Economic implications of a SARS/Coronavirus outbreak

[Dona Ferentes]

Economic implications .... at my level
When the reality was awning on people that things might be serious and we might have a pandemic on our hands, there was slow attribution. But at the same time, late 2019 and early 2020, markets were looking toppy and there was a fair amount of commentary around that the good times may not last. Having run a 'growth strategy' and probably over-allocated to equities (in a portfolio sense), I bought some exposure to gold and started trimming holdings, with the aim to have at least $100k in cash (enough to live on for AT LEAST a year) as I took the view it would be best to sit this one out. By late Feb I had made the last share disposal and then as March unfolded, sat and watched and sat and watched. Bought bugger all. Kept powder dry.

Then the discounted capital risings came around and I have selectively put money into 5, of which 4 have delivered upside and one is treading water. Now sitting on a bit over $50K cash. We're coming into reporting season and it is pretty obvious that dividends are going to be lower, especially after last year's bounteous harvest.

So, where does this leave me? Got to pay myself (pension) but, at the same time, the spending is curtailed (no travel, or indulgent splash-outs), so things are netting out, roughly. My fear is the impact is going to be prolonged, that business is not going to revert to 'as usual'. Ah, the Wall of Worry. Meantime, it is very much interesting times with all that implies.... tech is changing our lives as much as a virus. Winners and losers.

But i am worried how much longer this will go on for.

Stay safe, people. Diversification is the only free lunch.

 

[Sdajii]

That's not even a guess: It is wholly contradicted by real world evidence of spread, including what is abundantly clear in the USA which has been trying to mitigate spread.

It's amazing that you continue to deny blatant reality as speculation or guess when it doesn't suit your narrative, but come out with bizarre speculation and expect it to be taken as fact without any need to backing it up. The USA clearly has all sort of its own problems going on which are completely unrelated to the virus.

Sweden has got measures in place, and I believe continues to have them in place, to mitigate spread. Borders to Sweden were closed by other countries, so it had also been effectively like how we are presently treating Victoria.

Indeed, sensible measures were used to flatten the curve, but they didn't go overboard. They've been criticised for being reckless in not attempting to control it, yet here you say they did control it. Which is it? At least stay consistent. They did approximately (close enough to) what I was suggesting from the start would be the best way to deal with it, which is by all accounts a very low level of mitigation effort and the maintenance of personal freedom compared to other countries, and their situation has now stabilised with a negligible number of ongoing deaths, unlike a country such as Australia with far more draconian measures and currently an escalating virus problem. Sweden has already had the virus run to a completion, Australia is still effectively in the early stages with a big problem in Victoria, the beginning of a similar situation in NSW, and potentially more outbreaks elsewhere.

Since Sweden was allowing the virus to do its thing, the border closures are not relevant to the situation within Sweden, only potentially other countries bordering it.

Sweden's social structure and sense of social responsibility is nothing like Australia's, so suggesting we can just do what they do would never work. Our cultural similarities to the USA and UK suggest we would fail massively.

This doesn't make sense. They literally had more liberty and allowed the virus to spread more than in Australia at an earlier stage, which is exactly what did happen! Your argument is clearly in contradiction to the reality we can plainly see, that is, that the virus did indeed spread earlier and faster in Sweden. Your claim that Swedes have a greater social awareness or sense of responsibility etc may be correct, but it is irrelevant since the point is that they tangibly did less to control it and it did spread because they didn't try to prevent it with extreme measures and that reasonable level of management has produced a result where they now have a negligible death rate and can carry on without the need for draconian measures, unlike the situation in Australia where such measures are in place and will continuously be in place until we do adopt a similar approach to what Sweden did, which inevitably will happen, whether by open admission of it being necessary/inevitable (extremely unlikely because whoever decides it will be committing political suicide) or through the use of an ineffective vaccine (which is my guess of what will happen).

 

[qldfrog]

Let's be positive the current wave will spread, and there are better ways to treat covid than 4m ago.
Once we will have been thru the worst, we will reached Sweden status and can move on.
the gesticulations of our various premiers will not change that course and we will be ready for the fake vaccines :december/january, Australia will restart.
we should give a medal to our ethnic crooks coming into Qld from Victoria.
they ultimately saved lives by speeding the process

 

[Sdajii]

we should give a medal to our ethnic crooks coming into Qld from Victoria.
they ultimately saved lives by speeding the process

An irony which most people will never see or understand.

 

[rederob]

It's amazing that you continue to deny blatant reality as speculation or guess when it doesn't suit your narrative, but come out with bizarre speculation and expect it to be taken as fact without any need to backing it up. The USA clearly has all sort of its own problems going on which are completely unrelated to the virus.

The USA is a prime example of what you claim should be done, yet is turning into an economic basket case. To suggest that 4.5million positive COV19 cases has no impact on their economy flies in the face of every credible commentator noting events as they unfold.

As the rest of you post continues to be off topic, why don't you move it to where it belongs.

 

[basilio]

Is deflation a "good thing" ?
Obviously the last quarter was affected by a few big items - fuel, child care costs.
But historically deflation equals depression.

 

[Sdajii]

The USA is a prime example of what you claim should be done, yet is turning into an economic basket case. To suggest that 4.5million positive COV19 cases has no impact on their economy flies in the face of every credible commentator noting events as they unfold.

As the rest of you post continues to be off topic, why don't you move it to where it belongs.

The USA is a complete basketcase. I have never endorsed the situation there and have said since before patient zero contracted the virus that the USA was a complete mess.

The rest of the post is perfectly on topic, you are clearly only making this post as a feeble excuse to avoid addressing the reality which conflicts with your views.

 

[rederob]

The USA is a complete basketcase. I have never endorsed the situation there and have said since before patient zero contracted the virus that the USA was a complete mess.

The USA is not a special case.
The first case was China.
The very first economic casualty was 6 months ago and fully contradicts your claims, along with most European nations - and these are nations that actually tried mitigation to preserve their economies as best as possible, without luck.
This is one of so many of your unsubstantiated claims.
As to Sweden, here's some facts.

 

[Sdajii]

The USA is not a special case.
The first case was China.
The very first economic casualty was 6 months ago and fully contradicts your claims, along with most European nations - and these are nations that actually tried mitigation to preserve their economies as best as possible, without luck.
This is one of so many of your unsubstantiated claims.
As to Sweden, here's some facts.

To say the USA is not a special case is just silly. If you can't see it has a quite unique situation going on affecting its economy and overall situation you're probably not able to see anything.

I'm not sure what your point is when you raise China. China is a totalitarian regime not at all comparable to any western country. China's reported figures can not be trusted. China remains in lockdown and does not have the same endpoint Sweden has achieved.

Your link to 'theconversation.com', a clearly biased source, doesn't really seem to have anything of relevance. It would make sense to raise any specific points yourself rather than just put up link to a biased source with a vague "here's (sic) some facts" statement.

 

[rederob]

To say the USA is not a special case is just silly. If you can't see it has a quite unique situation going on affecting its economy and overall situation you're probably not able to see anything.

I'm not sure what your point is when you raise China. China is a totalitarian regime not at all comparable to any western country. China's reported figures can not be trusted. China remains in lockdown and does not have the same endpoint Sweden has achieved.

Your link to 'theconversation.com', a clearly biased source, doesn't really seem to have anything of relevance. It would make sense to raise any specific points yourself rather than just put up link to a biased source with a vague "here's (sic) some facts" statement.

You seem incapable of understanding what you initially claimed, which I have shown defies realities, and continue to offer nothing other than your opinion. The link to The Converation actually used some data to make its point. Is there a reason you cannot?

 

[basilio]

Bank Stability through the COVID 19 crisis

I came across this analysis of US Bank exposure to CLO's Collaterilized Loan Obligations.

CLOs bundle together so-called leveraged loans, the subprime mortgages of the corporate world. These are loans made to companies that have maxed out their borrowing and can no longer sell bonds directly to investors or qualify for a traditional bank loan. There are more than $1 trillion worth of leveraged loans currently outstanding. The majority are held in CLOs.

Long story short the Banks exposure to CLO's rivals/exceeds the exposures they had to the CDC's which ended up undermining the US banking system in 2008 and creating that financial catastrophe.

The analysis from someone who works in the business points out COVID is creating simultaneous stresses across most of the economy and the risk of another financial collapse sparked by mass failure of these loans is on the table.

The Looming Bank Collapse
The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.
https://www.theatlantic.com/magazine/archive/2020/07/coronavirus-banks-collapse/612247/

 

[basilio]

Australia needs to address how we will harvest our fruit and veges with the collapse of backpackers and migrant fruit pickers due to COVID 19.

Without seasonal workers, Australia may face a hungry summer
Michael Rose
With not enough workers to pick the upcoming harvest, Australia faces potential food shortages, and its farmers face economic devastation
https://www.theguardian.com/world/2...al-workers-australia-may-face-a-hungry-summer

 

[SirRumpole]

Australia needs to address how we will harvest our fruit and veges with the collapse of backpackers and migrant fruit pickers due to COVID 19.

Without seasonal workers, Australia may face a hungry summer
Michael Rose
With not enough workers to pick the upcoming harvest, Australia faces potential food shortages, and its farmers face economic devastation
https://www.theguardian.com/world/2...al-workers-australia-may-face-a-hungry-summer

Not enough workers ?

The unemployment rate is supposedly about 11%.

Those receiving JobSeeker should be lining up outside farms.

 

[basilio]

Not enough workers ?

The unemployment rate is supposedly about 11%.

Those receiving JobSeeker should be lining up outside farms.

That's not the view of the people in agriculture. Picking fruit is seasonal and moves from place to place. It makes no sense for unemployed people hundreds of klms away to uproot their lives and move to a an area for 6 weeks work.

If you check out the story it is trying to support the Pacific Islanders who have come to Australia for the picking season.

 

[wayneL]

Not enough workers ?

The unemployment rate is supposedly about 11%.

Those receiving JobSeeker should be lining up outside farms.

That sort of work is beneath the dignity of the unemployed </tongueincheek>

 

[SirRumpole]

That's not the view of the people in agriculture. Picking fruit is seasonal and moves from place to place. It makes no sense for unemployed people hundreds of klms away to uproot their lives and move to a an area for 6 weeks work.

If you check out the story it is trying to support the Pacific Islanders who have come to Australia for the picking season.

There would be unemployed in regional areas as well who don't have to travel hundreds of kmls.

 

[satanoperca]

Economic IMPACT from an inept govnuts (VIC),

Property PRICES to get SMASHED, resulting in the biggest feedback loop of economic repression in the last 60 years.

 

[Sdajii]

Australia needs to address how we will harvest our fruit and veges with the collapse of backpackers and migrant fruit pickers due to COVID 19.

Without seasonal workers, Australia may face a hungry summer
Michael Rose
With not enough workers to pick the upcoming harvest, Australia faces potential food shortages, and its farmers face economic devastation
https://www.theguardian.com/world/2...al-workers-australia-may-face-a-hungry-summer

I haven't done farm work since I was a young fella over 20 years ago, for many years I'd have thought there's no way I'd ever do anything like it again, but I'm still young and fit enough to comfortably do this work (I'm 41 and pretty fit, in good shape for my age, active, not overweight, etc), and given the current situation, if it would mean I could travel again I'd be happy to spend a few weeks here and a few weeks there travelling around picking fruit etc. I'd honestly prefer to be just cruising around travelling and exploring as per my more recently lifestyle, but in this situation I'd happily do farm work if it meant I could hit the road and enjoy being outside. I'm not sure how many people would have similar sentiments to my own, but surely it would be a non trivial percentage of the literal millions of people out of work due to the restrictions. I'd even quarantine for two weeks, since I'm currently locked down and unable to do anything anyway.

Strangely, whenever there's a shortage of workers for harvests etc, the farm owners cause a fuss about a worker shortage, yet still almost always refuse to pay more than slave wages. Being a big traveller myself I cross paths with many other travellers and hear no end of stories about farm workers being exploited to absurd extents, by farm owners complaining of labour shortage. If there's a worker shortage, people can be paid well (which shouldn't be an issue if there's a food shortage and produce prices increase) and this seems like an obvious benefit to both unemployment and food security.

I'm not sure at which point common sense will start poking its head up in this situation, but this seems to be one thing which may encourage it.

 

[macca]

If people will fly to work in the mines in the outback in 45c heat simply to get the big bucks then maybe the farmers should consider paying higher wages.

As I understand it, you get paid per measure (bucket, bushel, bag etc) so just increase the payment and all good

 

[basilio]

Normally there isn't a problem with getting enough people to pick crops in Australia.
Trouble is farmers and the various Labour Hire companies have run out of options with the COVID situation.
Come on down Sjaji ! Looks like you have a real hands on opportunity.

https://www.abc.net.au/news/rural/2...ckers-after-illegal-worker-crackdown/10871214
https://www.governmentnews.com.au/migrants-trapped-in-slave-like-conditions-at-aussie-farms/
https://www.smh.com.au/interactive/2016/fruit-picking-investigation/