Economic implications of a SARS/Coronavirus outbreak

[IFocus]

I am a bit concerned (politics aside) about the governments economic response still not made to confront the down turn.

A number of issues but I hope the government doesn't get too smart trying to under spend Labors GFC response based on political grounds but its starting to look possible.

Going ahead of the curve and over spend is way in front of acting behind the curve.

One number that came out of insiders was it took 14 years for unemployment to recover from the 89 recession and given the increase of causal labour (over 3 million) that could get ugly if they screw it up.

Edit Red given the pollution levels apparently China hasn't returned to work with 40 - 50% of migrant labour still haven't returned to work (Insiders numbers)

 

[sptrawler]

As someone said, here goes another thread down the political or climate change road, it is a shame it stuffs up another good thread.
When the Government announces its action, then it becomes a point of discussion, untill then it is just biased guesses.

 

[IFocus]

Both of the below are very good reinforces aggressive action

 

[satanoperca]

The economic impact is largely in the hands of our leaders, the govnuts - to inform the masses about what is happening, to stop panic.

Based on the Vic Health Ministers response to a GP in Toorak, I think we are F---kd. Her incompetency just displays how inept our officials are which in turn results in economic downward pressure, both locally and nationally.

The country needs leaders, but we seem to be lacking them, who is to blame, everyone.

 

[Smurf1976]

Went shopping today. Not panic buying and hoarding, just buying food and so on. Some observations:

Generally extremely busy everywhere.

Woolworths have no toilet paper. Coles only have single rolls left and limit is 1 per customer. Foodland had a limited stock. All three were very busy. Noticed that various off the shelf medicines seemed to have been "raided" but there was still some stock there.

Bunnings also extremely busy in a manner more akin to the days prior to Christmas.

At the local service station it was also extremely busy. Cars at every pump and a queue in the shop to pay. Of note was someone filling a 20 litre jerry can with petrol - could just be a perfectly normal purchase that's going to be used for whatever but the thought they could be hoarding did go through my mind.

 

[Smurf1976]

One number that came out of insiders was it took 14 years for unemployment to recover from the 89 recession and given the increase of causal labour (over 3 million) that could get ugly if they screw it up.

Also a lot of regional variation in how long recovery took.

It was still full blown doom and gloom in some regional areas many years later.

Also plenty of people then aged over 45 never actually got another full time job. They didn't know it at the time but the recession ended their careers in practice and there were plenty caught up in that from unskilled through to senior managers.

 

[Smurf1976]

As someone said, here goes another thread down the political or climate change road, it is a shame it stuffs up another good thread.

I can see relevance in what governments are actually doing as distinct from the politics and I can also see relevance in air pollution as an observable measure of economic activity in places like China - if the air's cleaner than normal then it means activity hasn't returned to normal.

But yes, let's keep on topic.

As for the financial markets: https://i.redd.it/jeddjbest6l41.jpg

 

[wayneL]

Went shopping today. Not panic buying and hoarding, just buying food and so on. Some observations:

Generally extremely busy everywhere.

Woolworths have no toilet paper. Coles only have single rolls left and limit is 1 per customer. Foodland had a limited stock. All three were very busy. Noticed that various off the shelf medicines seemed to have been "raided" but there was still some stock there.

Bunnings also extremely busy in a manner more akin to the days prior to Christmas.

At the local service station it was also extremely busy. Cars at every pump and a queue in the shop to pay. Of note was someone filling a 20 litre jerry can with petrol - could just be a perfectly normal purchase that's going to be used for whatever but the thought they could be hoarding did go through my mind.

I was at Bunnings this weekend too and concur that it was extremely busy... Hard to get a park even.

On the other hand last weekend I was shopping with Mrs at one of the Westfields here in Brisbane and it was very quiet and very noticeable how many shops had gone down the shyte chute.

I have been following the commentary on the retail recession, but it was actually fairly confronting to see how much effect it had had in the malls. typical comment of those who were still open, was that they were having extreme difficulty getting stock.

It reminded me of the high streets in the UK back in 2008.

 

[sptrawler]

I can see relevance in what governments are actually doing as distinct from the politics and I can also see relevance in air pollution as an observable measure of economic activity in places like China - if the air's cleaner than normal then it means activity hasn't returned to normal.

But yes, let's keep on topic.

As for the financial markets: https://i.redd.it/jeddjbest6l41.jpg

As soon as the Government announce its response, Im sure another thread will start, as it should.
We seem to be doing very well keeping it on track and non emotional.

 

[basilio]

Also a lot of regional variation in how long recovery took.

It was still full blown doom and gloom in some regional areas many years later.

Also plenty of people then aged over 45 never actually got another full time job. They didn't know it at the time but the recession ended their careers in practice and there were plenty caught up in that from unskilled through to senior managers.

Quite true. A few other points to remember/realise from the unemployment that came from the 1991 recession.

• Social Security was a bit easier then. The government "allowed" many workers in their 50's who had lost their factory jobs to end up on disability pensions. Not a great result but they at least stayed solvent until they reached pension age. In 2020 people will go on Newstarve -- unless their partner has some employment
  
• I believe two income families have increased significantly in 30 years. These days that is just sufficient to keep a family paying its mortgage and getting by. But if one person loses their job there is no Newstarve and no family.
• There is far and away more casual employment. In 2020 these will disappear like autumn leaves. No redundancy packages, no nothing. Quick trip to trouble.
• And now we know there is substantially more household debt than ever before.

.......................................
Approps to now

view
‘If I catch the coronavirus I’m screwed. Gig economy workers can’t afford to be ill’
Tom Wall
Those self-isolating may end up relying on Deliveroo riders, but as the self-employed do not get sick pay they will be likely to carry on working even if they get the virus

https://www.theguardian.com/world/2...oor-to-stay-at-home-if-they-catch-coronavirus

 

[moXJO]

Im in two minds about stimulus.
We are due for a recession. Want cheaper housing, bills, goods. Then we can't keep kicking the can down the road. The longer it goes on the more pain we are in for.

On the other hand, people will suffer. Not sure the banks would cope with a lot of defaults. Small businesses would really wear it.
But at some point it will hit anyway. So what's the way forward?

 

[IFocus]

As soon as the Government announce its response, Im sure another thread will start, as it should.
We seem to be doing very well keeping it on track and non emotional.

One of the biggest economic implications is actually the Government response right across the board on managing the virus / information and of course monetary, there are few other variables that can be managed.

You are going to have to park up your emotions on this one I am afraid.

 

[IFocus]

Im in two minds about stimulus.
We are due for a recession. Want cheaper housing, bills, goods. Then we can't keep kicking the can down the road. The longer it goes on the more pain we are in for.

On the other hand, people will suffer. Not sure the banks would cope with a lot of defaults. Small businesses would really wear it.
But at some point it will hit anyway. So what's the way forward?

I think a recession is going to happen regardless its all the debt blowing up that really worries me.

 

[wayneL]

I think a recession is going to happen regardless its all the debt blowing up that really worries me.

And that right there is the crux of the matter. We have an everything bubble, which basically amounts to a massive credit bubble which at some point will of course blow up and everyone's faces. All it needs is a catalyst.

Is CV the catalyst? It's kinda looking that way in my opinion.

Sure there will be attempts to kick the can further down the road yet again, but I think the can is loaded with chlorine and brake fluid this time.

 

[moXJO]

Saw an Italian guy going off as the pasta had all gone out of woolies. Got to chatting about italy.
He mentioned that he had family in the entertainment industry and that the live crowds on tv shows had evaporated. Also said the "social isolating" had gotten really bad. No one was going out or interacting.

Concerts, clubs, seminars, or any large gatherings would surely be at risk in the next few months.

 

[SirRumpole]

It's obvious that our national income from iron ore and coal exports will fall dur to CV and the faltering Chinese economy, so the revenue has to be made up and there should be a resource rent tax to replace the lost income which can then pay for increases in Newstart and pensions. And when ore prices go up again , total revenue will increase.

Remember, increases in Newstart and pensions are forever, no government will reduce them once they are given, so there has to be an increase in recurrent income to balance it.

 

[sptrawler]

Talking to someone who works in a travel agency, staff dropped from four to two.

 

[qldfrog]

One small reflection is how long it took for people to realise and take this seriously
Just a flu they said..some still do...
We were already discussing economic consequences etc mid January here
The lockdown in China has worked as it has given us a month and a half to sort our mess out and be ready
I hope the various governments have too.
Mid January you could get masks,
medecine and as much pasta rice and TP as you could pay for...
With India locking exports of medecines, it could be wise for people not on my ignore lists to ensure they have enough paracetamol, iboprofen but also contraceptive pills and any other critical prescriptions.
You can replace toilet paper but not the pill as easily
As for bunnings rush i understand it perfectly, if everything comes from China at bunnings and the flow is stopped, when will you be able to get your screws taps or bits and pieces
If i was a tradie i would stockpile a bit of essentials.
I pity the asbestos team needing new masks..this means no job

 

[basilio]

Things are not getting better are they ?

Coronavirus: quarter of Italy's population put in quarantine as virus reaches Washington DC
Giuseppe Conte signs decree early on Sunday after 1,200 cases confirmed in 24 hours
https://www.theguardian.com/world/2...-italy-quarantine-virus-reaches-washington-dc

 

[moXJO]

Things are not getting better are they ?

Coronavirus: quarter of Italy's population put in quarantine as virus reaches Washington DC
Giuseppe Conte signs decree early on Sunday after 1,200 cases confirmed in 24 hours
https://www.theguardian.com/world/2...-italy-quarantine-virus-reaches-washington-dc

Italy is the place to watch. Australia is just as bad when it comes to dealing with problems. Similar attitudes.

China is not like the West. They are much more efficient at dealing with problems.