Will these unprecedented stimuli support a much quicker economic recovery?

Discussion in 'Property Market Economics' started by Sackie, 31st Mar, 2020.

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  1. Sackie

    Sackie Well-Known Member Premium Member

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    I don't think we saw anything like this during the GFC in terms of wide reaching government support that we are seeing now.

    Is it enough to avoid a recession and kickstart our stock and RE markets sooner than otherwise we'd expect?
     
  2. Trainee

    Trainee Well-Known Member

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    Doubt it. But it will make the recession less bad than it otherwise would be.

    The US put a massive amount of stimulus in during the gfc. They still had a bad recession, but avoided a 30s type downturn.
     
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  3. HUGH72

    HUGH72 Well-Known Member

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    No chance of avoiding a deep recession from here, with 6 million people additional people dependant on government support. It just limits the damage, some businesses just won’t be there on the other side. The confidence built up over 30 years of continuous economic growth has been destroyed, it might take 5 years minimum for it to return and level of wealth destruction is hard to comprehend.
     
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  4. hammer

    hammer Well-Known Member

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    I dunno. To say the stimulus has been thorough and plentiful would be quite the understatement!

    Sorting out the wages issue yesterday might well be enough to keep things ticking along?

    My only pause is that there hasn't been a lot of major companies go under as yet. If a few dominoes start to fall then maybe everything will go pear shaped again.

    But I'm just a minnow. Very much looking forward to reading the responses of far more experienced posters!
     
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  5. marmot

    marmot Well-Known Member

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    The way the government is dealing with flattening the curve , its actually going to last a lot longer, instead of a sudden spike with hospitals completely overwhelmed ,they are planning to slow it down with manageable numbers for the health system , at the current rate they are dealing with the public health issue first and foremost.
    The economic fallout with huge, then when its finished the government will need billions of dollars more to kickstart the economy.

    Virgin Australia are now looking for a bail out of up to $1.4 billion , and there will be many other along the way.
    https://www.perthnow.com.au/news/av...p-to-survive-covid-19-downturn-ng-b881504841z
     
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  6. Omnidragon

    Omnidragon Well-Known Member

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    Not sure. If printing money helps people avoid recessions or poverty, there wouldn’t be Congo or Russia. We’d all be China or Switzerland.

    That said, if you do it for a short period, you may get away with it. Drag it on, and you’ll lose your AUD and become a much poorer country overall.
     
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  7. marmot

    marmot Well-Known Member

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    It looks like China may be doing in a little as possible 10 weeks .
    Our country is probably looking at 6 months, by which time other countries are well and truly back near full pace, with our supply lines virtually still closed and many Australian suppliers unable to get goods back into their markets due to the very high cost of international airfreight, until commercial airlines start flying here again.
     
  8. JDP1

    JDP1 Well-Known Member

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    Not a chance. It will be a slow and painful recovery economically.
    There is nothing that will light a fire under shares (other than low IR and maybe some fiscal policy that will quickly come to an end once we are on top of the situation).
    Unlikely recipients of handouts will spend on shares. Some will, but a lot won't.
    At the end of the day, ya gotta do stuff that the world will pay money for. We dont have much (other than commodities), and that's the main reason why I think the economy will be slow to recover.
     
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  9. Omnidragon

    Omnidragon Well-Known Member

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    6 months is pretty long and experimental.

    I’m feeling like they’re going to **** the economy up more by doing this than the virus will.

    China’s going pretty well atm. All my friends’ factories Are back up (albeit western orders have fallen). Chinese people generally also have high savings so they were able to ride it out pretty easily.
     
    Last edited by a moderator: 31st Mar, 2020
  10. Player

    Player Well-Known Member

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    We will enter (technical) recession but I think depression will be avoided. It will be left for another time and possibly pushed out to other generations.

    Timeline all depends how the pandemic recovery plays out and whether or not we see a recurrence of cases and deaths. Stock market volatility will continue
     
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  11. Sackie

    Sackie Well-Known Member Premium Member

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    Interesting takes. How do you all see real estate play out over the next 12 months?
     
  12. einentiva

    einentiva Well-Known Member

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    I reckon real estate 10-15% quick drop followed by stagnation for a couple of years. Good buyer window potentially.
     
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  13. LibGS

    LibGS Well-Known Member

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    If 150k die in US how will the DOW and ASX 200 look?
     
  14. paulF

    paulF Well-Known Member

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    Your friends my be in on a nasty surprise after all this is done and dusted... I don't think this will end well for Chinese manufacturing. Many countries are realising how dangerous it is to over rely on China's manufacturing.
     
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  15. marmot

    marmot Well-Known Member

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    No evictions = No Landlord insurance
    No L/L ins= will banks still write out investor loans.
     
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  16. Player

    Player Well-Known Member

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    My glass is uncommonly half empty right now. Not sure if you took my post to be bullish.

    Quite likely US might hit those numbers. There is definitely more carnage ahead. I feel they will do whatever they can to avoid a depression which would probably claim more lives than the virus itself :(
     
  17. Melbourne_guy

    Melbourne_guy Well-Known Member

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    A property that was for a few weeks advertised at $639k fixed, is today advertised as an online auction with a guide of $540-$590k. Looks like a distressed seller to me.
     
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  18. Woodjda

    Woodjda Well-Known Member

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    Not sure deaths impact markets much. But what do the DOW and ASX look like when companies like Facebook, Google and Apple announce revenue drops of 20%+.
     
  19. willair

    willair Well-Known Member Premium Member

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    I have not looked at anything for the past few days ,only the last hour or so when the ASX closed and as a lot will learn very quickly that never allowing a short term trade turn into a long term trade the way the market and the swing range is starting to work in this market ..
    The big worry i think is not what happens in Australia or the USA but if Europe collapses altogether ..
     
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  20. Trainee

    Trainee Well-Known Member

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    what do you think has driven them 30% off the highs?