CN&CO Events hosted the first in a series of webinars called Cartesian Talks, presented by asset manager Cartesian Capital’s MD, Anthea Gardner. The online discussions aim to help make sense of where the economy and the markets are going.

“I’m planning lots of market updates, such as how the Corona virus or the US riots will be impacting the stock markets and your portfolios,” said Anthea. “I will also cover a couple of critical topics such as pension funds, personal risk, different asset classes… and I think people have lots of questions, so I would like to take this opportunity to answer some of those questions in the webinars.” 

Anthea’s guest on the show, which was hosted by CN&CO’s Carel Nolte, was actuary Nick Hudson, co-ordinator of Pandemic Analytics and Data (PANDA) – a group of concerned professionals who saw a crisis coming and predicted the onset of a very dangerous set of circumstances, not only for South Africa but also for the world.

Anthea shared the following statistics with regard to the coronavirus:

  • The total number of people in the US who have claimed unemployment benefits in the past 10 weeks is over 40 million 
  • Stock markets are recovering from the initial plummet that we saw in March
  • But we are set to feel the economic pain for years to come
  • SA lost R15 bn in taxes due to the cigarette and alcohol ban
  • 6.5 million South Africans have applied for the Covid-19 grant, of which Sassa has managed to pay only 117 000
  • UIF has paid R15.8m to 3 million employees at 200 000 companies
  • Even with the 20% decline in revenue collection, SARS will still collect over R1.1 trillion this year. 
  • SA economy will shrink by 7-15% this year
  • 4-6 million South Africans will lose their jobs “and I believe we could be looking at an unemployment rate of more than 50%”
  • Our debt to GDP, currently at around 62%, is likely to hit 80%, which puts us in the IMF bail-out territory

“There’s no perfect answer,” she said “I am torn between ‘we need to get this economy kick-started’ and ‘oh my goodness, look at these coronavirus numbers’.”

Nick used his presentation time to debunk seven myths about the coronavirus:

  1. The lockdown was a question of trading lives for money. “The consequences of the lockdown will prove to be 30 times worse than the benefits of the lockdown,” he said.
  2. The virus itself is significant on a global level. “We will probably see half a million people dying from the virus, and while every death is a tragedy, we need to see that in the context of a planet of 7.8 billion; 50 million people die every year.”
  3. Lockdowns have flattened the curve. “Data from 80 countries that have peaked and whose epidemics are in decline, reveal that there’s no relationship between the stringency of lockdown and the ‘curve’.”
  4. Lockdowns don’t bring incremental economic cost. “This is a misguided perception; the virus has resulted in deep, deep economic declines around the world… and lockdown countries are faring far worse than non-lockdown countries.”
  5. Developing countries are at greater risk than developed countries. “Developing countries such as Mexico, Russia, Iran have, in fact, exhibited massively lighter experiences than developed countries.”
  6. South Africa faces unique risks. “Our high rates of HIV and TB were a concern, but tests indicate that South Africa’s epidemic is behaving in a similar fashion to those that have been seen elsewhere in the world.”
  7. The virus is a threat to many. “This disease overwhelmingly strikes people who are very old or very sick; less than 1% of the population is at risk of dying from the disease.” 

Nick said diverting resources from HIV and TB into Covid-19 would lead to an acceleration in the death rates associated with the two former diseases. To put this into perspective, HIV and TB caused around 64 500 deaths in 2017. The Covid-19 death rate at the time of the presentation was 643.

A very interesting Q&A followed. Watch the recording of the discussion below: