What potential aftershocks can we possibly get arising from a more protracted COVID-19 crisis:
1) US oil shale industry littered with bankruptcies as oil prices remain at depressed levels;
2) Emerging market bond crisis- sparked by a sovereign default possibly Turkey triggering massive outflow of EM debts, and creating stress for the EU banking sector
3) Substantial downgrade of BBB investment grade bonds to junk status , creating pain for high yielding bond holders such as pension funds, investment houses
4) Increasing nationalism as the world economy shrinks from de-globalisation , China consequently suffers from the present status of world manufacturing hub, China's economic growth impaired casting a shadow on Australia
5) Potentially higher inflationary environment stemming from removal of all fiscal restraint as Governments attempt to re-flate their economy with more fiscal stimulus spending out of printed money
6) Supply chain disruption remaining in effect for longer after the virus contagion
7) Failure of consumer spending to normalise in post-viral economic environment, leading to anaemic economic recovery
There are more , including more insidious macro problems that we hope would never come to pass.
