The SARS-CoV-2 Economy (physical distancing & good hygiene)

NorthReport wrote:

The economy is sound and the stock market reflects it. 

Sometimes people panic and oversell like they have done the last couple of days, but it is rebounding as expected.

I hope you're right but much of the world's economy can not afford to miss financial income for even one month. I don't think it would take that much of a downturn to force many businesses into bankruptcy and increase unemployment and private and public debt. Do you think the economy in China is currently sound or going to be sound for the next year or so? What happens if the situation in China is replicated in other parts of the world? Hopefully we'll dodge the bullet with Covid-19 but at this point that is not a certainty.

A day or so ago Trump said the coronavirus epidemic will be over by April.

JKR wrote:

A day or so ago Trump said the coronavirus epidemic will be over by April.

Unlikely. If it is weather sensitive it could be gone by the end of May. If not then it is here to stay.

Sean in Ottawa wrote:

JKR wrote:

A day or so ago Trump said the coronavirus epidemic will be over by April.

Unlikely. If it is weather sensitive it could be gone by the end of May. If not then it is here to stay.

It wouldn't be surprising if Trump is wrong about this considering the thousands of lies he's made since the start of his presidency. Trump probably needs to think the virus will magically disappear because he feels the Coronavirus is a threat to his re-election. With Trump it's always about him.

According to Trump, Obama was born in Kenya.

I think I have seen this movie before. The market starts to drop because the whole economic system is corrupt and unsustainable and the rulers of the US start to lose money. Fear not I am sure the billionaires will be quantitatively eased in the near future. Nothing helps the economy more than pumping  billions of dollars  into the coffers of Wall Street

With the energy sector under pressure, U.S. high-yield Credit default swap prices surged 73 bps this week. After trading near multi-year lows at 280 bps on February 12th, high-yield CDS closed today at 443 bps – the high since (Powell U-turn) January 4th, 2019. Investment-grade CDS jumped 17 bps this week to a 14-month high 83 bps. The big financial institutions saw their CDS prices surge. Goldman Sachs CDS jumped 20 this week to 91 bps (14-month high). JPMorgan CDS rose seven to 60 bps (14-month high). Financial conditions are tightening dramatically.

The torrential rain has begun, and all those that have been making such easy money selling flood insurance have begun to panic. And I don’t think the prospect for zero rates and massive QE is about to instill calm and confidence. Indeed, the entire notion of open-ended QE and fiscal deficits creates acute market uncertainty. How does this melt-up in Treasury prices impact “carry trade” speculation in corporate Credit? Could dollar prospects (and currency market stability) be murkier in such a policy backdrop? How does such uncertainty play for global leveraged speculation? It is difficult to envisage a scenario where myriad global risks (i.e. coronavirus, financial, economic, policy, geopolitical) don’t incite a momentous de-risking/deleveraging dynamic. The odds of the dreadful global “seizing up” scenario are rising. The Modern-Day Bank Run. .......

......I did at least try to warm people...mostly just to be ridiculed...to provoke some serious discussion, analysis and political solution...now the opportunity to act is closing quickly to paralysis......

Maybe the title of this thread should be changed?

In real time. Trump spoke tonight. 

The White House announced Trump would speak at 8:30 and right away the futures market rose and did so for a 1/2 hour.

At 9:00 Trump started speaking. Then overnight markets went into free fall.

If Trump wants to help the stock market he should go on TV and announce a three month golf vacation and that he would leave the country in the hands of someone competent (not Pence).

BTW the US screwed the pooch so badly that even the Canadian dollar went up against them despite the announcement of terrible news for Canada: US mayhem in response to CV; falling oil market; screwed US economy. 

NDPP wrote:

Stock markets have largely ceased to accurately depict or reflect actual economic conditions. These indices are now institutionally gamed, rigged and subject to multiple manipulations in the interest of maximizing profits for the largest players.

I agree with the above and this will be the test. If anything can destroy the financial system this is it. I don't think it will happen. The wealthy will ensure enough work is happening to maintain their wealth within our current monetary system. Workers will be even more desperate to make a buck opening the door to another Great Depression which will be addressed the same way the first was but with a green twist. 

Yanis Varoufakis discusses the economic impact of the covid19 pandemic. (18 min.)

NorthReport wrote:

What a golden opportunity for Canada to nationalize a lot of industries with our money, but unfortunately that's not going to happen as Trudeau will be bailing out the business community, the one percenters, and the rest of us will be getting nickels and dimes. 

 

Apparently they are putting 25 billion to help people -- this does not inlcude corporate bailouts. It seems that the govenment may place a priority on stoping the public from catastrophe. Clearly this is what they need to do. I am not sure there will be the room to spend on buying out industries. However, I have always maintained that the government should never give money to business without getting common shares capitalized at fair proportional value. this allows government to help companies and then take profit once they recover. 

NorthReport wrote:

Government set to announce $25B aid package to help Canadians through COVID-19 crisis

https://www.cbc.ca/news/politics/trudeau-coronavirus-financial-supports-1.5500045

I wonder who will and won't be eligible. Administering it through E.I. and the Canada Child Benefits still leaves out a lot of people. Of course, for a government that has a ministry of "middle class prosperity", it won't be surprising if the relief money is meant to trickle down only so far.

They also said that they will use the GST Tax Credit system. Through the GST tax credit system I think they should immediately send out approximately  $2000 for every adult and $1000 for every child. They should send out money every month until this crisis is over. They should also declare a national state of emergency.

kropotkin1951 wrote:

I find it fascinating that the amount of money people are suggesting that needs to be sent to people is more than the welfare rate in most provinces and in places like BC, that have suffered for decades under neo-liberalism they are more than a person with disabilities, who is already unable to work, receives. Strange that when able bodied Canadians have their income at risk the dialogue changes.

Agreed. As I posted in another thread, we need to take note of how much money our governments is tacitly admitting people need to live on in 2020. That should become the new benchmark for social assistance rates across the country.

Why are the stock markets still trading amid this pandemic? Trading should be halted indefinitely until this thing gets sorted out.

Freezing the trading would kill short trading profits for some.

NorthReport wrote:

Gas spotted selling for less than $1 a litre in Vancouver the lowest price in years. The combination of the COVID-19 and crash in oil prices is going to be an economic disaster for Alberta. 

It is around 70 cents in Ottawa after being 1.00 to 1.10 for some time