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Tuesday, 7 April 2020
Recently trending Why we’re not buying the market yetHow $200 billion is magically createdHoward Marks on 'Which way now?'Drawdown reductions needed for retirees - UPDATED POLICYWhat are the possible economic effects of COVID-19 on the world economy?
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Bill Gates warned the world in 2015 that we were not ready for the next inevitable pandemic, and we ignored him. The Washington Post has provided free access to his updated views.
Australia is in a relatively good position to borrow $200 billion, with the RBA using printed money to buy bonds in the market. The long-term consequences are better than the alternative.
The turning point in this crisis will be when the number of new COVID-19 cases starts to decrease. Until then, can we mitigate the damage to businesses and the economy so that we can snap back?
In a widely-quoted scenario using estimated attack and fatality rates of coronavirus, about 0.07% of the population of the US dies. That's about 230,000 people, which the market is not ready for.
This detailed analysis of infections, deaths, drugs and vaccines includes an optimistic scenario: perhaps US and Australian infection numbers will peak in early to mid-April with a decline after.
Andrew Baker is well-known as a superannuation consultant. Now working in the UK, he was caught in France with his family and is in lockdown. He worries Australian policy was too slow.
Coronavirus is a particular worry compared to past epidemics because the world is now so interdependent, but the stockmarket has a habit of exaggerating threats as well as opportunities.
Quantum computers have a theoretical ability to calculate millions of possibilities in seconds, yet it may take time before we see a breakthrough in the practical applications of sub-atomic computing.
Our close links to China mean the impact of the virus could tip the local economy into recession and certain sectors such as resources, education and travel will be harder hit than others.
As we approach the 2020s, we are sailing into uncertain waters at best. These times also have some historical precedents, but we need to make important reforms before our luck runs out.
Prolonging a recovery with stimulus could lead to a worse slump later. Even today, policymakers are haunted by actions taken in 1937 which led to a loss of production and jobs and a falling GDP.
Global trends will create opportunities in Asia, including dealing with some of the world's youngest and oldest populations. Australia's Free Trade Agreement with ASEAN this week a valuable step.
The Australian market bounced back last Friday (13th) and Monday (16th) tempting analysts to call the bottom of the coronavirus scare. This is too early as the impact on companies is not yet evident.
Howard Marks is the largest investor in the world in distressed securities. What does he think after checking the virus positives and negatives, and how much has he changed his mind in only a few days?
During the GFC, in the face of rapid falls in super balances, the minimum drawdowns required for pensions were reduced by 50% to help preserve overall retirement savings. It's time for a repeat.