Economic implications of a SARS/Coronavirus outbreak

[sptrawler]

It will be really interesting to see what financial steps are taken, there isn't a lot of wriggle room, already large Government debt, borderline running a balanced budget.
I'm glad it isn't my job, to decide which way to jump, this is where high ranking public servants earn their money. Hopefully they are up to it.

 

[moXJO]

Everything still looks bloody expensive. What the hell was the market running on before?

 

[sptrawler]

Everything still looks bloody expensive. What the hell was the market running on before?

That is what I'm finding, apart from financials, my other shares are holding up o.k.

 

[moXJO]

I love a good panic.

 

[banco]

It will be really interesting to see what financial steps are taken, there isn't a lot of wriggle room, already large Government debt, borderline running a balanced budget.
I'm glad it isn't my job, to decide which way to jump, this is where high ranking public servants earn their money. Hopefully they are up to it.

Government debt isn't that high really compared to other western countries. Private debt is another story.....

 

[sptrawler]

Government debt isn't that high really compared to other western countries. Private debt is another story.....

That is true, but not having as much debt as someone who is insolvent, isn't a high bar to get over.

 

[basilio]

That was a shocking day on the markets. Certainly creates concern for how this will all unfold.

 

[qldfrog]

But it is ok
Todays news
The virus incubation period is probably closer to a week rather than 14 days. The 14 days has margin for error in it.
"Most of the international community would like to see if we can safely reduce that period, because it is an awfully long time."
From Chief medical officer Brendan Murphy
How inconvenient so lets shorten it
With science like that....
Reading behind the line, it is an admission of defeat

 

[sptrawler]

But it is ok
Todays news
The virus incubation period is probably closer to a week rather than 14 days. The 14 days has margin for error in it.
"Most of the international community would like to see if we can safely reduce that period, because it is an awfully long time."
From Chief medical officer Brendan Murphy
How inconvenient so lets shorten it
With science like that....
Reading behind the line, it is an admission of defeat

I think there isn't much more they can do, it isn't China where you can shut people down, so everyone will be told what to look out for and what steps to take if you become ill.
For the most part, they will be wanting to get back to business as usual, as quickly as possible IMO.
Whether it pans out that way, time will tell.

 

[matty77]

True, you cant quarantine whole countries it kind of misses the point. Quarantine earth maybe as the next step? You get my point, but the best case scenario is to slow the spread as much as possible so medical facilities can keep up and treat people. I think Government around the world have pretty much admitted its coming, but lets just slow it down as much as possible.

Time to go get healthy and build that immune system.

 

[qldfrog]

In term of economic cost
https://simpleflying.com/qantas-a380-grounding/

 

[Smurf1976]

In term of economic cost

I think it's worth saying that what we've got here is an economic event not just a financial market event.

It's planes sitting on the ground, empty restaurants, shops without customers (except those selling toilet paper obviously) and so on.

A lot of that will never be recovered. Activity will eventually come back to normal yes but what's lost won't be recovered as such. We're not going to see people taking the holiday they cancelled because they were quarantined next year on top of the holiday they'd otherwise have taken next year. We're not going to see people eating at restaurants at 2am catching up on the meals they missed. Etc. What's lost is mostly lost for good.

Central banks can throw money around but it's much harder to create real activity.

 

[Knobby22]

The real economic cost though is failure of supply chains, the forced shutting down of businesses, cash flow problems, businesses going broke, unemployment rising, people unable to pay their debts,

Then:
banks getting huge rise in bad debts,
Governments unable to collect adequate taxes, high drain on health system, shortages of goods and food, etc.

 

[basilio]

The real economic cost though is failure of supply chains, the forced shutting down of businesses, cash flow problems, businesses going broke, unemployment rising, people unable to pay their debts,

Then:
banks getting huge rise in bank debts,
Governments unable to collect adequate taxes, high drain on health system, shortages of goods and food, etc.

Absolutely.. IMV the most important activity in the next few months is negotiating some form of soft landing from this situation. I mean not allowing our political and social systems to totally crash and burn. To try and protect the core of industry and business. To keep people in their homes and avoid widespread bankruptcy. To prevent runs on the banks and a failure of the banking system.

In my view much of traditional economic activity - travel, fashion, shopping, buying cars, renovating will take a very big back step as we wrestle with widespread quarantines, disruption of production and possibly tens of thousands of premature deaths. (there's a growth industry. Buy into funeral parlours..) The sooner we realise that is what we need to do and stop attempting to force feed a traditional consumer led recovery the quicker we will find ways to strengthen our community.

Otherwise bring on the bottom feeders..

 

[basilio]

Some current thoughts in the UK from the past Treasurer

The former UK chancellor, George Osborne, has urged the chancellor, Rishi Sunak, to use this week’s budget to introduce immediate measures to help individuals and smaller companies cope with the economic shock of the coronavirus, saying he would expect the UK to see an upsurge in cases in the coming weeks.

The Guardian political correspondent Peter Walker reports that Osborne told BBC Radio 4’s Today programme:

I’m not an epidemiologist, but I can’t help noticing that the UK cases are quite like the Italian cases were two weeks ago. And they’ve gone and sealed off the whole of northern Italy, and an enormous city like Milan has been closed. I’m not saying we will be there, but we could be there in the next two or three weeks. If I was chancellor I don’t want some complicated scheme that’s working in six months’ time. I need to use the tools that are available to me right now.

Ideas could include direct cash grants to people such as the self-employed, to “create an incentive that if they feel ill they stay at home”, and for smaller businesses with low cash reserves to be let off national insurance or other taxes for a period, Osborne said.

The argument over longer-term fiscal rules could be set aide while the economy dealt with “a very short, sharp shock to the system”, he added.
https://www.theguardian.com/world/l...-5e660f7d8f08c2df6d275e04#liveblog-navigation

 

[basilio]

European Stock exchanges seeing 7-10% falls at the moment.

Global stock markets have suffered their biggest falls since the 2008 financial crisis while the oil price crashed amid panic selling because of the double threat of a coronavirus-driven global recession and an oil price war.

Julia Kollewe reports that the FTSE 100 index in London plunged almost 9% and fell through 6,000 points when trading began on Monday morning. It is currently trading 74% lower at 5,991, down 471 points. The index is on track for its worst one-day fall since 2008, when the collapse of Lehman Brothers heralded the onset of the global financial crisis. Oil stocks are the biggest fallers, with BP and Shell down 18%, while the travel company Tui dropped 14%.

The FTSE 100 is trading at levels last seen at the time of the Brexit vote.

As panic selling spread across Europe, Germany’s Dax tumbled 7.5%, France’s Cac dropped 7.6% and Spain’s Ibex lost 7%. The biggest sell-off was Italy, the country worst hit by Covid-19 in Europe, with the FTSE Mib index down 10%.

https://www.theguardian.com/world/l...-australia-recession-fears-update-latest-news

 

[Muschu]

That is what I'm finding, apart from financials, my other shares are holding up o.k.

I’d be interested to know what those other shares are —- if you care to share,

 

[Smurf1976]

European Stock exchanges seeing 7-10% falls at the moment.

With the sheer speed of this my thinking right now is not so much about the stock market but about who (funds, institutions, etc) will have "blown up" amidst all this?

It wouldn't need a particularly large amount of leverage for someone to have blown up their account with all this. Not so bad if it's one individual, potentially massive problem if there are hedge funds or anything else involving serious $ in that situation.

Given the speed of the decline, it would be a brave move to say there aren't any such casualties.

 

[sptrawler]

I’d be interested to know what those other shares are —- if you care to share,

Three that I'm happy with are COL, HZR and CWY

 

[sptrawler]

Margin calls have quadrupled over the last week apparently, so some are definitely hurting, may be some Rolex watches on ebay.