Economic implications of a SARS/Coronavirus outbreak

[qldfrog]

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.

But that is only after it goes down...
Asx was at its highest last week with this country imho much more exposed than even the Chinese market

 

[moXJO]

But that is only after it goes down...
Asx was at its highest last week with this country imho much more exposed than even the Chinese market

We won't see the effects here for a bit. But thinking it will be bottleneck then boom to catch up. That's if everyone doesn't go broke in the meantime.

Talking to one of my solar guys and he said that nothing is getting through at the moment. Anyone wanting solar get it done now as it's looking like a 6 month bottleneck. Ships are being delayed. Definitely a mess.

Like I said the economic ramifications will be felt harder then the virus imo.

 

[fergee]

Chris Martensen from Peak prosperity has so far been the most accurate analyst on Covid1-19 I have come across, I have been following his analysis for a few weeks now and I recommend everyone to watch it.

 

[macca]

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.

Mostly they do get shots but the flu vaccine is not very successful (compared with polio etc) there are about 40 different strains of flu and they usually only vaccinate for 4 or 5.

Flu mutates so quickly that the flu one person suffers is different to the next victim.

As previously posted Vit D every day is the best and most universal deterrent that has been discovered so far.

Hopefully they can come up with a winner but they still can't cure a common cold so may not happen for a while.

Imagine the share price of the company that announces a cure for the common cold

 

[Dona Ferentes]

My last three reports have been dominated by the huge impact that the coronavirus will have on the Chinese and global economy. I have bombarded you with statistics highlighting the gigantic difference between the current crisis and the SARS crisis in 2003. I said I was astonished that so many mainstream economists were so dismissive of the potential shock to global economic activity.

That is now changing, and changing quickly, as most of the world’s leading investment firms rush to downgrade their estimates of economic growth and their estimates of corporate earnings. In fact I know of one very large global financial institution that has downgraded its China annual GDP forecast 4 times in 3 weeks.
I have never seen that before.
During the week countless companies across the world issued statements about the impact of the coronavirus on their sales and their global supply chains, with Apple leading the way last Monday.

(Jonathan Pain - The Pain Report)

... was talking to a doctor today, he came out with the usual, "it's just like the flu, we'll be back to normal soon " line, but I think the flow-on supply line shock will impact economic numbers. But of course these don't show up for a while.

Mr Pain goes on to say:

The problem is that this economic crisis is so very different to anything we have seen before, because the economic, financial and political context is completely different....

Valuations today in U.S equity markets are very expensive with the price/sales ratio on the S&P 500 actually surpassing the levels we saw in March 2000.

Hard to believe, but true, and something I have mentioned several times in the past few months.

And then we could talk about global debt levels.

And I hear you say, don’t worry, J Powell’s got this!! Incidentally [] the same thing [was said] in 2007, only that time you said, Bernanke’s got this.

At the risk of repetition, don’t laugh, the current Chinese economic crisis will serve to amplify the existing vulnerabilities in the global economy, at a time when equity valuations are very stretched...

- holding plenty of cash, but not yet looking for a home

 

[qldfrog]

Chris Martensen from Peak prosperity has so far been the most accurate analyst on Covid1-19 I have come across, I have been following his analysis for a few weeks now and I recommend everyone to watch it.

I like his discussing the fact that we do not need to be binary: it is not remaining blissfully ignorant or panicking as a maniac, you can just be aware and prepared.economically, socially and healthwise

 

[Dona Ferentes]

Chris Martensen from Peak prosperity has so far been the most accurate analyst on Covid1-19 I have come across, I have been following his analysis for a few weeks now and I recommend everyone to watch it.

Wow.... 26 minutes in. Be afraid .

Thanks for posting.

 

[banco]

I hope the next person who says: "It's just like the flu and don't you know the flu kills X number of people every year" gets punched in the face. It's such an inane line.

 

[Dona Ferentes]

Screenshot from 26 minutes. It ain't the 'flu. Context is everything; listen to the talk

 

[sptrawler]

I found it interesting that there is a very low infection rate in children, but a very high infection rate in the elderly, usually they go hand in hand the old with low immunity and the young with no immunity.
Anyone for frogs conspiracy theory.

 

[banco]

From what I've read children do get infected at same rate but it generally affects them a lot less than adults. It was same with SARs apparently.

 

[basilio]

Iran has blown up. The virus is clearly out of control

In the Middle East, concerns are quickly mounting that Iran is now a major hub of the coronavirus, and that the virus may have taken hold in pilgrimage roots before its existence was realised.


Authorities said 50 people have died in the Shia shrine city of Qom this month alone, sharply up from the 12 deaths reported among 47 cases nationwide. Deaths per reported infections were sharply higher in Iran compared to other countries, and that data reflected concerns that the extent of the virus had been significantly under-reported. Those fears now appear to have been realised, and officials are now rushing to contain a cluster - the spread of which would have serious implications for regional health.

https://www.theguardian.com/world/l...ections-death-toll-outbreak-xi-jinping-update


That analysis from Chris Martensen is detailed and very disturbing. It feels a bit like On the beach.

 

[basilio]

Stock markets in Europe taking a beating.

Stock markets slump as coronavirus spreads in Europe – business live
Rolling coverage of business, economics and markets amid investor concerns over extent of outbreak beyond China

• FTSE 100 loses 3.3% by mid-morning
• Italian stocks fall by 4.3% as country suffers outbreak
  
• Gold hits seven-year high and bonds gain as investors seek havens
• Easyjet, Tui and British Airways owner among the biggest losers
• https://www.theguardian.com/busines...-sterling-ftse-italy-korea-gold-business-live

 

[basilio]

Quick question.

How would people who are quarantined for weeks on end and unable to go to work financially survive ? The realty is that most people do live from pay to pay. There was a dreadful example of a Chinese family who became homeless and left their child at an orphanage in the extended quarantine in Hubei.

Chris Martensen made this point and said governments need to be prepared to basically keep people solvent in this crisis. It is in no ones interest to see widespread instant homelessness and incapacity to buy food, pay bills.

 

[macca]

Quick question.

How would people who are quarantined for weeks on end and unable to go to work financially survive ? The realty is that most people do live from pay to pay. There was a dreadful example of a Chinese family who became homeless and left their child at an orphanage in the extended quarantine in Hubei.

Chris Martensen made this point and said governments need to be prepared to basically keep people solvent in this crisis. It is in no ones interest to see widespread instant homelessness and incapacity to buy food, pay bills.

Given that so many people live life to the fullest, with the credit cards usually maxed out, it is going to put enormous pressure on the employers to continue paying wages even when the employee is in quarantine.

This then puts pressure on all businesses but in particular SME, who will have no hope of paying wages without cashflow.

The gigantic bubble may well be about to burst, the GFC was just a blip, this could be the "black swan" that people spoke about when the gold standard was scrapped

 

[Smurf1976]

this could be the "black swan" that people spoke about when the gold standard was scrapped

I've been thinking that this definitely has the potential to be comparable to the global financial crisis (2008) or the Arab oil embargo (1973-74).

If you look back at economic statistics at the national or entire industry level, or if you look at things like share prices, then it's not hard to find something that 12 years later still hasn't recovered from the GFC and for that matter there are things which still haven't recovered from the oil crisis 46 years ago. If they haven't recovered by now, well it's a fair bet that they never will.

I can see this ending up as as similar event. Someone looking back at economic history 20 years from now will clearly see an inflection point in various things from which there was never a return to what was business as usual beforehand. Just as happened with the oil crisis and GFC - even after they were resolved many effects were permanent.

As an example of that, I expect that the boom in Chinese manufacturing is now well and truly dead and that's permanent. Just about every company with a high (or even total) reliance on China is going to be seeing that they need diversity of supply sources and that's going to reshape the global economy over the coming years.

 

[basilio]

Its an interesting thesis Smurf but i wonder if countries have the basic industrial infrastructure to go back to pre China days ? I don't know if one can just come up with new factories without the component parts, employee skills and all the elements that enable a rounded manufacturing industry to work.

On the other hand perhaps the new manufacturing modes might look quite different from historical examples. Much more automation. Perhaps a lot less production.

One thing though. As I see it the whole social infrastructure is more precarious than at any time in the last 40 years. Many people require two incomes to just survive . The loss of one wage will be sufficient to destroy the viability of the relationship/home/everything. That goes back to my comments about how we keep the country solvent if there is extended quarantine and/or many businesses can't operate. This won't be creative destruction. It will be economic armageddon.

Watch out for bottom feeders snapping up desperate house sales and desperate asset sales

I really hope this question is being considered now by the government before the merde hits the fan.

 

[qldfrog]

Anyone for frogs conspiracy theory.

Not conspiracy, just escape from the single and only Chinese lab..in Wuhan..handling such dangerous crap
https://www.biorxiv.org › co...PDF Uncanny similarity of unique inserts in the 2019-nCoV spike protein to HIV-1 ...
So an HIV SARS merged creation..
But sure blame snakes, then bats, then pangolin..... what's next?
Look at the article then you can not just discard this as conspiracy because the ABC or WHO tell you so....
They know better i am sure...
What they know is that it would be very counter productive to put the blame on the chinese government..i agree so keep the masses in the dark
From Wikileaks control to CO2 causing global warming and so called fake news:
the west has never been subjected to so much propaganda in the past 100y
I do not think the virus was released purposely, as to why it was extracted/designed?
Could be just playing with fire, science or work on bio weapon..i do not know nor pretend to know, and should we care?

 

[basilio]

I checked out Chris Martensen Twiter feed and website
He is most definitely across the Corona virus. There are a number of articles which indicates far broader infections than seem to be currently acknowledged.

Also worth remembering that most cities don't have more than a weeks supply of food in the system. They all rely on
1) a measured daily demand ie not sudden panic buys
2) continual replenishment of product
https://twitter.com/chrismartenson?ref_src=twsrc^google|twcamp^serp|twgr^author
https://www.peakprosperity.com/the-...-world/?utm_source=dlvr.it&utm_medium=twitter

 

[basilio]

Why Covid-19 Demands Our Full Attention
This is an unprecedented moment for our hyper-connected planet
by Chris Martenson
Friday, February 14, 2020, 2:44 PM

Pulled it all together a couple of weeks ago..
https://www.peakprosperity.com/why-covid-19-demands-our-full-attention/