Economic implications of a SARS/Coronavirus outbreak

[Smurf1976]

Probably not. As a worker you are basically on unpaid leave so technically not unemployed.

I suspect that's the case.

I'd much rather know the facts in any situation though no matter how painful. If the choice is 5% officially unemployed and 20% "hidden" unemployed then I'm the sort of person who calls it as it is and says well that's 25% unemployed then. Etc. I'd rather see the blunt truth and have everyone understand that's the reality than live in a delusion.

 

[PZ99]

I suspect that's the case.

I'd much rather know the facts in any situation though no matter how painful. If the choice is 5% officially unemployed and 20% "hidden" unemployed then I'm the sort of person who calls it as it is and says well that's 25% unemployed then. Etc. I'd rather see the blunt truth and have everyone understand that's the reality than live in a delusion.

Agreed. However for the figure to be worth anything the data has to be derived the same way as other countries do for the sake of comparison. China of course will report zero unemployment

Another method would be to take the total of newstart payments from the budget and report it as a % of GDP. That would be fun.

 

[SirRumpole]

I reckon one certain loss from the budget will be the third tier of tax reforms promised by the Liberals.
Absolutely no way these can ever see the light of day.

On the big picture I think there will have to be some amazing budgeting to handle the $300plus billion expenditure increase and collapse of income. This will be forecast in the October budget.

I doubt if the Libs will do it but I think the only reasonable source of revenue to pay the bills will be some sort of export tax/ resource rent tax on mineral exports and natural gas.

Every other sector of the economy will be stuffed, but these materials are still in demand and will be even more so as world economies crank up again. The measures should be permanent as we have been letting these resources go far too cheaply for too long.

 

[MrChow]

Medical team advising Trump becoming more public with their projections perhaps to halt his dangerous optimism (which I shared at some point too).

https://www.cnbc.com/2020/03/30/whi...dicts-up-to-200000-us-coronavirus-deaths.html

"The White House coronavirus response coordinator said Monday that she is “very worried about every city in the United States” and projects 100,000 to 200,000 American deaths as a best case scenario.

Birx said the projections by Dr. Anthony Fauci that U.S. deaths could range from 1.6 million to 2.2 million deaths is a worst case scenario if the country did “nothing” to contain the outbreak, but said even “if we do things almost perfectly,” she still predicts up to 200,000 U.S. deaths."

 

[Smurf1976]

I doubt if the Libs will do it but I think the only reasonable source of revenue to pay the bills will be some sort of export tax/ resource rent tax on mineral exports and natural gas.

The problem I can see is that probably isn't going to be enough $ at any realistic rate of taxation.

Governments are going to be cash strapped for quite some time after all this.

 

[sptrawler]

The problem I can see is that probably isn't going to be enough $ at any realistic rate of taxation.

Governments are going to be cash strapped for quite some time after all this.

We haven't run a surplus since Howard, when was that about 2007, so how the hell we are going to pay this down will be interesting to say the least.
It wasn't as though, we as a Country have been making money hand over fist, in the first place.
So what come from the ashes of this disaster, will have to be pretty amazing, but I wont be holding my breath.
I just can't see how this isn't going to get a lot worse economically, before it gets better, that's if it ever gets better.
We have been struggling to build a strong economy since the early 1980's, when trariffs were dropped, since then it has been a slow but steady decline.
Now we will have twice as much debt, with less businesses, it doesn't seem to look all that promising.
But you never know, there may be a plan, I hope it doesn't involve pineapples.
I'm also too old, to be towing Chinese tourists around, in a rickshaw.

 

[MrChow]

People really have China on their mind now a days?

98% of overseas investment in Australia is not from China
85% of tourists in Australia are not from China
70% of foreign property investment in Australia is not from China
70% of international students in Australia are not from China

 

[Humid]

People really have China on their mind now a days?

98% of overseas investment in Australia is not from China
85% of tourists in Australia are not from China
70% of foreign property investment in Australia is not from China
70% of international students in Australia are not from China

What about a percentage on viruses?
Got one?

 

[Humid]

We haven't run a surplus since Howard, when was that about 2007, so how the hell we are going to pay this down will be interesting to say the least.
It wasn't as though, we as a Country have been making money hand over fist, in the first place.
So what come from the ashes of this disaster, will have to be pretty amazing, but I wont be holding my breath.
I just can't see how this isn't going to get a lot worse economically, before it gets better, that's if it ever gets better.
We have been struggling to build a strong economy since the early 1980's, when trariffs were dropped, since then it has been a slow but steady decline.
Now we will have twice as much debt, with less businesses, it doesn't seem to look all that promising.
But you never know, there may be a plan, I hope it doesn't involve pineapples.
I'm also too old, to be towing Chinese tourists around, in a rickshaw.

Firstly, the cited $96 billion dollar Labor debt inherited by Howard in 1996 comprised

$40 billion of Fraser government debt, carried through the Hawke/Keating period.


This means that the true Labor debt was $56 billion.

To pay off this debt the Howard government sold $72 billion of government assets. Hence, the move to “negative debt” or surplus if you like ($72 billion – $56 billion = $16 billion) was not due to “careful and responsible” budget management.

 

[Humid]

a list of 75 assets sold under Coalition governments and let me cite just a few substantial ones: Jan 1997 – $1.5 million + annual lease payments Avalon Airport Geelong Ltd; May 1997 – $3.337 billion Melbourne-Brisbane-Perth airports; July 1997 – $408 million DASFLEET; April 1988 – $730 million Phase 2 Airports; March 1999 – $650 million National Transmission Network; November 1999 – $347 million ADI Ltd; June 2002 – $4.2 billion Sydney Kingsford Smith Airport (plus SACL debt of $1.35 billion); November 1997 – $14.2 billion Telstra 1; October 1999 – $16 billion Telstra 2; November 2006 – $15.4 billion Telstra 3

 

[PZ99]

Expect that list to blow out over the next 20 years.

Or short circuit the whole thing and just sell off Christmas Island for a trill or two.

 

[qldfrog]

Biggest concern I have about payments is that I wonder if this is an attempt to fudge the statistics?

Someone still technically employed and being paid taxpayer funds via their employer but not actually working will be included in the statistics as an unemployed person, right? Or not?

If not then it reeks of politics since that arrangement and being on the dole are much the same in practice. Both involve being paid welfare and not working so my hope is that this isn't an attempt to fudge the figures on a technicality.

One good thing is that people will be counted..many people wo job do not bother going to centerlink as they will get 0
Unless you are down to your last cent, unemployment benefits will only trigger when you have no money left, or worse for an adult below 22 when their parents have no money left either ...
This was a poverty trap as why would anyone work on a casual job get paid then lose ot all when retrenched before getting help back
This helicopter money would in my opinion be better replaced if we want to go that way by a taxable amount sent to everyone..will be taxed back if you have an income
Look at a couple of investors renting properties as a way of income.now zip income for them as well, how long before they can qualify for anything, no tenant will pay rent anymore for the near future, they will probably still expect repairs and bill paid for rates etc by the landlord...

 

[SirRumpole]

The problem I can see is that probably isn't going to be enough $ at any realistic rate of taxation.

Governments are going to be cash strapped for quite some time after all this.

And with no guarantee that it won't all happen agan.

 

[Knobby22]

From world famous Australian Investor John Hempton of Bronte Capital, experts at investing and shorting.

Coronavirus – getting angry

I am going to give you a few stylised facts about severe acute respiratory syndrome coronavirus 2 and the data.
First – no matter what you say about the Chinese data – and the Chinese data was full of lies at first – China has controlled the outbreak. Shanghai, Beijing, Chongqing are all functional mega-cities with no obvious health catastrophes.
The virus has been managed to very low infection rates in Singapore and Taiwan. The numbers (completely real) in Korea show a dramatic slowdown in infection.
Korea has not shut restaurants and the like. The place is functioning. But it has had rigorous quarantine of the infected and very widespread testing. It has complete social buy-in.
China tests your temperature when you get on a bus or a train. It tests you when you go into a classroom, it tests you when you enter a building. There is rigorous and enforced quarantine.
But life goes on – and only a few are dying.
In Singapore nobody has died (yet) though I expect a handful to do so before this over. This is sad (especially for the affected families) but it is not a mega-catastrophe.
There is a story in the Financial Times about a town in the middle of the hot-zone in Italy where they have enforced quarantine and tested everyone in the town twice. They have no cases.
The second stylized fact – mortality differs by availability of hospital beds
A. Coronavirus provided you do not run out of hospital beds probably has a mortality of about 1 percent. In a population that is very old (such as some areas in Italy) the mortality will be higher. In a population that is very young base mortality should be lower. Also co-morbidities such as smoking matter.
B. If you run out of ICU beds (ventilators/forced oxygen) every incremental person who needs a ventilator dies. This probably takes your mortality to two percent.
C. Beyond that a lot of people get a pneumonia that would benefit from supplemental oxygen. If you run out of hospital beds many of these people also die. Your mortality edges higher - but the only working case we have is Iran and you can't trust their data. That said a lot of young people require supplementary oxygen and will die. If you are 40 and you think this does not apply to you then you are wrong. Mass infection may kill you. Iran has said that 15 percent of their dead are below 40.
I will put this in an American perspective with a 70 percent strike rate by the end.
Option A: 2 million dead
Option B: 4 million dead
Option C: maybe 6 million dead.
By contrast, Singapore: a handful of dead.
China has demonstrated this virus can be controlled. The town in Italy has demonstrated it can be controlled even where it is rife.
Life goes on in Singapore. Schools are open. Restaurants are open in Korea.
The right policy is not “herd immunity” or even “flattening the curve”. The right policy is to try to eliminate as many cases as possible and to strictly control and test to keep cases to a bare minimum for maybe 18 months while a vaccine is produced.
The alternative is literally millions of people dying completely unnecessarily.
What is required is a very sharp lockdown to get Ro well below one – and put the virus into exponential decay.
When the numbers are low enough – say six weeks – you let the quarantine off – but with Asian style monitoring. Everyone has their temperature measured regularly. Quarantine is rigid and enforced. You hand your phone over if you are infected and your travel routes and your contacts are bureaucratically reconstructed (as is done in Singapore). And we get through.
And in a while the scientists save us with a vaccine.
The economic costs will be much lower. Indeed life in three months will be approximately normal.
The social costs will be much lower.
Every crisis has its underlying source. And you want to throw as much resources (and then some) close to the source. Everything else is peripheral.
The last crisis was a monetary crisis and it had a monetary solution.
This is a virus crisis and it has a virology solution.
Asian Governments are not inherently superior to ours – but they have done a much better job of it than ours. The end death toll in China (probably much higher than stated) will wind up much smaller than the Western death tolls. I do not understand our idiocy.

 

[qldfrog]

In full agreement here,do a mandatory enforced lockdown for 2 weeks 3 at the most ,then release with testing and enforced quarantine of contacts, tracking
In 4 weeks, you get a working economy again
What i have seen so far is this flatten the curve until everyone get contaminated.dangerous game, even more if no vaccine can work or mutations such that you get reinfected within 6 or 12 months by a variant.
As is, a suicide indeed

 

[Dona Ferentes]

Goldman Sachs last night revised down their U.S Q2 GDP forecast to MINUS 34%.

 

[rederob]

From world famous Australian Investor John Hempton of Bronte Capital, experts at investing and shorting.

Coronavirus – getting angry

I am going to give you a few stylised facts about severe acute respiratory syndrome coronavirus 2 and the data.
First – no matter what you say about the Chinese data – and the Chinese data was full of lies at first – China has controlled the outbreak. Shanghai, Beijing, Chongqing are all functional mega-cities with no obvious health catastrophes.
The virus has been managed to very low infection rates in Singapore and Taiwan. The numbers (completely real) in Korea show a dramatic slowdown in infection.
Korea has not shut restaurants and the like. The place is functioning. But it has had rigorous quarantine of the infected and very widespread testing. It has complete social buy-in.
China tests your temperature when you get on a bus or a train. It tests you when you go into a classroom, it tests you when you enter a building. There is rigorous and enforced quarantine.
But life goes on – and only a few are dying.
In Singapore nobody has died (yet) though I expect a handful to do so before this over. This is sad (especially for the affected families) but it is not a mega-catastrophe.
There is a story in the Financial Times about a town in the middle of the hot-zone in Italy where they have enforced quarantine and tested everyone in the town twice. They have no cases.
The second stylized fact – mortality differs by availability of hospital beds
A. Coronavirus provided you do not run out of hospital beds probably has a mortality of about 1 percent. In a population that is very old (such as some areas in Italy) the mortality will be higher. In a population that is very young base mortality should be lower. Also co-morbidities such as smoking matter.
B. If you run out of ICU beds (ventilators/forced oxygen) every incremental person who needs a ventilator dies. This probably takes your mortality to two percent.
C. Beyond that a lot of people get a pneumonia that would benefit from supplemental oxygen. If you run out of hospital beds many of these people also die. Your mortality edges higher - but the only working case we have is Iran and you can't trust their data. That said a lot of young people require supplementary oxygen and will die. If you are 40 and you think this does not apply to you then you are wrong. Mass infection may kill you. Iran has said that 15 percent of their dead are below 40.
I will put this in an American perspective with a 70 percent strike rate by the end.
Option A: 2 million dead
Option B: 4 million dead
Option C: maybe 6 million dead.
By contrast, Singapore: a handful of dead.
China has demonstrated this virus can be controlled. The town in Italy has demonstrated it can be controlled even where it is rife.
Life goes on in Singapore. Schools are open. Restaurants are open in Korea.
The right policy is not “herd immunity” or even “flattening the curve”. The right policy is to try to eliminate as many cases as possible and to strictly control and test to keep cases to a bare minimum for maybe 18 months while a vaccine is produced.
The alternative is literally millions of people dying completely unnecessarily.
What is required is a very sharp lockdown to get Ro well below one – and put the virus into exponential decay.
When the numbers are low enough – say six weeks – you let the quarantine off – but with Asian style monitoring. Everyone has their temperature measured regularly. Quarantine is rigid and enforced. You hand your phone over if you are infected and your travel routes and your contacts are bureaucratically reconstructed (as is done in Singapore). And we get through.
And in a while the scientists save us with a vaccine.
The economic costs will be much lower. Indeed life in three months will be approximately normal.
The social costs will be much lower.
Every crisis has its underlying source. And you want to throw as much resources (and then some) close to the source. Everything else is peripheral.
The last crisis was a monetary crisis and it had a monetary solution.
This is a virus crisis and it has a virology solution.
Asian Governments are not inherently superior to ours – but they have done a much better job of it than ours. The end death toll in China (probably much higher than stated) will wind up much smaller than the Western death tolls. I do not understand our idiocy.

The question for us is why we have learned little to nothing!
And as a result have decimated large slabs of our economy.
The Asian examples were available to us before we started to get heavy on social gatherings and closing borders.
Wuhan was unique and needed to be locked down.
Beyond that, as South Korea, Singapore and some other nations have discovered, temperature checking and, separately, virus testing of high risk groups has mitigated spread, as noted in the article.
It also appears the successful nations had solid pandemic strategies ready to roll, having faced SARS and other killer viruses in recent decades. I cannot see that we have anything in place except a mishmash of make it up as you and hope for the best strategies, differing across State and federal jurisdictions.
An earlier Youtube link from @Joules MM1 gave front line, up to the minute guidance on the "rules" that needed to be followed to feel safe whenever venturing out. Thanks. Had I not watched it I would have done a few things poorly on my last toilet paper hunt at the shops (actually it was only for fresh produce). After watching this wonderful Pulmonary and Critical Care specialist from the Weill Cornell Medical Center I felt somewhat liberated, except that his saviour has been an antibacterial hand sanitizer, and this stuff has been rarer than TP on shop shelves.
The other interesting difference between China's initial response and ours was that they immediately ramped up production of every medical requirement to meet Wuhan needs. We ramped up an economic solution for a recessionary economy instead.

 

[lusk]

The question for us is why we have learned little to nothing!
And as a result have decimated large slabs of our economy.
The Asian examples were available to us before we started to get heavy on social gatherings and closing borders.
Wuhan was unique and needed to be locked down.

Oh yes the Asian example. That would be the one where they lock down the city but allow
citizens to still travel to other countries?

Didn't 5 million exit Wuhan before being locked down?

I find it very hard to believe its over for China.

 

[rederob]

Oh yes the Asian example. That would be the one where they lock down the city but allow citizens to still travel to other countries?

Didn't 5 million exit Wuhan before being locked down?

I find it very hard to believe its over for China.

The lockdown was complete on 23 January, and enforced with an iron glove.
You should be asking why so few countries adopted port of entry health measures until months later.
Lots of things have been obviously successful overseas, but we continued to overlook them.

 

[satanoperca]

"However, public health experts at a briefing with the President said even if Americans continue to stay home and limit contact with others, between 100,000 and 240,000 deaths could occur over the next fortnight."

If this becomes a reality, prepare for war.

"The death projections “are very sobering, and when you see 100,000 people, and that’s a minimum,” Trump said. “A hundred thousand is, according to modelling, a very low number.”

From the man himself, who had everything under control 2 weeks ago.

Note : this is playing out exactly as our soon to be masters had planned