By David Prattent

Is it yes, or no, or maybe?

MarketWatch has spent the morning ploughing through some of the world’s news publications and journals.  The amount of column space devoted to the coronavirus pandemic is truly staggering.  What on earth did we do for news before this happened?  And perhaps just as importantly what are we going to do afterwards?

With the assistance of some brain food I fell to wondering about the future.  As most countries look to emerge from their various forms of lockdown, the chatter is turning to what a recovery will look like.  Predictions range from the types of economic recovery, future property prices, the price of oil, currency values, the list is endless.  And all these opinions are repeated in the media as if they were facts.  Moses would be stunned; he probably never contemplated that he would have so many imitators.

MarketWatch is old enough to remember the days when the press actually reported news.  Speculation was reserved for thoughtful editorials which often avoided the trap of trying to act like an alternative government.

So let’s just take the opportunity this month to take stock of where we are.

Will there be a recovery and what will it look like?  Pretty much everybody agrees there will be a recovery.  After all, we can’t keep going like we are for ever, can we?  But it depends on your definition of recovery.  If you mean will it get better than it is now, the answer is probably yes.  If you mean will we get back to where we were, the answer is maybe.  If the question is will we better than we were before, the answer is probably not for some time.

To show how complicated it is, consider the following recovery scenarios:

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Introduce all the variables available and the ability to predict the future becomes an impossibility.  I have read opinions which put forward every one of these options.  And the final outcome could well be none of these.  They are all just guesses.

Is globalism dead?  Probably no, but it is certainly wounded.  This pandemic has tended to focus nations on their own self-reliance, rather than collaborating to work towards an economic and health solution.  It has been pretty much a case of “sauve qui peut” (every man for himself).  Can we get back to where we were?  Who knows?

Australia has got itself in a tangle with China.  You can argue on and on as to whether we should have poked the ants’ nest with a stick, but you can’t escape the one truth that almost everyone in business knows; it is dangerous to rely on one customer to the extent that your business cannot survive without it.  This issue is just another compounding factor in how we contemplate a recovery.  Stock markets don’t seem to think we have a problem, but that’s an issue for next month.

I could go on like this almost for ever, but we get the idea don’t we?  These are surely the most perilous of times.  So how do we respond in our daily business lives?

Well, one thing you can do is not to assume media reports, which look to the future, are a source of truth.  Although it is a slightly pessimistic comment, the best economic statement I have read comes from the eminent Harvard economist, Kenneth Rogoff:

“I liken the incident we’re in to The Wizard of Oz, where Dorothy got sucked up in the tornado with her house, and it’s spinning around, and you don’t know where it will come down.  That’s where our social, political, economic system is at the moment.  There’s a lot of uncertainty, and it’s probably not in the pro-growth direction.”

The second thing is to remember the golden rule of a crisis; in every crisis there is opportunity.  We have talked about it before and Marketwatch will keep banging on about it.  The current economic and health crisis is outside of our control.  Rather than be dispirited about it, take control of what you can and seize the opportunities when you see them.

This month, in the spirit of globalism, MarketWatch has turned his gaze to Europe.  Spanish wine has often been regarded as having a dual purpose both as cheap plonk and as paint stripper.  But this does not do justice to some of their great wine regions.  I recommend El Bombero, a Grenache from the hot, dry region of Cariῆena.  A wonderful red and good for most foods.  If you can get the Gran Reserva then even better.

See you all next month.

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