Global economic policymakers should NOT give Coronavirus any important consideration. The Coronavirus is making its rounds but is also on the run from the epicenter in China to Iran, S. Korea and Italy. Only weak preparedness of nations and immunodeficient segment of the population will result in Coronavirus spread.
What today's beginning of stock market rebound demonstrated is that we have become less paranoid and panicking less than last week. As I have said before, panic and paranoia is not productive and it is this realization will put us back on track. I am not afraid of the Coronavirus because I think my immune system can handle it if it finds its way close to me. Ten years ago in the fall of 2009, H1N1 pandemic was making rounds and got me and over a million and a half others, out of those infected 284,000 of our fellow inhabitants of the world died ie 17.4% fatality. Compare that to the fatality rate of 2% due to Corona virus predominantly killing the seniors above 70, smokers and those with serious immunodeficiencies.
How am I going to give my immune system an advantage to beat the virus from destroying my lungs and killing me should I get infected? My research and that of others summarized in in an editorial in a Future Medicine publication has revealed a drop of 100% unadulterated pomegranate juice could potentially neutralize the infectivity of a million Corona virus particles. Don't worry. Prepare.
https://www.futuremedicine.com/doi/abs/10.2217/fvl-2017-0154
1
And where's the President as all this is going on?
He's in North Carolina "trolling the Democrats."
2
I thought the Coronavirus was a hoax put on by the Democrats. Trump, Hannity and Limbaugh said so repeatedly over the past week. Oh wait.That’s right. All three are “entertainers” and we’re not meant to take their comments seriously.
Now the virus fall guy VP Pence says it’s an “all out war” to fight the spread. Trump will claim he only knew Pence “a very little” but “he was a very good guy” as they drag him from under the bus.
8
China shut it countries down and the disease is under control. We are just waiting for this disaster to heat up. Simply test 1000 individuals in Chinatown and let’s see if 5% of the population are infected. If not that is great but if infected close the city down for two weeks immediately before hundreds die.
1
Economist have still to learn that with the global trade they advocated ALSO came the free trade of pathogens.
1
Viruses and bacterium are among the meek, the tiniest, minuscule creatures on Earth. The Bible might be right on the money when in Matthew 5.5 we read; Blessed are the meek, for they will inherit the earth.
I have witnessed humanity spreading like an evil presence across the Earth, slowly killing every life form its path. It looks like 'Mother Nature' has had it with the lack of stasis humanity has wrought and humanities lack of respect for all life.
1
Global policymakers have watched Trump lie for years. After he tried to discount the epidemic as a "Democrat hoax", why should they trust his reassurances when it concerns the health of their nations, their children--or themselves?
12
The Fed is being measured - as they should be.
The only “slow to act” group in this country is the Trump administration, that had more than a month to start a comprehensive screening program to get ahead of this problem and chose to deny that it existed for much of that time.
Public Health agencies all over the country were able to get their own tests up and running, but were denied permission to use them - this, in the face of CDC intransigence and unwillingness to test people outside a narrow spectrum.
People are dying because of this policy. More will likely do so. It will not matter what color hat they wear. This virus is color blind and cares naught for tribes.
And all the current occupier of the White House can do is criticize the Fed for being “slow to act” or call the coverage of the crisis a hoax - really?
3
When what sustains the world’s continued economic expansion in in effect the U.S. consumer, then I submit we are standing on shaky ground.
4
Nobody has accurate models of the US economy. Macroeconomists study the subject intensely, but their models do not actually have predictive value.
Although macroeconomics is an important subject, economic activity as reflected in markets is subject to irrational exuberance and irrational pessimism.
Experts on investments devote much energy to calculating all sorts of statistics, but nobody really knows what the statistics mean.
There is the Schiller CAPE ratio, for example, which a few days ago stood at 30.91 compared to a long range average of 15.21. That figure suggests that the markets are richly valued, that a drop of 50% in the Dow is overdue.
But there are always justifications for the belief that "this time is different." Right now, it is the record low interest on 10-year treasuries.
Investors now receive negative real returns, so feel forced to move assets into stocks. But how do we measure that effect?
The result is that for their retirement, ordinary folks are forced to gamble.
The people that don't gamble are the billionaires, who cannot spend the money they already have in a hundred lifetimes.
They invest in the low-interest bonds that allow the government to continue running up deficits of $one trillion per year.
The wealth tax of Sanders and Warner would force billionaires to liquidate holdings.
Nobody knows what the effect might be.
Perhaps a market crash that would wipe out the wealth of the billionaires before it is taxed?
7
Trump has only himself to blame if the US falls into a recession since he is the one who severely cut funding for the CDC, NIH and global infectious disease programs. Now the CDC is floundering and the virus will have its way with his administration, like it or not.
19
And as usual our “slow to get anything “ boyish President doesn’t get.
How much longer can we tolerate this self centered nut.... who is ruining our country as I type.
17
Monetary easing (lowering rates) will not help and will likely worsen the eventual economic fallout. Please do not lower rates....
6
Here is my theory. God saw that Americans were not smart enough to save themselves from a second Trump term. So he sent us the virus to crater the economy and save the Americans from Trump, and themselves.
24
Let's just be honest.
Democrats desperately want Covid-19 to cause a recession. (And Republicans would want the same thing if a Democrat was president.)
After the failure of every other one of their supposed existential crisis (e.g. Mueller, impeachment, etc.), the coronovirus in their last, best hope.
Sadly, once the Great Coronavirus Hysteria of 2020 subsides in a couple of months, the Democrats will once again be left with nothing but their own chaos.
3
@John
Are you applying for a job with Pecker's paper? Honestly, that is what it sounds like.
8
@John (OR)
The stock markets around the world are already rebounding significantly.
I'm sure you happy about that, right?
Just kidding.
2
@John Yup, I'm just hoping and praying for my retirement portfolio to be wiped out.
1
Why oh why did the central banks use up their ammunition now? It was just a minor correction. If market prices start falling further--as they probably will, since fundamentals haven't changed--what are they going to do?
Short-term foolishness.
7
@M. Exactly. You can't cure coronavirus with a monetary stimulus.
2
Don't misunderstand me. Debt is a critical part of the modern global economy.
But debt has taken on a life of it's own over the decades far beyond it's original function, especially sovereign debt. Any pretense of managing debt against spending and income has pretty much been tossed out the door. Well, maybe Germany is the only exception. But their responsible behavior will not make the slightest difference if things turn south really fast.
We've now reached a point where sovereign debt is really nothing more than monopoly money. Decisions tossed about under the pretense creating predictable change is really just about shuffling the pieces on the board. Completely separate from the real impact it as on the daily lives of humans.
The elites making these decisions are seen as disconnected from the unwashed masses. That's why we have so many of the younger generation in the USA tossing their lot in with candidates like Senator Sanders and Senator Warren. While there is a problem, far too much attention is pointed at private enterprise, almost none to the public sector, where most of the real problems lie.
You can't have your cake and eat it too. It's a scientific fact. But that's what all these elites, as well as the media, have been pitching to the electorate. And they've been swallowing it hook, line and sinker for decades.
3
I'm a data guy. Someone needs to show me the data that proves covid-19 does not have a 100% death rate, and that we are not experiencing a plague.
- 81% of cases are "mild," but it can take months to show symptoms bad enough to get diagnosed.
- People who have been designated "recovered," get sick again. - Only 3k of 90k have died; but there is not enough data to say for certain the rest won't.
- There is not enough data to say if any population is immune, and this won't affect everyone.
- There is no data to know if seasonal weather will impact it's life.
- Plagues happen every 1-3 hundred years.
We cannot prove this isn't a plague yet. No, it is not likely one, but we cannot prove it yet. Plus this is spreading so fast, we can't even keep up with it. We don't know for sure when or if a cure is coming. And we got Trump and Pence running this, trying to save the economy first, and trying to score political points with this. I'm in total disbelief.
I'm a data guy, and IMO the data says we need to strongly consider an isolation strategy right now. I think Seattle should be quarantined, now. Maybe San Francisco Bay too. I think everyone should be forced to install an app on their phone, letting the WHO track our geo location, and identify places known covid-19 patients have been. I think everyone flying needs to be tested. It's time for action. We don't know how bad this can get. It's time to take this very serious. It's time to assume the worst, and not the best.
10
Oh Christopher, man, take a chill pill.
1
Save the stock market! Let the people pay for the cure if they can afford it!
‘An Outrage': HHS Chief Azar Refuses to Vow Coronavirus Vaccine Will Be Affordable for All, Not Just the Rich
"This is what happens when you put a Big Pharma CEO who doubled the price of insulin in charge of regulating Big Pharma." by Jake Johnson, staff writeronThursday, February 27, 2020
17
“The market’s up today... Our country’s very strong economically.”
The Dow was up more than 5% today. Pretty impressive given that Asian markets were down about 3%.
Since the American stock market is obviously the only measure of what is good or bad in American society, it seems perfectly clear that President Trump -- with the loyal service of Vice President Pence, his virus czar -- has put this so-called virus problem to bed.
So let's stop whining about what a bunch of experts claim is some kind of health risk and focus on making America great again. Let's tell positive stories, like they do in Communist China. Then we can all be happy again.
18
Rate cuts won't make me fly anywhere much less to China, South Korea,or Italy.
8
As word arrives of a 25+ per cent reduction In global emissions thanks to reductions in manufacturing, shipments to fill the supply chains and huge drops in air travel, there are some who feel that the onset of the coronavirus is merely Mama Nature’s response to problems that humans aren’t clever, or driven, enough to fix.
11
Since 2017, American business and economy have contracted a deadly virus called trump. What our economy immediately needs is a vaccine against trump, the virus !
18
@Sam Sampanthan
The press needs to continue to focus on the massive failure of Trump's CDC to provide corona virus TEST KITS to detect infection.
This is either another shocking display of Trump Administration total incompetence or a willful attempt to hide the real numbers of those infected with this virus... no test, no report of confirmed cases.
South Korea with a population of 51 million people has already tested over 100,000 citizens. They can now test 10,000 a day.
America, the most technologically advanced nation on the planet with 350 million citizens, won't even provide a count of those tested...but maybe a few hundred?
“The incompetence (U.S) has really exceeded what anyone would expect with the C.D.C.,” said Dr. Michael Mina, an epidemiologist at Harvard University. “This is not a difficult problem to solve in the world of viruses.”
14
The topic of potential causes of this reduced global GDP, in the near future, as suggested by Jeanna Smiaek and Jack Ewing in this Times' piece; are discussed In an article from the Harvard Business Review (02/28/2020), titled: "How Coronavirus Could Impact the Global Supply Chain by Mid-March." In it, Pierre Haren and David Simchi-Levi discuss how "lean manufacturing," or "Just-in-Time" (JIT) processing, has reduced the need for inventories in today's global logistics chains. As a result, low ROIs from inventories are reduced as funds flow into higher returning assets. But, the cost of these reduced inventories is that disruptions in the supply chain can affect production very quickly. They state: "Such cost cutting measures mean that when there is a supply chain disruption, manufacturing will stop quickly because of a lack of parts."
They state that after major past disruptive events such as "the March 2010 Iceland's volcano eruption, and Japan's earthquake and tsunami in March 2011, " that "companies increased the amount of inventory they keep on hand. But, they still usually carry only 15 to 30 days' inventory."
Haren and Simchi-Levi conclude: "In summary, we believe we should brace for a major effect on manufacturing worldwide. It will begin to hit full force in two to three weeks and could last for months."
[03/02/2020 M 2:19pm Greenville NC]
7
Ah, well, it was nice while it lasted. I just hope we get a reasonable President next who actually understands that for the economy to truly recover and flourish, we need a more robust middle-class, a better environment for small business owners, and a lower-income bracket that can get reasonable health-care. This would benefit the billionaires just as much as it would the rest of us. And it really shouldn't be that hard to do.
65
Trump's activities cannot help but scare people. His inexcusable comments about how the news media is out to get him with the Coronavirus would be laughable but for the fact he is the leader of the most important govt in the world. He has largely based his reelection on the US economy's performance. He paid little attention the virus until it showed its potential to cause the economy to slow down. Then the deluge of non sense comments. Its a good suggestions to end the trade tariffs put in place by the US and China. Also cutting work hours rather than laying off people.
35
This virus will prove what Trump has always denied. Which is that the US economy is but a component of the global economy. We do not and cannot stand alone. There are no purely bilateral agreements. By the nature of the modern global economy, all agreements become multilateral, whether intended to do so or not.
The tariffs are slowing down China which is slowing down the world, which is slowing down the US. Anything we do to hurt China ends up hurting ourselves. This is evidenced by the contraction of US manufacturing, the decline of steel prices and weak global growth.
The corona virus is therefor everyones problem. All nations will experience reductions in growth and some may indeed fall into recession. The US could be one of those nations.
The only way to mitigate such calamities is through global cooperation, global alliances. Not through Trumpian bilateral intimidation.
Unfortunately, it took the the most primitive life form on the planet to make this evident. A virus.
105
@Bruce Rozenblit
What? If Mr. Trump believed that the US could ":stand alone," why on earth has he renegotiated NAFTA and is seeking better trade terms for the US vis-a-vis China, Japan, Europe and South Korea?
Hyperbole is never an adequate substitute for rational analysis.
8
@David H
That's exactly my point. He is using bilateral agreements instead of multilateral ones. He is using tariffs as a tool of intimidation, not of negotiation. If Trump was successful, then why is manufacturing output down? Why are the farmers being bailed by 28 billion dollar welfare payments? Why was the stock price of US Steel $43 in 1918 and is now below $8?
Why is the US electronics manufacturing industry being crushed with 30% price increases for parts when there are no other sources than China? All the while, our foreign competitors can get the parts tariff free? The results speak for themselves and the bottom line is never irrational analysis.
65
Bumper sticker: “ A virus will save us”.
And it will.
10
Trump is blaming the Fed for being slow to act to help the financial markets. How is cutting an already low interest rate going to encourage people to go out shopping, eat out, attend events, keep schools and public places open? It's the CDC that the people will be watching and Trump gutted that place so I can't say I have all that much confidence in that agency. Good going Mr. "Everything Bad Is a Conspiracy Against Me; Everything Good Is Because of Me" President.
46
@Newman
It helps rich people. Doesn’t really help anyone else significantly.
Maybe consolidate some debt at slower rate but doesn’t help much if you are concerned about losing a job or having less pay from missing work.
10
@Mathias
Right! What it is really is Socialism for the rich. Just like the Corporate welfare for farming conglomerates hurt by Trump's tariffs. The tools the Government has to help the country in times of recession (e.g. fiscal stimulus through deficit spending, and interest rate cuts to ease the country back into economic growth) are instead being used to prop up the stock market in an election year, and to delay the slowing of the economy already underway before Coronavirus. Trump's businesses (e.g. resorts, hotels) are likely to be hurt by the reduction in tourism due to the virus. His prodding the Fed is not just a coincidence.
7
The idea that growth will only slow when airports and hotels are empty worldwide is ridiculous. There will be a serious decline in economic activity worldwide this year - possibly as much as -5%. None to soon either to see international goals to drop economic growth as a proxy to well-being. Some businesses will thrive. Shares in online learning leaders like Coursera, EDX, Alison, and Udemy are soaring. Time to reallocate capital!
2
Trump needs to shutdown the Organization for Economic Cooperation and Development for disagreeable comments about the effects of the global spread of this virus. Maybe he should label them part of the international Liberal Democratic Conspiracy to harm his re-election?
1
This will forever be known as the Trump Crash. It will serve as a reminder of what happens when you put money before lives, and LIE about it.
14
@Pop
March 2, 2020:
https://www.barchart.com/stocks
Dow 30
26,703.32
+1,293.96 (+5.09%)
Hmmmm....
2
So far in the 2019-20 flu season, the flu, which we do not panic over, has already killed 10,000, hospitalized 180,000, and infected 19,000,000, in the USA. The flu killed a lot of people when Obama was president, too; it is apolitical. The world economy has not collapsed. Somehow we mange to keep going.
5
On the bright side, with so much constraint on travel and shutdown of manufacturing, China is a lot closer to hitting its Paris Climate Accord targets!
9
THIS is Trumps Pearl Harbor, Katrina and 9-11. Even in the unlikely event this Virus fizzles out in a few months, He is finished. When someone shows you their complete, incredible Incompetence, believe them. He will not “ pivot “ or magically starts soliciting and accepting advice from actual Experts.
The Reality Show will finally be Cancelled.
NOVEMBER.
10
So, growth forever until the collapse? Growth like we want is not in any way different from cancer. The host is destroyed because the growth just can not stop. Hideous and suicidal. That's the story.
8
Finally some good news and some hope to save the planet.
Economic slowdown is the only way out of the collective suicide that is capitalism.
6
All of this just shows you how much the world depends on China to buy its product. And USA also relies on China for lots of imports like computer parts and computers etc that are the nucleus of the economic global economy.
Time everyone got back to the olden days of baking your own bread, making your own home made soap, washing powder etc. Just google how to make...…..
4
America is the greatest socialist country in the world already. Why being afraid of sanders while you have already a president who calls for state intervention all the time and his puppy powell who delivers. Stock markets are rising because the central banks are supposed to solve it all. Rather sick enonomic mentality
12
Excellent. Perfect time to elect a socialist as president of the United States!!
3
Trump: Malicious Incompetence.
NOVEMBER.
10
Only positive note to the coronavirus pandemic is due to the lockdow, NASA recorded a sustained drop in the levels of noxious nitrogen dioxide over China, a notorious air polluter.
https://www.earthobservatory.nasa.gov/images/146362/airborne-nitrogen-dioxide-plummets-over-china
5
Stop economic growth and save nature. Do you care?
3
Global death toll at 3000 and everyone's calling for the end of the world. We lose 8,000 people in the US alone in a routine flu season. Get a grip.
2
@JimBob Flu has been around for so many years, Covid-19 has just started about 2 months ago. Time will tell, how severe infection from Coronavirus compared to Flu and how severe when they coexist during winter months.
4
@JimBob
Influenza death rate is 0.1%
The current worldwide coronavirus death rate is 2-3%... 20 times greater than the influenza rate.
But no worries, says Trump as the U.S. reports 6 deaths in the first 100 coronavirus detected cases.
Trump's CDC needs to apologize profusely to the American people for completely botching the testing for this virus.
We are now way behind, with reports that the virus has been spreading, untested, in Washington state for several weeks now.
South Korea, a nation of 51 million people has already tested over 100,000...and now can test 10,000 a day.
The U.S. has 350 million people, and the
Trump CDC has tested, what, maybe a few hundred?
People are dying waiting for testing in America.
Yet Trump goes to his rallies, (despite health officials warning citizens to avoid large gatherings) and shockingly trumpets his own brilliant "leadership" in getting ahead of this virus.
2
Negative impacts are already being felt in the travel and tourism industries. Several airlines have already begun canceling flights due to low load factors. Obviously, hotels, restaurants etc. are now feeling the pain as travelers cancel trips and locals avoid congregating in public places.
This initial reaction will spread and ripple throughout other businesses -- including an already beleaguered retail sector as more and more people turn to home deliveries to avoid shopping in public places (but, think, who packed that carton?).
The markets are hoping Central Banks will come to the rescue. But they can only do so much with rates already at historic lows.
A global economic recession seems inescapable. Perhaps we need to start talking in terms of a full-scale depression?
3
At some future point, we'll have to confront the root problem with a capitalist economy in world with a fixed (stable is much too generous) consumer base, i.e., no "growth". A sustained, mutually beneficial (for all humans) economic system is something we must move to, but the "greed and fear" (mostly greed) that moves and underlies our markets are proving unmanageable anachronisms. The resulting gross inequities invariably cause destructive conflicts.
ROI is not human.
11
Mixed economies work, laissez faire capitalistic and centrally planned economies do not.
2
Notice the report does NOT say that economic ACTIVITY will be cut in half, but rather economic GROWTH—and the mere prospect of that could send advanced economies into recession. This is everything wrong with the material lives we live: i.e. that our continuing “prosperity” depends entirely on sustaining a model of growth that is entirely unsustainable, that is destroying the planet, and that is literally killing us by the thousands and soon, possibly, the millions. Like a metastasizing tumor.
30
@Dennis Smith i agree Dennis. Also, WE HUMANS are the metastasizing tumor. Our population growth must stop or nature will make sure it does.
18
Trump promised America 6% economic growth. The Republican Wealth Re-distribution/Tax Cut for the Rich needed 3% per year to pay for itself. Then Trump's own people projected 2.2%. So growth (think tax revenue) was already going to miss by 30%.
Now the projection is 1.5%, which means missing growth and tax revenue projections by HALF! After putting $2 trillion of debt on US taxpayers.
Try paying half of your mortgage payments and see what happens. Yet Republicans are screaming "tax cut" again, which means MORE debt, even while economic growth plummets toward zero.
23
@Troy I hear repubs yelling at Powell to cut interest rates, as if the availability of more ("free!") money) is a solution. It isn't.
10
@Troy So much winning
7
@Troy Republicans are a one trick pony and that trick involves the rest of us cleaning the stable.
6
global growth is destroying the world. Best thing that could happen would be to permanently cut it.
27
It sounds like Wall Street is anti-big government only until they want to be bailed out. As if the Fed and government have not been propping up the markets by cheap credit and low taxes for the past couple years.
89
@Steve You are so right on this point. While the public has not been looking, the Fed has been loaning Wall Street banks trillions of dollars in low interest loans to shore up the repo market. WFT
38
@Maron A. Fenico
At the same time, Republicans have been de-regulating the banks, eliminating regulations put in place after the "too big to fail" banks crashed the economy in 2008, and have gutted the Consumer Financial Protection Bureau.
5
Within the last few days the NYT had an article the argued that central banks and The Fed, in particular, could do little if the coronavirus really upsets the global economy.
The banks can't get consumers into stores, onto airplanes, reconfigure supply lines for just-in-time industries, etc., etc.
So exactly what can the central banks do besides print money?
33
Perhaps we should see it as a necessary trial run to what will become imposed on us (and necessary) in the near future, both for the environment and to counteract a rapidly growing global population explosion. An entirely new way of calculating future GDP is needed; put a price on and add to the GDP any country’s supply of clean water and fresh air, on its infrastructure, on historical buildings, museums and art, on marine conservation areas and nature parks. If the Great Barrier Reef had a price, perhaps it would be in better shape than it is today.
28
@Broman YES!!! Thank u
5
@Broman Free birth control for all humans would be a good start. We have an "overage" of billionaires, most with absolutely no idea what to do with their excess funds. DO SOMETHING!
8
The economy reflects human social behavior not the accumulation of wealth and power. Wealth and power are consequences. The focus should be on dealing with the infections before worrying about future economic prosperity. We do not have enough information to forecast consequences.
One thing is becoming clear, the demands upon our health care system are going the rise, a lot. We need to get the resources shifted to deal with it. It looks to be more deadly than flu so we can expect more expensive treatments for more people than for the flu.
9
@Casual Observer 20 times more deadly, from today's numbers. What should be clear is that the countries with adequate public healthcare systems (e.g., Italy, South Korea, most of Europe) have been able to test for infections quickly, meaning they can most accurately assess the scope of infections, and that leads to successful containment. We have failed on this first round: we had inadequate (fired!) national response organizations, worthless test kits (with NO explanation of that failure!), too few, too late, and a privatized, profit-driven healthcare system so expensive that people are afraid of interacting with it.
Let's see if our emergency rooms are soon overloaded (a distinct possibility that I certainly don't want to see).
Planet Earth will have to watch this virus "run its course". What have we learned? Universal healthcare is a right, for all humans. We can provide that. That we do not is to our mutual detriment, and money will not protect anyone.
8
COVID-19 reminds us that in the final analysis, nature is in charge. Being wealthy does not make one coronavirus immune. If we as a species were smart, we'd understand that climate change is going to have an even greater effect on the world and start acting appropriately.
44
@Mike S.
Exactly. Mother Nature bats last, and she swings a big stick.
8
@Mike S. Prince Prospero and his Masquerade Ball.
2
Good. Until we figure out how to grow industry using renewable resources, global economic growth is correlated with increased carbon emissions. Our planet can not withstand an increase in this. An economic downturn, even one brought about by the coronavirus, may end up saving humanity.
29
@Kate It would be great if Big Oil (the entire fossil fuel industry) would "allow" the world's economy to develop alternate (e.g., renewable) energy sources, but they fight against that. They are killing US slowly.
5
@Kate It would be great if Big Oil (the entire fossil fuel industry) would "allow" the world's economy to develop alternate (e.g., renewable) energy sources, but they fight against that. They are killing slowly.
How ironic that Trump will be seeking re-election when the US may be in recession or teetering on one and his only effective insurance policy is China -- not monetary policy -- hoping she will keep supporting the global economy and thus, the US economy via the global supply chain!
Even before Corona, world growth was already being undermined by US tariffs and other policies.
Corona might just be the catalyst of a global recession but not the cause.
Our political leaders and their able econmic advisors have done their best to sabotage economic growth.
6
People saddled with medical debt from lengthy trips to the ICU are not going to be spending money they don't have.
People who watched their savings evaporate while out of work / in quarantine are not going to be spending money they don't have.
Neither of these situations will correct themselves the moment the virus goes away. The epidemic has the potential to wipe out a tremendous amount of wealth and expose how fragile the economic situation of tens of millions of Americans is on a good day.
61
@Bill
And allow creditors to repo that wealth while bailed out by government. Socialism for the rich.
10
My financial firm just stopped all non-essential international travel. I would expect the other firms to follow (they usually act in tandem). I actually was surprised but clearly this type of reaction is going to spread among firms. Consumer spending, at least in the travel industries, is likely to contract as well.
15
@Parker76
Exactly zero international travel for financial firms is "essential".
4
So, a worker at a wet market in China who came into contact with the blood of a bat now threatens to bring the global economy to its knees.
That is one absurdly fragile system the elites designed over the past 25 years.
Ah...globalization...the gift that just keeps giving.
The top-down, neoliberal economics- and shareholder-driven model of globalization has failed in a rather spectacular fashion, which is the root cause of the populism roiling the developed world.
And now this.
We're on a trajectory towards widespread global social unrest, yet the post-financial crisis of 2008 complacency of the media, business leaders, and politicians continues.
We need to restructure the global economy from the bottom-up to be more resilient, with no single-points-of-failure.
If Silicon Valley can't figure out a way to harness emerging technologies to execute the most important "pivot" in history, then the Digital Revolution will have been an even more spectacular failure than globalization.
42
@TB
"The top-down, neoliberal economics- and shareholder-driven model of globalization has failed in a rather spectacular fashion, which is the root cause of the populism roiling the developed world."
Yes, but won't the Fed's dropping of interest rates make everything better? The financial elites are telling us just that. Never mind the "secure" retirement accounts of we oldsters. So many pawns.
10
@LynnBob
You make it sound as if Globalization is responsible for a virus. As a scientist, just look at the history of disease/plague on mankind. Plagues have been arriving constantly, and every 100 or so years wipes out about 25% of the population. This has nothing to do with globalization.
4
@Sal So in the past 100 years plagues have wiped out 25% of the population? Where?
You claim this has nothing to do with globalization, and you're a "scientist"?
1
GDP growth in the US is around 2.1% which is fairly weak. Keep in mind that it is presently fueled by cheap energy and very low interest rates. In fact, oil prices/barrel have hovered around $55-60 for quite a while, and interest rates have flirted with the lower/zero bound. Doesn't get much cheaper than that; and if all we can squeak out of cheap oil and free money is 2-3%, don't be surprised if a squeeze on transportation/flow of goods and services hits that number hard.
In fact, with our "consumer" and "service" economy, taking human interactions out of the equation and making deliver of those goods/services problematic, could stall it completely.
Having said that, the "growth is good" model, the one everyone uses, may not be the only model. We've got a pretty good standard of living. If you had to suffer through another year like last year, would that kill you? Would it even hurt? The people most hurt would obviously be at the lower income end while the rich would happily bounce along and mid range incomes stay static. so really, nothing necessarily changes all that much. Not right away.
What wasn't really examined was the long term impact of the 1918 Flu Pandemic on global long term advancement. That's where the big changes would be seen.
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The virus proves that there is something much more powerful than the dollar.
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Paragraph 13 starts out: "The economic risks posed by the coronavirus are unpredictable."
Yet paragraph two states: "One major multinational group warned global growth could be cut in half if the infection spreads widely."
I'm confused.
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Look on the sunny side. A bad year for global growth is a good year for carbon conservation.
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Looks like another taxpayer bailout for Wall Street coming soon. Mustn't let Covid 19 impact wealthy investor portfolios and interrupt life styles of the rich and corrupt. Wait for it.
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As schools start closing and sporting events get canceled and people stop travelling and going out for entertainment how could that be less than a two percent drop in GDP. And that isn't even taking into account the layoffs due to supply chain disruptions and slowing of air travel.
We will be very lucky if this only causes a mild recession.
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@JAY LAGEMANN Coronavirus is nothing more than a media invention to attract eyeballs.
It doesn't even begin to move the statistical needles of a normal flu season here in the US. https://www.cdc.gov/flu/weekly/index.htm
If the media had never uttered the catchy word "coronavirus", we would never have looked up from our total ambivalence to this flu season.
I loved the news yesterday that "the deadly coronavirus has been circulating in Washington State for 6 weeks". OK, if this thing is so bad, where are the pictures of the overflowing morgue??
This isn't Ebola, and we should stop treating it as such.
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