This is to help an otherwise very healthy US economy (low unemployment rate, solid gdp growth, income increases) from being taken down by an one time external, expiring event and panic that flows from it.
What is the point not supporting crucial companies in the stock market? Are you really better off if target or chevron or Hilton goes under? And tons of people have no jobs and there no access to staples?
Unfortunately the US economy isn't very healthy - it's over-leveraged on debt and has been artificially propped up by cash injections into the market. In actuality this recession may be caused by corvid-19 but it was ready to go at the first serious economic hiccup.
I think if anything, the Fed was probably overjoyed about COVID-19; they were just waiting for an excuse to do a massive cash injection without sparking massive backlash and protests.
The new rules against gathering in large crowds are an added bonus; the Fed is not only excused, they are legally protected from any possible backlash.
I've seen this argument by investors, but what's going to change?
The virus isn't going to magically get better overnight one day. It doesn't expire. This is either going to be EXTREMELY bad in the short run or very bad over a long period of time. Either way, the economy is either going to be hurt very badly all at once or slowly deteriorate as countries have to stay quarantined. (Something that the US may have to do soon.)
Perhaps a bit too dire -- much work, and play, can be redirected for lower proximity, as has already begun. We'll be seeing a lot of tennis and golf on TV this summer, I would wager.
Ruinous nevertheless for elective healthcare, health clubs, barbers, and sit-down restaurants.
GDP has been barely above CPI while asset prices have skyrocketed. Incomes have not skyrocketed. If asset prices skyrocket yet income does not, that money has to come from somewhere. It comes from debt.
I beg to differ. US was the first major country to ban travel from China. Other countries only followed suit after. South Korea, Japan, France, Germany and Italy never did, and see where they are now.
Please do not spread disinformation: Italy banned direct flights from China pretty quickly too.
It did not matter, because patient-0 in Europe was a German. It’s now accepted that the virus arrived by crossing the Alps in some sort of Euro-business trip, not directly from China.
So banning international travel could have at least stopped it from reaching Germany. I think you are making his point while arguing on a technicality. I see no conceivable way that the economic loss of tourism or "business trips" is worse than what is about to go down in Europe.
The infection in Germany happened mid-January, when the Chinese had not even fully admitted to the problem. Chances are it had already reached all continents by the time any travel ban was even considered.
Unless you can read minds, these things happen very quickly now that the world is a global village.
> is worse than what is about to go down in Europe.
It's going down in the US too! We're merely a few days behind. If we had no cases, or a few contained clusters, then this would be an arguably useful policy. We have multiple uncontained outbreaks already, and have yet to enact meaningful policies to contain them.
It's too late. All this ban does is try to shift blame.
Excluding China (which they wisely banned early) and South Korea (one city daegu is the center and majority of infection) there is only japan with 639 cases. Europe has close to 20,000 cases.
But if an Asian country’s cases quickly spikes, pretty sure Asia will be shut down in travel to US
Mexico wages are already lower than wages in China. In fact, chinalawblog.com talks a lot about companies shifting to Mexico due to USMCA and short turnaround for supply chain.
South Korea has tested 66k 2 days ago. China has no such capacity to test even that much, let along 800 million in quanrantine, and people have been welded in their own homes with no escape. The dead bodies have been going straight to the furnace in Wuhan. Which government’s number would you rather trust?
Countries that are heavily affected right now primarily have open borders with China (still!!?) - japan, South Korea, Italy, Iran, with tons of Chinese workers going back and forth
US had banned travelers with recent Chinese history from entering the countries effectively from Feb 2nd.
I would be much more alert right now as regards to people from Europe/Middle East. Iran is a pretty powerful source of infections to the whole region and so far is just keep escalating.
BTW: in Iran's case, they banned entry from China early on, but one of the merchants gets to China via 3rd country and bring the virus back home.
At this point, I suspect that the East Coast, like New York or Boston, is going to get hit next. And the infected vectors are going to come in from Europe.
Once Manhattan reports its first confirmed case, then it’s over. This thing will go full blown.
What does it matter anymore who can and can't enter really ? It's everywhere, it's spread the globe, it's now in American communities and it's here to stay. It's no longer just a foreign issue now.
It's time to assume the brace position, prepare for the worst and hope for the best.
Italy has blocked flights to and from China pretty early. It seems that this prevented tracing and monitoring people coming from China, because they just flew in through a different country.
- coronavirus have been shown to reappear in recovered patients in China (prob due to the unsanitary conditions in cities)
- they have welded people in their homes. How would they have tested these folks?
- 800 million people are under quarantine. Again, how do they test all these people? Plus it’s been shown that family members locked in a tight space transmit the disease to each other. And the entire family dies off.
You're on the right track, though I don't think the welding was common. Chinese neighborhoods are under a type of lockdown where there are some 4 taxis per 10-50k people that are designated for goods and extreme emergency cases. One of the many ways the government makes the numbers look smaller.
They are playing straight out of the old Soviet playbook. Their party is literally an incarnation of the CCCP. Do not treat this country as you would a democratic first world nation - it's culture is nothing of the sort, for better or worse.
Every country needs to take a hard look at the supply chain of critical goods such as medical supplies or chemicals and figure out how to reshore these factories. Even if the Chinese migrant workers comes back to the factory (estimated only around 20-30% did), most of the small businesses might be gone by then.
https://asia.nikkei.com/Business/Industry-in-focus/Virus-hit...
35% of 1,506 Chinese SMEs surveyed in early February expect to run out of cash within 1 month, 85% within 3 months.
Chinese small business which account for 99.8% of registered companies in China and employ 79.4% of workers, according to the latest official statistics. They contribute more than 60% of gross domestic product and, for the government, more than 50% of tax revenue.
Trade deficit - going way down wrt China. Also, dollar is strong, and we turn commodities from other countries into more valuable goods that we export.
Record fiscal deficit/gov debt - hard to judge without also looking at gdp + asset growth, which US is doing great in (stock, real estate). Also. US is safe haven for investors right now
What is the point not supporting crucial companies in the stock market? Are you really better off if target or chevron or Hilton goes under? And tons of people have no jobs and there no access to staples?