A time to panic?

 In Allgemein

Von Ivan Mlinaric, Geschäftsführer der auf Risikomanagement spezialisierten Quant.Capital Management GmbH.

The 2019-nCoV (or Coronavirus) in China is raging hard. The growth rates in confirmed cases over the past week have been at a staggering +35% to +68% per day. Over 40m people are quarantined. Many large-scale public events have been cancelled. Public holidays have been extended by one or even two weeks. China’s governments (state and local) are willing to sacrifice economic growth to contain this outbreak. THAT is significant!

The extended near-halt in economic activity will certainly have a detracting effect on China’s economic growth. We do not know how strong this will be. There will probably be second-round effects (disruptions of supply chains in Europe/US). Scope also unknown. We know the situation is serious. It will cost lives and economic growth.

So, is this the time to panic?

On the contrary, now is the time to prepare. Now is the time for dynamic risk management.

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