Economic implications of a SARS/Coronavirus outbreak

[over9k]

0% interest rates have a lot to do with it.

 

[over9k]

Because what the f**k else is there to do on lockdown?

 

[qldfrog]

View attachment 116551

Because what the f**k else is there to do on lockdown?

Was inevitable:
https://www.france24.com/en/20200408-virus-may-spark-devastating-global-condom-shortage
And more seriously,in a plague situation, you may have sex but no babies.
Here,covid is not a risk to mum baby and at home cashed up,why not...
A good thing GDP wise...

 

[over9k]

A story in six parts:










I just can't figure out how these things are connected.

 

[over9k]

Meanwhile, fedex beats estimates by 20% and still falls on earnings:



The same thing happened with zoom even though its earnings were way above estimates, which gives you an idea of both how little attention the market is paying to analysts and what kind of expectations are being priced in at the moment.

Stocks seem to drop if they don't beat estimates by about 50% or so. Which means that the market is actually estimating things to be a good third or so higher than what the analysts are.

So either the analysts are way out of touch, or the market is.



Considering that earnings keep getting reported way above estimates and the stocks are still dropping, it would appear the actual answer is somewhere in between the two

 

[over9k]

Final step before actual signoff/approval for deployment, which is the final thing needed to remove any doubt of a bull market from here on out.

 

[over9k]

Meanwhile, china's apparently ordered a whole mountain of copper:




The reason(s) why are unclear but I suspect it's probably for the same reason as all the oil they ordered - concern about future supply/to basically just stockpile it.

 

[sptrawler]

An interesting way of presenting statistics.

The rich, the comfortable middle and the rest: Australia’s wealth and income ladder revealed

New research compares the upper, middle and lower rungs of wealth and income.

www.smh.com.au

From the article:
The richest tenth of households owns almost half Australia’s private wealth followed by a “comfortable middle" of 30 per cent with 38 per cent, leaving the lowest 60 per cent - who tend to be younger – with 16 per cent of household wealth.

If you think that is hard, talking fractions, then percentages to throw the formula, try the bar graph which wont print.
But here are the percentages given.

What a hoot:
Highest 5% - $524k
Highest 20%- $298k
Second highest 20%- $159K
middle 20%- $116K
Second lowest 20%- $79K
Lowest 20%- $41K
Lowest 5%- $23K


The bottom 60 per cent of Australian households had average wealth of $277,000, with owner-occupied housing and superannuation the biggest assets.

The average wealth in households with a reference person aged 65 years and over was $1.38 million - 1.5 times that of younger age groups (with an average of $904,000).

Income is more equally distributed than wealth. The best-paid 20 per cent of households had an average pre-tax income of just under $300,000 a year, the middle 20 per cent $116,000, and the bottom 20 per cent $41,000.

I don't know what it is meant to say, other than no one is worse off than $23k a year and the majority fall somewhere between $50k and $200K.
But if Joe average tried to read it, they would probably just add up the percentages and go, what a dick.
Obviously Christmas is affecting everyone. lol
They really do need to do a better job of explaining things IMO.

 

[over9k]

I suspect the whole point is to make joe average outraged - outrage gets clicks.

There's a little metric called the gini coefficient for measuring this stuff

 

[sptrawler]

I suspect the whole point is to make joe average outraged - outrage gets clicks.

There's a little metric called the gini coefficient for measuring this stuff

I think Joe average is over the BS.

 

[over9k]

More semiconductor absurdity:

 

[over9k]

The day:



Moderna still not approved, stimulus still not approved. Both are as close to being approved as possible whilst not actually being approved. Hospitalisations increasing at about 1000 people a day.



The week:



Fangs first, r2k second, nasdaq third, sp500 fourth, dow fifth. All ended in the green, fangs & r2k best & 2nd best. Barbell spread still the overwhelmingly best play with each end being highest & 2nd highest of the major indices.

 

[over9k]

Time to buy a big bank etf.

 

[qldfrog]

The move back to banks, big oil, probably big retailers etc.
Numbers do not count, and covid response was a perfect example: only the story matters.

 

[over9k]

FINALLY

 

[noirua]

Hopefully, this new strain of coronavirus seen by some as a new super-strain won't reach and damage the economy of Australia as it is starting to do in England. Seems to have been found in the county of Kent in the southeast. Probably best to ban all persons from the UK from leaving for Australia.

Boris Johnson calls crisis meeting over new Covid strain (msn.com)
Boris Johnson summoned ministers for an emergency meeting on Friday to discuss how to tackle mounting concerns about the new strain of coronavirus identified in parts of south-east England.

Huge scientific effort underway to find out if the new Covid variant is behind the surge in cases in England

Huge scientific effort underway to find out if the new Covid variant is behind surge in cases

Sage members working through Christmas to see if the new strain of coronavirus is more dangerous after links to surges in hospital admissions

inews.co.uk

 

[qldfrog]

Hopefully, this new strain of coronavirus seen by some as a new super-strain won't reach and damage the economy of Australia as it is starting to do in England. Seems to have been found in the county of Kent in the southeast. Probably best to ban all persons from the UK from leaving for Australia.

Boris Johnson calls crisis meeting over new Covid strain (msn.com)
Boris Johnson summoned ministers for an emergency meeting on Friday to discuss how to tackle mounting concerns about the new strain of coronavirus identified in parts of south-east England.

Huge scientific effort underway to find out if the new Covid variant is behind the surge in cases in England

Huge scientific effort underway to find out if the new Covid variant is behind surge in cases

Sage members working through Christmas to see if the new strain of coronavirus is more dangerous after links to surges in hospital admissions

inews.co.uk

the normal evolution of viruses is to become more widespread but less dangerous, until they reach very widespread presence. I believe what we see is the standard expected behaviour.There are also great chances that mutation means vaccine will not work, as per flu strain etc
But all good, now it has been decided we have a vaccine-> instead of below 1% fatalities without, we will have a below 1pc vaccine failure rate which will be deemed very good;

Sooner or later, reality will have to be faced, by will or by force with a collapsed economy but it will be far too late to get out of this mess without lasting damages.
We had it all..For me, the real issue now is how can I save some

 

[over9k]

Well the good thing with both the pfizer and the moderna vaccines is that they're both mRNA type, which (and I'm not an immunologist) means that they're apparently very easy to "tweak" in response to virus mutations, typically only taking a few weeks to do so.

I'm sure that the scientific term contains far more syllables/is far more intelligent sounding than "tweak", but that was the layman's term the article I read used to describe the process.

 

[Smurf1976]

The reason(s) why are unclear but I suspect it's probably for the same reason as all the oil they ordered - concern about future supply/to basically just stockpile it.

I expect China's thoughts are much the same as the ones I have but haven't thus far been able to prove or disprove.

The basic idea that production capacity is lower now than it was a year ago and that once demand recovers, we'll run into a situation where the limits are approached and every major producer finds themselves able to set price.

Referring to oil and looking at EIA (US Govt) data (available at eia.gov)

2019 Non-OPEC production = 65.98 mmbpd
2020 Non-OPEC production = 63.67 mmbpd

2019 OPEC production = 34.63 mmbpd
2020 OPEC production = 29.27 mmbpd

2019 OPEC surplus capacity = 2.52 mmbpd
2020 OPEC surplus capacity = 6.15 mmbpd

So adding that up:

Non-OPEC actual production is down 2.31 mmbpd but capacity change is unknown

OPEC capacity is down by 1.73 mmbpd.

2019 world consumption = 101.23 mmbpd
2020 world consumption = 92.38 mmbpd

If China or anyone else wants to physically stockpile oil, now's a good time to do it before there's any major rebound in consumption.

 

[over9k]

American oil supply is a non-subject. Like I said, they're actually now net exporters of oil.



The problem china et al have is actually physically getting the stuff from the gulf:



But to tie this in to economic implications, a crash in oil demand obviously sends an oil-selling-dependent country absolutely broke:



And so makes them very keen to get selling.

In the case of saudi arabia (and others) they have massive sovereign wealth funds precisely for rainy days like this, but several other oil exporters don't, so they can't just leave the taps off and live off savings, hence why iraq and some others are upping production now even though the consensus of the OPEC meeting a week ago was to not do so - they haven't got a choice as they need the income now:



"Iraq devalued its currency by about 20% against the dollar, the biggest cut on record, as the cash-strapped government faces an economic crisis brought about by low oil prices and crude-production cuts".

Read more at: https://www.bloombergquint.com/onwe...ncy-by-record-against-dollar-as-economy-wilts
Copyright © BloombergQuint

"Cash-strapped iraq seeks $2 billion upfront payment for oil"

Iraq is seeking an upfront payment of about $2 billion in exchange for a long-term crude-supply contract, the latest sign of Baghdad’s growing desperation for cash as its economy unravels... In a letter to oil companies seen by Bloomberg News, the Iraqi government sought to mitigate its dire financial position by proposing a five-year supply contract delivering 4 million barrels a month, or about 130,000 barrels a day. The buyer would pay upfront for one year of supply, which at current prices would bring in just above $2 billion, according to Bloomberg calculations...

“They need the money,” said Ahmed Mehdi, an expert on the Iraqi petroleum industry at the Oxford Institute for Energy Studies. “On a monthly basis, the government is short around $3.5 billion to pay for salaries, imports, pensions and debts.”

Iraq’s monthly revenue has shriveled to roughly $4 billion this year, barely half what it was in 2019.

Bloomberg - Are you a robot?

www.bloomberg.com

So yeah, a buyer's market (from iraq at least) at the moment for sure. And I think it's pretty obvious who the buyer is, isn't it?