China is currently dealing with a new respiratory virus that has struck fear in citizens across the country. Although the virus appears to not be as dangerous as the severe acute respiratory syndrome, they faced in 2003, The coronavirus appears to be a bigger threat to the economy than before. One of the bigger problems China is facing is containing the spread of the disease. With updated public transportation and high-speed trains, the virus was able to spread around the region a lot faster and a lot further than the SARS virus was able to. China has made attempts to control the spread, but it may be too late to avoid frightening the community. Coupled with a swine-fever epidemic, the coronavirus has driven down consumer spending significantly. Compared with the SARS virus in 2003, The coronavirus shows a more disastrous effect on Chinese economy. In 2003, SARS consumer spending that drove economic growth dropped to just 35% compared to 50% at the time. Now consumer spending drive 60% of the growth in China. This new virus threatens to drop this number even lower, because of how fast it spread throughout the region. This virus differs because it is active in a larger area than the SARS virus. The Chinese economy travel, and tourism has become immensely popular and a good source of revenue for the Chinese, but due to the virus trips have been canceled already putting more hardship on Chinese economy. If the virus continues to get worse then the Chinese economy might be facing drops in the stock that depends on Chinese consumer spending and on tourism. As public safety is the number one concern, the economy taking a hit could be disastrous for the countries efforts to rise as one of the new emerging superpowers in the world. This virus may have a unique impact on the country. It will be interesting to see how the virus impacts China’s ability to trade with the rest of the world. 

Taplin, Nathaniel. “China's Economy vs. Virus .” The Wall Street Journal , January 24, 2020, sec. Business and Finance . WSJ.com.

After increased severity of the Coronavirus which I wrote about last week, today it has made front page of the Wall street journal. The virus has spread to multiple countries infecting about 4,500 people and killing 106 people already. For the fifth consecutive day, the DOW has dropping 454 points in the past five days (1.6%) due to the increasing severity of this new virus, as well as increasing fear. Other markets in China like Wynn Resorts, American airlines, and Apple have dropped significantly in the past few days. Despite recent agreements between America and China, uncertainty has risen because of this new virus, and people are less apt to take risks in times of turmoil. The most effected businesses are related to vacation, travel, and hotels. This has been a trending topic throughout news sources since the initial announcement of the outbreak. Since then, news sources like social media, televised news, and newspapers carry stories that ultimately lead to panic. It is no surprise that people are starting to take this a lot more seriously and begin to become more and more worried as more people contract the virus. Also, stories have come on regarding the amount of people that allegedly left ground zero at the Huanan Seafood market in Wuhan, China. Obviously, a drop in the market is never good, and if the media keeps feeding the public fear, stocks may begin to drop at an alarming rate in China. For China, this could be devastating, a deadly virus coupled with stock market decline could result in long term hardship. The Chinese economy hardship will have effect on the global market, and especially will effect the United States economy.

Langley , Karen. “Virus Fears Rattle Global Markets .” The Wall Street Journal, January 28, 2020.

American economy as well as many other countries rely on their small businesses to contribute a lot to the economy. As a possible shutdown looms, these small businesses face hardships. With the recent mandated closures and recommendations, small business is unable to weather the loss in profits because consumers are unable to utilize their businesses. The only businesses that will be able to weather this crisis are big corporations with an extended amount of funding. Small businesses especially restaurants are facing two main problems: rent and employee wages. Owners are being put in a tough spot, and unfortunately if this problem continues to keep things shut down, then some businesses might never open back up. There needs to be action taken in order to bailout these businesses. This needed help only comes from the government. Government aid can help small businesses by sending money as well as freezing rent payments for these small businesses. The issue compounds itself when workers that are hired by these businesses face this sudden drop in income. They are unable to pay their own debts never mind contribute to the economy. 

                This article has very real implications for state economies and American economy. There are a lot of small businesses in America that survive day to day off what they make. This is also a critical time of the year for business that has already hurt some real profitable days. For example, bars across America for the most part missed out on St. Patrick’s Day, and if this continues Easter brunch may be enjoyed at home for most families instead of out a restaurant. The other day my family ordered from a pub down the street, and employees of the pub reminded us how important it is they receive at least some sort of income, for the employees and for the business itself. If all of these small businesses go under their may be serious long-term economic problems for the community. If people can’t contribute to the economy then the economy is doing worse, and if life doesn’t get back to normal, then the coronavirus may end up being a compounding tragedy for the American people. I think there needs to be government support during this time for the working person, and for these small businesses.
Citation

Mullainathan, Sendhil. “We All Need Small Businesses. Don't Let Them Die.” The New York Times. The New York Times, March 20, 2020. https://www.nytimes.com/2020/03/19/business/small-businesses-coronavirus-help.html.

Summary
 The article starts with the staggering statistic. “In a single week in March as financial markets convulsed and major parts of the economy began shutting down, banks made over $240 billion in new loans to companies — twice as much in new lending as they would ordinarily extend in a full year.” (Kelly) COVID-19 has stopped revenue for a variety of businesses, and with bills to pay there really isn’t much more ways to stay afloat. Companies are looking to open lines of credit in order to survive these difficult times. Cash is suddenly harder to raise despite the past few years, even companies that haven’t been directly affected by the outbreak still face the difficultly of dealing raising capital. Banks are starting to get bombarded with loan requests, which is usually good for business, but as people continue to dip into their savings, and people are getting these loans they cannot pay back right away, the amount of loanable funds is starting to deplete and their simply isn’t enough to go around. The big corporations are having an easier time borrowing from these banks, because they are less likely to default their debts.  In the past weeks, JP Morgan alone lent out about 78 billion dollars’ worth of credit. 

Reflection
This article is daunting. Last week I wrote about the struggles to come for a lot of small businesses in America soon. It was scary to read about how easily big business can get the loanable funds needed to survive through the economic crisis. Kelly writes, “Companies that are rated investment grade” (Kelly) These companies are having an easier time building capital through loans, and these companies have been trying to raise capital through the selling of bonds. This is something that small businesses are having trouble doing. It will be interesting to see what the Fed will do with the incoming banking crisis, and it will be interesting to see how the Government gets involved to help bail people out. The amount of loanable funds is decreasing with the large amount of loans being requested. It is also decreasing through these funds simply being removed from the loanable pool of funds. People are going to start dipping into the saving accounts and this will take away the supply of money. I think their needs to be some sort of bailout plan carried out by both the fed and by the government in order to avoid major economic consequences when this is all over.
Citation

Kelly, K., & Eavis, P. (2020, March 31). As Virus Hobbles Economy, Companies Race to Tap Credit and Raise Cash. Retrieved March 31, 2020, from https://www.nytimes.com/2020/03/31/business/coronavirus-companies-banks-loans-credit.html

Accessed at https://www.nytimes.com/2020/04/07/business/coronavirus-ppp-small-business-aid.html

Summary 

The lightly staffed Small Business Administration has been working tirelessly to combat the onslaught of people asking for help to save their business during the pandemic. On Tuesday, “178,000 loans totaling $50 billion had been approved for small businesses through the Paycheck Protection Program that was unveiled Friday by the S.B.A. and the Treasury Department.” (Flitter) People are beginning to get mad that the relief bill has not gone into effect. The workload has piled up and it has left uncertainty to when people will get the money to keep there businesses afloat. The application process has become more complex with the large wave of people applying for.

As expected, small businesses are pushing to stay afloat through loans, and other aid in order to pay bills, and prevent from closing. The big corporations are doing the same, but they are having a bit more success with the process. They are able to take out large loans because they are big accredited corporations, whereas small businesses have to go through this difficult process in order to achieve the funds they need to survive. The process these small businesses have to go through to obtain these funds is a difficult process, and the vehicle they need to pursue. The process has been tremendously slowed because they were not prepared to deal with this amount of pressure coming from businesses so quickly. Now they are so busy businesses will have to wait even longer as the Small Business administration processes all the requests and sends out the money and hopefully it is not too late.
Citation 

Flitter, Emily, David Mccabe, and Stacy Cowley. “Small Business Aid Program Stretches Agency to Its Limits.” The New York Times. The New York Times, April 7, 2020. https://www.nytimes.com/2020/04/07/business/coronavirus-ppp-small-business-aid.html.

Monday’s events took me for a surprise. I did not really consider the implications in the oil industry. People have ceased to use oil at a normal rate, and now we have a surplus of oil so high that is now essentially worthless. This new crisis may cause a lot of problems for a lot of people. For one, countries like Russia and Saudi Arabia, whose economies depend on oil production and export. Now these economies are being forced to a complete stop. Not only that, but the surplus of oil will keep their economies at a complete stop for some time. There is nothing these countries can do. There is not even enough space in the world to store all the excess oil. A lot of these oil companies are going to have to start relying bailouts and bankruptcy claims. It will be interesting to see how many oil companies will be able to push through this time. It may be a long time coming before oil companies will be able to recover and start turning a profit again.
Citation

Reed, Stanley, and Clifford Krauss. “Too Much Oil: How a Barrel Came to Be Worth Less Than Nothing.” The New York Times. The New York Times, April 20, 2020. https://www.nytimes.com/2020/04/20/business/oil-prices.html.