Virus vs future economic/trading climate...
Discussion
As the current fascinating and thoroughly destructive pandemic takes hold I find myself in the position of trying to evaluate the future trading climate (for the purpose of cashflow / borrowing requirements) factoring in the how the virus is behaving and the governments reaction to it.
More data will come online in the next 2 weeks from the guinea pigs in Europe (Denmark, Austria, Germany Etc..).
My current thoughts are we're probably around 1.5 - 2 million persons who have been infected. Mortality is probably around 0.7 - 1% making the virus lethal enough to warrant continual social distancing measures until a workable vaccine is created or a successful mortality reducing treatment regime for those who end up in hospital. So, working from the basis that we have a long way to go 'its marathon' the effect to the economy is going to be huge.
I think the OBR are talking out their arses! I cannot see a bounce back I see mass lay-offs driven by clear cut reduction in consumerism, driven by a multitude of factors not limited to but including - Job security, reduction in asset prices, liquidity, change in attitude to debt, re-assessment of priorities putting consumerism further down ones list of things that are important to them.
on that basis I see at least a 20% average reduction in revenue across the board when trading returns to the new normal. For me the most likely date for trading returning to the new social distance normal being July/August.
Anyone else have any thoughts?
More data will come online in the next 2 weeks from the guinea pigs in Europe (Denmark, Austria, Germany Etc..).
My current thoughts are we're probably around 1.5 - 2 million persons who have been infected. Mortality is probably around 0.7 - 1% making the virus lethal enough to warrant continual social distancing measures until a workable vaccine is created or a successful mortality reducing treatment regime for those who end up in hospital. So, working from the basis that we have a long way to go 'its marathon' the effect to the economy is going to be huge.
I think the OBR are talking out their arses! I cannot see a bounce back I see mass lay-offs driven by clear cut reduction in consumerism, driven by a multitude of factors not limited to but including - Job security, reduction in asset prices, liquidity, change in attitude to debt, re-assessment of priorities putting consumerism further down ones list of things that are important to them.
on that basis I see at least a 20% average reduction in revenue across the board when trading returns to the new normal. For me the most likely date for trading returning to the new social distance normal being July/August.
Anyone else have any thoughts?
Interesting discussion
I see a lot more of the population having this, or have had this. I reckon your looking more like 20% plus, something like 70% of cases are asymptomatic.
I can see what the OBR said happening, I think there will be a pent up energy were people want to get out a shop, dine etc etc. I mean people haven't stopped shopping online have they?
So I see a 'V' recovery happening over about 9 months, with us getting back to pre-pandemic levels about feb/March 2021
As somebody who runs an SME, lets say it will be interest how this pans out
I see a lot more of the population having this, or have had this. I reckon your looking more like 20% plus, something like 70% of cases are asymptomatic.
I can see what the OBR said happening, I think there will be a pent up energy were people want to get out a shop, dine etc etc. I mean people haven't stopped shopping online have they?
So I see a 'V' recovery happening over about 9 months, with us getting back to pre-pandemic levels about feb/March 2021
As somebody who runs an SME, lets say it will be interest how this pans out
I'm with Birkin.
The economy was very good until the virus appeared and put everything on hold. But the virus will go away.
The long-term issue is how governments will deal with the massive hole in their budgets. For us, we can scrap HS2, which IMHO was the first bad decision Boris made, and spend the money that would have been spent on a silly white elephant on filling the hole.
The economy was very good until the virus appeared and put everything on hold. But the virus will go away.
The long-term issue is how governments will deal with the massive hole in their budgets. For us, we can scrap HS2, which IMHO was the first bad decision Boris made, and spend the money that would have been spent on a silly white elephant on filling the hole.
Simpo Two said:
I'm with Birkin.
The economy was very good until the virus appeared and put everything on hold. But the virus will go away.
The long-term issue is how governments will deal with the massive hole in their budgets. For us, we can scrap HS2, which IMHO was the first bad decision Boris made, and spend the money that would have been spent on a silly white elephant on filling the hole.
I speak to a lot of people that have very much taken this quarantine time to reflect on what they wanted from life and what they were achieving, the common theme being that the average set up (2.2) requires a lot of work hours to function, causes a lot of stress and it revolves around money. The economy was very good until the virus appeared and put everything on hold. But the virus will go away.
The long-term issue is how governments will deal with the massive hole in their budgets. For us, we can scrap HS2, which IMHO was the first bad decision Boris made, and spend the money that would have been spent on a silly white elephant on filling the hole.
Off the back of this I can see a change in attitude to how people spend their money, time and where they seek to gain value/quality of life. The other common denominator is people have missed the humans in their lives most and not the ability to use their possessions.
As for the debt, considering the Gov owns the BOE and interest rates are at .1% I don't see it as an issue, as every other developed nation will be in the same boat - I can see a good argument for a worldwide central bank debt write off.
If you start scrapping large infrastructure projects, then you would only be achieving less spending in the real economy and thus look down the road of mass layoffs and increasing unemployment.
Birkin1932 said:
I think the govt said yesterday that HS2 will start immediately.
Shallow me misses driving my cars
I miss walking round and spending cash
Your average guy/girl will just carry on as normal, IF they haven't lost their job, the key to this is keep the masses in work
Apologies if it sounded that I was implying those who spend money are shallow!!Shallow me misses driving my cars
I miss walking round and spending cash
Your average guy/girl will just carry on as normal, IF they haven't lost their job, the key to this is keep the masses in work
So the UK have 8.5Million over 70, should longer lockdowns be extended for this age group, which I see as highly likely, the economy is unlikely to function like before. I know several people over 70 who will be isolating for the 12 weeks/longer, and they are saving a fortune, money they would normally be spending in restaurants/pubs/garden centres etc...
If each business sheds 10% of staff as a result of reducing consumerism then we are going to see double digit unemployment and a recession like none seen before. I just cannot see how the OBR are predicting a boom!!
I would like to add I believe the government can support the economy until a vaccine is created/herd immunity is proved but it is going to require some serious creativity!
PT88 said:
I just cannot see how the OBR are predicting a boom!!
They may know more than you do. But you could go with whatever august body it was that predicted a 14% fall in GDP if you prefer. The truth is 'nobody actually knows'. Perhaps a retail boom in Q3-4 2020 then bust 2021?Basically there's nothing you can do about it so enjoy it
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