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Economic implications of a SARS/Coronavirus outbreak

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Something to ponder is that during the SARS outbreak, China only represented about 2% of global economic output but recently it has been edging closer to 18%. So comparing the impact of Caronavirus to SARS could be very misleading. The economic effects on Australia could be devastating if the shutdown situation in China continues for months. I'm surprised that our market is holding up so well, why hasn't Qantas, Crown and other travel exposed stocks crashed, why is BHP still above $38 (should be more like $34), I agree with qldfrog 7100 complete lunacy. Is their something I'm missing here? I'm looking at shorting opportunities (not something I normally do).
 
2018: could not find more recent:

2003: SARS:below 15billions:

We are roughly 10 times more exposed..probably does not include tourism, etc and not in indexed currency
So any comparison with SARS economic effects is not realistic here
 
Johny5 said:
I'm surprised that our market is holding up so well, why hasn't Qantas, Crown and other travel exposed stocks crashed
Click to expand...
My perception is that most Australians are in denial about the seriousness of the problem.

The market will get a lot more “interesting” really quickly when that changes.
 
It would appear that Oil is cheaper, just going on the bowser, so oil price is falling. This may be a trap for the unwary shorters in that commodity and oil stocks, though, as oil can be contrary due to the ability to turn supply off or down.

The Cruise Industry is about to stop cruising, and the hordes of cruisers will return, if they can, to their medication and bowls.

The Casinos are cactus.

The Airlines have already been affected, VA no longer going to HK and QA price falling.

All is woe.

gg
 
Thinking about this on and off, I'm thinking that the single biggest economic risk would be a banking crisis in China.

I don't have a specific reason for saying that other than that if businesses are shut well then money isn't circulating and that's going to lead to defaults in practice. On the other end of those defaults is a bank.

Now I wonder to what extent there are potential flow on effects to banks outside of China?
 
Latest:

Deaths: 635
Infections: 31,432 and rising at 3000/day

Estimates put cost at 2.5% of World GDP or $2T

Supply chains across Asia are now disrupted. Singapore has gone to Orange alert.

jog on
duc
 
On the good side, rate of transmission is slowing, no longer exponential. Seems the Chinese are winning. These assumptions that it is 10 times worse are likely an exaggeration by the usual suspects.

The danger is that it takes off in a country like the Philippines. That is what I really fear.
 
Or Indonesia, Egypt, Nigeria, Mexico..you name it
We check tourists and some got it, what about places where they do not did not check them, or Africa which is now a Chinese outpost
I can not see how it can be possible to contain it, we can gain time for remedy, development of vaccine but it is too far spread imho to be contained as SARS was
 
Just thinking about good old nine lives Australia, think about all the economic crises we've survived over the past 30 years, Australia always seems to come out on top (well not totally unscathed). Many Asian countries look at Australia as a safe haven from disease, terrorism and many other nasties, many are champing at the bit to emigrate to Australia. But most pathways for easy emigration are being blocked, however one pathway is still open the "Business Innovation and Investment visa". So maybe more wealthy Asians will take up the opportunity to invest and live in Australia, I'm sure the government will welcome their millions with open arms, but it may only prop up Sydney and Melbourne, with hopefully a flow on effect to other states. So will Australia triumph yet again.
 

Maybye or maybye the bushfires, climate change and unpredictable Aus govt make Australia a less stable country to go to
 
Too many posts in this thread to read them all...but thing that seems to have fallen by the wayside and not getting much media attention of late is why China refused to provide the virus to WHO despite being able to easily to do so? It took Australian researchers to "copy" the virus and provide it to WHO. Why would China not assist WHO and provide the virus????
 
There is way too much conflicting information on the nCoronavirus and it's spread/lethality to make any sense or prediction on it's effects.

So I'm going downstairs to the public bar to have a few beers, listen to the welded wisdom of the drinkers at the Ross Island Hotel and wait this out pro tem.

gg
 
Garpal Gumnut said:
There is way too much conflicting information on the nCoronavirus and it's spread/lethality to make any sense or prediction on it's effects.
Click to expand...
A big problem is uncertainty as to the accuracy of the information which has been released.

Officially there are 34,896 cases with 724 deaths but there are plenty who dispute those figures with their basis ranging from claiming that there has been genuine under counting of infection rates through insufficient testing through to claims that the figures are outright lies.

That being so, and given the impracticality for any of us to verify the facts, I'm treating the issue with caution so far as investing is concerned with the thinking that there's a fair chance we'll see a panic in the markets before this is finished.
 
So_Cynical said:
And we have the beginnings of a plateau
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I sure hope you're right but for me it's a bit in the "unconvinced" category.

That's referring to the underlying situation not you or your post.

I just bought something from China on eBay. It's a cheap off the shelf item, value about $3, but the quoted delivery time is 6 weeks to 3 months.

Suffice to say I can only assume there's some virus impact embedded in that time since it's a standard "off the shelf" item as such. Just as well I'm not in a hurry - won't be using it until November just bought it now so I don't forget. If that time turns out to be real though well then the situation would seem to be having quite some impact.

I think we're about to find out the truth on all this over the coming week or two.

Claimed number infected in China = 34,620.

So that's less than the population of Dubbo or Warrnambool in a country with almost 1.4 billion people.

Monday is the 10th of February, getting a bit late to stretch out the New Year stuff, and I think that if the factories don't resume production then it's going to become more difficult by the day to keep stretching it out whilst retaining credibility. One way or another, we're rapidly approaching a point where the truth is going to become apparent.

Either outcome will move the markets is my expectation. Factories resume production etc = good news. Factories etc don't resume production = adds a lot of weight to those questioning the accuracy of the statistics.

Time's about up is my thinking.
 
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News from France this morning:
Brits back from Singapore 3d trip..probably business
Stop for a short week of skiing in french alps in a chalet with 2 flats
Result:5 people confirmed contaminated, both flats inc a local 9y old boy
2 schools closed tests underways
Just to show how contagious it can be and it is not restricted to China
anymore.In SZ 900km from Wuhan, work expected to restart tomorrow.
Employers checking province of origin, in the town, any case trigger whole building lockdown.
While i believe China is doing/has done has much as could be done, i am worried about the emergence of a new uncontrolled hotspot somewhere else.like Cambodia or similar country without the power to fight it
With Australians, Germans, Frenchs, infected , people might start reacting a bit differently my 2c.
The link https://www.lefigaro.fr/sciences/coronavirus-5-nouveaux-cas-en-france-20200208
 
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Economic impact
Surgical masks in Australia: 3 weeks ago on ebay
20 for below 13$ delivered.got them in a week
Yesterday, same seller,same product
35$
Chinese buying them reimported from Brazil at 7$ a piece plus postage..a lot of money there
There is no availability, production is 20 millions a day as told there, not enough..and restricted to doctors and medics..but still mandatory to get outside in most of China
Expect shortage to extend outside China
 

6weeks to 3months is standard sea shipping time from China that's one of the reasons why your product was $3 inc shipping Im guessing.

I think the stone has been cast and the economic ripples will reach the shore line later this year not just in China but around the world.

The real question imo is how will markets react to that will they even flinch or just dip and rally? Where do you even park your cash? Bonds are in a bubble, bank interest rates are near zero, dividend yields low and stock market at all time highs, pet rocks(gold) no yield, bitcoin no yield, property yields close to zero and markets at all time highs?

Will the 2020s be the Roaring twenties V2?
 
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