The meltdowns in equity, credit, debt, and money markets look like textbook signs that the coronavirus crisis could tip the global economy into another GFC-style liquidity crunch.

The fear is that inter-bank credit lines will dry up again as banks lose confidence in each others’ creditworthiness and become reluctant to lend to coronavirus-hit companies.

However, there’s a bigger issue at play. There is reduced expenditure and consumption due to lockdowns and closures; leading to reduced employment and thus even less consumption.

Supply chains are very interdependent, much more so than people imagine, and they are getting massively disrupted as all sorts of businesses shut down.

The result? A flow on effect where even more businesses shut down because it’s easier to do that than adapt to this difficult environment.

The government is making it worse by allowing businesses to put themselves into cold storage, with no fixed costs. No rent, no labour costs, no debt repayments, etc. All government mandated.

As a business manager, you could go for broke and try to make it work, or have a nice holiday and wait for the whole thing to blow over. Australian business types don’t have much character, so taking they’re taking the easy option.

The Chinese on the other hand, they go for it. Someone’s else’s loss is their gain. You make cars one day, then a pandemic hits and days later, you’re making face masks.

The result? It’s not a lack of liquidity for business that will result in the next recession; it’s a short-term lack of customers and a lack of balls. When it’s all done at least another 25%, if not more, of Australian business activity will be transferred to China. Another 25% will be bought at bargain prices by the Chinese.

Although it begs the question, why bother? There will be a flow on effect to Australian consumers such that they will not be able to afford as much. So as a market, we’ll be shite for just about anyone.

The share market will take a big hit just like the GFC. But for different reasons. Then we had a liquidity crisis. Now we have a consumption crisis. At the end of every supply chain, there lies consumer consumption that ultimately drives all business activity.

So the best thing a government could do is to keep people employed and give businesses good reasons not to shut down.

The super funds should wait for the stock markets to halve in value and then go on an overseas spending spree. This assumes there will be some sort of bounce in the global economy when the virus thing settles down.

That’ll be true unless it lasts longer than 2 years. My rough estimate is that the half life of business knowledge and skill in hibernation is about one year. So after 2 years you pretty much have to start from scratch and re-invent and re-learn everything that you once knew, as a business and as a supply chain.

Two nights back I had a dream wherein I was listening to Bob Dylan play live.

The odd thing was he was playing a song that doesn’t actually exist. And it was great.

Which means that I composed, played, recorded and arranged a Dylan track completely in my head.

Since this is very unlikely to have turned out very well (that is, I have no musical talent or skill) I can only conclude that my brain was lying to me. It must have been actual shite.

Calibration achieved; dreams can be complete lies. Don’t trust them.

In Australia in 2017 the “common” flu deaths was 1,255 with 251,142 lab-confirmed cases of flu. A death rate of 0.5%.
(source: https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/3303.0~2017~Main%20Features~Deaths%20due%20to%20influenza~5)So far, of all countries, Germany has had the most “aggressive” (read; intensive) testing for coronavirus. The number of deaths to date in Germany is 267 and the number of clinically proven cases is 43,938. A death rate of 0.6%
(source: https://www.worldometers.info/coronavirus/)There’s plenty of error in these numbers. The biggest issues:1. Unreported clinically proven cases not included in the data, for both coronavirus and especially the common flu, since there usually isn’t the same degree of panic associated with common flu symptoms. Also, for both common flu and coronavirus, there are many unreported asymptomatic cases.2. The deaths recorded against these diseases probably needs to be weighted for each case, based on the severity of the underlying conditions. That is, most people that died had pre-existing conditions so, for example, a very morbid person maybe shouldn’t be counted as one death, but a small fraction of one since the virus wasn’t the major cause of death but just the last straw. This way the severity of the illnesses being compared could be factored into the statistics.Even allowing for these and other sources of error, the raw death rates for the common flu and the coronavirus currently are very similar despite the fact that many people have partial immunity to the common flu strains, so probably don’t get as sick as they otherwise could.So the real issue with the coronavirus isn’t its morbidity. Rather it is its virulence. Without an vaccines or inherent resistance the virus is supposedly free to spread completely through the population. Especially since it spreads during the symptomless early stages of infection.For example the population of Australia is 24,600,000. If 100% of the people caught the coronavirus and the death rate remained at the German rate of 0.6%, then we could expect 149,488 deaths in the first wave.Note, in 2017 the total number of reported flu cases in Australia was just 251,142, just 1% of the population. That is, without any lockdowns, closures, social distancing and the like, only 1% of the population caught the flu (although this is probably a lower bound to the true figure, because of unreported cases).Assuming the coronavirus mutated it would come back around and each time it would have a lower death rate, and infect less of the population because of (a) inherent partial immunity, and (b) vaccines as developed by then. After a few years it would become just another “flu”.The issue with the coronavirus is that the peak in the first wave of infections and deaths could totally overwhelm the medical system, leading to deaths that otherwise might not have occurred. By way of example, in Italy the death rate from Coronavirus is 10.2%, up from the German baseline of 0.6%. This is primarily a result of the medical system getting overwhelmed, but also the quality of the medical system and the underlying poor health of the elderly population could be contributing factors. The major difference though is probably that the Italians are probably not doing much testing, so the number of reported cases is drastically under-recorded leading to an exaggerated death rate.Our government-led imperatives to slow down the spread of the virus are all based on the proposition that if they do not do so, then the population will be very ready to blame the politicians for any subsequent unnecessary deaths.Country-to-country comparisons will give the electorate the ammunition they need in order to blame the politicians for any lack of action.Since the politicians are elected or rejected by the people, it’s quite Pavlovian of them to behave the way that they are now. Basically, it’s “bugger the economy” for a while.However at some point, re-winding the economy backwards in time (as measured by consumption per capita of energy and raw materials) will cross over some emotional threshold where a majority of the people will consider the effort too great for the benefits of saving yet more people from an untimely death.My guess (based on living a few years) is that after a few weeks of the “big re-set” that we have already wound back to 1990. I don’t think the Australian people will be willing to go back past 1960, no matter how many lives that doesn’t save.The real trick for the silly buggers “in charge” will be to finesse the attenuation of the economy so that the medical system can “just cope”. This way, no unnecessary deaths will occur. As the population gets more resistance and vaccines become available then the economy can slowly adjust back to its previous completely unsustainable state (based on ever-increasing high levels of personal consumption).Of course, nothing will be learned.

The party will stop one day. For good.

Our lives

Our comfort

Our freedom and rights

Luxury

Along comes a plague, and the bottom of the above table is sacrificed for the items above.

Until we run out of items to sacrifice. Then we’re fucked.

Used 1964 model, well used.

It’s in concourse condition. Every part that needed changing has been changed with OEM parts as they conked out . Seriously it’s as good as new.

Blows at bit of smoke when it’s drinking but that’s it. Otherwise mechanically sound and will go another 55 years.

Pistons work a treat. That’s not my opinion but the general opinion of all the passengers.

It has the usual set of upgrades designed to suit my needs. If you don’t like them, good luck trying to change them.

Full and clear title from all ex owners, despite their best efforts.

Willing to loan out on a trial basis to potential buyers but only only on a strict quid pro quo basis.