Over the past few months we've all been watching the dominos that are COVID-19 fall in one coutnry

after the other. Initially, I for one, didn't think it would 'get to Australia' that somehow we'd

dodge this like we've dodged so much over the past 30 years, in fact since the October 1987 

stockmarket crash.

It's now the end of March. My son's 25th birthday is in a week but it's pretty much not

on either of our minds. Dealing with this uncertainty is the new normal. So much so that

I think my purchase of rather more winter seedlings for my garden will result in a massive surplus

of various veggies come the end of April!

But let me take you back to October 1987.

On that day I was interviewing one of Australia's then leading businessmen for a book I had been commissioned to write for, get this, the ASX.

We were in his office high up in the Riverside Centre in Brisbane, the same building the then Brisbane Stock Exchange (back then each city had its own exchange) was in.

Not long into the interview the entrepreneur became completely distracted by what was happening on one of his computer screens. I asked him what was up. His reply? 'I'm watching my share price tank and there's nothing I can do about it.'

'Do you want to continue the interview?' I asked

'Sure, there's nothing I can do'.

The interview lasted another 30 minutes after which we both went down to the floor of the Brisbane Stock Exchange and watched the rout.

It was a memorable introduction to Australia. I'd only arrived here seven months before to take up the research and writing project.

Over the next two years I travelled all over Australia interviewing over 200 of Australia's leading business people and entrepreneurs.

It was fascinating talking to these successful business people and, in some cases, they lost their fortunes.

Think John Spalvins, Colin Reynolds, Bruce Judge, Frank Lowy, Carla Zampatti, Steven Rich, Bob Ansett, Ron Brierley, Isi Libler, Sir Tristan Antico,

Kerry Stokes, Stan Perron and Jim Kennedy to name a few.

Researching and writing this book, Champions of Enterprise. Australian entrepreneurship 1788-1990, was a crash course in Australian business and what makes and entrepreneur,

two areas I've been involved with ever since.

 

As a business historian I've seen more than my share of booms, busts, recessions and over-heated markets: 1987, 1991-2, 2008 and now.

Having recently written a history of one of the big four banks I've had my head in the history of world banking and finance for few years and read some terrific books on the subject.

While the world's markets reel in response to the uncertainty that is coronavirus, I am watching the ASX as the red arrows keep coming, the trading halts and pauses increase and

profit guidance restatements keep flowing. I am also reading the newspaper commentary and am appalled at some of the cheap shots some journalists are taking at our

Prime Minister, as if they are now suddenly experts on all matters public health and contagious diseases.

I keep thinking of Rudyard Kipling's poem IF, the first two lines of which most of us know.

If you can keep your head when all about you

Are losing theirs and blaming it on you . . .

Now is a time for those who are in positions of leadership and the media to work together to provide clear, factual and calm advice...or say nothing.

Speculation and fear-mongering in such a volatile situation is more than not helpful, it's dangerous.

I am not suggesting that there be no commentary about the actions of our federal and state leaders, just that media commentators need to provide considered, clear updates and information not ill-informed, personal opinion.

As to the markets, well, this correction has been a long time coming.

Quantitative Infinity, as I dubbed it a year or so back, was not, will not and could not, stop the malaise that had become the low growth, low inflation, asset bubble phase we were experiencing.

The deleveraging of the world's stock markets has been a matter of wide discussion for a couple of years now... it's just that no-one knew when and most thought it would be through a market (man-made) correction

NOT a supply shock felt through the global supply chains that says Robert Guy "exposed the vulnerabilities of the just in time fetishism and over-reliance on China as the factory to the world."

Guy goes on to note:

A decade and more of super low rates has incentivised all sorts of capital misallocation nonsense that has allowed cash-brining unicorns to flourish and old-school zombie companies to limp on."

For the past decade US companies (but not only US companies) have gone on a humungous borrowing binge – as have Australians in relation to housing loans – taking advantage of ultra-low interest

rates to load up on debt to fund mergers, buyouts or buy back their shares. I've seen this before in slightly different ways...but I've seen it.

As a result US corporate debt is now $15 trillion, or a record 47% of the US economy.

Add the coronavirus pandemic along with the chaotic and late action by the Trump administration on to this and 'We've got a problem, Houston'.

But, it's not an unsurmountable one.

This pandemic will pass, and the the global reset of economies will, in my view, finally take place.

We'll all have to adjust to, well, less. Mostly lower expectations about what we think we're entitled to across the board.

And that's not a bad thing.

The post 2008 party had to end. That party was killing the planet, increasing inequality driving social unrest and, in Australia, leading to increasing rent seeking and under investment in our future, education.

 

If you haven't already, it is now time to hit the reset button not to panic.

 

We'll get through this, but what's on the other side is NOT more of the same and I for one, am not sad about that.

If nothing else I'll have a bit more time to get around to updating my book, Champions of Enterprise as it's been on my to-do list now for five years.

Watch this space, stay safe, tell those you love that you love them and don't worry about the markets or the value of the $A.

There's nothing you can do about it.

You can, however, be calm, co-operative and help those around you to focus on the facts.