I found an interesting article on one of the boglehead boards, I hope it hasn't been posted here before. The article is about a week old.
https://www.scmp.com/comment/opinio...ing-standing-between-coronavirus-and-us-stock
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A slowdown in China alone could trigger a global recession. While the current level of commodity prices doesn’t yet imply a global recession, it is quite close. If the prices of oil and iron ore decline by another 20 per cent, a global recession would be upon us.
If the manufacturing disruption lasts through March, production in other industrial economies like Japan and South Korea would be affected. Emerging economies that make shoes and garments will have trouble sustaining production.
The migration of downstream manufacturing to Southeast and South Asia is backed by supplies of materials and parts from China. In this scenario, a global recession becomes highly likely.
Even if Beijing orders all factories to restart, events beyond its control may stop production anyway. If one virus carrier is found in one factory, part of its workforce would need to be quarantined. The factories down the supply chain will be affected. China’s manufacturing sector will have to depend on luck to operate normally.
In the worst-case scenario, all human efforts won’t be enough to contain the outbreak. The world must wait for the real saviour – summer time – to break the crisis. The prolonged disruption to global supply chains would lead to bad earnings for multinational companies for two quarters.
The bad news may trigger the US stock market bubble to burst, which is likely to be more devastating than the crash in 2008. The global ramifications are easy to imagine.
The US Federal Reserve appears determined to prolong the bubble. Despite the record low US unemployment rate, it introduced another round of quantitative easing last autumn – about US$400 billion since September – to protect the bubble. While the Fed may come up with wild theories to justify its actions, it is clearly in the pocket of those who benefit from the bubble.
Since the 2008 global financial crisis, no major economy has cut their debt leverage. The biggest two – China and the US – have increased it. All these debts have not weighed the world down, because asset prices have risen faster than debt, making businesses and households feel secure.