The Covid-19 virus is getting worse in some places, especially Italy but it is also getting a hold in Spain.
And following a bad week on sharemarkets in the last two weeks there are even bigger drops this week, with the Dow Jones slumping.
At the same time oil prices have crashed by more than 20%.
The spread of the virus seems under control in New Zealand for now, but the economic effects are significant with Air New Zealand scaling back operations and many businesses under stress.
We may benefit from plunging oil prices, but our stock market (and Kiwisaver investments) is suffering, and it is likely to follow \world markets down and get worse today.
And problems around the world are much worse, especially currently in Italy where they are shutting down a lot of the country to try and stop the virus spreading.
Reuters: EU seeks to tackle coronavirus as Italy locks down north, prisoners riot
EU leaders will seek a coordinated response to the coronavirus after global markets plunged on Monday and Italy sealed off much of its industrial north, where six prisoners were killed in a riot over curbs on visits.
Joining the global rout, triggered by a 22% slump in oil prices, Wall Street’s main share indexes dropped 7% and the Dow Jones Industrials crashed 2,000 points – which would be its biggest ever one-day ever if there is no recovery by the close.
More than 110,000 people have been infected in 105 countries and territories, and 3,800 have died, the vast majority in mainland China, according to a Reuters tally.
With Italy’s economy already on the brink of recession, bars and restaurants in Lombardy were ordered to close or to restrict entry and maintain a distance of at least a meter between people on their premises.
Major sporting events in Italy, including top-flight Serie A football, will be played without spectators for a month.
This must have a major impact in the Italian economy. And the virus is spreading in Spain.
In Spain, schools were closed in the town of Labastida near Vitoria in the Basque country after nearly 150 cases of coronavirus were identified in the region.
Spain has reported 999 cases in all, most of them in two areas around Madrid and around Vitoria in the north. Prime Minister Pedro Sanchez said it had prepared an emergency plan to deal with the economic consequences of the virus.
It is improving in regions that were first hit.
China and South Korea, Asia’s second-worst-hit country, both reported a slowdown in new infections.
Mainland China, outside Hubei province, center of the outbreak, reported no new locally transmitted coronavirus cases for the second day on Monday, but a top Communist Party official warned people against dropping their guard.
South Korea reported 165 new coronavirus cases, bringing the national tally to 7,478, while the death toll rose by one to 51.
The New Zealand Government is rolling out economic measures.
Beehive: Cabinet approves Business Continuity Package in response to COVID-19
Cabinet today approved the development of a Business Continuity Package to help support the economy through the disruption caused by COVID-19.
The Business Continuity Package includes:
- a targeted wage subsidy scheme for workers in the most adversely affected sectors.
- training and re-deployment options for affected employees; and
- working with banks on the potential for future working capital support for companies that face temporary credit constraints;
As part of the package:
- The Treasury and IRD have been directed to develop tax policy options in line with the goal of reducing the impact for affected businesses, to support businesses to maintain operational continuity.
- The Treasury and MSD have been directed to develop policy options to support households to maintain incomes and labour market attachment.
The detail of this package is now being worked through. It will be discussed again at the Cabinet COVID-19 committee on Wednesday, and the Government expects to be in a position to make further detailed announcements next week.
So a bit of dabbling so far.
“New Zealand is well-placed to respond to COVID-19. We have been running surpluses and our net debt position at 19.5% of GDP is well below what we inherited, and well below other countries,” Finance Minister Grant Robertson says.
But if world markets crash they will drag us down, and that could have a major impact.
Newshub: BNZ becomes first major New Zealand bank to predict a recession
BNZ is now using the much-dreaded R-word, saying it’s more than likely there’ll be a recession this year.
“Everyone sort of panics when they hear the word recession,” BNZ head of research Stephen Toplis said. “It’s like the whole world’s going to fall in.
That may be happening now.
CNBC: Oil nosedives as Saudi Arabia and Russia set off ‘scorched earth’ price war
Oil prices fell through the floor in early trading Monday, tanking as much as 30% after Saudi Arabia slashed its crude prices for buyers. The kingdom is reportedly preparing to open the taps in an apparent retaliation for Russia’s unwillingness to cut its own output.
- Oil prices are down nearly 50% for the year after OPEC+ talks collapsed and Saudi Arabia announced slashed prices in an apparent price war with Russia.
- With previously agreed OPEC+ production cuts expiring at the end of March, Saudi Arabia and Russia can theoretically pump as much crude as they want.
- An oil price war will have massive geopolitical consequences, pummeling markets already shaken by the new coronavirus, COVID-19.
Reuters: Wall Street pounded by oil crash, virus fears
Wall Street’s main stock indexes plummeted about 5% on Monday, as a slump in oil prices and the rapid spread of the coronavirus amplified fears of a global recession on the anniversary of the U.S. stock market’s longest bull run.
The energy .SPNY index plunged 18.2% to its lowest level since August 2004 and crude prices were on track for their worst day in three decades as Saudi Arabia and Russia moved to significantly ramp up production after the collapse of a supply cut agreement. [O/R]
Companies listed on the S&P 500 have now lost more than $5 trillion in value in a sell-off sparked by fears that the coronavirus epidemic could tip the global economy into recession.
That report is out of date, Wall Street has got progressively worse through the day, with several trading haalts to try to pause the slide.
At 2:15 pm Monday in New York the Dow Jones is down 7.3% for the day.
The NZX already dropped 2.94% in Monday trading and will be affected by international markets today. All we can do is wait and see what happens.
And all the New Zealand Government can do is try to limit the damage here, but the may be chasing a bear.
Your NZ 
Pete George
/ 10th March 2020Newsroom: Questions remain over Govt’s coronavirus response
https://www.newsroom.co.nz/2020/03/10/1075202/questions-remain-over-govts-coronavirus-response
Pete George
/ 10th March 2020Duker
/ 10th March 2020Here we go again . Lazy Newsroom recycling headlines about ‘Questions remain’ yet again.
Its like they are saying ‘Our reporters dont leave the office and talk to real politicians, public servants or business leaders so we write this guff instead.’
A real reporter like Rod Oram who writes for Newsroom apparently is doing the ‘middle aged guy in lycra cycle tour’. At least its worth reading his musings
Whos asking these questions ? Is there a single person they spoke to that has a question ? They do say ‘The policy’ has been announced’ but lo and behold all the fine details have yet to come .
Is there any other way?
Government Bureaucracy 101 . Policy – Detail -Implement. Not the other way round
Its a recycled ‘Questions remain’ template that can fit any story. Junk news for Facebook
Duker
/ 10th March 2020Hers how real reporters work. Todays NZ herald story on the same topic
Coronavirus: Government may step in to guarantee loans to Covid-19 hit businesses
Its called reporting for a reason
“BusinessNZ chief executive Kirk Hope said wage subsidies, and a pledge that government departments would pay their bills quickly, could be in place soon.
and other
“Michael Reddell, a former senior official at the Reserve Bank said Robertson’s statements suggested the banks and the government may come up with a scheme where a company’s bank remained liable for existing loans, but if further credit was required, some or all of the liability would fall on the Crown.
and again
“In a bid to boost confidence in the banking system, the Reserve Bank and the New Zealand Bankers’ Association issued a joint statement saying banks were prepared to cope with Covid-19. Governor Adrian Orr said the Reserve Bank was monitoring for signs of funding market pressures or emerging signs of credit stress.
and yet again
“NZBA chief executive Roger Beaumont said banks were prepared to discuss the possibility of suspending principal payments or restructuring loans, providing access to short term funding, or referring customers to budgeting services.
Thats 4 business and Reserve bank leaders quoted in areal story. Not the garbage template driven storys coming out of Newsroom
Pete George
/ 10th March 2020RNZ – Coronavirus: Businesses call for speed, clarity on Covid-19 assistance
https://www.rnz.co.nz/news/political/411336/coronavirus-businesses-call-for-speed-clarity-on-covid-19-assistance
Pete George
/ 10th March 2020Pete George
/ 10th March 2020Blazer
/ 10th March 2020market indicies are well overdue for a correction.
That the neo liberal devices of the 80’s are going to result in a recession is guaranteed.
Trying to combat deflation with interest rates, by expanding the money supply is laughable.
Covid19 is a trigger for mayhem in international markets.
Trump is leading the way back to the protectionism and tariffs of the early 20th century,as the OECD is drowning in unpayable..DEBT.
As they say ‘when your neighbour loses his job its a recession….when you lose yours its a…depression’.
Corky
/ 10th March 2020I wonder, Blazer, if it’s finally dawning on you the importance of capitalism for our well being?
BTW…would you accept a vaccination shot should the Israelis deliver on their promise. Given your barely disguised contempt for the Jewish state…I believe you would rather die?
🤔
Blazer
/ 10th March 2020Not convinced you even know what Capitalism is…in reality.
You give ‘it’ credit it does not..deserve.
Corky
/ 10th March 2020Then educate me. If Capitalism has ‘credit it does not deserve,’ then who deserves the credit for the Wests fantastic standard of living.? A standard so good… migrants will risk their lives ( and that of their children) for a piece of the action.
Alan Wilkinson
/ 10th March 2020B will go to his grave muttering “It’s all the bankers’ fault.”
There’s nothing he enjoys more than a good recession.
Corky
/ 10th March 2020He needs reeducation, Alan. The country would be a better place if all socialist spent a year learning financial literacy
Duker
/ 10th March 2020Israeli vaccine ?
Then why are they having drastic quarantines on all arrivals. An anti-viral type treatment would be a better bet …plenty of opportunities to try them out
remdesivir is a good hope at the moment for severe cases
https://www.biopharmadive.com/news/coronavirus-remdesivir-gilead-antiviral-drug-covid-19/573261/
It comes from Gilead Sciences in ‘socialist california’
Kitty Catkin
/ 10th March 2020Even if a vaccine was perfected today, it couldn’t be used immediately. It would need to be manufactured and distributed as well as being administered. People who have the virus already would still have it and still distribute it.
I agree, anti-viral treatment would be ideal, but can’t believe that no one’s working on this.
Corky
/ 10th March 2020Please read what I write.
Take 2:
”BTW…would you accept a vaccination shot should the Israelis deliver on their promise.”
Duker
/ 10th March 2020That’s easy..a promise that can’t be met in 3 months, tested and fully safe
However they can use Israelis as the trial population during the clinical trials instead of the usual primates and other lab animals.
Call me Ishmael...
/ 10th March 2020Trump and his administration have vacillated between ignoring the threat and making wildly unrealistic promises about it. On Wednesday, Pence promised 1.5 million coronavirus tests, but as at Friday fewer than 2,000 had been conducted in the US.
Trump himself is simply lying about basic facts about the COVID-19 response; despite the testing kit shortfall, he has publicly stated that everyone who wants to get tested can get tested.
Trump’s initial impulse to downplay the risk, at least until the stock market took note, was dangerous. He has consistently minimized the number of sick, blamed Obama’s administration for a shortage of test kits, and publicly suggested a vaccine would be found quickly. Our response to COVID-19 should be based on something more than hunches and magical thinking.
Trump needs to learn that a virus can’t be bullied and that it doesn’t care about poll numbers. And he needs to stop talking about COVID-19 as if it were a hoax intended by the Dems to bring him down.
In other words, he needs to do his job, which is — in a fundamental sense — to manage his raft of executive agencies with all their immense resources to address a wide range of issues.
Sadly for the rest of the world this is exactly the part of the job of President that Trump has never shown the slightest interest in or capacity for.
Alan Wilkinson
/ 10th March 2020As noted previously Trump”s US has an extremely low rate of infections per capita much to the chagrin of his clueless opponents.
Alan Wilkinson
/ 10th March 2020Ha! Scored two of them already.
Duker
/ 10th March 2020Thats good , mean Trump doesnt have to avoid crowds and can keep up those mega bucks fund raisers…those illegal migrants who work in his golf clubs would be a worry
Call me Ishmael...
/ 11th March 2020here you go Alan. Now try to think for a moment how many cases of COVID-19 America would have if its testing regime was as thorough as… say… South Korea.
Trump”s US has an extremely low rate of infections per capita because it has an appallingly low testing rate of 5 tests per million people – TRUMP CAN’T MANAGE WHAT HE REFUSES TO MEASURE.
Alan Wilkinson
/ 12th March 2020I guess Trump faked the low number of deaths per capita too?
The US should be dong as many tests per capita as countries with high death and infection rates?
Griff.
/ 10th March 2020Your TDS is showing.
Can you read Alan ?
2000 tests out of a population of 350,000,000 .
607 confirmed and 22 deaths.
The USA is showing a low rate of infection because they are not even testing for it.
Trump and co fucked up badly when they decided to develop their own test rather than using the WHO one .
https://www.worldometers.info/coronavirus/covid-19-testing/
Covid 19 is running uncontrolled in the USA.
David
/ 10th March 2020Its 7000 plus but you are spot on with the ridiculous bureaucracy in the US that makes everything as difficult as possible.
Lets hope a vaccine comes out of a non US lab and can be approved more expeditiously than the FDA will ever do.
Duker
/ 10th March 2020Comparing ALL of China with ALL of US is false . These things operate often in clusters…Wuhan would be bad while say Harbin in Manchuria not so much.
In US Seattle is a hot spot while Tulsa Oklahoma hardly if any.
Alan Wilkinson
/ 10th March 2020Bugger. Trump is probably right again:
https://spectator.us/donald-trump-hunch-coronavirus-likely-correct/
Call me Ishmael...
/ 10th March 2020Alan deliberately avoids seeing the blindingly obvious – America has a low number of confirmed infections because its testing regime is next to non-existent. Alan, you of all people should know that you cannot manage what you don’t measure.
https://www.theatlantic.com/health/archive/2020/03/how-many-americans-have-been-tested-coronavirus/607597/
Panic is spreading even faster than the coronavirus because America has no leader to reassure the jittery public.Trump had no credibility coming into this crisis, and he has stayed true to form with his many ‘Mission Accomplished’ moments.
Feb. 2: ‘We pretty much shut it down coming in from China.’
Feb. 26: ‘You have 15 people, and the 15 within a couple of days is going to be down to close to zero.’
Friday: ‘We closed it down; we stopped it.’”
Trump and his crew have been equally Pollyannaish in trying to bolster the markets.
Kudlow tells investors on Friday to buy stocks because he claimed the coronavirus was ‘relatively contained.’
On Monday Trump was blaming ‘Fake News’ for the stock market collapse, even though investors were reacting to genuinely bad tidings.
The problem Trump and the American economy face – and by default, all of the rest of us – is that Trump’s pretty much exhausted his federal reserve weaponry. He’s bullied the Feds for the past 3 years to keep the base rate down around 1-1.5% and he’s run up a trillion dollar deficit through lining the pockets of the wealthiest 1%
One final comment: Trump owns shares in V.F. Corp. and Thermo Fisher Scientific, the makers of the testing kits. I would have thought it would be in his own interest to get millions of those kits made and distributed, but yeah, nah…I don’t think Trump believes that COVID-19 is a real issue, and there is not a single person in either the Administration or the GOP willing to say otherwise, so…it’s not a real issue. If the numbers of the infected and dead go up, they’ll be dismissed as Fake News. It’s just Trump doing what he’s always done, which is impose his own reality.
David
/ 10th March 2020Interesting watching Italy and South Korea with 500 deaths versus 50 with not a huge difference in the number of infections. After joining the euro Italy,s economy is no different in size to what it was 20 years ago per capita, it has huge youth unemployment, a bloated inefficient state sector, has had a horrendous migrant problem to fund so when you combine that with continuously useless governments people die.
With debt at 136% of gdp and basically stuck with Germany,s currency they are stuffed and as many feared this could well precipitate GFC mark 2.
Duker
/ 10th March 2020Not really in 1995 Italy was 115% ratio, and Japan is around 200%.
before Trump the US was around 115% so that would have rocketed since
NZ gross debt BE ( before English) was around $20 bill , when credit card Bill left it was aeround $90 bill
Your point was ?
Blazer
/ 10th March 2020that’s why Billy got..knighted….hopeless!!
David
/ 10th March 2020Duker you seem to be having a Jacinda moment and confusing debt levels with GDP levels. GDP is the sum total of all economic activity and there are a few measures of it and debt levels are the totality of debt owed by the state of Italy.
The point is Italy,s debt is 2.6 trillion Euros and their economy has barely grown in decades, their debt is owed in a shared currency and their central bank is shared too so if they default it will be complicated and big enough to make Lehmans look like a walk in the park.
Italys debt and lack of growth has left its health system in a pretty rubbish and underfunded condition hence their reaction to the virus has been sub optimal.
I hope that explains the general point I was trying to get across about the divergence between Sth Korea,s numbers and Italy,s.
Italy has now been shut down, all 60 million of them.
Duker
/ 10th March 2020Every country has more debt , both in amount and as % of gdp since the GFC. What’s interesting is that NZ has had a far greater % of GDP increase in debt than Italy.
We would be serious trouble except for Cullen’s foresight in stashing away around $7 bill which has groewn to $30 bill plus as well as being NZs biggest taxpayer
Bill just left debt as his legacy ..no wonder the private sector doesn’t want his former treasury bureaucrat..come pretend sheep farmer on their boards
Conspiratoor
/ 10th March 2020Agree with the sentiment but Bill’s got his obligatory gong So he’s been able to weasel his way onto some fairly high profile bods
David
/ 10th March 2020The difference being that we borrowed for the GFC then the quakes and debt then peaked around 2013 and then started a downward trajectory.
During this whole period public services were improved and our state sector has been pretty well run since Douglas and every government since has left the place in a better state than the previous one which is why we rate as one of the best countries in the world in pretty much all the important measures. Italy, not so much with its only reforms being EU directives.
Call me Ishmael...
/ 10th March 2020Trump’s hubris is astounding. There were 11 cases of Ebola with 2 deaths in the United States and he attacked Obama over his handling of it 103 times on Twitter.
Obama established the global health security unit. Trump closed it down. Trump fired the entire pandemic response chain of command, including the White House management infrastructure, in 2018.
Obama created it, so it had to go. Now Trump’s chickens are coming home to roost….
Call me Ishmael...
/ 10th March 2020How Trump’s administration is failing America (and the rest of the world):
The National Association of Immigration Judges (NAIJ) had recommended to immigration judges that they post in courthouses the English and Spanish language versions of the CDC’s “Stop the Spread of Germs” and “Symptoms of Coronavirus Disease 2019” posters.
The Department of Justice’s Executive Office for Immigration Review (one of Bill Barr’s offices) ordered that they be removed.
Alan Wilkinson
/ 10th March 2020Apparently you missed this bit:
Cristian Farias
@cristianafarias
I reached out to the Justice Department’s Executive Office for Immigration Review for comment, who had this to say through a spokesperson:
“The signs should not have been removed. The matter is being rectified.”
Call me Ishmael...
/ 11th March 2020apparently you missed the bit where the signs were ordered to be removed in the first place. here are two clues:
1. “EOIR has ordered immigration court staff to remove CDC posters designed to slow spread of coronavirus”
2. “The signs should not have been removed”
Alan Wilkinson
/ 11th March 2020No, I didn’t miss it. I just read the full story in your link which you either didn’t or didn’t want to report.
Call me Ishmael...
/ 12th March 2020You can deny reality all you like but you still ignore the fact that the EOIR ordered immigration court staff to remove the CDC posters in the first place.
That’s their failure… and yours.
Alan Wilkinson
/ 12th March 2020Someone in the EOIR made a mistake which was ordered to be rectified. Somehow that was all Trump’s fault in your twisted Lefty world.
Zedd
/ 10th March 2020Oh dear,, business confidence is down; it must be the current Govts. fault, or so the Natl party would ‘suggest’.. we better vote them back in eh wot: the ‘safe pair of hands’ ??
>OR could it be that there is a global pandemic which is effecting all economies, that this Govt. are working to mitigate !
David
/ 10th March 2020Dont think anyone is blaming Ardern for this Zedd.
Zedd
/ 11th March 2020maybe not.. BUT it sounds like there are noises that ‘this Govt. have not done enough’ & it sounds like Natl. are trying to use the apparent ‘downturn’ as ANY reason to return them to power on 19/9 ?
Duperez
/ 10th March 2020On leadership in the United States:
“What we’re seeing is the outcome of people who’ve been able to live in a world of alternative facts who’ve been able to count on a massive propaganda machine to spread whatever is their version of the truth on that given day. The problem is when you’re dealing with global markets and you’re dealing with coronavirus you can’t control the narrative.”
Alan Wilkinson
/ 11th March 2020If you are under the delusion that Trump controls any narrative you should have a lie down, dups. He may initiate them but he certainly doesn’t control them when he has an army of Lefty journalists who hate him getting their bile out every day in every way.
Call me Ishmael...
/ 12th March 2020Deny, accuse others, distract, lie… you know how Trump operates, Alan. Don’t kid yourself and don’t try kidding us.
Alan Wilkinson
/ 12th March 2020Irrelevant. He doesn’t control the narrative as I stated. End of story.
Call me Ishmael...
/ 13th March 2020Trump was sure controlling the narrative during his live televised address to the nation that crashed markets around the world … look at the Dow down by 2,300 points overnight in direct response to his speech… If the Dow has another day that’s as bad as the one it just had, it’ll fall below where it was the day Trump took office and all of the Trump presidency gains will have been wiped out…
—-
Remember when the Dow crashed and Obama said “I got this,” then H1N1 hit and people panicked but Obama said “didn’t I just say it got this?” then Ebola hit and Obama said “I told y’all I got this,” then stocks soared and everyone got free health care?
Anyway (sigh)
Good times…