First off, this is just my personal opinion (the whole point of a blog right?), and I am not an expert on much of anything, much less the Covid-19 virus.
Let me start by saying I think this Corona virus is overblown. The fatality rate is low. The symptoms for most are less intense than the standard flu. It is not wiping out towns, cities or countries. I believe it is being overblown. I believe the media loves hysteria and whats better than a illness that COULD KILL US ALL (du dun duh!!)? From their standpoint it is great, it makes people watch the news constantly, which means ads and revenue and profit. It’s disingenuous but it’s the way media works.
My fear of this Corona virus is the chain reaction I see as very possible from industry to industry making everything worse, a domino effect.
The hardest hit place so far is the travel industry. A quick look at the stock market will show you that every airline and cruise stock has taken a beating. Norwegian cruise lines just announced all cruises booked through September can be canceled all the way up to 48 hours prior to departure for full cruise price that can be applied to future cruises. American Airlines made a 2 week window where tickets booked can be changed without fees for future flights. I assume other travel companies are making similar arrangements for their guests. I just happen to have upcoming flights and a cruise scheduled.
In the last week a huge industry conference, South by Southwest, was canceled. Last year 73k people attended this. Imagine the economic hit to Austin, where this was to take place. 73k less people flying there, staying in hotels, renting cars, taking ubers, eating out and yes drinking. The lost revenue to these local businesses will be huge. They prepared for this likely for the past year, making reservations, accommodations, hiring staff, ordering supplies, planning menus, maybe remodeling. Now there will be so much wasted time and resources, revenues lost and people not working.
This is happening all over. A friend who travels for work a good bit just mentioned on facebook that their company has suspended all travel by air until further notice. My sister in laws employer just told everyone to work from home for the next week. Work from home and altered travel plans can be easily done for the short term without much hit to overall productivity. However if this continues to spread and the hype increasing then people will stop eating out or going to the mall or Walmart (never thought anything could stop people from going to Walmart) or going to sporting events or concerts, or anywhere there are people in numbers. If this happens then the malls and Walmarts and restaurants and concert venues will not need employees to come to work. If those people don’t go to work then they don’t get paychecks. We know as a country that most people don’t have reserves to pay expenses for more than a couple weeks. Oh, but a lot have credit cards to fall back on. However banks are not dumb. If people aren’t working then they will chop credit limits (this happened to many in 2008-10, including me). Not to mention if people are scared to go out and companies are telling people to stay home, there may not be anyone at the bank to talk to since they will also likely be closed. If people aren’t working and trying to survive on what they have are they out buying new cars? I doubt it. Are they spending any money on non-essentials? I doubt it. So the dealerships close and the big auto manufacturers close for a bit and all those people are left without their next paycheck. And then the places they all spend their money aren’t selling lunches and beers and clothes and… you get the point.
I am looking at this on a large scale and also from my personal standpoint. I own a repossession company. On first thought it might make sense that the number of repossessions should go up if people are squeezed and more focused on food, housing and getting a paycheck coming back in. However the clients that we do work for have staffs of people making the decisions on what accounts should be repossessed. If the people working in these call centers or large office building are also staying home then there is no one to order the repossession. If orders for repossession do not go out then I don’t have enough to keep my staff busy and therefore have to either cut hours or lay people off. Then they have the same problems mentioned above trying to pay their bills without a paycheck or at least not a full paycheck. Even if I cut staff to zero and did whatever had to be done by myself, I could not generate enough alone to cover the truck payments and insurance and facility and utilities and softwares we use. I could find myself in the same position easily. My company is small, with 15 or so employees, but as a business owner I can see the same holding true to most any business with a massive cut to production. Even something as needed as plumbing could be a challenge if employees are scared to go visit someones house for fear they might have Corona virus. Everything could come to a screeching halt.
The above doesn’t even take into account the even bigger mess if because of all this the Walmart that no one wants to go to closes and the grocery stores have no employees to run the store or the truck drivers don’t want to drive cross country with food or medicine for fear of being a thousand miles away from home and not able to get back to their families. Or because trucks aren’t running there is no gas at the pump and now getting anywhere becomes not possible.
And then the ultimate worst case scenario we’ve all seen played out in movies or shows, police aren’t there doing their jobs, same with fire and medics and the world burns in chaos. Then the zombies eat us all….
Sheesh, that escalated quickly. (completely kidding about the zombies, btw)
I fully believe that people smarter than me can figure all this out before we get to the zombie part. Where in that rabbit hole it stops and gets better? I’m not sure.
I again want to point out that I think this entire thing is completely blown out of proportion and pretty much everything above should never happen. However people are not very smart and are easily led down a path of fear and overreacting, so I see it as a possibility. I certainly hope we get some good news on containment in the coming week or two. I know there are vaccines and treatments being rushed to market to combat the virus (rushed medicines could have its own set of issues).
So the question is, what am I doing personally? I am taking a wait and see attitude. I am not rushing to make any big decisions or changes. I am a little bit of a “prepper” anyway, so I keep a little extra long term food stored anyway (you never know, natural disaster or a virus named after a beer or any number of other things could disrupt life so better to be a little prepared). I am running my business to be efficient. I am holding off on the purchase of another truck temporarily. Does it hurt anything to have some extra food for the dogs and couple cases of water? Nope. I am working on a plan in case business slows drastically so I am not caught unprepared. I made sure I have a little cash in case banks were to close for a bit.
Some might say that’s overreacting, and it might be. But one of the few life lessons I took from my parents was “better to have it and not need it than need it and not have it”.
doing it different 