Economic implications of a SARS/Coronavirus outbreak

sptrawler said:

That's interesting, why rice growers?
I would have thought the restaurants would have really struggled with a second lockdown, or do you think the sales of rice will take off, it is a point because a six week lockdown is extreme.
The four week lockdown in W.A stripped the shelves of pasta and rice, so good point a six week lockdown may send them into a real frenzy.
I am seriously considering Kimberly Clarke as an option, they already process fine particulate paper, so to import or adapt equipment to supply different protective devices may not be too difficult.
Even after the virus, one would think a home sourced supplier, may be better patronised.

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To think that we grow rice in this country, without a large scale water infrastructure network that straddles our entire East Coast States, is crazy. Rice is one of the most water intensive crops on the planet.

sptrawler said:

I'm also thinking local tour providers and leisure equipment(caravans, camper trailers, motorhomes etc), may see an upsurge.

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Typo - sorry - meant Star City Entertainment Group = SGR.
I was looking at SGL's chart earlier today to see if it was worth a punt and slipped up on the codes.

Estimates of a $6 billion hole in the VIC economy now with this 6 week lockdown.

Safer to keep all our domestic borders closed I think, until we are 100% certain that we have this virus under control in all states and territories.

Chronos-Plutus said:

Estimates of a $6 billion hole in the VIC economy now with this 6 week lockdown.

Safer to keep all our domestic borders closed I think, until we are 100% certain that we have this virus under control in all states and territories.

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Victoria will really show where the weaknesses are in the economy, a lot of companies that struggled through, will now go to the sword.
So it should give an indicator, to what areas of the economy, are really stretched.
Just my opinion.

rederob said:

Deaths is a small part of the equation.
People testing positive should not be at work and will generally not be returning to work for at least 2 weeks

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A very fit 40 year old couple in my street were 8 weeks and 5 weeks in bed with the virus, lots of talk about people not having a problem less so for those that do which I think is higher than reported.

That's a direct impact on the economy right there.

sptrawler said:

Victoria will really show where the weaknesses are in the economy, a lot of companies that struggled through, will now go to the sword.
So it should give an indicator, to what areas of the economy, are really stretched.
Just my opinion.

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Yes, I tend to agree. I just hope that we don't follow the same path here in Sydney.

Our NSW Police and ADF do their job well and I feel confident that our Southern border is secure; however we had a flight in today from Melbourne, that originated internationally, which was never quarantined.

If Sydney goes back into lockdown: it will be a disaster for Australia; psychologically and economically.

Chronos-Plutus said:

Yes, I tend to agree. I just hope that we don't follow the same path here in Sydney.

Our NSW Police and ADF do their job well and I feel confident that our Southern border is secure; however we had a flight in today from Melbourne, that originated internationally, which was never quarantined.

If Sydney goes back into lockdown; it will be a disaster for Australia, psychologically and economically.

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That is so true, if NSW goes into lockdown, it is game over IMO and I dont even live there.

sptrawler said:

That is so true, if NSW goes into lockdown, it is game over IMO and I dont even live there.

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Are you in the right thread .

rederob said:

Are you in the right thread .

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Sydney is the financial capital of the Southern Hemisphere.

rederob said:

Are you in the right thread .

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NSW is the epicentre of Australian economic activity, anything that has a chatostrophic effect there affects the Australian economy, whether we like it or not.
If NSW takes a major hit, I think the ASX will, you may think differently and you can post up your reasons.

sptrawler said:

NSW is the epicentre of Australian economic activity, anything that has a chatostrophic effect there affects the Australian economy, whether we like it or not.
If NSW takes a major hit, I think the ASX will, you may think differently and you can post up your reasons.

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The ASX took a decent hit yesterday and today with Melbourne going into lockdown.

Our Chief Health Officer in NSW should be sacked after today with the flight into Sydney that wasn't quarantined, considering the Ruby Princess fiasco.

How many people will lose their jobs because of this mistake, if we go back into lockdown in Sydney.

Chronos-Plutus said:

Our Chief Health Officer in NSW should be sacked after today with the flight into Sydney that wasn't quarantined, considering the Ruby Princess fiasco.

How many people will lose their jobs because of this mistake, if we go back into lockdown in Sydney.

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I can do the job, do it better, and do it for half the price.

qldfrog said:

Really?, drama of endoctrinement and sacrifice of generations for maybe a few above 70s.
You save a few to kill more
Honestly amazed by your and @Smurf1976 attitude there, full respect for the individuals, so obviously, and i hope you guys have done the same: i ask myself, could i be wrong?
I am no reb rob here
Nope, facts and figures are clear...
Proof if need be that scare panic hysteria and a bit of propaganda is a powerful tool
For your own integrity which i think you and others have
Look genuinely at the arguments and facts presented.
No answer wanted or needed.it is an ethical issue for you to solve

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There are multiple issues in all of this. Among others:

One is the direct health impacts from the virus the long term impacts of which are unknown. As has been pointed out that's not really the subject of this thread, although obviously if enough people die well then that's not good for GDP beyond the short term funeral boom.

On the economic side there are multiple issues.

One is about moral hazard and whether society should socialise the cost of poor business decisions?

Concentrating a company's workforce in a single large building, failing to insure for the risk of a pandemic or to hold adequate cash reserves internally, failing to have reasonable inventory levels, failing to diversify supply chains and so on.

If company A got it right and is doing just fine while company B is screaming for lockdowns to end because they're about to go broke, well capitalism does have an answer for that.

Another issue is about the march of progress and as others have noted, the pandemic is simply accelerating trends that were already there. Trends which in most cases are away from the very things which could be seen as iconic symbols of 20th century business - big skyscrapers, hierarchical corporate structures and promotion of those who engage in the best "water cooler chat" not those who are best at actually making the company money.

Large offices are not an overly productive environment indeed they tend to drive those who want to get on with the job crazy. A quick Google search tells me that the average office worker is actually working 30 - 50% of the time and the rest is idle chatter about non-work subjects, engaging in "visibility" and so on.

Now there are going to be businesses who realise that there's money to be saved in this "work from home" thing via productivity, reduced management and accommodation costs and who stick with it. Those businesses then gain an advantage over competitors who stick with the higher cost structure of big offices, lower productivity and more overheads.

Relating to that is the issue of one location versus another and in the Australian context that's a big one. The issues relating to lockdowns and so on are just another one on the list of reasons why someone would choose to live somewhere other than a big city.

No surprise then to find that it's the states which don't have the big cities which are fighting the hardest to be virus-free. The idea that SA needs to actively patrol the border to keep Victorians out is a concept that would have brought laughter not too long ago but it's reality right now.

All of a sudden those who live in apartments in Melbourne are taking an interest in suburban houses on their own land in the smaller cities and contemplating how they could make this work? All of a sudden that big city address is not so appealing at all.

No surprises then that it's NSW and Victoria that have been keen on opening things up whilst the smaller states have taken a much more cautious line. There's an advantage in elimination if it can be done and it's simply a matter of business that those who can gain economically by doing it will try to do so. It's no different to WA gaining from minerals or Tasmania from water resources or Queensland from the climate and so on. If there's an opportunity then most places will grab it.

Chronos-Plutus said:

Our Chief Health Officer in NSW should be sacked after today with the flight into Sydney that wasn't quarantined, considering the Ruby Princess fiasco.

How many people will lose their jobs because of this mistake, if we go back into lockdown in Sydney.

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Let the virus rip, it is more predictable than our pollies and govnut officials trying to contain the unstoppable: nature.

Kogan keeps spiking in response to all of this, so there's that.

The same rules of market response to the virus apply everywhere guys. I don't have much money in the ASX, but kogan's one of them


Still, all the travel related stuff etc has been kicked back 6 weeks basically. None of the reopenings have been cancelled - they've just blocked victoria. There's still plenty of pent up demand and here, unlike in the USA, people feel safe to go & do stuff.

over9k said:

Kogan keeps spiking in response to all of this, so there's that.

The same rules of market response to the virus apply everywhere guys. I don't have much money in the ASX, but kogan's one of them


Still, all the travel related stuff etc has been kicked back 6 weeks basically. None of the reopenings have been cancelled - they've just blocked victoria. There's still plenty of pent up demand and here, unlike in the USA, people feel safe to go & do stuff.

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They went for a spp, i participated...usually a spp means that the management believes the price is overstretched..
But yes i own.
And kgn fell today in line..a bit more than the xjo...hum

Just saw on the news that the passengers which flew into & left sydney airport without being screened by nsw were actually screened in vic before they left, so I don't see how they're going to spread anything unless they were false negatives?

Everything else is a disaster though. Vic on lockdown for 6 weeks, act delaying reopening for a fortnight, everyone have closed borders to vic. WA reconsidering reopening on the 18th.

So the borders to everywhere except vic are getting reopened, but the business restrictions aren't.

Related to the thread:

One of the economic implications of this outbreak has been a lot of stimulus. Apparently the white house is wanting/now calling for their next lot before the august congressional recess. The politicians are just bickering about what it looks like. Futures are up there.

Here in aus, there was already a lot of resistance to ending the jobkeeper etc package when it was scheduled to, and with this victorian outbreak, I suspect that's now going to get postponed.

In other words, the more virus we get, the more stimulus we get.

rederob said:

Are you in the right thread .

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The result of a second lockdown on stressed companies is starting to become apparent.

https://www.theage.com.au/politics/...lapse-in-second-lockdown-20200708-p55a4e.html
From the article:
Thousands of businesses in inner-Melbourne face closure, with estimates more than 15 per cent could permanently shut their doors due to the cumulative effects of two lockdowns.

City of Melbourne data shows the municipality's hospitality industry contributed $2.5 billion to the Victorian economy before the pandemic struck, but just 45 per cent of food businesses managed to keep operating during the six-week April and May lockdown.
Lord mayor Sally Capp said further restrictions, which take effect from 11.59pm on Wednesday, would spell disaster for many businesses.

If an outbreak caused a concurrent shutdown of Sydney, I think the Government would be in a quandary as to how to go forward.