Economic implications of a SARS/Coronavirus outbreak

[basilio]

This is spreading across the globe. If it takes off in poorer countries which don't have the medical/financial capacity to control it, then the impact on economies, financial institutions, international stability will be catastrophic.

I don't think this is the time to be long in the markets..

Coronavirus: window of containment 'narrowing' after Iran deaths, WHO warns
Virus is spreading in Middle East, with confirmed cases in Lebanon and Israel

https://www.theguardian.com/world/2...ainment-narrowing-after-iran-deaths-who-warns

 

[fergee]

I originally post this in end of the china bull2 but thought it might be more appropriate to post it here:

Just a thought I have had for while now is what happens when Chinese nationals who own investment properties in NZ, Aus and Canada start to have financial troubles back home? If they start to get margin calls or start to run out of working capital due to a big slow down will they start to liquidate overseas investments to cover shortfalls back home? I have had this thesis for a while now but this Covid-19 could be the trigger, it may spill over and effect our property markets through an increase in selling pressure...Just a thought I would be interested to hear what other people think about this.

 

[basilio]

I originally post this in end of the china bull2 but thought it might be more appropriate to post it here:

Just a thought I have had for while now is what happens when Chinese nationals who own investment properties in NZ, Aus and Canada start to have financial troubles back home? If they start to get margin calls or start to run out of working capital due to a big slow down will they start to liquidate overseas investments to cover shortfalls back home? I have had this thesis for a while now but this Covid-19 could be the trigger, it may spill over and effect our property markets through an increase in selling pressure...Just a thought I would be interested to hear what other people think about this.

Very, very good point... Yep the Chinese are very big in the property market in Australia/NZ. At the very least we could see
1) A sharp drop in new apartment sales
2) A rise in people walking away from deposits on apartments
Both of these situations would be serious xhit. If there is pressure to actually sell current assets....

 

[frugal.rock]

Very, very good point... Yep the Chinese are very big in the property market in Australia/NZ. At the very least we could see
1) A sharp drop in new apartment sales
2) A rise in people walking away from deposits on apartments
Both of these situations would be serious xhit. If there is pressure to actually sell current assets....

We saw this around 2 years ago..., property in general is only just starting out of the doldrums, location dependant.
I know a developer of a block of units in Parramatta City, Sydney NSW, that endedy up having troubles selling, even the Chinese had stopped buying by then.
That was 18 months ago.
So, on that basis, sharp drops? Not sure, but any developments finishing around now and near future may/will have a slow sell period, no doubt with some discounting occurring.

F.Rock

 

[sptrawler]

We saw this around 2 years ago..., property in general is only just starting out of the doldrums, location dependant.
I know a developer of a block of units in Parramatta City, Sydney NSW, that endedy up having troubles selling, even the Chinese had stopped buying by then.
That was 18 months ago.
So, on that basis, sharp drops? Not sure, but any developments finishing around now and near future may/will have a slow sell period, no doubt with some discounting occurring.

F.Rock

Probably in the wrong thread, but on the same subject, houses in W.A that have sat on the market for 4 years are starting to move.

 

[Smurf1976]

Update on the effect of the CoronaVirus on Australia in particular product shortages

An observation is that shortages, of anything, tend to be downplayed until there's no possibility to downplay them any longer.

The theory being that acknowledging the possibility of a shortage causes hoarding which then guarantees an actual shortage of product for sale eventuates.

Only exceptions are things which can't be hoarded at the consumer level - eg utilities or the use of services such as public transport.

 

[frugal.rock]

I wonder if the world is running out of Tommy sauce and other tomato based products?
Bought some McDonald's yesterday and the ketchup packets are different now as to 3 or 4 months ago.
They don't have any labelling anymore apart from the obvious.
No Heinz info, no country of origin.
Previously had normal product info on the back, now blank, no made in China/Heinz?
Might be nothing in it, a normal package change, however the timing seems odd? Coincidence?
A little ketchup packet could be a big indicator....?
Where's Hamburglar or Ronald when you need them? Scaring kids again no doubt...

F.Rock

 

[frugal.rock]

Another thought is on gold....
Once the 'world' is back to normality, production will be back in full swing.
I can envisage an increase in the requirement of capital, the result being a potential pull out of gold to fund things.
The press likes to scaremonger about the virus, gives them something to bang on about and fill in their time slots...
Just my thoughts.

F.Rock

 

[basilio]

What life is like in a region of 60 million under lockdown.
Makes one wonder how we would cope with this situation. As to the economic effects of such a situation...
This is not a media beat up and suggesting or pretending it is isn't useful.

Coronavirus COVID-19's Wuhan lockdown, a month on

Almost 60 million people have been placed under an unprecedented lockdown in China's Hubei province since the novel coronavirus broke through its capital city, Wuhan. A month on, here's a look at what life in the usually bustling transport hub has been like.
https://www.abc.net.au/news/2020-02...hubei-china-lockdown-month-long-look/11983818

 

[Dona Ferentes]

Update on the effect of the CoronaVirus on Australia in particular product shortages

From batteries to shutters: Australian firms eye potential coronavirus shortages

which post was it that someone was talking about hoarding?

Anyhow, the random walk down high street today didn't reveal any obvious shortages. The supply lines still seem to be filling the shelves. But maybe it would be sensible to "go long" on a few consumables, for those items with a high Made in China component. Might even skirmish Bunnings.

For food and basics, this country is providentially well set up. Import substitution may see some items get a bit more expensive, though.

 

[qldfrog]

which post was it that someone was talking about hoarding?

Anyhow, the random walk down high street today didn't reveal any obvious shortages. The supply lines still seem to be filling the shelves. But maybe it would be sensible to "go long" on a few consumables, for those items with a high Made in China component. Might even skirmish Bunnings.

For food and basics, this country is providentially well set up. Import substitution may see some items get a bit more expensive, though.

I needed a new cheap toilet suite, i hurried up getting it last week, i could choose, all are made in china, it will not take long for stocks to go down, and you slowly have to buy more and more expensive.not easy to substitute.
But i would only be worried if i was in the process of building, months by months, we should see specific shortages appears and it is always a $ cost when you can least afford it

 

[basilio]

If the virus gets into residential care homes there will be some serious economic effects. I imagine it would have devastating effect on the elderly and frail and the loss of clientele would cause severe problems for the for profit owners.

Keep that in mind for your health portfolios.
--------------------------------------------
I also wonder how our health services would cope with hundreds or thousands of additional severe cases of infectious diseases ? We have already seen the deaths of people in Chinas health system. How will our system stand up to infectious threats?

I also wonder if the powers -that-be are ramping up with all possible speed masks and infection control apparatus. Realistically every factory in the world, ( mostly China...) will be churning this stuff out. But I wonder if they can handle a world wide demand of the order that could be expected.

 

[sptrawler]

It might not be climate change that gets us after all.

 

[Smurf1976]

If the virus gets into residential care homes there will be some serious economic effects. I imagine it would have devastating effect on the elderly and frail and the loss of clientele would cause severe problems for the for profit owners

I have a family member who's a permanent resident of such a facility.

Last year they were put "on lockdown" and my first thought upon hearing the term "lockdown" had visions of police crouched behind cars with guns pointed whilst a helicopter hovered overhead and so on. In my mind the term "lockdown" was associated with terrorists, someone roaming around with a gun, escaped prisoners or whatever not with a medical issue.

Turns out it's a standard procedure if a resident gets the flu. Thing is, that's because they know full well that most of the residents will get it so they're aiming to not spread it to the wider community.

This was before this current virus concern but it illustrates the problem very clearly.

 

[Smurf1976]

One economic implication which comes to mind is that the Diamond Princess is now a ship that most people associate with a disaster, albeit a virus outbreak not the ship sinking.

I'd expect that regardless of any rational logic that will deter at least some people from traveling on it in the future. It'll probably deter some people from going on any cruise actually.

 

[Smurf1976]

I see that flights are being sold from Australia to the USA for under $700.

I don't know if that has anything to do with the virus but it's seriously cheap so I'm assuming it's a case of airlines having empty seats they need to fill and trying to generate demand with lower prices.

 

[SirRumpole]

I have a family member who's a permanent resident of such a facility.

Last year they were put "on lockdown" and my first thought upon hearing the term "lockdown" had visions of police crouched behind cars with guns pointed whilst a helicopter hovered overhead and so on. In my mind the term "lockdown" was associated with terrorists, someone roaming around with a gun, escaped prisoners or whatever not with a medical issue.

Turns out it's a standard procedure if a resident gets the flu. Thing is, that's because they know full well that most of the residents will get it so they're aiming to not spread it to the wider community.

This was before this current virus concern but it illustrates the problem very clearly.

One would think that all residents and staff would get flu shots. I suppose there would be people whose age or health wouldn't allow a shot so management of such cases would be difficult. They should have masked staff greeting visitors at the door and checking for coughs and sneezes.

 

[moXJO]

One of my guys in China said they are going back to work (manufacturing) that was last week. Anyone importing goods be aware that the virus can last a long time on items.

 

[Knobby22]

The news was all bad this weekend so I tried to sell some shares at open.
Seems everyone is like minded, had to reduce my price.
Am expecting a very bad day in the USA tomorrow.

 

[moXJO]

The news was all bad this weekend so I tried to sell some shares at open.
Seems everyone is like minded, had to reduce my price.
Am expecting a very bad day in the USA tomorrow.

Just remember when the news gets at it's worst to buy in on the bargains again. Flu goes through it's cycle. It ain't a permanent thing.