Corona Virus

There are going to be indirect effects from this epidemic. For example:

The tourist industry (worldwide) is in real trouble already, and this is particularly affecting airlines. Since the air travel downturn is likely to last at least until the end of the year, and only resume very slowly, it is almost certain that there will be a number of airlines that collapse.

Now consider Boeing. They have hundreds of 737MAX aircraft parked waiting for software modifications to enable them to be deemed airworthy, expected in the next six months. By that time, how many of the customers that have paid deposits are going to accept delivery if they can possibly avoid it? And how many of their customers are going to be out of business by then? Can Boeing survive this?

There will be similar repercussions all over the economy, that is just a very well documented example (that I have been following for other reasons).

Not sure this will be as bad as 1929. There is some optimism in the markets for a quick recovery once coronavirus has been contained. Paul Taylor who manages the $ 5 Billion fidelity Australian equities fund, says once over the virus, it could recover within a year because of tailwinds on monetary and fiscal stimulus , and low interest rates. People will then focus away from the coronavirus risk, to the low cost of capital, quickly. Also, the World is awash with money, with interest rates so low, there is really no alternative to equities to finding yield and Australian equities are now offering attractive yields to 4% or 5%, fully franked. After the coronavirus, the ASX 200 index should go back up to 7, fairly quickly. While it took the ASX a dozen years to recover from the GFC , the quality of company balance sheets is much better this time around, Taylor said. As for comparing this to 1919, nothing could be further off the mark. No where near it yet.

A documentary on the Spanish flu. The Spanish flu killed more people in 25 weeks than HIV aids killed in 25 years.

YouTube

Yes, I agree that recovery should be a lot quicker than in 1929, partly because governments have learnt a few lessons from that. But because of the interconnectedness of everything is far more than it used to be, the depth of the recession may be worse.

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Originally Posted by bob10

Not sure this will be as bad as 1929. There is some optimism in the markets for a quick recovery once coronavirus has been contained. Paul Taylor who manages the $ 5 Billion fidelity Australian equities fund, says once over the virus, it could recover within a year because of tailwinds on monetary and fiscal stimulus , and low interest rates. People will then focus away from the coronavirus risk, to the low cost of capital, quickly. Also, the World is awash with money, with interest rates so low, there is really no alternative to equities to finding yield and Australian equities are now offering attractive yields to 4% or 5%, fully franked. After the coronavirus, the ASX 200 index should go back up to 7, fairly quickly. While it took the ASX a dozen years to recover from the GFC , the quality of company balance sheets is much better this time around, Taylor said. As for comparing this to 1919, nothing could be further off the mark. No where near it yet.

A documentary on the Spanish flu. The Spanish flu killed more people in 25 weeks than HIV aids killed in 25 years.

YouTube

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Good post Bob, I try to keep up with financial stuff, being an ex banker, & I know how these things can affect Financial Markets which will impact massively more people than those affected by the Virus. I say this knowing of course that lives are more important than dollars.
So I agree with you & hope that recovery is as you say, I say "hope", because no-one really knows at this stage what will happen.
And, finally some sense, The AGP will run, if it runs at all, without spectators, who will be locked out. An announcement is expected within the hour as to whether the race will be run at all, Supercars are saying that, at this time, they are happy to race, of course that would also be, without spectators. AGP now CANCELLED.
Pickles.

F1 - No spectators. We’ve been bumping in our equipment for 3 months there. This will cost a bomb. The economic impacts will be huge and ongoing - I think everyone will have to take a big bite of a giant **** sandwich on this one.

Recession here we come...

Reading the package thread casuals will not have to wait the exclusion period to get new start sickness benefits, they need to catch it though and be diagnosed. But those that cant work because the boss in the hospitality industry says don't come in due to lack of business from this scare then nothing. I hurts those that are unable to get fulltime work thru no fault of their own and can only get the odd casual job to make ends meet,' there no a lot of full time work out there.

And small businesses apparently are getting a 50% refund on submission of new activity statement in April to ease up cash flow with a refund within 2 weeks after.

No race now, cancelled completely. That just cost taxpayers $25M for no return.

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Originally Posted by JDNSW

There are going to be indirect effects from this epidemic. For example:

The tourist industry (worldwide) is in real trouble already, and this is particularly affecting airlines.

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While it may effect worldwide tourism, it may actually be a god-send for local tourism, particularly the RV side of it.
More people are going to look at moving themselves around, rather than use mass people movers, like buses, trains and especially planes.

I think the UK advice is sadly the most accurate.

"I must level with you, level with the British public — more families, many more families are going to lose loved ones before their time," he said.

Live every day with kindness and love is a rule I have had for a long time.

A drop in overseas tourists may make the tourist parks drop their prices to entice the Australian holiday makers to their parks which would be Nice.