One has to wonder about how the economic systems around the world will hold up as the COVID situation deteriorates.
Debt defaults, widespread unrest, collapse of financial institutions, potential breakdown of infrastructure.
South Africa is in deep trouble as is Brazil.
https://www.mckinsey.com/business-functions/risk/our-insights/covid-19-implications-for-business
It depends a lot on who wins the US election in my view.
If it's Trump then there will be a lot of chaos and disorder, if Biden, who knows but one hopes that he'll find a way to bring the Western world together more cooperatively and not just run a US first policy.
And may not always be that bad, having cheap junk to throw away and fill landfill in the West has limited advantage the inevitable day the Kmart buyer of junk becomes unemployed and his relative wealth is redistributed in China or Bangladesh..Ok my background is developmental economics/employment relations and geopolitics/governance:
This withdrawal from the global system was already underway pre-trump. He's just kicked it into overdrive.
If you have an afternoon or a few hours spare, any/all of these are worth a watch to understand what's going on:
Here's from way back in 2014:
A 2018 update:
And another update after that:
If you're going to watch them, watch them in the order I've listed.
The long & the short of it is that shale oil (fracking) has severed the only thing that's actually been tying america to the global system for several decades. They were already in the process of retreating back into isolationism, trump's just accelerated the process.
Historically, we're retreating back into something far more normal where we all just worry about ourselves. What's happening is literally decades overdue.
Change is constant.Historically, we're retreating back into something far more normal where we all just worry about ourselves. What's happening is literally decades overdue.
Ok my background is developmental economics/employment relations and geopolitics/governance:
This withdrawal from the global system was already underway pre-trump. He's just kicked it into overdrive.
If you have an afternoon or a few hours spare, any/all of these are worth a watch to understand what's going on:
Here's from way back in 2014:
A 2018 update:
And another update after that:
If you're going to watch them, watch them in the order I've listed.
The long & the short of it is that shale oil (fracking) has severed the only thing that's actually been tying america to the global system for several decades. They were already in the process of retreating back into isolationism, trump's just accelerated the process.
Historically, we're retreating back into something far more normal where we all just worry about ourselves. What's happening is literally decades overdue.
From a personal perspective, which is someone under pension age, but above employable age, who is self funded.
This is certainly a period of eroded wealth, no welfare assistance, minimal dividends, minimal interest = minimal income, so it is a case of burning capital.
It isn't a problem because I have capital, but it should be food for thought for those who are looking at becoming self funded, it is a worst case scenario at the moment and probably a good base line for the amount of money required to be self funded.
I'm thinking that anything which had passed its' peak anyway, due to technology or simply being outdated / old, may well never resume whereas without the virus it would have declined far more gradually over however long.
Retail is an obvious area there. Now that even those who were previously reluctant, older people mostly, have given online ago it seems reasonable to expect that at least some will stick with it. Physical shop trading volumes won't go back to pre-pandemic levels.
The entertainment industry is another area where I think that may occur. For those bands and other performers who are passed their peak but were still touring, well I wonder how many will bother getting going again? And how many will decide that now that they've been forced to stop and have become accustomed to doing whatever they're doing instead, that's it they're done with standing on a stage, indeed they're done as such, and it's all over now?
There would likely be some in far more normal jobs who think similarly. They've been forced to stop doing whatever, they're near retirement anyway, so can they really be bothered getting going again? Or is that it, game over?
Cruising's another one where it's hard to see there not being at least some permanent damage. For those who just wanted a holiday and don't really care if it's a cruise or if it's some other sort of trip, well there's a lot of negative publicity for the entire concept out of all this.
The big one though, more significant than the rest, I wonder about is the concept of CBD head offices in big buildings? Historically that's been the goal of many, get promoted to head office, but I wonder if now the opposite is true? Will the best talent be seeking to avoid such places unless paid enough to persuade them? Is a CBD office now a liability rather than an asset?
As a case in point, well NAB have mothballed entire office towers and yet they're still functioning as a bank. That raises a lot of questions as to why, exactly, they'd go back to those buildings with all the costs involved and so on? Especially so if they find some other bank trying to poach their best staff with an offer of permanent work from home. Etc, same with any business. WFH is now more than proven for purely desk-based roles and any employee who wants to do it and is worth employing is going to be using it as a bargaining point.
Another one I wonder about is locations. Eg Melbourne and Sydney versus the smaller capitals or anywhere regional? The whole virus experience would seem to be a negative for the bigger cities especially and I'm thinking that at least some will want out. That then comes back to employers - if someone in Melbourne wants to keep their star employees then they might have to just accept that they now live in regional WA and will never be turning up to the office physically.
That then has implications for real estate and house prices if fewer people have an actual need to live anywhere specific and particularly in the big cities. No doubt there's quite a few Victorians who over the coming weeks will browse real estate websites looking at homes in regional areas or interstate.
And so on. I'm basically thinking that anything where there was an existing trend due to technology or age etc has just been given a huge push along.
I've no doubt that I'll be wrong to considerable extent, we're not going to abandon the entire CBD or anything like that and not every 50 year old singer is going to throw in the towel at this point, but I'm thinking that we'll see some changes with that sort of thing. If even 5% or 10% shift then that's a huge impact on things like office vacancies and so on.
In short, I'm thinking that some will adopt the forced changes permanently. They've been forced to see a different way, a way that doesn't involve them trawling through shops in search of something, working in a CBD office or standing on stage bashing out their hits from the 1980's or whatever and I'd be surprised if some don't stick with the change permanently.
Along with what people want to do and what we as a planet allowing, I think we will have the reality of economic devastation far beyond what most people expect.
Singers... meh, I don't think it's that big a deal what any individual artist does, there's always literally a thousand people desperate to take their place. The interesting thing will be what the masses want. Will there be a reduced demand in the long term for being part of a crowd, whether it's a concert, sports game, etc, or a festival.
The way I'm thinking of that one is that there's an assortment of artists who were at their peak in the 1990's, 80's or even 70's who still tour and who still attract a reasonable crowd.
To the extent that they say stuff it, I'm done, my thinking is that whilst there's a million or more aspiring musicians to take their place, those replacements won't be attracting the same individuals to their shows. Someone aged 50+ probably isn't going to turn up to see some pop singer who's younger than their own kids. etc. If that's the case then it narrows the market for the live music industry overall, it chops the oldies off basically.
Another way a similar effect would occur would be if many overseas based acts simply narrowed their future touring plans. Those from the US tour the US and Canada but that's it, they're not going further than that. Or those from the UK tour the UK and a few European countries but they'll give the idea of flying to the other side of the world a miss. etc. That's another way that the overall scale of the live music industry could be reduced for an extended period well after "normal" returns.
Reason I mention it is that live entertainment is one thing that's extremely hard hit, it's literally gone to zero so far as anything major is concerned, and all up it does employ quite a few people. It's not just those on stage but it's all the people behind the scenes and all up there's quite a lot of people employed.
It also has a significant cultural place in society and having 20,000 people in an indoor venue is one thing that would be symbolic of "we're back to normal".
As a declaration of bias - well I've seen an order of magnitude more live concerts than I've ever watched professional sports of any kind. Along with travel, it's really the only thing I can't do at present that I'd normally do. So I have some personal bias there in using it as a measure but I do see it as being of some relevance - it would be somewhat symbolic of "normal" to see Rod Laver Arena (Melbourne) with a capacity crowd and a major international act on stage.
Sdajii and Smurf are both emotionally compromised on these sort of themes/topics .
Play the ball, not the player.
Sdajii and Smurf are both emotionally compromised on these sort of themes/topics .
In what way?
I have noted bias in that I'd like to see a return of live music and have stated that the lack of that, and the inability to travel, are the main impacts of the current situation on me personally.
I have not suggested that anyone ought be put in danger via COVID-19 in order to facilitate my hope that live entertainment returns.
Nor have I suggested that $ billions of taxpayer funds should be used to facilitate it happening.
What I am doing is simply raising it as an industry of significance, primarily culturally but to some extent also economically, which could plausibly suffer long term impacts and fail to return to "normal" anytime soon.
I could be wrong and have acknowledged that. So could anyone else on this subject given that it's a subjective assessment of what's going to happen, it's not something which can be calculated with precision or even based on past precedent since there isn't one recent enough to be of relevance in the world in which we live today.
It's not like a market crash where it can be compared to all previous crashes on fundamentals and technicals. There are numerous past precedents to compare with.
Nor is it like an infrastructure project where the costs of various options can be calculated with reasonable certainty and the cheapest options identified. Unless someone's proposing to build a world first then for most things there are plenty of past projects which give a range of likely costs and that's enough to determine that it is or isn't worth proceeding to a more detailed assessment of a specific proposal. Nobody needs a detailed design to conclude that a bridge across Bass Strait is an economic dud idea for example, there's been more than enough bridges built around the world with their costs known for that to be immediately apparent.
The subject by its very nature is a speculative one and to the extent anyone here is compromised, it would be if they argued that anything was certain in an environment where very clearly it isn't. I don't see that being the case.
All that can really be said at present is that we've got Australia's borders shut, we've got some state borders shut, a lockdown in Melbourne and that overseas the US has seen a breakout in the infection rate with the death rate now also turning up. For other countries it's mixed - I'm focusing on the US simply due to its degree of influence. Where that all ends economically though, well that's anyone's guess since there's a lot of things in the mix beyond pure economics.
What happens next is speculative at best even for seemingly trivial matters. As just one example - would anyone like to predict whether normal New Year's Eve celebrations will go ahead this year or not? For that matter, will we even see someone dressed as Santa in shopping centres and so on for Christmas? Anyone's guess at this stage.......
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?