While coronavirus numbers continue to grow in Victoria and Queensland shuts the borders to Sydney, a survey by the ABS finds Australians are split on when life will return to normal. Meanwhile Bunnings has been dealing with customers who refuse to wear masks – the new normal.
On the good news front, the government has extended early access to super and electricity prices are down.
We also look at how poker provides lessons for investing, and sharks.
The one-minute weekly recap
- The coronavirus outbreak in Victoria has led to a loss of 60,000 jobs in July.
- Queensland will shut the borders again to anyone from greater Sydney from Saturday 1Aug 1am after more COVID-19 breakout hotspots have been identified.
- The government is forecasting unemployment to peak at around 9.25 percent in the December quarter.
- GDP is forecast to decrease by 3.75 percent for the calendar year.
- Large declines in taxation receipts and increases in payments, has seen a major deterioration in the budget position, with estimated deficits of $85.8 billion in 2019-20 and $184.5 billion in 2020-21. The government is spending big.
- The government has extended early super access by three months. I guess I won’t be retiring until I’m 90!
- Treasurer Frydenberg has called for Reagan and Thatcher like supply side economic policies to help the Australian economy but has been rebuffed by the PM. The treasurer is beholden to dead politicians beholden to dead economists.
- Australian manufacturing ranks last among OECD countries in terms of self-sufficiency according to a report by the Australia Institute. At least we make those thingies here – don’t we?
- The AUD is up over a cent in the last week relative to the USD as the USD has faced downward pressure. It is close to a yearly high. Now is a great time to order some stuff from overseas to arrive for Christmas!
- Treasury forecasts expect the iron ore price to halve by the end of the year.
- Gold rose to a record US$1944 an ounce on Monday and many are tipping it to pass $2000 with the US dollar softening and heightened inflation expectations.
- The Chinese stock market is continuing its recent bull run.
A Sniippet for You
Australians split on when life will return to normal (ABS, 28 July)
- Just over 50 percent of Australian believe that life will return to normal in 6 months; 18 percent believe it will take a year
- 9 percent do not believe their pre-pandemic lives will ever return
- 60 percent considered their mental health to be excellent or very good
- 29 percent would like to continue spending more time with family and friends after restrictions are lifted
- 28 percent do not want to continue any restriction inspired behaviour once restrictions lift
Bunnings beefs up security against anti-maskers (AFR, 27 July)
- Bunnings has beefed up security and says it will call the police on customers who refuse to wear masks at its stores in coronavirus lockdown zones in Victoria
- Mobile phone footage of a woman refusing to wear a mask and confronting Bunnings staff at a store in Melbourne’s south-east on Sunday has gone viral
- Victorian police have the power to arrest people who choose not to wear face coverings and subsequently fail to comply with a police directive to provide proof of identity
Electricity prices plunge to lowest in five years (AFR, 22 July)
- Wholesale electricity prices traded at the lowest in five years as commercial demand has fallen during the pandemic
- Wholesale prices make up about one-third of residential electricity bills
- Wholesale prices could fall another 20 percent over the next two years
‘A national crisis’: 16,000 Australian community sport clubs face collapse in wake of Covid-19 (The Guardian, 22 July)
- 25 percent of local sports clubs are at risk of folding if financing is not found soon
- An estimated $1.6bn has already been lost by local clubs since the pandemic hit
- Clubs need $1.2bn to survive pandemic
- ““These clubs are about more than the sport itself – they are the lifeblood of communities all over Australia.”
- Australia’s two largest workers compensation schemes are losing hundreds of millions of dollars each year
- The Victorian ombudsman describes the behaviour of some insurers as “downright immoral and unethical.”
- According to NSW Treasury documents icare has underpaid approximately 52,000 people around $80 million
A Sniippet of Finance advice
What poker can teach you about investing (Bloomberg, 24 July)
- A doctor in psychology became a professional poker player to better understand research on risk.
- You need to lose to get better. Winning blinds you while losing forces you to learn
- You need to remain objective when you lose
- Focus on the process not the outcome
- Know why you make your decisions
A Sniippet of Brain food
How to exercise your judgement during a pandemic (London Business School)
- Good judgement is the ability to combine personal qualities with relevant knowledge and experience to form opinions and take decisions
- It means taking decisions in the right way at the right time – a bad decision is better than not taking a decision
- Do you have enough information and do you understand the information?
- Use a rolling plan not fixed forecasts
- Since right now most leaders don’t have the data they need or enough experience of pandemics, this is probably not a great time to trust your gut.
A Sniippet of Trivia
- Worldwide study finds Australia among nations with highest shark numbers
- Sharks are functionally extinct in 20 percent of reefs surveyed
- Destructive and unsustainable fishing has caused a crash in shark numbers across many of the world’s coral reefs