Economic effects of Covid-19

Discussion in 'COVID-19' started by RPI, 14th Mar, 2021.

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  1. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    {Note from mods: split off from thread What a rout! WA state election }
    They didn't. They did a half ass attempt and still shut stuff down everywhere.
    My doc says I would die if I got Corona and I don't consider that my life is worth it.
    Way more people have died, will die and have had their lives ruined by the economic devastation. One of my clients I know of killed himself, dozens more have lost everything they worked for years or decades to build up. And SEQ has fared better than most so far. The economic fallout hasn't even started. We are in the magic government money tree phase.
     
    Last edited by a moderator: 14th Mar, 2021
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  2. kierank

    kierank Well-Known Member

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    I believe our governments did a half ass attempt initially even though they put health first. Look at what happened in NSW and Victoria.

    To me, it was obvious what governments had to do. For example, we started wearing masks from early March 2020, even before ScoMo declared COVID a pandemic.
    Only after things got out of control and then they tried to open up the economies/businesses way too soon (eg Christmas in UK)
    In the US, 550,000 have died from COVID. Are you suggesting “way more people have died, will die and have had their lives ruined by the economic devastation” in the US?

    Maybe, their government should have put health first?
    I understand the pain of suicide.

    Mental health is a awful, largely hidden disease. I lost a cousin (a school principal who hung himself in the family home) but that was before COVID.

    Hopefully, a bigger/stronger light will be shone on mental health issues as a result of of COVID.
    I understand the pain of losing everything.

    My in-laws were in business, lost everything and went bankrupt (in their 50’s).

    My two business partners who bought me out subsequently lost everything and went bankrupt (in their late 50’s).

    Even though both occurred before COVID, I lived with their pain (my in-laws moved in with us for years as they were homeless).

    Sovereign risk has always been a business risk that business owners should be aware of, have plans/funds to mitigate, ...
    Obviously, I have a way more positive view of the economy, especially in Australia.

    The global economy, especially the economies of countries like UK and US, aren’t anyway near as rosy. That could have an impact on our economy, hopefully not.
     
    Last edited: 14th Mar, 2021
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  3. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    500K died. I think the median age is something like 80 and with people having 2 co-morbidities. My aunty is one of the Covid deaths in the UK. Was 92 and been sick for quite a few years. So who knows what the actual number who died from covid is or what the reduce in lifespan years are. If you are of that age and have a dozen other things wrong with you then maybe covid did kill you, maybe you just didn't wake up or maybe it was something else.

    But yes I am suggesting that the numbers have been blown out of proportion and that the devastation economically has been and will be way worse than if we had not shut down economies. And yes. Deaths of people who wouldn't have died shortly and had a different cause of death is way less than those who have killed themselves or had their lives ruined.

    And yes I have a very pessimistic view of where the economy is headed. We have been putting everything on the credit card for years and were already overdue for a decent recession. Now I think we will have one that we can't borrow our way out. I'm at about 20% chance that we struggle our way through. You can't kill that many businesses, and borrow that much money and continue on a growth trajectory
     
    Last edited: 14th Mar, 2021
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  4. kierank

    kierank Well-Known Member

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    In my haste, I initially posted numbers of cases (30M+). I have corrected that error to 550,000 deaths. That is still an incredible number of deaths.

    I am going to stop posting because we are sidetracking this thread and it is obvious that we see the world differently.

    Overall, I am very happy with how our Federal and State Governments handled the pandemic (yes, mistakes were made, lessons were learnt, ...), far better than a lot of other countries.
     
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  5. paulF

    paulF Well-Known Member

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    Indeed, give it a few weeks when the government stops the Job Keeper payments on the 28th March, that's when the real pain begins.
    Victoria has around 600K people on job Keeper, it's going to be bad.
     
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  6. paulF

    paulF Well-Known Member

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    What makes you say that?
     
  7. geoffw

    geoffw Moderator Staff Member

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    And I had a cousin in law who died in Mexico, 50s and healthy.

    Many healthy people died. Many people above 65 who died would have had many years ahead of them.

    Many people died with co-morbidities. High blood pressure (the most common comorbidity cause of death with covid-19 patients) and being overweight for instance. They are not death sentences. A person's death should not be accepted just because they are overweight, have a non threatening autoimmune disorder, or diabetes, for instance.

    The effects are bad. But we had a choice of taking drastic action to stop the spread of the virus, or to keep the economy running. The US chose to "sort of" keep the economy running, while also taking some action. Their infection rates and death rates are twenty times that of Australia - and the economy is in no better shape than Australia's.

    I think we took the right course of action.
     
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  8. kierank

    kierank Well-Known Member

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    That is my view. That is why I posted it.
     
  9. paulF

    paulF Well-Known Member

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    Obviously that is your view but what i meant to ask is what makes you so positive from an economics perspective about things to come ?
    The government opening the immigration tap again after vaccination roll out? More people spending their savings in OZ instead of internationally.... Or is it just hopium?
     
  10. Speede

    Speede Well-Known Member

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    Keep the hopium up....as if aus economy is good...stonk market is not the aus economy.
     
  11. kierank

    kierank Well-Known Member

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    Every Quarter, I update my Net Worth spreadsheet. Because I will be in Melbourne at the end of March, I updated my spreadsheet earlier today.

    Key numbers were:
    1. SMSF balance up 30% YoY
    2. Net Worth up 14% YoY
    3. Total Debt down 68% YoY
    4. LVR across property portfolio is down from 42% a year ago to 18.5% now
    5. LVR across total assets is down from 27.6% a year ago to 10.7% now

    From a financial perspective, it would be great to have a pandemic every year. Just kidding :eek:.

    Out of 25M Australians, I don''t believe I am the only one who has done well in the last 12 months. I am sure some have done a lot better than me.

    I know some people have done it tough and I realise the media is full of these stories. But these sorts of stories were around prior to COVID, during COVID and they will be around post COVID.

    As I posted earlier in this thread, I know people who have committed suicide (a cousin), gone bankrupt (in-laws and prior business partners), ... I know this is terrible but my examples happened before COVID, some experienced it during COVID and others will experience it post COVID. That doesn't make it right but that is life.

    I have been posting on PC since last August (when Melbourne was in its 3 months lockdown) that a Golden Age is coming. My stats above supports my view, at least for me and I guess for others.

    I don't believe the Golden Age is over yet. But I could be way wrong - time will tell.
     
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  12. Lizzie

    Lizzie Well-Known Member

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    I think a lot of what happened economically was on the cards already - recession - work from home - change of nationwide business direction - embracing of renewables - appreciating community - domestic travel ... it was simply bought forward

    The economy needs a good shake out ruffle every few decades (such at 80's and early 2000's) to reset, and correct the course. Yes, it is painful for some - and extremely painful for others - but it is also a positive in disguise for the majority going forward
     
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  13. ttn

    ttn Well-Known Member

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    I had that same view too when last year I could have bought AfterPay shares less than $10 as I thought with uncertainty why people would buy and delaying in payments unless they got nothing to lose (not saying they would die and debts wiped off) but when the govt pumped $ into the economy and look at where we are now (shares back up again, houses up the roof, etc) and after April if we are in need again, the govt just pump more $ again and we are off to new records again
     
  14. gman65

    gman65 Well-Known Member

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    Usually I am quite negative on the economy, but this time I am of the opposite opinion..we had our recession, and the best times are ahead of these. Things have gone v shaped, and this has already surprised many.

    With property booming across Australia and the uplift effect this has, coupled with rising economic prospects in US and EU ahead of us, there is much to be positive about.

    Things have changed for sure, but there are massive opportunities ahead in certain industries as they adapt and replace the old.
     
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  15. Trainee

    Trainee Well-Known Member

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    One interpretation might be it would have been very bad if nothing was done last year. But the government threw a lot of money into it and most importantly kept confidence up. So even if there is a drop from the stimulus ending, the damage will be a lot less.
     
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  16. MTR

    MTR Well-Known Member

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    Stimulus still required to power on

    Australia Economy Surges Into 2021 With Cashed Up Households
     
  17. MTR

    MTR Well-Known Member

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    Last edited: 7th Aug, 2021
  18. kierank

    kierank Well-Known Member

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  19. Lizzie

    Lizzie Well-Known Member

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    I agree. Failure rates for businesses in Australia are high in the best of times ... throw in a changing society (changing HOW we do things) and rates will be higher as some are unable to pivot.

    Although the pandemic is ghastly, I believe it's simply bought these changes forward. Those businesses that have been able to move with a different society are booming

    Business Failure Rate in Australia - Why is it so high? | Inline Partners
     
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  20. Scott No Mates

    Scott No Mates Well-Known Member

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    You've hit the nail on the head, those businesses that have evolved have thrived.

    I have heard anecdotes of eat-in restaurants which are now fully pick-up only or offering take home meals, other suppliers who now provide home delivery services and providing a complete contactless service.

    Some industries are booming regardless however facing supply issues eg construction however it's not across the board.
     
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