I don’t actually know

Got me. Not a scooby what the correct response is here.

I think that governments are screwing the pooch in their response but then I always think that. Being more specific though, paying wages? Business support? VAT holidays? Dunno.

My general thoughts are, yes, horrible recession. And also a short one. Current financial market economists are talking about 15% off GDP for a quarter. And 1.5% off for the year. So, that’s a horrible, very deep and also very short recession. From what we can see in statistics from China they’re already climbing back. Orders are coming in to replace commodity stocks for example. Firms are reopening, people are back at work.

Yes, deep, deep, cut in output and therefore also in incomes. But something to think about. This happens often. The economy comes to a shuddering halt every Sunday for example. Yes, I know, different, but still a point to consider. It’s not how deep a production closedown is, it’s how long it lasts.

One more thing. Recessions that happen because of something we know about lead to much faster recovery growth than when we’re all standing around without that scooby. Because we know what the cause is, once it’s stopped happening then we resume not quite but almost where we were. There’s not the discovery period twatting about trying to work out what went wrong. There’s also not the reorganisation period trying to solve it.

Thus, short, sharp recession with steep recovery.

At which point you can argue either way. Let it happen and carry on. Or given that it’s going to be short why not pay everyone’s wages etc? I don’t really have a view on this.

58 thoughts on “I don’t actually know”

  1. The world is afloat in debt. A can’t pay B cos he is stuck indoors, B can’t pay C –and down comes the entire chain. Default and deflation–agonising but the way out OR print-up hyperinflation as political piggies try to save themselves and restore a vanished status quo. Read Doug Casey, Schiff etc.

    Short, sharp with strong recovery? “Once upon a time…”.

  2. What we need is a pause button.
    The world was ticking over quite nicely until the governments all started stopping everything.

    Well now we can’t work (some people), can’t go out to socialise, can’t do much of anything really. But bills still need paying.

    Here’s my proposal – a government issued/backed credit card (probably better to have banks do it and just govt underwrite), 0% interest until a year after the crisis finishes, to each adult.
    Only accepted by utilities, supermarkets (for food and essentials) and rent/mortgage companies, fuel and other essential items. When something like this happens, we can effectively pause the economy, people can still buy whst they need to survive, and when its over they can pay off what they spend when they get back to work.

    I just thought of it as an idea now when making my morning brew, so there’s probably some flaws.
    Thoughts on how to improve it?

  3. I’ll give you the answer. But first you have to tell me when we will come out of the stopped economy lockdown thing we are in now. I’m beginning to think it’s not worth it.

  4. Cherny, you bugger, I was already picturing a new big screen TV when you spoil it with the sentence beginning “Only accepted by…….”

  5. However you do it Chernyy–its still funny money that the Piggies don’t have to give. If creating dosh worked everybody in the history of the world would have printed themselves out of trouble.

    Since the youngest and prime years have the least chance of a bad result they should have been left to work–including shops because most under 50 aren’t getting it much and schools as kids don’t seem to be getting it at all. And take all possible measures to safeguard older people. With the economy still going and the streets not full of kids things would have gone better.

    But Blojo is shit-feared of media-squark “My whoever died because callous Blojo didn’t do every crazy, destructive thing “expert” idiots thought up to save him/her”–boohoohoohooobooohoo etc.

    Eton educated chap will soon have a shit-load more people just as angry–if not angrier–on his case “Where’s my job/my business/the last 30 years of my life/how am I going to feed my kids etc, etc”

    I remember that in the 3rd Mad Max film one of the actors was billed as ( and this was his “real” not character name) Angry Anderson.

    I think large numbers of people will be changing their first name to Angry within a few weeks.

  6. “What we need is a pause button.”

    Yes, yes. How do you put some economic activity in hibernation? Airlines, for example. I don’t know either.

    There are a variety of medical wonks, with zero understanding of economics and seemingly less of psychology, in a bidding war for how long to make this last. One year? I raise you two years. And as with all political speech it is “there is a cost, X, to inaction, and benefit, Y, from this action”. We are never told about the benefits of inaction or costs of action. In the case of narrow-minded wonks, because they barely understand the issue.

    We need to have a civilisation left to emerge to. Some behemoths will weather the storm for sure, but I really don’t want Lufthansa, Swiss, and BA rebooted by O’Leery, McDonald’s to take over all my favourite restaurants, or Amazon running all the shops. Do you?

  7. Bloke in North Dorset

    Tim Stanley on Twatter claimed:

    “Incredible. Politics will never be the same again. Classical liberalism has just gone into the study with a revolver.”

    As I pointed out in a side discussion, not even the ASI is arguing that the government shouldn’t be doing anything. The point is we’ll need that classic liberalism when we get out the other side.

    One point I have seen commented on anywhere was Grant Schapps announcing a relaxation on the hours delivery drivers can work. Needs must and all that, but it does point to a wholesale review of regulations. What else has been slipped through?

  8. But we have no idea how long this thing is going to last! Italy has been in lockdown for nearly two weeks, and they’ve just tightened restrictions further. The number of new cases and new deaths continues to climb daily. What if schools don’t reopen until 2021? Then you won’t be talking about a “short, sharp recession”; but a long, deep recession, the likes of which we haven’t seen since the 1970s.

  9. @Addolff

    Indeed, that’s why i think it would have to have controls on what can be bought with it, as well as a reasonable spending limit. Otherwise the lefties will find the people who would go out on day 1 and buy 6 plasma tvs then whinge they’ve got no money or are massively in debt at the end, and use them to demonstrate why it doesn’t work/why its evil of the right/Thatcher’s fault.

    @MrEcks
    I don’t think printing money short term is a problem, as long as at the end of the emergency situation, the money is unprinted (i assume there’s a technical term) – hence why it all has to be repaid.

    @BiG
    I don’t know of a definite way of putting economic activity in hibernation. I guess the scheme i mentioned could be extended to some companies as well?

    @no one in particular
    I agree with Ecks. Letting the young and healthy carry on is probably the best way, while taking some precautions like keeping a bit of distance at work.

  10. At some point either the Italian curve will flatten or it won’t. If it doesn’t we know i) that the Chinese curve flattened because they had a vaccine all along (sorry to sound conspiracist) and ii) we’re going to have to live with this and let it rip through the old.

  11. One thing interesting is universities (and schools) – they’re doing the online lecture thing… if they do it for any length of time a real chance either unis themselves or some upstarts will change the model dorm based lecture attendance model permanently.

  12. I don’t like the “here’s some money, but you can only spend it on what I tell you” thing, but it has to be acknowledged that there are morons out there that do have to be protected from themselves. (A friend of mine was a support worker for one such unfortunate who, if allowed, would cash his giro and then spend the lot on cheese, then wonder why he had no money for anything else.)

    Dropping bank base rate to 0.1% sort-a gives people free money, but only to people who have access to credit. Over the month I already get to £100 under my overdraft limit, dropping rates isn’t going to increase the amount I can borrow, only make my existing borrowings cheaper.

  13. I like Chernny’s idea – been bandied about before. I wouldn’t want a government committee deciding what was essential – one man’s Marks and Spencers ricotta with an AC Bordeaux may be essential to him, and happy to forego holidays and already has.
    It’s a variant of student loans – many students don’t work ( don’t have to pay Council Tax either ).
    Possibly allow government credit card borrowing of up to the student loan limit plus £1500 on top to allow for CTAX, with repayment terms the same. Most students buy essentials with their borrowing, but don’t let the government make it compulsory to only buy essentials.

  14. I read an article or saw a video and it made a lot of sense to me at the time (I am trying to find it),someone was explaining why it is unlikely to be a fast V-shape recovery, because in many areas when you shut something down it is very difficult to put back into play later, it’s gone forever. For instance, one coal plant was recently demolished, a perfectly fine building, was not used for some other function but demolished.

    The Marxist twat Matt Frei now on LBC so I am listening to the silence.

  15. One very positive aspect of this is the gyppos begging outside every shop round here have all fucked off. Let’s hope it’s not temporary and that they all went back to Romania, Albania etc

  16. @BF – according to Old Holborn, Easter Europe has a flood of workers (and moochers) coming home from the UK and Germany including a lot of Roma, who are refusing to quarantine or take any notice of any new rules.

    Sounds like a job for the army…

  17. MC: ’… including a lot of Roma, who are refusing to quarantine or take any notice of any new rules.’

    Gosh! Imagine my shocked face…

  18. Now I understand everyone’s shit’s emotional right now. But I’ve got a 3 point plan that’s going to fix EVERYTHING.

  19. This is all a massive over-reaction to a not very dangerous disease. Writing a long long post at the moment about it. 177 deaths in the UK over winter and early spring is barely noise in the mortality rates. Even Italy’s death numbers are not worth panicking about, they’re creating a hospital problem, but destroying the economy is not the answer. We should be making hay while the sun shines and getting some more ICU beds and ventilators ready for next winter.

    The horror story scenario is all based on guesswork and wonky models. We haven’t a clue how many people actually have the disease (and the tests are very unreliable), so we don’t have a clue on the death rate. But Covid-19 has been racing around a highly globalised world for at least four months now, if it really was a horror show we’d have seen massive death numbers by now. Most likely it will die down in April as cornaviruses usually do.

    Cure massively worse than the disease.

  20. Ecks 8.41am, Interested & GC +1

    Italy hasn’t had two weeks of lock down yet. China’s trend showed that it takes that for the numbers to start to level off, assuming they were being accurately recorded before that, which they weren’t. Ie, we can’t tell yet that Italy’s gig isn’t working, the current increases will be pre lock down instances.

    Hallowed Be

    “On line education” And businesses, spending all that money on office space. Great, convert more of it to inner city resi – which might help solve that housing crisis.

    Chloroquine – it’s the zinc, isn’t it?

  21. Hector Drummond +1000

    I’m in favour of interrupting the mass social businesses for three or four weeks just to give the best chance for the vulnerable and those caring for them, but leave everything else going.

    Any country that achieves community immunity without fucking its economy is going to leap ahead of any that locks down, fucks its economy and leaves its population ready to be infected again.

  22. Hector is right.

    The surreal experience of visiting the supermarket to see all the toilet paper and paracetamol gone is the second time I’ve been gobsmacked by the behaviour of British crowds. First time was when Princess Di popped her Monolo Blahniks (sad) and yuge numbers of ostensible adults were blubbering like schoolgirls in public (gay).

    Chinese Virus 19 is bad, but probably nowhere near as bad as:

    * Spanish Flu
    * The Somme
    * Sex with Alex Salmond

    We want to minimise deaths, but what happens when people die? We mourn them and carry on.

    The Chinee are probably lying about their numbers, but importantly – China is still there. It hasn’t turned into a chop suey version of Mad Max, far as I can tell. Life is going on, people are going back to work. And that’s at ground zero.

    At some point, we’ve got to stop overreacting to a disease that’ll probably kill fewer people than alcohol does every year.

  23. I think some-one mentioned on here the number celebrities with the virus as a worrying proxy for how wide-spread it already was ( Arteta, that Olympiakos owner, Dorries, Trudeau, Hanks or was it Travolta ).
    I can only think of Barnier in the last week.
    It’s possible the true rate of R is below 1 now in the advanced countries. Certainly hope so.

  24. Nothing the CCP says can be trusted.

    Italy is a special case. It has:
    1-Prob loads more mild cases than known about–a lot more. BinC suggested this.
    2-A kissy -kissy Latin culture
    3-More extended families under one roof than some other areas of Europe
    4-A ICU shortage
    4-A pre-existing TB epidemic
    5-100,000 Chinese working in CCP cheap tat factories. Many from Wuhan and who have been in Italy for at least a year and possibly back and forth to China. The bosses certainly will have and some at least of the workers many have gone home possibly once on holiday etc. Also the CCP Neo-Silk Road Iron Horse will have continued back and forth with a direct link to Virus HQ. Then spread around North Italy by off-duty Chinese Tat workers. Also the official line is that phlegm virus lives for 6hrs on outside surfaces. But is that certain–could goods coming down the Silk Road themselves carry the virus?

  25. Back to Tim’s point; legals we corks all do with remembering what Uncle Milt taught us. This recession is of course a monetary phenomenon. So the chancellor has done the right thing, for now. The way he done it though is far more emphatic than in 2008, he has set off the nuclear chain reaction. He will need to drop the rods very shortly, probably in a matter of weeks and not the months the medical crisis will last.

  26. “Cure massively worse than the disease.”
    Here’s a pandemic with a 5% death rate if it exceeds the capacity of the health service, and just 1% if it doesn’t. Any government in the developed world knows perfectly well that their party is doomed forever if they end up with 5% instead of 1%.
    But getting it down to 1% is really, really, difficult.

  27. I don’t believe 1%, let alone 5%.

    We know that the virus has been spreading since at least mid-November. We’re told that Covid-19 is infectious and deadly, at least relatively speaking, compared to, say influenza.

    But if it’s highly infectious, why aren’t there more cases worldwide? Mass travel and mass tourism and billions of people packed together in big cities should mean that it’s everywhere by now. Yet there’s only been 285 000 people infected. 285 000 is about 0.003% of the world’s population. That’s not my idea of infectious at all.

    But, it will be objected, 285 000 won’t be the real number. No doubt millions of people have been infected, it’s just that they don’t know it, because they didn’t show any symptoms, or the infection was mild enough that they didn’t bother going to the doctor. This is probably true. But that totally undermines the idea that this is a deadly disease. If millions of people have it, or have had it, and they’re all right (with perhaps a week off work or school for some of them), then the scary death rates of over 1% are blown out of the water. If, say, 11 million people have had it in reality, then that does make it more infectious (although that would still only be 0.14% of the world’s population), but that brings the mortality down to about 0.1% (there have been 11 0000 deaths so far). This is not scary at all in the communicable disease context. It’s about one in a thousand, around the same as flu.

    So either this disease is not as infectious as feared, or it is, but it’s not as deadly. I can’t see how it is both, based on the number of deaths that have occurred this winter.

  28. Again–only if the POS reaches massive infection rates no other disease in history has ever managed.

    Only at mega-infection rates does the 1% become a big deal. And the APPARENT 5-10 % of Italy is a result of special conditions detailed –several times now –on other threads.

  29. The main challenge is that we don’t have enough ICU beds and ventilators. A better response would be to say let’s make hay while the sun shines, over spring and summer, not destroy the econmomy, and invest a lot of money in those things in readiness for the winter, when Covid-19 is likely to cause a lot of respiratory problems in old people who are in a bad way.

    In general, though, this is not a very deadly disease. Hell, it has barely managed to kill a single child in the whole world in four months. What kind of deadly diisease is that? It mainly kills people who are at high risk of death due to heart and lung conditions, or auto-immune conditions, but even mild rhinoviruses kill these people.

  30. Ah, Hector…. But pointing this out makes you a Fascist Peddler of Fake News whot Wants To Kill Your Gran!!

    Interestingly, over here in the Netherlands they’ve started testing blood donors in batches for CoV antibodies.
    It might give an answer to the “how widespread is it really” thing when more than 75% of cases are just shrugged off as a mild cold, along with a decent indicator how far this Herd Immunity thing is coming along.

  31. The horror is that we are ALL at risk from an economic meltdown. The 1930s didn’t exactly pan out well and govts then–thick as there were–weren’t as thick as they are now.

  32. I’m beginning to think we’ve gone too far in shutting down the economy. I prefer last week’s leaky lockdown. I think at some point soon we’ll need to get going again or face a worse outcome than a few deaths. So long as it’s not me, of course. Talk of a year or two’s disruption is just crazy.

  33. “There is nothing as permanent as a temporary government program”

    The muppets in government have no idea how to exit from a zero-rate interest rate environment, despite the massive harm it has done to savers, and have no idea how to bring Help to Buy to an end, despite its obviously counter-productive outcomes.

    God alone knows how they could ever reverse the unprecedented intervention they are currently undertaking.

  34. In yesterday’s Daily Telegraph it reported that the Italian gov is going through the death certificates. 88% of those reported as dead with Coronavirus already had fatal illnesses, some more than one. Only12% had no pre-diagnosed fatal condition.

    That changes the death rate due to C19 somewhat.

  35. I know where all the same English people are. I’ve just been for a walk on Box Hill. Packed to rafters, it was. Not a face mask in sight and precious little social distancing.

    UK death count up a mere four from yesterday. Daily Mail stock will take a bashing on that kind of performance.

  36. Just read a lengthy article on BBC website about coronavirus in Italy and why they were so badly hit.

    Not once did it mention the large number of recent Chinese immigrants.

    Origin of virus. China.
    One of the worst hit regions in Italy. Tuscany.
    Region with most Chinese immigrants. Tuscany.

  37. Bloke in North Dorset

    Notwithstanding whether or not you think the government needed to act if they did I think this was a smart move from the chancellor. All those people being made redundant or unemployed at the same time would have overwhelmed the benefits system and there’d have been chaos.

    Furthermore, in the short term the costs of those people on benefits would have been about the same as he’s covering and if they’d all been released it would have been an extra cost and time delay for companies to recruit to meet demand in the event of a quick recovery.

  38. Downtown Vancouver all week was deserted, today Headwaters trails packed with people out enjoying the nice weather.
    Supper markers were stripped but are restocking and getting back to normal

  39. Lud, the UK death totals seems to be produced by each of the four home nations’ NHSs in individual increments. Only when England comes in does the number represent the whole UK day. Looks like 56 today. The Daily Mail will be happy with that?

  40. MC said:
    “according to Old Holborn, Easter Europe has a flood of workers (and moochers) coming home from the UK and Germany including a lot of Roma”

    That doesn’t sound true – why would the moochers go home? Bar workers, yes, I can believe they will be heading back, but how many of them are Roma?

  41. Mr klapp, I wonder what the ghouls at The Mail would be satisfied with.

    I also wonder how they live with themselves.

  42. “So long as it’s not me, of course.”

    Quite.

    If you get sick, it’s an epidemic. If I get sick, it’s a pandemic.

  43. China and WHO must not be allowed to ‘rewrite history’ on COVID-19
    https://www.youtube.com/watch?v=XpHVrrIWe_o

    China’s “dishonesty and negligence” unleashed COVID-19 on the rest of the world

    @Tim W

    “Not a scooby” not good enough for Senior Fellow of ASI

    You should at very least have a reasoned view on “this move is good/bad for UK Economy”:

    – Wage guarantee ‘not the best way forward’
    Finance Minister Mathias Cormann has all but ruled out a UK style wage guarantee for workers, telling Sky News the measure was not the best way forward in the “Australian context”
    https://www.youtube.com/watch?v=eaZ7PM4Mfqo

    @Chernyy_Drakon March 21, 2020 at 8:24 am

    That is a sensible idea, but a weekly credit limit required so back to “what is permissible” An 80% of wages top-up debit-credit card better, credit being the missing 20%.

    Glaring Problem – Sadly, the feckless will abuse your idea and Gov handout, especially with “no evictions for rent arrears”

    Once back to normal Al-Beeb full of whining Chavs being evicted, but never asked “Why/How do you have a new £50,000 car”

    @Ecks

    Much as I hate Gov’t spending/Bailouts, I think BoJo/Sunak correct as Gov’t mandating the shuttering of businesses

    However, I foresee massive fraud, especially from RoPs. Also, many “off the books” employers/employees being found

    – Holy Shit
    South Australians who fail to self-isolate could cop a $20,000 fine, under strict new rules to curb the spread of COVID-19
    https://www.youtube.com/watch?v=rCvK9lqpDZc

    This is what’s paying for the stimulus? SA Gov needs shut down by EIIR’s Aus Governor for their tyrannical behaviour

  44. So either this disease is not as infectious as feared, or it is, but it’s not as deadly.

    Yep, spot on Hector.

    Just as a totally anecdotal example, the actor Idris Elba was tested because he’d been at some do with the Trudeaus. He tested positive and is self-isolating at home. All his social media posts report zero symptoms. How many others are like him?

    Crashing the world on the basis of models, which are themselves based on very shaky data, is insane.

    @RichardT – don’t know, just passed it on. OH is in Eastern Europe, I am not. Maybe the Roma he mentioned are workers not moochers? Maybe the moochers returned home because no-one’s buying their Big Issue?

  45. I know someone who has it. Diagnosed on Wednesday. No signs yet of any symptoms.

    There’ll come a point where anecdata becomes data.

  46. Bloke in North Dorset

    Edward,

    My brother started with it on Wednesday and was tested. He reported a fever and tiredness and just slept. Yesterday morning he said starting to feel better.

    This morning I received an update from my niece saying he started getting breath difficulties and he’s now sedated in ICU and on a ventilator to help fight it. He’s 60 in May and a Type 2 diabetic and would normally be given a flu vaccination, but of course there aren’t any, which is why the NHS is going to be overwhelmed eventually.

    More anecdata to become data.

  47. “would normally be given a flu vaccination, but of course there aren’t any, which is why the NHS is going to be overwhelmed eventually.”

    There’s no guarantee even if there was a vaccine the NHS would get round to giving it to him. My father is a type 1 diabetic, blind, bed bound and is on all manner of heart medications as well. He was due a flu shot back in September last year, as usual. Nothing happened so my mother rang the district nurse and asked what was happening. ‘Oh, we’re not doing them yet, as we haven’t had all the returns from all the surgeries with details of who needs home visits to give them’. So my mother rang the local surgery and said this was madness and were they able to give the shot? ‘Oh, I don’t know about that I’ll look into it’. More weeks passed, another phone call. The doctor agreed to deliver some vaccine to be administered by the district nurse at her next visit. Great. District nurse rolls up, checks Dad over, is asked to administer the vaccine ‘Oh no I can’t do that, I’ve not had the training!’.

    I don’t know if he ever got the jab in the end. For all I know it may still be sitting in my mothers fridge.

    Best wishes for your brother BiND.

  48. Bloke in North Dorset

    Thanks Jim & Edward,

    Ref flu vaccinations, round here they nag if you don’t turn up on the designated day.

  49. @Hector Drummond March 21, 2020 at 11:29 am

    “This is all a massive over-reaction to a not very dangerous disease. Writing a long long post at the moment about it. 177 deaths in the UK over winter and early spring is barely noise in the mortality rates…”
    https://hectordrummond.com/

    Agree, as does Peter Hitchens – good article with plenty of stats

    https://www.dailymail.co.uk/debate/article-8138675/PETER-HITCHENS-shutting-Britain-REALLY-right-answer.html

    .
    @Mr Lud etc

    The Daily Mail reporting by Columnists has been good and ‘Keep Calm’ with no scare mongering – other than the hysterical ravings of Piers Morgan

    – Rees-Mogg shuts down Piers Morgan: if he wants to say silly things and look foolish, it’s up to him
    https://www.youtube.com/watch?v=kUJHp26Dsmc

    @Jim March 22, 2020 at 11:54 am

    Flu vaccine: obtain prescription, collect from chemist, do it yourself

    Comes in preloaded syringe with 26g needle. Simple intra-muscular (bicep) injection

    Been doing it since 1989

Leave a Reply

Your email address will not be published. Required fields are marked *