China Corona Virus - World Economic Impact

The world press on Sunday have turned much more negative over the impact of the China Corona Virus

Comments

  • "North Korea has clamped down on trade and travel as one of the world’s most reclusive nations isolates itself even further in a bid to stem the spread of coronavirus."
    FT Report https://www.ft.com/content/2e859a48-496b-11ea-aeb3-955839e06441

    But no news as yet on Africa, a possible hotbed of infection?
  • With so many manufacturing plants closed in China, which could expand to other large manufacturing hubs, one needs to think that supply may become insufficient for demand, whether localized (eg toilet rolls in Hong Kong), or internationally (the inability to manufacture or transportation to the place of demand).
    Could this start to cause "inflation"? (thus fixed income security values may reduce?)
    Hate to think the implications of much higher interest rates for mortgages (nice for those with Fixed Interest 10/20/30 year contracts)

    Likewise some services (travel, entertainment) & products (eg aircraft,oil, Gas) may have supply well above of demand - thus lowering prices.

    Your thoughts would be appreciated

    Arjungaur
    "And what drives it down is Emotional Pressure, Financial Pressure and Inertia : )"
    I think you are absolutely right, however your assumption that supply chains can fulfill later in the year maybe a bit over optimistic.

    sussexmade
    "China trying to effect force majeure"
    I agree that this is going to cause massive contractual problems, whether internationally or even just within China itself! Many orders for Services / Products will not be completed, but who is going to pay for the cost of this major disruption.

    We wait and see what happens to next week's stock markets

  • edited February 9
    The Press is under pressure from technology giants for the advertising dollars, readership has moved online and doesn't want to pay for press, them turning much more negative in order to survive is perfectly predictable - https://www.linkedin.com/pulse/loss-truth-media-threat-our-democracy-ray-dalio/

    For North Korea, pre-emptive waivers from the UN are a no-brainer to enable supplies to be sent to authorities in Pyongyang

    Africa is not a hotbed of infection -
    https://en.wikipedia.org/wiki/2019–20_Wuhan_coronavirus_outbreak_by_country_and_territory#Africa
  • edited February 9
    The supply shock causing inflation is possible but not probable, at least not for now. And inflation is not a problem for the central banks, raise rates, reduce demand and voila, demand-supply imbalance solved.

    I didn't actually assume that supply chains can fulfil later in the year. So let's go back to what i actually said - Implications for the travel & aircraft industries can be offset later in the year

    Then I agreed with you - Supply Chains are definitely getting disrupted, but i believe in adaptive performance of humanity

    Reminds me of the Great horse manure crisis of 1894 -
    https://nymag.com/news/features/establishments/68513
    https://www.businessinsider.com/david-tepper-speech-horse-sh8t-2010-9
    https://en.wikipedia.org/wiki/Great_horse_manure_crisis_of_1894

    who is going to pay for the cost of this major disruption > All of us > it is a Force Majeure

    We wait and see what happens to next week's stock markets > And Rates, Credit, Currency, Commodities, Inflation, Crypto Markets
  • Arjungaur, I like your comment re "Great Horse Manure crisis", in the UK we call it Bull-shit, More local to the area where I live we have the saying "Cock & Bull" stories, which originate from two coaching inn in a place called Stony Stratford, Buckinghamshire.
    http://www.stonystratford.gov.uk/visit-stony/history/cock-and-bull-stories-
  • edited February 9
    no actually the cock and bull story is this one > The world press on Sunday have turned much more negative over the impact of the China Corona Virus > There was nothing unexpected on Sunday to turn any more negative than before

    Great horse manure crisis on the other hand is an analogy for supposedly insuperable extrapolated problems being rendered moot by the introduction of new technologies > Supply Chains are definitely getting disrupted, but i believe in adaptive performance of humanity > The point is, markets adapt, people adapt.
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