Coronavirus and property values

China is expected to inject 1.7 billion USD of liquidity into the finance market on Monday.

 

I think the difference is during the GFC they started slashing rates after things had begun crashing and the financial crisis was already underway whilst now interest rates are dropping whilst markets are rising which feels like it will just continue to push them up. That’s what I got from reading old articles anyway. Banks were already going under between 2005-2008.

 

Officially china's debt is about US 5trillion++. 1.7b is not going to do much once that debt starts unwinding. And if Beijing and Shanghai economies come to a standstill, throwing money is not going to work as there is no one to spend it or buy stuff with it.

 

So then it looks like the markets will open to the start of absolute pandemonium this morning.

 

Contrarian position here:
- china government won't take significant GDP hit lying down,
- already taken steps to manage financial impacts,
-their preferred way to stimulate growth is through infrastructure
- Infrastructure requires hard commodities, the kind AU sell a lot of
- scale of virus spread and following China response will determine impact for AU, could be small, could be significant
- wait for signs of stability and buy resource stocks?
- not financial advice

 

Yup looks like pandemonium in china today. Iron ore is down 8percent max out for the day too lol. Not convinced? Wait till it spreads to other markets. Bubble popping now.

Chinese Stocks Sink 9% as Markets Reopen to Crisis After Break

 

This virus will take at least another month and half to play out. IF they can contain it properly in just wuhan. If it starts spreading like crazy in beijing its game over for about three months at least. Wuhan only has 86.5million, beijing shanghai and shenzhen have more and will have bigger economic impact. Cant invest in infrastructure during a quarantine situation.

 

For sure, today is not the day but it is a trade to watch for in the future

 

Coronavirus could be ‘death blow’ for small Chinese manufacturers

 

17.3k total cases this morning. Number of new cases ramping up exponentially. Soon we will be at 100k

 

Are you surprised...we are talking about China...where there is no transparency......they jail people who report the truth!

Whilst I feel sorry for the poor innocent Chinese people...it is probably a good thing for China to feel economic pain....it will bring more changes within the Central Government as that is what they fear a revolution as unemployment increases...they take more notice of this than anything else.

The Chinese people will put up with a lot...but if their living standard suffer or things get tougher for the average layman..it will get interesting....

The boys in American intelligence (ie CIA) are proabably grinning like Cheshire cats.

 

Nope not surprised. I put the total at more than a million cases, its been going around since december last year. Didnt even originate from the market as the chinese gov. claims

China 1.35b people, wuhan 86.5million. at a penetration rate of 10percent similar to flu thats at least 8.6m in wuhan who will get it and 135m nationwide. 2percent mortality... CIA has done there math, hence usa first to ban all flights...

 

CIA probably done this to begin with.

 

On the flip side many speculate its was a leak from Wuhan Bioweapons lab located near the fish market. Who knows...

 

so what does this mean for Aus real estate? Is the 40% crash finally about to happen? How can such high values be maintained if China is about to experience economic Armageddon?

 

No one really knows...as I said there are people in China who know..like their doctors who are very dedicated...and some have shown to be selfless. The issue is the Chinese govt...they cannot be trusted!
Wuhan officials criticised for slow response to outbreak

As for property values....it will affect prices of property there and will affect their economy.

Apart from Sydney (which has the highest population of Chinese) and largest financial centre...and maybe Melbourne. I think it will be business as usual for most of the Aussie property market.

 

How long have you been waiting for the crash?

 

Unless we get tipped into a real recession, then its negative nationwide. W.A and QLD in particular will be hit pretty bad when commodity prices crash..

With less than 1% left, I don't think RBA can do much to avoid a recession this time round. Unless we get lucky and Wuhan virus clears up next week.

 

The OZ economy may go into a technical recession...but I can't see there being a 40% crash...as a matter of fact more money may flow into Real Estate from the Share Market.

But I can't see Melb and Sydney jumping up massively.....in prices...as there will be some fear of people losing jobs.

 

if China crashes wouldn’t that cause a global financial crises?