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China to inject $174B of liquidity on Monday as markets reopen

reuters.com

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Re: China to inject $174B of liquidity on Monday as markets reopen

#51

Post by user5994461 »

daenz wrote: post #31

Maybe this is demonstrates an immediate consequence of having a people (mainland China, not necessarily HK) that is governed primarily by fear: reactions of extreme subordination, which keep things running "smoothly" under normal conditions, can threaten the whole system to collapse under abnormal conditions.

It's not governed by fear, especially not hong kong.

It's more of a cultural reaction that many went to the shop to gather food, detergent, face masks and more for the next month(s) so the shops have run out of things (plus many businesses and transports have closed). The panic wasn't driven by government decision but by people acting individually in concert.

It's hard to tell if the same would happen in the US or Europe if and when the first few people will get infected by the virus.

Re: China to inject $174B of liquidity on Monday as markets reopen

#52

Post by adnzzzzZ »

bane wrote: post #20

The Chinese government's response to this situation (after some initial dithering) has been to move swiftly with big moves. I suspect that the force that overcame the initial delays in local response were powerful central government actors who could some in and simply shut cities and entire areas down and not fool around. There appears to be at least one emergency prefab hospital with about 1600 beds under constructi…

This kind of analysis I'm seeing everywhere is so misguided. The reason the local government didn't report on the situation accurately and even punished some journalists for speaking about it is a flaw of how their country is run and how their command structure incentives are poorly set up. This isn't a new problem and it's why we have converged to a different system in most of the West.

The government coming in later after the situation is already out of control and responding aggressively is only a sign of their failure, given that it wouldn't be necessary for this to happen in a country that wasn't so authoritarian. This should be a wake up call to people in the West who think that banning "fake news" and "misinformation" is a good idea, given that the local government used this exact same excuse to punish journalists speaking about the outbreak early, when it could have been controlled properly.

Re: China to inject $174B of liquidity on Monday as markets reopen

#53

Post by QuesnayJr »

cltsang wrote: post #24

Pardon my lack of economics knowledge. They may be able to keep the stock afloat for a few days, then what's next? Where will the money eventually go? How can this help when economic activities halt?

It's standard Keynesian monetary policy. There's bound to be some impact on the economy from the coronavirus, but sudden shocks to the system cause the economy to overreact, and far more people get thrown out of work. If the government overstimulates, then you get inflation, but in a crisis unemployment is a bigger problem.

Re: China to inject $174B of liquidity on Monday as markets reopen

#54

Post by ed_balls »

jmnicolas wrote: post #33
wwwtyro wrote: post #2

Here's a map with the latest coronavirus data: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to your link the survivability rate is almost 98% (305 deaths for 14628 cases). (I'm trying to inject a bit of optimism here, people are so gloomy).

I'd like to see some more granular status e.g. out of 15k cases 1000 are 25-35 years old males that were healthy. The survivability rate is X for that group.

Re: China to inject $174B of liquidity on Monday as markets reopen

#55

Post by totalZero »

jmnicolas wrote: post #11
howmayiannoyyou wrote: post #6

China = 20% of global GDP -> shutdown until Feb 17th. China = ??% of global supply chain -> shutdown until Feb 17th. This is the current status quo. If the situation isn't controlled by Feb 13th you can kiss at least 1/3 of global GDP goodbye. And, don't get me started on possible outbreaks elsewhere.

Stop spreading FUD. There have been a couple hundred deaths. Even if the numbers have been minimized, compare this to the 40'000 deaths due to the flu in the US every year ...

China has implemented drastic containment measures and many foreign companies have sharply cut business they do in China.

Emergency braking of Chinese commerce will hit the global economy hard, no matter how low the death rate is believed to be, because fatalities aren't the driver of the economic impact.

Re: China to inject $174B of liquidity on Monday as markets reopen

#56

Post by staplers »

QuesnayJr wrote: post #37
notyourwork wrote: post #26

> It will do the exact opposite. Hasn’t the Chinese government been doing this for years in one form or another to artificially stimulate the market?

I don't understand this obsession with "artificial" stimulus. If the economy naturally grows at 2% a year, but "artificial" stimulus causes it to grow at 3% a year, why wouldn't you do it? It's like refusing to get vaccines because they are unnatural.

Because natural resources are finite. If you don't understand why runaway inflation is bad then you'll need to educate yourself.

Re: China to inject $174B of liquidity on Monday as markets reopen

#57

Post by bitxbit »

cltsang wrote: post #24

Pardon my lack of economics knowledge. They may be able to keep the stock afloat for a few days, then what's next? Where will the money eventually go? How can this help when economic activities halt?

Companies will face cash crunch because they temporarily can’t sell (since they can’t make widgets). This will help them bridge that gap in theory.

Re: China to inject $174B of liquidity on Monday as markets reopen

#58

Post by grey-area »

jmnicolas wrote: post #33
wwwtyro wrote: post #2

Here's a map with the latest coronavirus data: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to your link the survivability rate is almost 98% (305 deaths for 14628 cases). (I'm trying to inject a bit of optimism here, people are so gloomy).

It depends. NB there are only 300 confirmed recoveries as yet, and figures from China are likely underestimates. It’s probably too early to tell mortality in the initial wave and often viruses mutate as they spread and become more virulent.

Still, hopefully mortality will be low and this will pass quickly, we are quite good at dealing with epidemics now. I suspect the economic impact may be important though if things worsen even a little and the lockdown continues.

Re: China to inject $174B of liquidity on Monday as markets reopen

#59

Post by stapled_socks »

jmnicolas wrote: post #33
wwwtyro wrote: post #2

Here's a map with the latest coronavirus data: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to your link the survivability rate is almost 98% (305 deaths for 14628 cases). (I'm trying to inject a bit of optimism here, people are so gloomy).

My interpretation would be that the rate of survival is 53%; 348/(305+348). People don't die immediately, the ones currently infected can go either to the "Recovered" figure or the "Deaths" figure.

From the link above: 14628 are currently infected(?) 305 were infected and died 348 were infected and recovered

Re: China to inject $174B of liquidity on Monday as markets reopen

#60

Post by [deleted] »

notyourwork wrote: post #49
bitxbit wrote: post #45

Earlier quoted context omitted.

In a way you’re assuming no inflation which has been the case for the past decade. BUT. What happens when China goes offline and takes low cost labor with it? For the record, I believe this situation will resolve within the month but it will certainly reveal global over-reliance on China (this is meant as a positive comment that China has been the single driving force behind economic recovery which they don’t get eno…

The lost lives of their blue collar work force deserve the credit.

[deleted]
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