What a week it was. The Weekend AFR said 'Pandemic Panic'. Saturday's Age pointed out that Australian share investors had lost $210 billion 'as coronavirus grip tightens'. The weekend Australian's offering was 'Virus contagion: recession'. As the man who has been telling readers recession was now likely, and per capita recession virtually certain, the latter headline gave me grim satisfaction.
Share markets have been strongly overbought, and a 10 % fall was always going to happen. When the panic subsides, there may be some recovery. We've had a 'correction'. If the market keeps falling next week, we may before long lose another 10 %, to make a 'crash'. Beyond that further substantial falls would make for a 'catastrophe'. In the big catastrophes of capitalist history, markets have fallen by large amounts and can turn a recession into a depression.
At a chemist yesterday I asked did he have any heavy duty hand sanitiser. 'No I cannot get it'. What about masks? I asked. 'We have sold those we had in stock', he replied 'and I have ordered more'. My luncheon companion, a lady medical researcher, asked me I had purchased a few months of the medicine I am advised to take each day. I had to say 'no' and I was advised to get on with it. Then my luncheon companion asked whether we were building up a stock of food. I again had to say 'no'.
We both ordered sanitiser and masks. Food will be trickier as our fridge is unreliable and the pantry is hard to find anything in. Will my chemist allow me to buy stocks of my medicine?
This happened in one of Melbourne's leafy Eastern suburbs. When people decide they need heavy duty sanitiser, masks, several month's stock of medicine and extra food a mere 10 % fall in share prices (from a clearly overvalued level) looks pretty minor.
I have just read a report on the Internet that says the government has been hoarding stocks of medicines, sanitisers, masks, etc in large secret buildings which are now being opened so that people can prepare in case the virus turns into a large and active brute and gets to Australia in far larger numbers than now is the case.
I am pretty laid back about virus scares, so I shall limit my time outside our home and not worry too much about extra food and medicine. As my portfolio has been deeply conservative for some time I do not have to worry too much about the potential catastrophe in the markets, although there is the difficult matter of when to get back in. (Hint: the time for that is when shares are clearly cheap, which means well below the trend line of the past decade or so.)
Kulture
Sporting life
Last night's AFL All Stars verses Victorians was a stunning display of brilliant footy skills and very fast ball movement. For the first three quarters it seemed as if the All Stars were going to win but the last quarter saw an absolute blood bath as the Vics kicked 14 goals to one. Sadly I had gone to bed, ruminating on the problem when a game is not for premiership points. Still, a record crowd raised a lot of money for the bushfire victims. Will the AFL season go on as planned if the virus gets a big enough hold on Australian footy players and spectators?
Note for AFL board members. How come Eddie Betts and Patrick Cripps were playing for the All Stars and not the Vics? I puzzled about this during the first three quarters and then turned in to ponder the issue.
The Aussie cricketing shielas have to beat New Zealand if they are to challenge India in the latest cricketing frolic. The Aussie cricketing blokes just beat South Efrica 2 to 1 and one assumes Messrs Smith and Warner let their bats (and brilliant fielding) do the talking.