Economic implications of a SARS/Coronavirus outbreak

sptrawler said:

The WHO has asked for a stop to lockdowns.

WHO backflips on virus stance by condemning lockdowns

The World Health Organisation has backflipped on its original COVID-19 stance after calling for world leaders to stop locking down their countries and economies.

www.news.com.au

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While i do not have much respect for who's top management, they still have to consider the overall health and well being of the world, so not surprised .the current governments policies are killing millions now and destroying economies so killing into the future.
Even wo government lockdown, my aged inlaws called yesterday from France, their mental and physical wellbeing is collapsing : no more gatherings, outing, friend or family visits with the hysteria.obviously no money spend...except for extra prescriptions and medical fees.
It would be 8nteresting to see overall medical expenses on the pandemic: i expect an initial slowdown then a pretty steep jump due to undetected illnesses and lockdown/scare created specific chronic diseases: from depression, lack of exercise to eating disorders.
With winter coming in the northern hemisphere and mood collapsing,health figures will not be healthy in 6 months without the need of covid actual sickness.

sptrawler said:

The WHO has asked for a stop to lockdowns.

WHO backflips on virus stance by condemning lockdowns

The World Health Organisation has backflipped on its original COVID-19 stance after calling for world leaders to stop locking down their countries and economies.

www.news.com.au

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Now even the WHO is being forced to admit what I've been saying since early this year, including in this thread where I've been ridiculed and berated for saying it; these lockdowns and the hysteria campaign are clearly causing far more harm than good to both the global economic and health situations. It will cause far (many many times) more death and suffering than it will prevent. It was incredibly obvious when I was predicting it early in the year and it's now overwhelmingly obvious that it has already occurred and will get progressively worse even if we take the necessary backflip now, which we won't, but the sooner we do wake up to the obvious the less damage will be caused. We've turned what should have just been as bad as a very bad flu season into a complete catastrophe which will literally cause more human deaths than anything else ever has, and put more people into poverty than anything ever has. I'm not just predicting this any more, even the WHO is admitting it and it's already happening and completely clear and obvious.

Sdajii said:

Now even the WHO is being forced to admit what I've been saying since early this year, including in this thread where I've been ridiculed and berated for saying it; these lockdowns and the hysteria campaign are clearly causing far more harm than good to both the global economic and health situations. It will cause far (many many times) more death and suffering than it will prevent. It was incredibly obvious when I was predicting it early in the year and it's now overwhelmingly obvious that it has already occurred and will get progressively worse even if we take the necessary backflip now, which we won't, but the sooner we do wake up to the obvious the less damage will be caused. We've turned what should have just been as bad as a very bad flu season into a complete catastrophe which will literally cause more human deaths than anything else ever has, and put more people into poverty than anything ever has. I'm not just predicting this any more, even the WHO is admitting it and it's already happening and completely clear and obvious.

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The problem is in Australia everyone thinks we are the norm, when in fact we are far from it. We think just do what we are doing and shut everything down, when we are one of the only countries who can afford to do it.
Places like Bali etc are in a terrible state, people are struggling to survive, due to the fall in tourism.
Very few places in the World have any form of welfare, let alone able to afford to double the payments, meanwhile we sit back smugly and criticise how they are handling the situation. Sad really.

sptrawler said:

The problem is in Australia everyone thinks we are the norm, when in fact we are far from it. We think just do what we are doing and shut everything down, when we are one of the only countries who can afford to do it.
Places like Bali etc are in a terrible state, people are struggling to survive, due to the fall in tourism.
Very few places in the World have any form of welfare, let alone able to afford to double the payments, meanwhile we sit back smugly and criticise how they are handling the situation. Sad really.

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This is true, but even Australians will be harmed economically and mortally and morbidly and psychologically far more by the politics than the virus itself, and more than the virus would have harmed us if we'd done literally nothing. Flattening the curve, the original mantra, was the appropriate course of action, assuming the hospitals would be overflowing and there would be widespread death for want of hospital capacity. As it turns out, we were just never going to be in a position anything like that, and that was obvious early in the year.

You're mostly right, the rest of the world will suffer more than Australia on average, but Australia will suffer severely in the long run, and has already suffered more than we would have due to the virus. So far it is Melbourne hurting the most, but you don't severely harm 20% of the population of Australia and do extreme economic damage without long term consequence to the whole country.

All along, it has been clear that people view the lockdowns according to the way it affects them personally in the immediate term. About 80% of Australians (those not in Melbourne) typically think the lockdowns are no big deal and are happy to either say 'Hang in there, Melbourne!' or 'Haha, suck it, Melbourne, you're garbage and deserve it, we're better than you and aren't suffering because we're not scum!' (often honestly believing that they actually are in a population of people who are better than those in Melbourne, and that all people in Melbourne, including those like me who became trapped here despite not living here, deserve to be in this situation). Most people think that if they're not going to starve from poverty, the poverty issue isn't too bad. If they're not suffering from mental illness, it's a manageable issue which was worthwhile. It's no surprise to anyone with much understanding of human nature, but it is a spectacular display of how self-centered humans are. The most poor people in the world will be the ones suffering most, in their hundreds of millions. Billions of humans will suffer very significantly. It's possible that the deaths will be in the hundreds of millions, all to save a few hundred thousand preventable deaths! Most deaths will be due to economic issues, coming from the lockdowns and clearly not the virus.

sptrawler said:

The problem is in Australia everyone thinks we are the norm, when in fact we are far from it. We think just do what we are doing and shut everything down, when we are one of the only countries who can afford to do it.
Places like Bali etc are in a terrible state, people are struggling to survive, due to the fall in tourism.
Very few places in the World have any form of welfare, let alone able to afford to double the payments, meanwhile we sit back smugly and criticise how they are handling the situation. Sad really.

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And we will have to reopen one day or is North Korea our new model?
Some may remember my initial thoughts on a vaccine..well october now clock is ticking and nothing factual
Considering at least 75% of infected people present no symptom..from memory but it could be 60%...in any case huge majority: how are we going to determine a working vaccine?
As we all agree that no vaccine can be 100% efficient...
Soon we might see with vaccine only 40% of people got sick, and shout victory?
I will join them eyaaa eyaaa vaccine....as long as the circus stops

Doesn't matter. The politicians are not going to change their tune.

Sdajii said:

This is true, but even Australians will be harmed economically and mortally and morbidly and psychologically far more by the politics than the virus itself, and more than the virus would have harmed us if we'd done literally nothing. Flattening the curve, the original mantra, was the appropriate course of action, assuming the hospitals would be overflowing and there would be widespread death for want of hospital capacity. As it turns out, we were just never going to be in a position anything like that, and that was obvious early in the year.

You're mostly right, the rest of the world will suffer more than Australia on average, but Australia will suffer severely in the long run, and has already suffered more than we would have due to the virus. So far it is Melbourne hurting the most, but you don't severely harm 20% of the population of Australia and do extreme economic damage without long term consequence to the whole country.

All along, it has been clear that people view the lockdowns according to the way it affects them personally in the immediate term. About 80% of Australians (those not in Melbourne) typically think the lockdowns are no big deal and are happy to either say 'Hang in there, Melbourne!' or 'Haha, suck it, Melbourne, you're garbage and deserve it, we're better than you and aren't suffering because we're not scum!' (often honestly believing that they actually are in a population of people who are better than those in Melbourne, and that all people in Melbourne, including those like me who became trapped here despite not living here, deserve to be in this situation). Most people think that if they're not going to starve from poverty, the poverty issue isn't too bad. If they're not suffering from mental illness, it's a manageable issue which was worthwhile. It's no surprise to anyone with much understanding of human nature, but it is a spectacular display of how self-centered humans are. The most poor people in the world will be the ones suffering most, in their hundreds of millions. Billions of humans will suffer very significantly. It's possible that the deaths will be in the hundreds of millions, all to save a few hundred thousand preventable deaths! Most deaths will be due to economic issues, coming from the lockdowns and clearly not the virus.

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I agree with your sentiment, but the economic reality is what it is and we will recover, we are still a growing economy and population.
I just hope it all proves to be worthwhile and based on factual evidence, rather than orchestrated, which unfortunately lots of things are these days.

sptrawler said:

I agree with your sentiment, but the economic reality is what it is and we will recover, we are still a growing economy and population.
I just hope it all proves to be worthwhile and based on factual evidence, rather than orchestrated, which unfortunately lots of things are these days.

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You realise we are in a pretty severe recession, right? That literally is defined by a contracting rather than growing economy.

The virus did not cause this. The policies did. With zero policy change and zero awareness campaigns, the global economy would have been minimally effected and Australia would still have a growing economy. Australia's economy will grow again, but don't hold your breath waiting, and it's going to be an ugly economic (and political, social, etc) situation in the mean time.

When your neighbor loses their job, it’s a recession.
When you lose your job, that’s a depression.

sptrawler said:

the economic reality is what it is and we will recover, we are still a growing economy and population.

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There's also the reality that we're getting economic change done in a matter of a year or so that would otherwise have taken decades to get anywhere.

Sdajii said:

You realise we are in a pretty severe recession, right? That literally is defined by a contracting rather than growing economy.

The virus did not cause this. The policies did. With zero policy change and zero awareness campaigns, the global economy would have been minimally effected and Australia would still have a growing economy. Australia's economy will grow again, but don't hold your breath waiting, and it's going to be an ugly economic (and political, social, etc) situation in the mean time.

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I started work in 1970 so I have been through a few recessions, this one actually isn't that severe, there wasn't any government handouts in the others. It was just a case of suck it up princess.
As Paul Keating said in the 1980's we just have to have recessions occasionally, the economy gets bloated, the public sector gets bloated, asset prices get bloated, people take on debt to buy bloated asset's in the hope they bloat further.
Sooner or later something has to pop the bubble, otherwise everything becomes self perpetuating, all investment goes into the non productive side of the economy.
How many people were pouring money into factories and small businesses, as opposed to those pouring money into real estate and shares?
If it wasn't covid, it would have been something else, wash, rinse, repeat.
Just my opinion

sptrawler said:

Sooner or later something has to pop the bubble, otherwise everything becomes self perpetuating, all investment goes into the non productive side of the economy.

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The situation has been apparent to those paying attention for more than 15 years now and the effects are there for all to see with a generation largely priced out of housing, stagnant real wages, Australia's international competitiveness in a truly shocking position, massive supply chain vulnerability for even basic goods and so on.

Unpleasant though it may be, recessions are needed just like humans need exercise. Keep putting it off and ultimately there's a huge price to be paid for doing so.

The pandemic bull chasing us down the street may well have been destructive but it has forced us go get of our collective bottoms and go for a decent run for the first time in years.

sptrawler said:

The problem is in Australia everyone thinks we are the norm, when in fact we are far from it. We think just do what we are doing and shut everything down, when we are one of the only countries who can afford to do it.
Places like Bali etc are in a terrible state, people are struggling to survive, due to the fall in tourism.
Very few places in the World have any form of welfare, let alone able to afford to double the payments, meanwhile we sit back smugly and criticise how they are handling the situation. Sad really.

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Its really bad in some places. I know a lot of the animals are starving in tourist locations across the world as well.

moXJO said:

Its really bad in some places. I know a lot of the animals are starving in tourist locations across the world as well.

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What that shows is just how badly we collectively failed to plan for something we always knew was possible.

sptrawler said:

I started work in 1970 so I have been through a few recessions, this one actually isn't that severe, there wasn't any government handouts in the others. It was just a case of suck it up princess.
As Paul Keating said in the 1980's we just have to have recessions occasionally, the economy gets bloated, the public sector gets bloated, asset prices get bloated, people take on debt to buy bloated asset's in the hope they bloat further.
Sooner or later something has to pop the bubble, otherwise everything becomes self perpetuating, all investment goes into the non productive side of the economy.
How many people were pouring money into factories and small businesses, as opposed to those pouring money into real estate and shares?
If it wasn't covid, it would have been something else, wash, rinse, repeat.
Just my opinion

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In a way I admire and even envy your unbridled, unrealistic optimism. There weren't any government handouts previously because the situation wasn't so dire. What you're saying is basically "This one isn't so bad because it's so drastic that they've taken extreme measures in desperation which were not needed before".

The last severe economic disaster was 2008, the 'Global Financial Crisis'. That was nothing compared to this. That was a zero sum game. There were no lockdowns, there was no fear campaign to stop being carrying out economic activity. There was no travel ban, no forced closure of business, quite the opposite of all of that. In that zero sum game, wealth just changed hands. There were winners and losers, but little net loss. The world never fully recovered from that and has been economically vulnerable since then. You can justify saying that we 'needed a recession' around now, I remember Paul Keating saying what he did in the 80s, I remember everyone mocking him, and I'll confess that it wasn't until some years after then that I understood that he was correct (most people will never grasp the concept and no politician would make such a statement now, because correct as it may be, the masses won't understand it and will assume a politician saying it is a dozen types of hideous). The difference is that in this case, not only were we sitting on a very fragile economy, but we have two severe impacts, neither of which make it a zero sum game like previous crashes; we have government policy enforcing economic harm by literally stopping economic activity by law, plus we have a fear campaign making people too terrified to take part in economic activity (whether they're too scared to go out and do anything/spend or too scared to invest/carry out business because things seem so bleak), plus the third impact being the underlying economic fragility at this time, and you have the perfect storm for something much worse than Keating's recession we had to have or 2008's zero sum game, or other minor (by comparison) recessions. This is also the most global economic disaster in history, rather than being more of a national issue, and that comes at a time when the global economy is more interconnected and susceptible to contagion than ever before. Additionally, we have a cold war brewing with at least one very major player actively wanting the west to economically suffer, while they are doing extremely well economically (a tinfoil hat wearer's wet dream/nightmare).

When Keating said "...recession we had to have" no one was predicting hundreds of millions of people facing starvation and many more facing severe poverty. Pointing out that you've been in the workforce for 50 years just puts your poor assessment of the situation in a worse light.

Sdajii said:

The last severe economic disaster was 2008, the 'Global Financial Crisis'. That was nothing compared to this.

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That is true the 2008 global financial crisis had very little impact on us, the U.S had sold consolidated debt obligations full of crap mortgages to U.K and European financial institutions, we were quite fortunate our banks had very little exposure.
This is very different and it is affecting a different part of the economy, but the early 80's had over 10% unemployment followed by 20% interest rates, so I know it isn't as melodramatic as shutdowns etc but it was difficult.
From what I have read Australia's fiscal contraction isn't earth shattering, Federal debt will go to about43% of GDP, which isn't good but isn't the worst that we have had and isn't huge in comparison to other developed countries.
The Federal Government is pushing to open the borders, but is limited in how much they can do, as the States make their own decisions.
As for the rest of the World i feel sorry for them, as I don't think most are in as good a shape as we are, except for China, Russia and other authoritarian countries that can just enforce anything.
Maybe the fact you are probably a lot younger than me, increases your angst and panic, who knows.

On one hand this is the worst global downturn since the 1930's.

On the other hand, I can certainly see the point that life thus far for the average Australian hasn't reached 1990's levels of despair on account of the economic situation. On account of other things like the loss of major events or being locked indoors perhaps yes, but not due to the economic situation.

In the 1990's I knew someone who moved to WA. They had no job lined up and didn't know a single person living there. They went for one simple reason - the state's 8% unemployment rate was a massive attraction compared to that prevailing in Vic, SA and Tas at the time. With an unemployment rate so low, there'd be at least some chance of getting a job surely.

The latest ABS data shows unemployment below 8% not just in one one state but in every state. The whole country now has an unemployment rate lower than the best state did back then.

There's also a duration thing to all this. The economic troubles of the late 1970's had barely ended when the 1991 recession arrived and despite what economists may claim, the "early 1990's" recession lasted until pretty close to the year 2000 in terms of its practical effects. All up we'd had gloom and doom fully 90% of the time for a quarter of a century by that point.

Thus far we've got what, 7 months of trouble. That's nothing compared to those previous incidents. In due course that will probably change, I fully expect this whole thing will be a long and drawn out affair, but 7 months isn't long, not when you consider that things were still pretty stuffed after 7 years following the early 80's and 90's recessions.

Smurf1976 said:

Thus far we've got what, 7 months of trouble. That's nothing compared to those previous incidents. In due course that will probably change, I fully expect this whole thing will be a long and drawn out affair, but 7 months isn't long, not when you consider that things were still pretty stuffed after 7 years following the early 80's and 90's recessions.

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That is what I was getting at, from an economic position this hasn't really played out yet, unless things start and return to normal it could get a whole lot worse.
If it gets back to normal i.e freedom of movement and cross border travel, then the Government stimulus payments could well flatten out the fall and the slow return to growth will start.
But there are a lot of stars that have to line up for that to happen, if they don't this could well turn out to be the worst recession ever.
Every country is pouring in some form of stimulus, so our raw materials will still be required.
Housing will be hit due to lack of immigration, but is that a bad thing? New housing and building is getting short term stimulus, which is attracting new home owners and social housing is on the agenda, so the possible outcome is a fall in established home prices again is that bad?
Local tourism is booming as overseas travel is stopped, obviously Victoria is suffering, but that should be short lived. Retail is booming as cancelled overseas holidays and and extra stimulus money is channeled into comfort spending, DIY is booming, used car sales are booming, it could all fall on its ar$e but it hasn't yet.
If things aren't opened up before the stimulus stops, well that will turn things nasty IMO.
Time will tell.

sptrawler said:

That is true the 2008 global financial crisis had very little impact on us, the U.S had sold consolidated debt obligations full of crap mortgages to U.K and European financial institutions, we were quite fortunate our banks had very little exposure.
This is very different and it is affecting a different part of the economy, but the early 80's had over 10% unemployment followed by 20% interest rates, so I know it isn't as melodramatic as shutdowns etc but it was difficult.
From what I have read Australia's fiscal contraction isn't earth shattering, Federal debt will go to about43% of GDP, which isn't good but isn't the worst that we have had and isn't huge in comparison to other developed countries.
The Federal Government is pushing to open the borders, but is limited in how much they can do, as the States make their own decisions.
As for the rest of the World i feel sorry for them, as I don't think most are in as good a shape as we are, except for China, Russia and other authoritarian countries that can just enforce anything.
Maybe the fact you are probably a lot younger than me, increases your angst and panic, who knows.

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It's surprising how short term your view is. Australia may be a literal island, but it does not exist in a vacuum. Australia is one of the wealthiest countries in the world because of its natural resources, which are exported. In the very short term, now, Australia's wealth allows it to survive relatively comfortably (as long as you ignore the extreme suffering by the significant number of Australians who are killing themselves, losing their businesses/jobs, having mental health issues in the biggest ever mental health crisis, etc etc). In the longer term, if the global economic situation deteriorates, Australia's economic situation will suffer horribly, because we won't have those export dollars coming in, we won't have so many cashed up foreigners coming to visit. Our previous economic prosperity will only carry us so far. Additionally, as a nation which has enjoyed many decades of being on the wealthiest in the world, there is a high addiction to high spending, leaving Australia very vulnerable to a decline. Your optimism is out of place other than in the short term.

I am not in panic as you've assumed. Being able to understand dire writing on the wall doesn't mean you are panicking and it does not require panic to understand it. My personal situation is irrelevant to the big picture, and I remain optimistic about my personal future. This year I've managed to save money money than any other since about 2012, which I suppose I'm reasonably happy with considering at the start of this year I lost my business and was wiped out to zero, literally losing everything right down to my clothes, laptop, toothpaste, etc, and became trapped in a country I had no intention of spending more than 1-2 weeks in, and just happen to be in the place with the world's most extreme lockdown, while even the WHO now admits lockdowns cause more harm than the virus.

You bring your age up again as though it is a default for wisdom or experience, but such things don't come automatically with age, even if there is a correlation. You seem to think that since you're old you must be correct. This is not the case.

Sdajii said:

You bring your age up again as though it is a default for wisdom or experience, but such things don't come automatically with age, even if there is a correlation. You seem to think that since you're old you must be correct. This is not the case.

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True, but wisdom and age beat youth and inexperience.