Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
First Mortgage Trust cut its [very high] floating mortgage rate of 7.25% by -50 bps to [a still high] 6.75%. Most banks have a floating mortgage rate of about 5.20%.
TERM DEPOSIT RATE CHANGES
None here today.
INTERNATIONAL CRASH
The international situation is dire today. Before Wall Street even opens, bond yields have dived further, with the UST 10yr down to 0.49%. That is a -25 bps crash from Friday's record low rate, itself a -39 bps dump in a week. Never before have all UST yields all been below 1% and that now includes the 30yr. Gold has jumped to almost US$1700/oz in non-New York, non-London trade and a +US$16 rise from Friday. Tokyo equities have opened down -4.7%, Hong Kong is down -3.9% at the open and Shanghai is down -1.2%. Locally, the ASX200 is down -5.6% and the NZX50 Capital Index is down -2.5%. The US oil price, which we reported was down to just US$41 this morning, is now down to under US$32.50 while the Brent benchmark is under US$37. This crash is all due to a Russian/Saudi punchup which Moscow had hoped would penalise the American shale industry. But it has gotten away on them in a few hours.
INTERNATIONAL CRASH - UPDATE 4:20PM
Since we first published, some big changes have continued to evolve. The US crude oil price is now down to US$30/bbl, a further -8% drop in just a few hours. The UST 10yr yield is holding low at 0.51%. Gold has pulled back somewhat to US$1682/oz. The NZX50 capital Index closed down -3.0%, the ASX50 is heading for a -5.4% rout. Shanghai is now down -2.5% for the day, Hong Kong is now down -3.6% and Tokyo is down an eye-popping -6.2% (and not helped by a very weak GDP result).
BNZ SEES RECESSION
BNZ now says a recession is now probable for New Zealand. They follow ANZ who earlier saw that it was increasingly likely globally.
GOVERNMENT PREPARED?
Here is our Government's latest updates and advice on Covid-19. There will be many more senior updates coming later today.
SHARP DOWNGRADE
Air New Zealand has today said it is withdrawing the full year 2020 earnings guidance of "$35 mln to $75 mln" it issued to the market on 24 February 2020. It also cut the pay of its newly appointed CEO by -15%.
LOCAL SWAP RATES DOWN
Wholesale swap rates have dived at the long end with the ten year down to 0.95%, another fall of -7 bps. The 90-day bank bill rate however is up another +4 bps to 0.84% as markets unwind their local rate-cut bets. In Australia, their swap curve flattened further although in the international context it is not huge. The Aussie Govt 10yr is down -12 bps at 0.58%. The China Govt 10yr is also lower, down -14 bps to 2.58%. The NZ Govt 10 yr yield is now just under 0.86%, and a -14 bps fall.
NZ DOLLAR DIVES
The Kiwi dollar has also crashed lower, now at 61.9 USc and down more than -1c. Against the Aussie we are unchanged at 95.6 AUc although volatility is rising. Against the euro we have dived to 53.8 euro cents, a drop of over -2c. That means the TWI-5 is sharply lower at 66.2, a -4.3% devaluation today alone.
BITCOIN SINKS
Bitcoin is now at US$8,209 and down -10.2% from where we left it on Friday. The bitcoin price is charted in the currency set below.
This chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
270 Comments
Holy crapperoly... look at the VIX
https://finviz.com/futures_charts.ashx?p=d1&t=VX
https://imgur.com/gallery/8ujNg6H
Add a beer and that'll be me in a couple of hours.
We're basically in self quarantined in ho chi minh at the moment- pool is closed due to Corona! Don't feel like going out as we are exhausted from 7 weeks of continuous haggling and still paying 5 times local prices.
So was thinking of doing the same thing (we are 6 behind nz) could be history in the making...or not.
As the fallout hits home, people on reduced hours, or without incomes won't be looking to trade up.. they'll be too busy trying to hang on to what they have. Sales volumes are going to plummet, prices.. harder to say, but the rocket just ran out of fuel. All hands to the pump.
And spending is going to be down, i've just put off ~$15k of spending from our household budget till next summer.
TDs in NZ look surprisingly attractive, but spread them around;
https://www.interest.co.nz/saving/term-deposits-1-to-5-years
So much for one piece of that protection scheme:
“Over $21 billion wiped off cryptocurrency market in 24 hours after massive oil price plunge”
https://www.cnbc.com/2020/03/09/bitcoin-btc-and-other-cryptocurrency-pr…
It's proformance over these series of drops and climbs is saying otherwise. Climb, sell off, climb, sell off climb. Those loosing their shirts and sell to cover their losses will be gone soon and it's game on.
The only other deflationary situation ever show large gold gains.
Bring it on. About time the debt leverage stacking ponzi caught fire and burned down. Irresponsible central bank practice have been responsible for extending the largest separation in history between financial reality and price stupidity. Trump is working on seperating itself from China, and Boris has severed the cancer of Europe. In the words of Bruce Buffer "Itsssss TIME"
JPY is or was the bellwether. Doesn't get much attention here. And gold obviously. Witnessed some insane stuff on GLD on the ASX this morning. Was up 6% at one stage. Way above spot price. Kind of like retail investors buying at any price.
Everything on the ASX monkey hammered. Mainly the stocks that people hang on to: Banks, miners, supermarket duopoly.
I fear property prices in Hamilton, Tauranga, Dunners, Palmy are to fall a lot harder. Auckland and Wellington property prices were pushed up not only by speculation but also, to a considerable extent, due to high-paying job growth in comparatively resilient industries (more so the latter).
The smaller urban areas have seen very little economic development and I don't mean an arbitrary growth figure pushed up by migration and asset speculation. The industrial mix in these regional centres are more or less as they were 30 years ago.
Agree. Although, I'm a little more bearish than 5%.
Auckland has multiple levels of protection.
The Government.
Immigration.
Auckland Council.
The handfull of developers who control all of the fringe land supply.
Dunno if that is the same for Palmy or Whanganui where all the 'smart' investors have been going.
It's hard to see middle to high income earners in Auckland getting whacked too hard. The jobs of the doctors, teachers, lawyers, police, council and government bureacrats are pretty safe. Still a few major construction projects going on, and state housing is ramping up. Speaking of which, no better time to ramp that up even further, immediately.
Maybe some financial services jobs will be hit.
There will be some carnage in hospitality and retail, but sadly the people worst affected will be the low income workers who don't own a house and have little or no prospect of doing so.
In Great Depression 1, FDR (effectively) confiscated all gold. In Great Depression 2, I suspect governments might confiscate all residential (and maybe even commercial) mortgages - effectively halting foreclosures by the banks and hence, halting all evictions from rental properties. GD2 could well be so disruptive on the global financial system that near 80% of the population could be homeless without some kind of government intervention.
Likely a lot of central Auckland houses will come on the market as Wuflu decimates the elderly. Something like 95% of dead will be over 50. That combined with this GFC will drop prices 10-15% over coming year. Might be a lot harder to borrow though, so that could push it down even further. Bach prices will take a real kicking, and rest homes will get absolutely hammered.
Rate cuts only work if banks haven't frozen all their lending because they don't trust anything (other banks/property markets/derivatives/futures etc etc). If nobody is lending, the only ones buying are those that have cash. And those that HAVE to sell (because they are overleveraged and banks are demanding they do), are in trouble. My advice to anyone right now about to buy a house... STOP! This mess could quickly turn into a financial crisis and you may be very much underwater on any collateralised loans (like a house @20% equity for instance).
I wrote this on Friday , much to Yvil's merriment
"If Wall St falls tonight , RBNZ will get the nod and cut OCR Monday morning . This was followed by
by Yvil | 6th Mar 20, 9:09pm
"We shall find out next week if Orr reduces the OCR, something tells me you'll be full of excuses if he doesn't"
followed with the quip by Yvil | 7th Mar 20, 8:40 am
"We'll find out on Monday morning then, Cowpat"
During the weekend I wrote this
by Cowpat | 8th Mar 20, 11:38pm
"Although its unlikely the RBNZ will cut inter meeting ,(doing so would put Yvil into a soft padded motel room), even though the conditions and yields would support such a move, and certainly when considered against the 2001 RBNZ reasoning, the outlook for the NZD and indeed AUD remains troubling in the near term . The daughters have , after consideration decided to open additional short positions NZD /JPY before closing on Saturday morning at 67.003, targeting 61 and a similar position in AUD/JPY . With an additional 90 contracts in play ,the coming week promises to be more turbulent than the last , hopefully Mr and Mrs Yen decide they want their money home for a few weeks." Our three daughters have just added 6000000 yen to their accounts , positions closed.
@Belle .......a very good answer .
We produce food , and even in a recession everyone has to eat .
The world can mothball aeroplanes in deserts , cease servicing routes , shutter factories , close steel mills , put assembly plants on short time and dig out fewer minerals....indeed close whole cities and Provinces, hell we can even go without the newest i-phone.
The human stomach cannot go without food
ASX has a lot of oil and tech stocks - NZX basically has 0 tech (problem with why we don't get any IPOs anymore cause they go straight over to ASX). We also have a lot of defensive stocks like power companies (your demand for electricity doesn't change) Tech stocks i.e. growth stocks fall far harder as they are riskier. US market has a ton of shale/oil stocks and tech stocks so expect a huge fall tomorrow when the US opens.
David, who was the first poster that from those first hints that there was a virus on the loose, hysterically warned of the Coronavirus being more consequential than everybody was expecting? I was was taking my evidence from a the long perspective of history, not just Sars, etc; not just in England but in many other European and Asian countries including China; you only need to start looking from 1918 back down the centuries and you will see that there were many plagues, famines, and wars and the like that had devasting results for whole populations.
I like this one, responding to AndrewJ asking whether to buy more cattle into a falling meat schedule:
by Belle | 24th Jan 20, 8:47am
I will try again. First comment disappeared. No Aj you dont. You sit tight. Remember SARS. People retired to their homes in fear. Stopped eating out and our meat schedules tumbled. This has legs.
The weather. Its January. We have feb and mar to get through. No rain in sight. And soon we will need a lot of rain to turn this around. This also has legs.
Be patient. However I think I am preaching to the converted.
That was me! I got burnt back in the Sars days. The bull schedule keeled over. Once burnt twice shy.
I only wish I could pick the next three months. Maybe it just scares me to think about it.
Farming wise. Our schedules dont repair. Ships have bother for many reasons. Staffing. Not enough load , so reduced sailings. Also a lot of farms are now cleaned out of winter feed. Meat processors have trouble staffing. Chains arent manned.
Healthwise. We lose a lot of our old people, and too many medical staff. Losing nurses and doctors will shock New Zealanders into taking this seriously. (Apparently the extra viral loading they face assures a more torrid time with this virus)
The Govt will prove to be less than hopeless. I base this on their soft approach til now. Soft is not what we need.
Tourism will be completely rooted. Long haul travel which we depend on is over and out for 2 years.
There will be lots of vans, travel buses and utes up for auction.
I have run out of oomph for this its too depressing....
"Traders Are Flying Blind in S&P Futures After CME Limits Are Hit Equity contracts went quiet when declines reached 5%, setting off Chicago Mercantile Exchange limits that keep prices from falling further."
https://www.bloomberg.com/news/articles/2020-03-08/rout-in-u-s-stock-fu…
If you want puke watch Alexander, Church, Dann and their BS property cheerleaders on this video. Great comedy. Btw, I never knew Alexander had such a whiny kiwi accent:
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…
These fools can all bugger off.
None of them looked past their own noses to macro risks until last month.
Charlatans passing themselves off as economic experts. All of them.
Alexander's comments about not allowing house prices to fall should usher in a revolution.
Church rabbiting on about "artificial constraints" - why doesn't he rally against the artificial Risk-Weighted-Assets calculation that means its more capital efficient for Banks to lend FAAAAR MORE against residential property.
Watch Alexander when others are speaking, he's nodding respectfully to their garbage, with his famous smirk.
Dann is the one I am most disappointed in recently, because you know what you are getting with the others. Never close to a heavy weight, I thought he was a tidy enough middle weight for a while.
Now I think he's a lightweight, a cheerleader for the herald and its sponsors. A guy who said a recession was *highly* unlikely just 2 weeks ago.
Charlatans is a great description.
Yeah, that was pretty nasty - basically telling people to use the crisis to put pressure on the government to let them keep screwing as much money as possible out of those who can least afford it. God forbid we let anything happen that might make things better for first hone buyers or renters, right Tony?
Switched from growth to cash in may 2019. It was the day the us/China trade negotiations broke down in the final moments of negotiation.
While I never expected a oil/pandemic shock, I was certain things were going to custard. Maybe I missed out on the most exciting times to be in shares (which I didn’t because I’ve also been investing in shares/eft’s outside of KiwiSaver) but to be honest, my cash fun has done alright for itself with the fall in interest rates and the bond market exploding since then.
Few days ago was talking to someone with $700K in the share market. They mentioned that the day before they had lost $30K. I said get out now - put it all in TDs across several diff institutions. They said, hell no, given I'm down $30K. It then turns out that he wasn't actually 'down' $30K - he was up $130K on his $700K portfolio of stock market investments. I said, you're nuts, get out now - that $30K loss was never your money in the first place. Didn't seem to understand (or be convinced by) the need to distinguish between unrealised (vs realised) capital gains.
In fairness most B2B transactions on account are all electronic anyway. Net change to that part of the economy would be nil. All the work done for cash including drug transactions....time will tell. I'm guessing it that becomes anything close to reality bitcoin and its siblings will get much larger uptake in the C2C market and Govts will be powerless to stop it.
Interesting there is already tracking of cash in Singapore, and it works fine there (unless you are a criminal).
We are lucky the PM dept and MoH got so much planning done in February.
https://i.stuff.co.nz/national/health/coronavirus/120122652/coronavirus…
This should have been sorted first day!
More planning yet to be done.
The Government will introduce a targeted wage subsidy for businesses hurt by Coronavirus, allowing them to keep on employees that they otherwise couldn't afford.
There will also be some targeted tax help for businesses hurt by the virus' economic effect, with possible deferred payments.
The "business continuity package" was agreed to by Cabinet on Monday and will be finalised in the coming days.
https://i.stuff.co.nz/national/politics/120130921/coronavirus-governmen…
More cut & paste, rather than prep & planning.
This is a technic/mechanism used by the previous govt.
RBNZ media release. Just then.
https://www.rbnz.govt.nz/news/2020/03/banking-sector-prepared-for-respo…
The Reserve Bank team are in regular dialogue with bank executives and are watching for signs of funding market pressures or emerging signs of credit stress.
“While we have not seen any significant pressures at this stage, we remain in regular contact with stakeholders across the financial sector. At the Reserve Bank we are prepared in our business continuity role to ensure a well-functioning financial system, including enabling access to cash, ensuring sufficient liquidity in the banking system, and managing a stable payments and settlements system,” Mr Orr says.
“All businesses should be preparing for possible disruptions from COVID-19. Think about how best to operate if staff are temporarily unavailable, or if suppliers have restricted stock, cash-flows are interrupted, and sales decline in some sectors,” Mr Orr says.
I believe helicopter money can work but it’s never implemented at the right time.
Go on, give me $3000 on Friday; it’s going straight under my mattress because I can see sh!t is about to hit the fan. Had you given me $3000 a year ago, I might have put it towards a better car.
Imagine if a Wall Street movie sequel came out today ............. Black Monday II
Unlike the 1987 Banking crisis , this could be tipped the ' 2020 Oil crisis ' , although to be fair that would be a misnomer .
There are scores of underlying issues and economic fundamentals out of whack that could cause a stock market rout right now , and it could be a perfect storm .
These include:-
Sovereign debt almost everywhere
Trade wars and tariff protectionism
The virus
Brexit
The oil price collapse
The hangover from Quantitative Easing
Disruptions to supply chains
Drying up of ore, coal and base -metals markets
Corporate debt levels
Personal debt levels
EU woes
Asset price bubbles
Strained economies such as Brazil , India , South Africa , Argentina , Southern Europe, oil producers and to a lesser extent Turkey and parts of South East Asia.
And now China too ........... as its years of deception , manipulation and spin becomes exposed .
And for some time I have been concerned at some equities prices where the underlying business has got huge debt and weak balance sheets .
Many people have borrowed to buy these shares , so its debt on top of debt. Its an American thing, having a share-trading account , and fortunately not many New Zealanders have done this ,and although we do have some exposure through Kiwisaver funds , these are not debt funded investments .
These debt -laden holders in the US will be forced to sell if markets fall too much, they will be forced into an exit at the risk of capital loss , and the whole thing becomes a herd scenario .
Its going to be a rough ride , no matter how you look at it
Which ones? The ones in the companies that go broke and disappear, as Equity Corp did? Maybe it's Air NZ this time, and no Govt bailout - just a shareholder wipeout in a debt-for-equity swap to save the carcass?
But who knows which companies will disappear this time! Tricky, this Buy and Hold in a crash, isn't it!
All this stuff is mostly over my head, but reading through, it makes me nervous about my 100k house deposit sitting in the bank. We have been holding off buying a house up till now, as it hasn’t been enough to get what we need...now I’m wondering if it is still safe sitting there in the bank?
Yes, it could have been avoided.
Population not allowed to top 2 billion from 1800 on. Full recycling of finite resources. Only renewable energy used. Sinks left as full or empty as found. Biodiversity maintained. Quotas calculated, monitored properly and stuck-to.
Then we could even have had a discussion about peace, and even equality.
But we didn't do any of that. We have arrived at a period of consequences.....
My daughter has been living in London, 2 kids. On her mothers group today, they were talking shortages. A mother from Edinburgh told us supermarkets are emptying. In London basics like soap are getting hard to find. Nappies are short, frozen vegetables and in some cases fresh vegetables. Online supermarket orders now have 2 week delivery wait. One mother told that last night she gave the neighbours some pasta as they had no food.
No faith in our institutions to do their job in the populace.
Something like this was always going to happen one day!
The housing market is going to become stronger in the future as it is pure and simply the safest investment bar none!
The ones that will suffer most are the ones that have invested heavily in the share market over the last few years and KiwiSaver account holders.
Personally never had a KiwiSaver account and relying on financial advisors who speculate with your hard earned has never been a certainty to success.
Hopefully this incompetent government we have operate better now than what they have shown up until now!
However, you wouldn’t want to hold your breath when they still want to push forward with the increase in minimum wages, which will be a recipe for mass job losses!
I have repeatedly said that the CHRISTCHURCH market is the most stable market for real estate due mainly due to the earthquakes.
Prices would be significantly higher if there had not been as much land opened up for subdivisions.
The higher priced locations will suffer a slight slowing for sales due to uncertainty and the overseas buyers keeping a lower profile, however prices will increase once the virus has settled down.
The young ones that have been relying on KiwiSaver are going to be set back from buying for a year or two however they will bounce back as young ones normally do.
Opportunities will present themselves for those that are wanting to take them!
For at least ten years before the EQ, Christchurch used to have a surplus of rental stock, keeping rents low, the EQ sorted that out, and now the redistribution of EQ money has worked its way through the market, we are back to where we were before the EQ., which is hardly surprising.
It will take years, a few bad tenants slowly turning the "as is' uninsured houses into empty sections, before we see any growth in prices.
If you have ever heard the saying the bigger the rise, the bigger the fall, Christchurch has to be potential to hold value , where very few others like Dunedin can.
Agree, its a great place to live
Rents, from a yield point of view might be better than anywhere else in NZ, but something has to be done about the as is uninsured stuff, and other than the free market approach which will take years, both rents and prices will drag.
Would you buy a Williams apartment and put it on the rental market. I wouldn't ?
Russia is dropping the price to slaughter the US shale oil out of business.
Maybe this is the Russian / China end game kicking in dropping oil and the States with it and bringing in a gold back cyrpto.
Cant say I would blame them, the States has been playing games with them for a long time now.
News - meaning:
“Newly received or noteworthy information, especially about recent events.”
Recent world/economic news is currently noteworthy – the sun coming up or a pleasant walk along a beach, while very nice, isn’t.
Unexpected events or those with extreme negative consequences could be considered even more noteworthy – the human condition.
And thus more comments - and you appear querulous - is it really that puzzling?
I've left my motel, we're doing great, the day was beautiful, sunny and warm, I'm in an AirNZ plane waiting to take off to Auckland. Looking forward to seeing my wife and daughter again. I'll approach ANZ tomorrow to increase a loan for some more extensive renovations. Also looking forward to tennis tomorrow and catching up with friends in the weekend. Life is great : )
So by my calcs, the ASX all ords are now down 19.75% from peak, so another 18pts to hit the 20% semi-official definition of a bear market.
So at the open tomorrow morning? or did the cat hit the ledge at the close today, and will bounce a fraction before realising that gravity always wins?
Am I the only one that thinks this virus is being a bit overblown? I mean less than 4000 deaths of the 7.5 billion people on earth is such a tiny number. And it isn’t even increasing that quick - they will probably have a vaccine before it hits any really scary numbers.
About the same number of people in the world were killed in a car crash today than by this virus since it existed.
(Not saying it definitely won’t be an issue but not worth panicking yet IMO)
Sigh, this has been well commented on. Those deaths in addition to all other categories, not replacing them. Plus for every death ten more are incapacitated and can't work, which is where the real economic effect comes from. Then the lock downs causing further economic effect.
Imagine the one scenario out there that this virus become a permanent feature, also on top of other death and sickness categories? Probalby quite likely, or if not then the limits to growth mean it is only a matter of time until something bigger hits.
You had better start thinking a bit more clearly, and preparing.
I darno Kezza, years ago when one of these other viruses was on the warpath someone reckoned the best place to be was some third world outfit. He/she maintained third world are so use to this shit there is no panic, everyone is self sufficient and they thought Thailand would be a good place to be.
In Vietnam currently, and I've been thinking a Similar thing. Most farmers here are still using water buffalo to plow fields, and weed control is mostly done manually with hoes. Most survive on a diet of what they can grow - rice, maize, Kumaras etc bit of chicken and pork. Very little in the way of external resources.
If they don't get the virus then life won't change one bit for most of them.
Why would this happen? It’s not exactly a death sentence, most people won’t even get sick and of those that do only older people have a serious concern. Isn’t this thing about 10x more likely to kill you than a normal flu? I mean I don’t want it but I’m hardly going to isolate myself for a year to avoid it!
Keep in mind that this is a virus with a relatively high chance of mutation, so it could become more deadly (or less). If you are over 60 and currently healthy I suspect it represents your most likely cause of death in the next year..
The economic effects (i think) are due to uncertainty of highly leveraged businesses surviving the disruption, and it doesn't take many failures to cascade.
Rather than call it overblown, think of it as a 5 to 20% chance of spreading uncontrolled with a 2 to 5% fatality rate in first world countries.
At the current rate of spread it will cover the world before a vaccine is created and mass produced, and we would probably have heard by now if an existing drug was an effective treatment.
I’ve been down that mental path – in pure current numbers it does seem a bit over the top.
It’s more the economic reaction, impact, fallout – and ultimately where it could take us before it all plays out.
Then put it among a debt laden, highly leveraged speculative market background – at some point there had to be a spark to ignite the tinder-box, and this seems like it could be that spark.
Not hard to imagin this one playing out on top of the bubnles that were ready for an event.
X numbrr of infections / deaths v global population isn't how to look at it.
20% of the population is going to be laid up for three to five weeks in hospital. 2 to 3 % of 2/3's of the world will die. 2% of 7 Billion is a hell of a lot, not to mention the 20% off work for a extended time.
This is not a commin cold.
At the current rate of transmission there would be a very long time before 2/3 of the world is even exposed to it, and exposure doesn’t mean much chance of getting it (think of the many people on planes that haven’t caught it even with someone having it on board). Assuming they create a vaccine in the next 6 months I doubt even 1/1000 of the world will get it. If there is no vaccine in 6 months maybe that’s a better time to panic.
If numbers triple every week then the whole world gets it within three months.
Medical supply chains are often 6 to 9 months to new zealand, plus manufacturing, testing, and inventing time. If there was a vaccine right now I doubt it would be generally available in less than 3 months in new zealand
Problem is outside China numbers have been trippling each week (or quadrupling)
10,000 infections now outside china?
30,000 one more week
90,000 two more weeks
270,000 three more weeks
810,000 four weeks
2.4 million in 5 weeks
7.2 million after 6 weeks
21.6 million in 7 weeks
64.8 million in 8 weeks
194 million in 9 weeks....
Half a billion in 10 weeks....
Even if death rate and hospitalisation is only at standard flu deaths rates things get messy.
Ok that's if no extreme measures are taken which we are seeing in Italy now. I think we are all getting it one way or another eventually. All they can do is slow it down so it doesnt overwhelm our hospital and economic systems in just a few short months. Not sure even that can be achieved now.
Panicking a bit now looks ok in the scheme of those numbers being even wrong by an order or two. In fact a bit of stock piling panic is good. Rather get some extra production of essentials ramped up now than after millions off work for several weeks.
Mind you the cure looks as painful as the problem.
I did enjoy the beach yesterday. It was free and the price of gas to get there was good and could improve.
But total infections and deaths have taken about a month to double. That makes your maths a lot different.
Let’s say the whole world goes into a two week lockdown to kill this thing off - total economic cost would be a one off 4% of GDP. Isn’t that the worst case real economic impact?
Hey jimbo go look up the meaning of exponential. You need to understand this from a math perspective. Also lookup the R0 of an infectious disease. The Corona virus has an R0 as high as 7. I would suggest that the people who are not worried about this simply cannot grasp the full implications of this.
And more importantly, all the major european markets are in or right on the verge of bear market territory (-20% from peak) in less than a month. This isn't pretty. US index futures are all pegged at -4.9% waiting for the open. We may even see the NYSE open straight into the circuit breakers..
"The yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.3469% in overnight trading. Bond yields move inversely with prices. The benchmark rate has tumbled 40 basis points in March alone. The 30-year Treasury yield also hit a record low of 0.7104%, breaching the 1% threshold for the first time in history."
30yr yeild at 0.71%
Heres a wild thought that has only just occurred to me. Politically speaking most of the worlds leaders are heading into the danger zone agewise for grave illness. So what happens if many of our pollies world over get very ill with some bowing out. Apart from the economic ructions starting to occur, we could have a very destabilising change in leaderships. In a lot of places. Everywhere in one year. Usually I go for the scared emoji at this point.
And its still raining....more than 12 hours after it started. Yussss.
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