Economic implications of a SARS/Coronavirus outbreak

[over9k]

As far as I'm concerned, the effects of the virus closing the borders, bending the universities over the proverbial etc etc is a good thing. The problem lies in the politicians and the budget etc.

AU follows the U.S depressingly closely reference markets. A green day in the U.S at the moment results in the AUD pulling against it. Everything I hold is in AUD & USD. GBP and EUR are going to continue to decline.

 

[againsthegrain]

What is interesting is that our country has been spared: seasonal weather, sea isolation , etc yet the scare tactic has been relentless so what now? Vaccine or not, sooner or later, we will have to open and see old people dying.just factual...so either we die economically and all starve, or pretend the vaccine works, reopen and see our first wave.
My fear is that the government, as in NZ, has locked itself in a position where it can not admit its error and so will either hide the deathtoll post vaccine or worse, carry on the North Korea solution, with aussies pretending that we can live in isolation.north Korea does so I am sure we can but that means a lot economically and the asx plays might not be the best option financially..
I know the usd is doomed mid term but not sure aud is better.Gold?

I don't think we can go NK, nobody can pull it off but NK, we are already letting in some international students etc
However its perfect timing for the coming winter, we got a few months so slowly ease the borders which we are doing. Maybe nothing will happen but our coming winter will be a big test.

Thumbs up for the gold tho

 

[over9k]

I suspect the next move(s) will be travel bubbles. Probably NZ first and then work out from there.

 

[qldfrog]

I suspect the next move(s) will be travel bubbles. Probably NZ first and then work out from there.

NZ sure and?
Every other country has cases. China maybe? wouldn't it be ironic

 

[over9k]

Normal backwardation is when the futures price is below the expected future spot price. This is desirable for speculators who are net long in their positions: they want the futures price to increase. So, normal backwardation is when the futures prices are increasing.

What's the Difference Between Contango and Normal Backwardation?

Learn about the futures curve, contango and backwardation, and what they mean for hedgers and speculators.

www.investopedia.com

Oil's looking good.

 

[qldfrog]

View attachment 116297


Normal backwardation is when the futures price is below the expected future spot price. This is desirable for speculators who are net long in their positions: they want the futures price to increase. So, normal backwardation is when the futures prices are increasing.

What's the Difference Between Contango and Normal Backwardation?

Learn about the futures curve, contango and backwardation, and what they mean for hedgers and speculators.

www.investopedia.com

Oil's looking good.

shusss I was just entering 3 buy orders CVX, NRGU and XOM.Now with the rain pouring down outside, time to get back to my real game: systems..Got months of backlogs.Have all a great day

 

[over9k]

I keep saying (and showing the evidence) that quantitative trading can't be relied on in this environment frog. There's too much that simply can't be modelled.

That's not to say there isn't going to be *some* help from it, but you've gotta do some good old fashioned detective work too.




My next plays are to see the earnings report from fedex on the 16th and probably nuke my postal related holdings then - fdx, ups, & ip. The U.S usually sees a selloff in the last week of december too as people eat their losses this financial year so they can deduct them against their taxes.

We have the curveball of the thanksgiving virus data out in the next couple of days too so there's plenty of curveballs yet.

 

[qldfrog]

I keep saying (and showing the evidence) that quantitative trading can't be relied on in this environment frog. There's too much that simply can't be modelled.

That's not to say there isn't going to be *some* help from it, but you've gotta do some good old fashioned detective work too.




My next plays are to see the earnings report from fedex on the 16th and probably nuke my postal related holdings then - fdx, ups, & ip. The U.S usually sees a selloff in the last week of december too as people eat their losses this financial year so they can deduct them against their taxes.

We have the curveball of the thanksgiving virus data out in the next couple of days too so there's plenty of curveballs yet.

I indeed expect lower market and my US looking systematic trading went bear this week.

 

[over9k]

 

[sptrawler]

The corona virus has had one dramatic effect, with people staying home savings rates are the highest in years.

Secret truth behind recession

By now you know Australia is in recession.

www.news.com.au

From the article:



Usually in a recession, there’s two types of people. Those who lose their jobs dip into their savings to cover cost of living. Meanwhile people who keep their jobs save more than usual. They do that because they are worried about the future – they could be next to lose their jobs, after all. Usually this second group is bigger, and so overall national saving goes up.

That’s bad news that makes recessions worse. The more we save the weaker the economy gets. They call this “the paradox of thrift”


If one person is thrifty and saves their money that’s great. But if we all do it, spending dries up, the economy gets weaker and we all suffer.

This time, on top of the usual paradox of thrift, we had lockdown and shutdown. That caused savings behaviour to go absolutely loopy. Some Australians are stuffing away thousands of dollars in every pay cycle. What else are you going to do with your income?

As the next graph shows, we saved an estimated 20 per cent of our income in the months of April, May and June this year. That is HUGE.


How did it get there? The answer is partly saved income, and also partly Centrelink. Centrelink payments are a big part of household income but they don’t count towards GDP. The P in GDP is for product, as in production. GDP counts income you get for work but not income transfers. And there has been a record amount of income transfers.

Billions has been spent on the JobSeeker supplement. Those transfers have done two things: First, helped stop spending from getting even worse. Second, some of that money has been saved, and will be spent in future.

 

[Smurf1976]

That’s bad news that makes recessions worse. The more we save the weaker the economy gets. They call this “the paradox of thrift”

Agreed that's true in the short term but it's a bit like running around the block.

Makes you feel pretty crap there and then but long term it's exactly what you need to be doing.

Much the same with save and invest versus spending the lot. Short term it causes a lot of pain but long term saving and investment is exactly what the economy needs so long as it goes into productive businesses not bidding up house prices.

 

[over9k]

NZ declares country free of virus, lifts all restrictions:

New Zealand lifts all Covid restrictions, declaring the nation virus-free

PM Jacinda Ardern says she "did a little dance" as it was confirmed NZ had no active virus cases.

www.bbc.com

And then offers travel bubble with australia:

Australia welcomes 'first step' towards normality as New Zealand announces planned travel bubble

Australian Health Minister Greg Hunt says the Government is ready to work with New Zealand to allow free travel between the two countries.

www.abc.net.au

Thanksgiving data is in and U.S hospitalisations hit a new peak but nothing like the madness we were expecting (which is good):



But markets couldn't care less because:



Result is everything into the green, r2k the best yet again:



with UPS & FDX screaming even pre-market as they have the contracts to transport the vaccines which are being stuffed into styrofoam boxes along with dry ice as we speak:








And oil & copper both still on a tear - copper's got a few weeks in it yet, oil has years:



More lockdowns are still inevitable though:




So in summary: More of the same virus data playing tug-of-war with recovery anticipation news. I guessed a flatline as of a week ago, everything's plus or minus about 1% since then (only the r2k is up) so we'll see. I suspect tomorrow will be quite red after today's exuberance as there's not going to be anything but bad news until the moderna vaccine in approved.

My next moves will be buying more oil etf's in the next dip and other than that I'm just waiting for the FDX earnings report on wednesday.

 

[sptrawler]

Agreed that's true in the short term but it's a bit like running around the block.

Makes you feel pretty crap there and then but long term it's exactly what you need to be doing.

Much the same with save and invest versus spending the lot. Short term it causes a lot of pain but long term saving and investment is exactly what the economy needs so long as it goes into productive businesses not bidding up house prices.

I think even the Government will have realised that horse has run its race, there is no future for Australia, by just inflating house prices to give people a perception of greater wealth so they will spend more on latte and dining out.
With China applying the brakes to Australian exports, Australian companies will have to go back to basics, chasing markets and value adding here.
It will mean most company directors will have to earn their keep, a bit of back to the future, it is about time they woke up to themselves way too many wet lunches and resting on their laurels IMO.

'Where there's wool there's a way': Could an outback town's plan kickstart the industry again?

The proposed Blackall wool scour may have a $198 million bill attached to it, but it could save an industry under pressure due to China trade tensions.

www.abc.net.au

From the article:
Blackall in western Queensland has a population of fewer than 1,500 people, but the little town is positioning itself as the big solution to Australia's wool industry woes.

The local council wants a new wool scour built to manage the entire wool handling process locally — from fleece to fabric — rather than sending it overseas.

It could provide a long-term fix to the problems posed by China's suspension on importations of a range of Australian commodities, including beef, barley, wine, and wool.

Australia is the world's largest greasy wool producer. According to the International Wool Textile Organisation it produced more than 368,000 tonnes, or 18 per cent of the world's wool, in 2019.


China is the world's largest wool importer, taking in 49 per cent of global greasy wool and 39 per cent of clean wool in 2018.

The mayor of Blackall-Tambo Regional Council, Andrew Martin, said trade tensions with China strengthened the merits for an end-to-end processing facility to be built locally.

"It's going to leave a whopping big hole in the wool market and the wool industry if China suddenly bans [importations] of wool from Australia," Cr Martin said.

A feasibility study into the viability of the facility was commissioned by the council and conducted by economic consultants AEC.

The report, released last month, showed the construction of the proposed $198 million facility would create 88 full-time jobs.

Once operational, 812 full-time employees would likely be required, including 270 locally, and it would generate $116.3 million in gross regional product per year.

AEC senior economist Jonathan Pavetto, who conducted the study, said the scour would "quite literally [double] the number of jobs in Blackall".




Well let's be honest it isn't as though we haven't done it all before.

 

[over9k]

Still holding moderna.

 

[qldfrog]

Agreed that's true in the short term but it's a bit like running around the block.

Makes you feel pretty crap there and then but long term it's exactly what you need to be doing.

Much the same with save and invest versus spending the lot. Short term it causes a lot of pain but long term saving and investment is exactly what the economy needs so long as it goes into productive businesses not bidding up house prices.

Or stock market bubbles where the money just disappear in a week.
As for the savings going in banks, inflation official or not will take care of it, and if not, governments will get it directly.
When you are part of an official great Reset, savings are a suckers' game

 

[over9k]

Basically all companies which can work remotely etc are doing the same thing. There's a mass exodus of wealthy youtubers, goldman sachs are moving to florida, you name it people and companies are moving if they can.

Coronavirus has been a mass experiment in remote/distance working and it's clearly done very, very well.

 

[over9k]

Reference the spending/saving discussion:

There's a lot of pent-up demand out there. Think what will happen to those savings once people can actually spend them on what they *really* want to.

 

[over9k]

Meanwhile:





Are the vaccine rollouts going to beat the virus spread? Not looking likely.

Recall the post I made showing how quickly zoom moved once the 3% positive test rate lockdowns came into effect

 

[qldfrog]

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Basically all companies which can work remotely etc are doing the same thing. There's a mass exodus of wealthy youtubers, goldman sachs are moving to florida, you name it people and companies are moving if they can.

Coronavirus has been a mass experiment in remote/distance working and it's clearly done very, very well.

Oracle moving to Texas too..Funny how these liberal minded people and leaders leave the mess they created behind to move to these republican states, let's just hope they will not corrupt the lot of the US.
And while we focus on Covid , China is moving ahead.These ruthless leaders are so cunning/or the west so stupid:
https://www.brisbanetimes.com.au/wo...-indefinitely-by-beijing-20201214-p56ne7.html

 

[qldfrog]

Reference the spending/saving discussion:

There's a lot of pent-up demand out there. Think what will happen to those savings once people can actually spend them on what they *really* want to.

Now a Oz focus entry, I know @over9k is more US focused.
Here, the question is what will they really want, and within which context? more bling? maybe not
With the China boom over for us, the average aussie might just want to be able to eat or be confident he /she will next year.While we are focusing on a "relatively benign" virus, we are in the middle of an economic war never seen in the last 20y and being strangled.When the rest of the world will reopen, we will be left stranded and I somewhat doubt Bidden or his cohort will even raise a finger seeing us crushed
https://www.brisbanetimes.com.au/wo...-indefinitely-by-beijing-20201214-p56ne7.html
To date: wine,coal, agricultural products: cereals and meat,(seafood I suspect as there is no reason for export to fall as demand is still there in China), are being banned by our main key exporting market
Maybe time to ship our latte and cappucino there?I have the feeling iron ore will be next, and as noted in this thread, China is making sure it has plenty of oil aside for its next move.
And I do believe this is definitively relevant in this thread