super mega world leader friends tell me your doctor mates are wrong.

Provide details or don't bother saying anything; I'm more than happy to check up specific points and if I'm wrong I'll thank you for bringing it to my attention. When it comes to the average ages of fatalities and respective country life expectancies, the figures are quite clear. When it comes to evolutionary tendencies of viruses, obviously biology comes with all sorts of exceptions and any crazy thing is technically possible, but it makes no sense to focus on extraordinarily unlikely events. You could probably take something I've said out of context, or nit pick a trivial detail (I might have unintentionally stated a strong generalisation as an absolute, for example), but if I have something meaningfully wrong, please point it out. It's technically possible that some random person in the world may have a mutation or recombinant event producing a virus which will wipe out the entire human race within a month. Sure, it's technically possible, so but unlikely it's not worth thinking about. What I said was definitely a broad brush view of the picture, not designed to look at smaller details if they are not relevant.

I never said you said the virus started in a market. You did bring up a concern about the virus getting "back into a wet market", as if this is somehow important in some way. Wet markets are little more than open air supermarkets. They are found all across not only Asia but the whole world, including Australia. It's entirely possible, even fairly likely, that there's someone infected by Chinavirus at a wet market in Australia right as I type this. It's certain that many infected people are at wet markets right now. As a qualified biologist who has spent years routinely shopping at wet markets in Asia, including buying bats (and unlike you in your colourful posts I'm saying this in a real, literal sense) I am not worried about this.

I apologise @Sdajii . The truth is I cannot argue the points with you. You count apples as oranges via Google. It's a non-linear chaotic argument.

One of the regulars at the Ross Island Hotel, a Dr. Heisenberg has advised me to stick to the wave. As he said after a deep inhalation " Stick to the wave man, particles are yesterday "

So I will surf along drawing lines on charts and remain ignorant on what google determines to be the aetiology and pathogenesis of the SARS-CoV-2 virus.

gg

 

[over9k]

You sound like you've come to trading via a maths background, not an economics one? You're very calculation heavy, not a lot of gut analysis going on?

Not a criticism as I'm the complete opposite so I always want to hear from the numbers guys.

 

[Dona Ferentes]

You sound like you've come to trading via a maths background, not an economics one? You're very calculation heavy, not a lot of gut analysis going on?

Not a criticism as I'm the complete opposite so I always want to hear from the numbers guys.

handy hint, .... Multiple posters ahead!! ... please reference whom you are addressing by using REPLY button. Gets messy otherwise.

 

[Dona Ferentes]

In the weekend press (its about how corporates will position for the new realities) ....https://www.afr.com/chanticleer/six-post-covid-megatrends-for-value-creation-20200611-p551lg

Six post-COVID megatrends for value creation

1. Cloud computing - or the digitisation of everything
2. Different Demographics
3. Environmental, social and governance
4. Debt
5. Renewable Energy
6. Geopolitics

I find pt 2 interesting, with countries responding differently according to the "radical and likely permanent change in the spending and saving patterns of customers. These patterns differ between age groups and between countries."

also #4; DEBT

Many businesses have been forced to borrow more money to get through the COVID-19 disruption. This has raised costs and will cut profit margins. That has consequences for value creation because of the change in the cost of capital and the need for increased cost-efficiency measures.

Governments around the world have taken on huge amounts of debt to pay for emergency support for workers and businesses. This debt will have to be repaid at some point. Businesses focused on creating value must ask a range of questions. Will there be higher corporate taxes? Will the GST be increased? Will superannuation funds pay more tax? Will individuals pay more tax?

3.

 

[Sdajii]

I apologise @Sdajii . The truth is I cannot argue the points with you. You count apples as oranges via Google. It's a non-linear chaotic argument.

One of the regulars at the Ross Island Hotel, a Dr. Heisenberg has advised me to stick to the wave. As he said after a deep inhalation " Stick to the wave man, particles are yesterday "

So I will surf along drawing lines on charts and remain ignorant on what google determines to be the aetiology and pathogenesis of the SARS-CoV-2 virus.

gg

Yet again, you respond with criticism but fail to actually address any specific point, or even refer to one.

If you think I actually have something wrong, by all means spell it out, state why you think I'm wrong, and I'll be the first to thank you if I am, or if it's something ambiguous I'll agree to shrug shoulders and say it's difficult to define, or if you're wrong I'll state why I think so. Or hey, we may continue to disagree, but at least that's some sort of attempt at something meaningful rather than just saying "Nyer, you're wrong, Dr. Heisenberg said so"

 

[Garpal Gumnut]

In the weekend press (its about how corporates will position for the new realities) ....https://www.afr.com/chanticleer/six-post-covid-megatrends-for-value-creation-20200611-p551lg

Six post-COVID megatrends for value creation

1. Cloud computing - or the digitisation of everything
2. Different Demographics
3. Environmental, social and governance
4. Debt
5. Renewable Energy
6. Geopolitics

I find pt 2 interesting, with countries responding differently according to the "radical and likely permanent change in the spending and saving patterns of customers. These patterns differ between age groups and between countries."

also #4; DEBT 3.

Thanks O, Greek one.

A very interesting post and perhaps deserving of its own thread.

The debt taken on by small business and the maintenance and in some cases increases in wages to public servants will cause a significant rift in asset distribution.

Demographic behaviour will change. The ageing population who were traditionally savers and distributors of capital post mortem being perceived as a disposable pandemic burden and of no consequence by many younger people, spending and transfer of wealth will change.

The cloud, energy and geopolitics will change, as will environmental and social change.

People with other agendas flouting the consensus behaviour during the pandemic by ignoring advice on distancing will lead to a small anarchistic rump politically.

All of this however is of interest only to sophisticated people of an independent mind.

Out there be bogans also.

gg

 

[Smurf1976]

If you think I actually have something wrong, by all means spell it out

I think there's still a lot of unknowns about this both known unknowns and unknown unknowns (things we don't know that we don't know).

Would anyone here be willing to state the ultimate outcome, medically that is, in the USA for example? What happens and when it happens?

That's only one country, and it's a developed one which should have all the data, but there's still a lot of uncertainty as to how it all ultimately plays out.

Does the virus in due course go away on its own?

Or at the other extreme is this a permanent problem effectively forever and the ultimate result is a substantial cut to human life expectancy?

The financial implications of the latter are massive, business will be in a world of pain as will consumers and government, so it's not something to take lightly.

At this point I don't think anyone can really say for sure how it ends.

 

[Sdajii]

I think there's still a lot of unknowns about this both known unknowns and unknown unknowns (things we don't know that we don't know).

Would anyone here be willing to state the ultimate outcome, medically that is, in the USA for example? What happens and when it happens?

That's only one country, and it's a developed one which should have all the data, but there's still a lot of uncertainty as to how it all ultimately plays out.

Does the virus in due course go away on its own?

Or at the other extreme is this a permanent problem effectively forever and the ultimate result is a substantial cut to human life expectancy?

The financial implications of the latter are massive, business will be in a world of pain as will consumers and government, so it's not something to take lightly.

At this point I don't think anyone can really say for sure how it ends.

Obviously we don't know everything. One thing which is clear is that whether or not this goes away, it's not going to have a huge impact on human life expectancy. As I said above (and as I encourage you to verify for yourself which is very quick and easy to do), the average age of Chinavirus deaths is very very close to the average life expectancies of the respective countries they occur in. This is in the initial wave as the virus hits the world for the first time.

Okay, from here we have multiple possible scenarios, all of them extremely mild.

Scenario 1) The virus doesn't mutate quickly and fizzles out and disappears. Clearly this is a very mild scenario. It may not be likely, difficult to say, but it's obviously not a scary scenario.

Scenario 2) We come up with a medical miracle, the vaccine the world is basing its current insanity on the assumption of being produced in the near future, or perhaps a cure. As above, it's not a scary scenario. I believe a vaccine is extremely unlikely. I've been saying this since the first day I heard about the virus, and I've been appalled at action being taken on the assumption that it will happen in a reasonable timeframe, because it's extremely unlikely. A potential cure due to a medical miracle due to unprecedented research efforts is a wildcard possibility. If you want to ignore my 2c and instead go for official guidance, then you assume this is the probably scenario (an effective vaccine saves the day and we go back to business as usual, worrying about which fake character on so-called reality TV is doing what).

Scenario 3) There is no cure. There is no vaccine. This is what terrifies people, but it's really not that bad at all. The death rate is already dropping rapidly (probably partly due to mutations making the disease less aggressive, and at least partly due to improved patient management as we learn more about the virus). This virus barely effects children. So, going forward, children almost all get exposed to it, most get no symptoms, some get something like a mild cough, and then go on and live the rest of their lives without incident, perhaps occasionally being asymptomatically reinfected or perhaps not typically being reinfected. The virus becomes slightly more mild due to the natural selection inclination and management techniques get better, so the rare person who slips through and doesn't get exposed until they're old doesn't have too bad a run anyway. In the short term, everyone ends up getting exposed to the virus, the sick and elderly get knocked off slightly earlier than they otherwise would have, and this goes on until everyone has been exposed. People look back and get angry at politicians for having ruined the economy and either say 'I told you so' like I will be, or pretend that they were in that camp. This is the most likely scenario.

I invite you to find another potential scenario or tell me how any of the above are wrong. I just spitballed them now and won't guarantee they're robust or exhaustive, but at a glance they seem to be.

 

[qldfrog]

Obviously we don't know everything. One thing which is clear is that whether or not this goes away, it's not going to have a huge impact on human life expectancy. As I said above (and as I encourage you to verify for yourself which is very quick and easy to do), the average age of Chinavirus deaths is very very close to the average life expectancies of the respective countries they occur in. This is in the initial wave as the virus hits the world for the first time.

Okay, from here we have multiple possible scenarios, all of them extremely mild.

Scenario 1) The virus doesn't mutate quickly and fizzles out and disappears. Clearly this is a very mild scenario. It may not be likely, difficult to say, but it's obviously not a scary scenario.

Scenario 2) We come up with a medical miracle, the vaccine the world is basing its current insanity on the assumption of being produced in the near future, or perhaps a cure. As above, it's not a scary scenario. I believe a vaccine is extremely unlikely. I've been saying this since the first day I heard about the virus, and I've been appalled at action being taken on the assumption that it will happen in a reasonable timeframe, because it's extremely unlikely. A potential cure due to a medical miracle due to unprecedented research efforts is a wildcard possibility. If you want to ignore my 2c and instead go for official guidance, then you assume this is the probably scenario (an effective vaccine saves the day and we go back to business as usual, worrying about which fake character on so-called reality TV is doing what).

Scenario 3) There is no cure. There is no vaccine. This is what terrifies people, but it's really not that bad at all. The death rate is already dropping rapidly (probably partly due to mutations making the disease less aggressive, and at least partly due to improved patient management as we learn more about the virus). This virus barely effects children. So, going forward, children almost all get exposed to it, most get no symptoms, some get something like a mild cough, and then go on and live the rest of their lives without incident, perhaps occasionally being asymptomatically reinfected or perhaps not typically being reinfected. The virus becomes slightly more mild due to the natural selection inclination and management techniques get better, so the rare person who slips through and doesn't get exposed until they're old doesn't have too bad a run anyway. In the short term, everyone ends up getting exposed to the virus, the sick and elderly get knocked off slightly earlier than they otherwise would have, and this goes on until everyone has been exposed. People look back and get angry at politicians for having ruined the economy and either say 'I told you so' like I will be, or pretend that they were in that camp. This is the most likely scenario.

I invite you to find another potential scenario or tell me how any of the above are wrong. I just spitballed them now and won't guarantee they're robust or exhaustive, but at a glance they seem to be.

Spot on.100% agreement on the medical side
Where GG and Dona may hit a point is on the potential social et economic sides
BLM but not any other colours and even old sick black black ones
Streets full of leftist nazis burning books, history and culture in their fanatism while propagating knowingly the virus may be remembered when the grandchildren will knock at the door for a $50, or a mortgage guarantee: cultural shift, and spending patterns: spend it all...
Political shift: based on attitude during this crisis
Wider gap between people and fragmentarion of society ..if even possible.
A lot of changes to trends: sharing economy..no thanks
Own car, own home not unit, potentially move out of cities: telecommuting and space
And i not even want to start about debt, cash role,taxes.
imho it is a shifting event disproportionate from its medical effect but here nevertheless

 

[qldfrog]

A completely different effect : stats
Expect to be force field in the near future with a lot of fake true facts:
Headlines like road accident deaths jump 100pc in a year, or surge in breast cancer, etc
All attributable to lockdown with delayed consequence which will be used by different interests from political to NGO or charities and schools rating...
Be ready with your critical analysis, but hey when millions can jump behind BLM like movements with no statistical proof, i doubt many reasonable responses

 

[basilio]

Really amazing (terrifying actually..) how some people can totally dismiss the overflowing hospitals of China, UK, Italy, Brazil (and across the globe) with people dying left right and centre and at home from the effects of COVID 19.

Why not consider Brazil as the poster example of Sdajji Scenario 3 ? Just let it rip and afterwards everyone can say it wasn't that bad after all ?

Truly comparing apples and rocking horse poo without a shred of awareness.

https://www.japantimes.co.jp/news/2...avirus-survivors-severe-health-effects-years/
https://www.bbc.com/news/uk-scotland-52506669
https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Brazil

 

[qldfrog]

Really amazing (terrifying actually..) how some people can totally dismiss the overflowing hospitals of China, UK, Italy, Brazil (and across the globe) with people dying left right and centre and at home from the effects of COVID 19.

Why not consider Brazil as the poster example of Sdajji Scenario 3 ? Just let it rip and afterwards everyone can say it wasn't that bad after all ?

Truly comparing apples and rocking horse poo without a shred of awareness.

https://www.japantimes.co.jp/news/2...avirus-survivors-severe-health-effects-years/
https://www.bbc.com/news/uk-scotland-52506669
https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Brazil

Wake up Basilio, no overflowing hospital in France Italy or Spain anymore
The first wave is gone and dusted as for the USA, isn't it a great example of actual do nothing effect and so ability to compare the effects , on the population which is one of the worst health on earth with obesity as a norm.
You have your worst case scenario, if not where and when?
I see more damage in the US done by the rioting BLM racists and lefties than by the virus
Has the covid killed more people than prescribed opioids medicine this year there? Do you want to compare ages of both set of victims and society costs?
self responsibility above gov control and brainwash everyday in our times ..fundamental difference between you and I

 

[over9k]

America is now the global epicentre. We know from case studies around the country and around the world that from the point in time of mass spreading events, we can expect to see significant surges in caseloads in three to five weeks. Memorial Day was May 25. The protests have occupied the first two weeks of June. We should expect to detect mass outbreaks across the country in both Red and Blue states in late-June and especially in July.

As to size, consider the case of Austin, Texas. Just two weeks after Memorial Day, Austin has already seen caseloads double. That’s before the protests have had a chance to add their own fuel to the fire.

America’s quarantine efforts were insufficient to root out coronavirus, likely making it endemic to the population. That was before the Memorial Day parties and protest movements. Purging the virus is now not only an impossibility, the United States is now on track to experience the worst documented infection rates in the world (many countries have worse testing regimes, so labeling the US #1 without a caveat is a bit disingenuous). About the only silver lining is that vaccine development efforts continue to outperform. We are highly likely to have a functional vaccine this year. That still leaves questions of mass manufacturing and distribution, but even in the worst-case scenario, that process will likely require under a year.

I highly recommend following peter zeihan - his macro intel is second to none IMO.

 

[Sdajii]

Really amazing (terrifying actually..) how some people can totally dismiss the overflowing hospitals of China, UK, Italy, Brazil (and across the globe) with people dying left right and centre and at home from the effects of COVID 19.

Why not consider Brazil as the poster example of Sdajji Scenario 3 ? Just let it rip and afterwards everyone can say it wasn't that bad after all ?

Truly comparing apples and rocking horse poo without a shred of awareness.

https://www.japantimes.co.jp/news/2...avirus-survivors-severe-health-effects-years/
https://www.bbc.com/news/uk-scotland-52506669
https://en.wikipedia.org/wiki/COVID-19_pandemic_in_Brazil

Okay, dry your eyes and see some sense.

No one is dismissing any human death. No one. Stop imagining that anyone actually did that, because it didn't happen, certainly not by me.

As I've repeatedly said and you've impressively managed to ignore, every human death is sad. The issue is that we should be doing what we can to have as little of it as possible, not causing 100 deaths here to save 1 death there.

The initial wave in China (and UK, Spain, etc) already happened anyway. It was in the early stages. Even in countries where the number of cases is continuing to decline, the proportion of fatalities and almost always the empirical number of fatalities is also falling. Look at any example you like, please actually do this, and check the average age of deaths vs. the average life expectancy for the respective country, and you find that the average Chinavirus deaths occur barely below average life expectancy. Old people die, it's what has always happened, it's what always will happen unless we cure aging. Something knocks old people over, their death is always inevitable. It's often a cold or flu or something trivial, because when they're right at the end, something is going to knock them over, no matter how small a thing it is. Death is inevitable. We don't generally worry about those deaths and neither should we, but in this case we're finding reason to get far too concerned about old people dying their inevitable deaths slightly earlier than they would otherwise have.

This really isn't that bad.

Now, you can take the 'even one death one day earlier than it had to be is a terrible tragedy' line, and that's perfectly fine, let's run with it. That's what we might have the option of mitigating to some extent. To be worthwhile, we need to do less damage than we save. Very, very obviously (to anyone not following the media hype and public hysteria) we are causing damage orders of magnitude greater than what we are preventing. Even if we look at the poster children of 'let it run its course without mitigation', we don't see as much damage being caused as what we are causing from the mitigation efforts.

Make a realistic attempt at quantifying the situation. Perhaps most people can't understand this, but this is the equation:

A - The total potential damage done by the virus with no mitigation efforts
B - The damage done by the virus given mitigation efforts
C - The damage done by the mitigation efforts

To be worthwhile, A minus B must be greater than C.

(I've spoken the above aloud but never typed it or seen it written anywhere, probably because the people who can understand it know that most people can't and almost anyone who can doesn't need it shown to them)

As it is, we have a value of C clearly much much higher than A minus B, this is insane. In Australia we actually clearly have C being much larger than A, let alone A minus B. This is also true of a slightly lesser extent of the world as a whole, and in most countries.

You are focussing only on reducing B, and imagining that A is far larger than it is, and you're failing to acknowledge the significance of C, despite it being by far the largest value in the equation.

 

[Knobby22]

The USA looking like losing 0.5% of it's population.
Not to mention permanent lung damage to another 0.5%. and we know the official figures are dodgy as the death rate is well above normal even removing the official covad figures.

We are all going back to something approaching normality with businesses reopening.

The USA has at least another 6 months of misery and businesses open with no custom. I have a friend there and the pubs may be open but there is little custom.

No way I would want to be in their shoes.

The countries that took it seriously are now in a much better position. Look at South Korea, you can go and watch Phantomof the Opera in a packed theatre.

I think you are believing too much propaganda Sdjai. And that's what it is,.

 

[Sdajii]

The USA looking like losing 0.5% of it's population.

Tell me, what percentage of the USA's population does it lose every year? (hint, last year it lost more than 0.5%, the year before and the year before that... every year it loses far more than 0.5% of its population!)

Not to mention permanent lung damage to another 0.5%. and we know the official figures are dodgy as the death rate is well above normal even removing the official covad figures.

Every time anyone gets a cold or any other form of respiratory tract infection they get some level of permanent lung damage. The question is how much. In reality, this is not a relevant concern in the big picture.

We are all going back to something approaching normality with businesses reopening.

You're quick to overhype the virus issue and underhype the mitigation cost issue.

The USA has at least another 6 months of misery and businesses open with no custom. I have a friend there and the pubs may be open but there is little custom.

No way I would want to be in their shoes.

The USA has its own set of problems. Love Trump or hate Trump, it is clearly obvious that those who hate Trump are trying to tear the country apart and the whole place is a mess. The USA is by far the worst affected country by the virus, which is at least somewhat odd given that even third world countries with almost no mitigation effort still did better. Make what you want of that, but it should raise eyebrows, and the USA is certainly not representative of the world as a whole, indeed, it is literally the single most extreme example, and inexplicably so.

The countries that took it seriously are now in a much better position. Look at South Korea, you can go and watch Phantomof the Opera in a packed theatre.

You can cherry pick your data if you want to, and South Korea is literally the most extreme cherry to suit your purposes, but it's not representative of the big picture. They are a case where they had a culture and system which allowed for the best management in the world, taking into account population density. South Korea is the exception, not the rule, but even there, I'm pretty sure that in the long term, C will be greater than A minus B. It's possible that South Korea will buck that trend though. In a country like Australia, the cost of C for a similar proportionate decrease in A was always going to be much higher. There's comparing apples to oranges, and then there's comparing apples to frogs.

One thing South Korea did which Australia could have done (well, culturally it probably would have been impossible but conceptually it was possible) would have been to go absolutely all out with the lockdown right from the start (I was saying this in March when the lockdowns were first announced, if you're going to bother doing this at all, it only makes sense if you do it properly, not half heartedly) to effectively eliminate it very quickly, allowing a return to normality in a short period of time. Asian culture is different. South Korea has a unified group culture, not an individualistic culture like Australia. You don't get massive protest marches in the middle of a pandemic there, or a large number of people who ignore the rules. Patriotism and loyalty to the community are far more universal among people, unlike in the west where patriotism has literally become taboo.

I think you are believing too much propaganda Sdjai. And that's what it is,.

It's bizarre to say I'm listening to propaganda when the mainstream propaganda is what you're repeating, and what I'm saying is literally unique. I've literally never seen anyone else present it in the terms I have above (which I find a bit surprising since it's the obvious formula for evaluating this situation). I was astounded by the lockdowns when they were first announced and I didn't anticipate such stupidity. I'd heard no propaganda either way, I was setting up a business in Asia, I was on a two week trip to Australia where I'm currently trapped, I was immediately amazed when I heard the first announcements and was immediately saying the same thing I'm saying now, without any external influence, so clearly I'm not being swayed by propaganda! It's funny how people who blindly follow propaganda assume that others are the ones doing that!

 

[Smurf1976]

Wake up Basilio, no overflowing hospital in France Italy or Spain anymore

Emphasis on the word "anymore". There's plenty of countries which have paid a high price for being too slow to act on this one.

Thankfully Australia isn't one of them from a medical perspective, although we arguably paid an unnecessarily high price financially by delaying the border closure. Had we done it sooner, had we not had people coming in infected and spreading it, we'd have lost a few tourist $ but contained the whole thing far more quickly. Aggressive action right at the start would have been a better approach so far as I can determine.

Where the ongoing issue exists is with what to do now?

Business will argue that we need to open up real quick and so on.

The same businesses will be screaming like there's no tomorrow if we open up so quickly that there's another outbreak and the only way to avoid overflowing hospitals is another major lockdown.

A problem there is that business expects they can socialise the cost if it goes wrong thus creating a bias toward taking on more risk than they would if faced with the full cost directly and no bailout.

The medical side of the argument has the same problem in a mirror image and will naturally bias toward a slower reopening because they aren't directly incurring the cost of things being shut down.

Both sides of the debate are compromised by vested interests so far as I can see. It's not about what's the best approach medically or which minimises any particular downside financially but rather, it's about what's best for whichever group is arguing for it and the truth will be somewhere in the middle.

 

[Knobby22]

0.5% of it population officially to coronavirus.
But it is much higher. It is amazing how many people appeared to have recovered and die from stroke, heart attack etc. This is due to the effect of the virus wrecking blood vessels.
https://www.nytimes.com/interactive/2020/04/28/us/coronavirus-death-toll-total.html

And it is the nations duty to look after its citizens, even people 60 years old and older. Not to mention the long term effects to people who recover.

 

[Smurf1976]

Looking at the US figures, for 12 June the reported new cases is 27,221 which is the highest since 21 May.

Looking at it on a chart, it looks awfully like a breakout. It's a higher high when compared to the recent peaks on 29 May (25,656) and 5 June (25,393).

I base that comment on figures from here: https://www.worldometers.info/coronavirus/country/us/

 

[wayneL]

Some data on the A, B, C equation