This is the first COVID-19 update.
World: 345,036 infected, 14,739 dead
Australia: 1353 infected, 7 dead, 73 recovered. Up from the 700 from Friday. At our current rate, we are predicted to reach 10,000 infected on Friday, 3 April 2020. 172 / 195 countries are infected. The likelihood of dying is ~4%, based on the above world stats. Current stat coming out of Italy is if you end up in the ICU, the chances of coming out alive is 0%. ZERO, it’s basically game over. More on Italy if interested.
Anyone else noticed the first things Australians do when they get back in the country and they are supposed to be quarantined. They go to the supermarket to get food because they have no food at home. …Can you see an issue here?
If you missed the news, schools closed from Tuesday to start school holiday early.
Also for at least 6 MONTHS – Cafe and restaurants are now operating on takeaway only. Pubs and Clubs – Closed. Footy is over. Gyms are now closed. My brother had to close his gym.
Other interesting reads
COVID-19’s Stop-Gap Solution Until Vaccines and Antivirals Are Ready
Market Update
Of course we’ve all noticed this is more than just a pandemic, this is interlinked with a financial crisis, so here’s a market update also.
ASX 200 – Closed up 0.7% on Friday, however we are still down 33% from highs on 20 Feb 2020. Image looks like it’s fallen off a cliff doesn’t it?
S&P 500 – Closed down 4.34% on Friday to 2304.93 which is right near the lows. Down ~32% from all time high. Just to highlight what the 2008 financial crisis looks like compared to what is currently happening. It’s a sharper drop in a smaller time frame.
Australian Dollars is rapidly losing value. Down against the EUR and USD (two currencies I care about). 1 AUD has dropped to 0.58 USD, and 1 Euro is now worth a whopping 1.84 AUD. (I should have spent AUD in Europe instead of EUR.)
EURAUD
AUDUSD
Oil has dropped off a cliff since the Saudi-Russia oil war started. Basically with China shutdown there’s been a decrease in demand for oil. The Saudi wanted OPEC to decrease production to keep prices high. But Russia, who is not part of OPEC, disagreed. (Maybe they want to make the US Shale Oil uneconomical.) So the Saudi are outraged and as a result are smashing down the oil price more than the Russian’s ever expected. It’s a race to the bottom now. Down another 12.66% on Friday. I’ve noticed some price difference at the petrol pump, anywhere from 1.12 to 1.60. If you are paying more than 1.20 at the petrol pump in Melbourne, you are paying way too much.
BTC
Since everyone keeps asking me about bitcoin prices, here it is for you. BTC still remains a volatile asset, currently trading at around 5900 USD, or just over 10300 AUD. What’s interesting is that some people are starting to see it as a call option on the whole financial system. Interesting.
Gold
Gold is often seen as the safe haven asset in times of financial turmoil. It has fallen 10% against the USD from it’s peaks, and is trading at 1497.01 USD per oz
However it’s at all time high against the AUD currently 2581.17 AUD per oz. Maybe it has something to do with the lack of supply of gold bullion in Australia at the moment, and there’s a line in the city.
My Market Commentary.
Certainly it’s a black swan event in every aspect as described by Nassim Nicholas Taleb. This is what it feels like to be in the middle of a stock market crash. This is what the start of the depression potentially looks like. Not convinced, then I’ll allow Raoul Pal to make the argument. (and also here)
This didn’t all start because of the COVID-19, It’s been slowly collapsing since 17 September 2019 when the NY Fed started to step in daily to bail out of the overnight repo market, which they are now printing over trillion dollars per day to keep liquidity following. COVID-19 is just the accelerant that makes the collapse happen faster. Now of course the central banks around the world are trying to throw everything including throwing the kitchen sink at it. Zero interest rates, negative interest rates, helicopter money, removing common law and allowing directors to trade insolvent, and even allowing banks to hold 0% reserves in the US starting last week. But pumping more money into the system and trying to encourage people to spend money when no one wants to go out is just not going to work. Everything is shut down. Small businesses are struggling, we’ve even had an email for Mini Maestro (music classes for young kids) pleading with people to take up their new online classes otherwise they will have to go out of business. Also pumping more money in this manner does nothing to directly solve the COVID-19 issues.
Think we’re safe in Australia? Don’t forget that the government passed “Bail-in” laws in 2018, there’s a loophole in the law that allows the government to take your money to save the financial institutions. Just like when it happened in Cyprus before. Noted that your bank already changed T&C to reflect this? We’re at 0.25% interest rates, so negative interest rates are definitely possible, where it costs money to keep money in the bank. Negative interest rates around the world: Switzerland -0.75%, Denmark -0.6%, Japan -0.10%. Wait, you want to take your money out of the bank as cash? #ScottyFromMarketing has that covered, there’s a cash ban bill currently in the senate. Banning the use of cash over $10,000, that can be lowered as needed without needing to go through parliament again. You now basically have an unsecured loan to the bank.
So in summary, businesses are struggling because no customers, employees are struggling because they are being let go. So unemployment will be up. And since they have no job, and prospects for a new job look grim, then mortgage / bill payment will suffer. Since we don’t produce anything in Australia anymore, we are struggling because nothing is coming out of China. Government needs to step in to save everyone by adding debt to the debt bubble.
On Working Remote
If you are struggling with being forced into this new working life. It’s actually very common in the technology and start-up space. I used to do it all the time in my previous role at the hedge fund. With half the team in Hong Kong, half in Melbourne, and a boss that lived in Sydney. Things I had found helpful are:
-Having a dedicated area or areas to sit down and work, even when it was the far corner of the dinning table in France.
-Having a mouse (not the type that squeaks), makes working much easier compared to using the trackpad on the laptop.
-Communicate through permanent group chats for everything. (saved me time from telling people the same thing more than once). And it allowed rapid development of dialog, which is not something that happens over email (the modern equivalent of snail mail).
-I had found Manager tools helpful (note it’s not just for managers), and I’ve noticed they’ve released a series on COVID-19
I get through a lot of books since I don’t own a TV or have Netflix. So if you read, a book that I recommend on the topic of working remotely is from the guys who founded 37 Signals which is a remote only company. – “Remote – Office Not required.”
Also good is the previous book by those guys but that’s less about working remotely. “ReWork – Change the way you work forever”
Thanks for reading. Hope you enjoyed it.