Hello energyplay, <<spending their money>>
(a) The unfortunate poor are getting less from government and less from odd jobs;
(b) The less fortunate masses are extremely worried about the longevity of their employers (novel situation), about their own jobs even if their employer makes it to ‘the other side’, and so spending money is not a smart thing to do and buying stuff is not fashionable;
(c) The unfortunate wealthier folks are scared that all they have worked for and earned may go ‘poof’ as the whatever economic condition we are in rolls inexorably forward;
(d) The fortunate still-moneyed crowd are aware that there may be more bargains tomorrow, the day after that, and the day after day after that;
(e) All are aware or suspect that what has happened to Hong Kong economy is, in variation of speed, ferocity, and other nuances, happening elsewhere – known as post-bubble adjustment. SARS is a fluke, war is an added flavor, officialdom screw-ups are a constant. The center of the core of the crux of the situation is post-bubble adjustment, surrounded by abracadabra globalization inflections towards various TeoTwawKi outcomes.
(f) Folks can intuitively understand that as SARS will be around for awhile, it will spread; slow, stop or reverse globalization; cost a lot of money; stop a lot of money from being made; destroy plenty of value; and
(g) (f) will happen assuming nothing nastier happens on this or other fronts.
By the time the benighted Maestro Greensputin gets back on the job, he and Professor Bernankaput will have to ponder how to accommodate the other officialdoms and released more of Maurice’s little electron blips representing value, lower discount rate to below nominal zero, pulverize the longer yields, trash the USD at USD-center, so as to aid RMB at USD-periphery.
BTW, some factories are shutting in China or slowing due to SARS effect, and even so, the manufacturers cannot simply open factories elsewhere, because they do not know that SARS will not disappear like Ebola, and so cost of goods are increasing, in a 'no-pricing-leverage' and surplus capacity economic environ. Can you picture the rock, the hard place, and the blade that is dropping from top-side, and the ground that is giving way like quicksand?
To add flavoring and condiments to the very strange shrinking pie, oil price may stay where it is, gas may go up, and the death blow, real interest rate may increase, and all currencies may implode in succession, as if they are sequenced demolition explosives to bring down a large building in on itself.
It is 7:26pm, where is your money?
Chugs, Jay |
