Author Topic: The day after tomorrow  (Read 8323 times)

Spekulatius

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The day after tomorrow
« on: March 19, 2020, 03:49:58 PM »
1) What is the Economy going to look like when the epidemic is over?
2) How long is it going to take until the economy turns
3) Which industries may take irreversible damage, which may benefit?
4) Economic changes? Are tax rates going up or down? For whom?
5) Political changes?
6) Bailouts, what is likely to happen, who is going to pay for it?
7) Will there be lasting changes to the health care system in the US?

I hope we can do some crowdsourcing here and get some new ideas and variant opinions.

Life is too short for cheap beer and wine.


Viking

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Re: The day after tomorrow
« Reply #1 on: March 19, 2020, 04:24:53 PM »
I would love to hear from people who have first hand knowledge of what is going on in China, South Korea and Taiwan right now. Like how fast the economy is ramping back up (if it is).

Companies with operations in China, like Starbucks, will have an advantage as they will have already established ‘best practices’ in China that they can now fast adapt to operations in other parts of the world.

montizzle

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Re: The day after tomorrow
« Reply #2 on: March 19, 2020, 04:38:19 PM »

Companies with operations in China, like Starbucks, will have an advantage as they will have already established ‘best practices’ in China that they can now fast adapt to operations in other parts of the world.

I work for a global building materials company in Canada. What I've seen at work is spot on with what you've said. We began getting emails as early as mid january about the coronavirus and how it may effect operations, long before anyone in this part of the world was taking it seriously.

My workplace has been surprisingly more co-ordinated and prepared for all of this than from what I've heard from friends in non-international companies. I think a lot of it is corporate learning from experiences in China a few months ago. Interested to see what material impact (workplace infection rates, maintaining level of productivity, etc.) this preparedness will translate to.

ValuePadawan

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Re: The day after tomorrow
« Reply #3 on: March 19, 2020, 04:42:14 PM »
For how long Coronavirus effects last the way I've been thinking about it is the outer bound will be 18-24 months when a vaccine is available and mass manufactured. If developed countries can "pull a China" and lock down their countries for 6 weeks and effectively track back flow cases, cases coming in from other countries, I think domestic business less reliant on global supply chains and commodities can get back to normal whatever normal is at that point.

That will take probably at least 12 weeks from now and will only happen if they perform excellent at contact tracing once the cases begin to decline which is a big if in countries that have had responses that weren't exactly swift to say the least (looking at you Iran, Russia the USA etc).

The airlines are going to be hurting for the next two years at least and if I was the government dust off the Buffett playbook and go for perpetual preferred shares with warrants. Their investment will pay off so taxpayers will be happy and airline shareholders will be grateful for the liquidity. Both sides win.

I think this will make companies reconsider the level to which their supply chains are globalized and along with nationalism having a resurgence the last 5 years more companies will modify their risk by moving production closer to where the products are sold.

This is mostly speculation but it will be interesting how things shape up!

fareastwarriors

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Re: The day after tomorrow
« Reply #4 on: March 19, 2020, 04:55:47 PM »
I would love to hear from people who have first hand knowledge of what is going on in China, South Korea and Taiwan right now. Like how fast the economy is ramping back up (if it is).

Companies with operations in China, like Starbucks, will have an advantage as they will have already established ‘best practices’ in China that they can now fast adapt to operations in other parts of the world.

Owner of a soap, shampoo/conditioner factory in Guangzhou is back to full capacity. They supply lower end SE Asia market. Probably still working through back orders...

His family is back to eating dim sum every day. I guess things are not That bad anymore.

Jurgis

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Re: The day after tomorrow
« Reply #5 on: March 19, 2020, 05:24:15 PM »
1) What is the Economy going to look like when the epidemic is over?
2) How long is it going to take until the economy turns
3) Which industries may take irreversible damage, which may benefit?
4) Economic changes? Are tax rates going up or down? For whom?
5) Political changes?
6) Bailouts, what is likely to happen, who is going to pay for it?
7) Will there be lasting changes to the health care system in the US?

I hope we can do some crowdsourcing here and get some new ideas and variant opinions.

Just for fun:

1) Same as it looked pre pandemic
2) Depends on how the pandemic is handled. Best case: 1-2 quarters, worst case: probably a year. Yeah, I know that vaccine is not gonna be ready for a year-18 months. Economy won't stop for 18 months. People won't shelter-in-place for 18 months.
3) Likely none. There will be companies that go BK though.
4) At some point tax rates will likely go up. Quite possibly not soon.
5) This is not politics section
6) Yes. Deficit will go up. Money will be printed.
7) No.
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Spekulatius

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Re: The day after tomorrow
« Reply #6 on: March 19, 2020, 05:32:41 PM »
For how long Coronavirus effects last the way I've been thinking about it is the outer bound will be 18-24 months when a vaccine is available and mass manufactured. If developed countries can "pull a China" and lock down their countries for 6 weeks and effectively track back flow cases, cases coming in from other countries, I think domestic business less reliant on global supply chains and commodities can get back to normal whatever normal is at that point.

That will take probably at least 12 weeks from now and will only happen if they perform excellent at contact tracing once the cases begin to decline which is a big if in countries that have had responses that weren't exactly swift to say the least (looking at you Iran, Russia the USA etc).


I think the timeframe should be the starting point  to think about how this is playing out. There is still a lot of thinking going around (besides those that still believe in the flu variant) on that this is over in a few weeks. The longer it lasts, the greater the economic damage is going to be.

The 3 month timeframe until things clear up and the normal live more or less can restart sounds about right to me. When we look back at China, this thread got started early in January and now the normalcy returns mid March, so for us starting in March, it seems that June is our best case scenario, assuming a similar timeline. Most likely, it is going to be a longer drawn out affair though.

We do not know if this epidemic is seasonal, but if it is, it might reoccur in Winter. Then we are most likely talking Spring next year. Even if not seasonal, I expect new infection hotspots popping up, but hopefully they will be easier to contain when part of the population is already immune and the government and states know what to do. In any case, it’s going to be a 3 month best case, but more likely one year affair.
Life is too short for cheap beer and wine.

Cigarbutt

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Re: The day after tomorrow
« Reply #7 on: March 19, 2020, 06:33:21 PM »
^Frankly, I don't even know what tomorrow will bring so forget about the day after tomorrow.
Also, from an advice you gave me in September 2018, the aim is to move from understanding to observation, as far as unknowables are concerned.

So, only 7) is discussed here. I'm more optimistic than Jurgis and I think that change will occur from the inside and/or will be imposed from the outside and that may impact many private entities involved in health care. And even if the virus is significant, it's the evolving status of the (economic) host that I worry about. Something along those lines just came out from somebody who is looking for an opportunity:
https://www.newyorker.com/magazine/2020/03/23/why-americans-are-dying-from-despair

Viking

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Re: The day after tomorrow
« Reply #8 on: March 19, 2020, 11:01:48 PM »
Here is a summary of where Italy is at. Not out of the woods yet. And lots of unanswered questions about what the future holds.

https://www.thelocal.it/20200318/when-will-the-coronavirus-epidemic-in-italy-peak

cubsfan

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Re: The day after tomorrow
« Reply #9 on: March 20, 2020, 05:42:04 AM »
So, only 7) is discussed here. I'm more optimistic than Jurgis and I think that change will occur from the inside and/or will be imposed from the outside and that may impact many private entities involved in health care. And even if the virus is significant, it's the evolving status of the (economic) host that I worry about. Something along those lines just came out from somebody who is looking for an opportunity:
https://www.newyorker.com/magazine/2020/03/23/why-americans-are-dying-from-despair

Cigarbutt - great article on the human side of the disaster.

thank you