The coronavirus. There is no certainty, of course, but the CDC believes that the virus is building up steam in other parts of the world. China may be able to contain it, but other countries may not. Then it spreads throughout the world, and then, it re-enters China again. Maybe Indonesia is next. It also didn’t help that the CDC’s test kits that they shipped all over the world is faulty. Now, we have a mass pandemic, and all nations shut off their borders.

Then all the corporate debt accumulation over the past few years, means that these companies are vulnerable if they miss their profits. And a lot of companies have just warned about the virus. Three years ago, I don’t think anyone ever saw this coming, except maybe, Bill Gates, but even he didn’t know when it would happen.

I think the first shoe to drop will be China’s external investments, such as in real estate. They’ll need to re-shore their money back to China, because a lot of private businesses in China will go bankrupt. This means less money for outside investments. This might trigger the real estate bubble to finally pop. Then secondary effects will happen, as other sectors that depends on real estate, will be impacted, and the dominos will begin to fall. Even energy wasn’t expecting such a demand shock to come from China. That came out of left field. Then automotive, then aerospace, then hospitality, then tourism. China has been propping up a significant portion of GM’s international profits for the past 5+ years. Boeing was expecting to sell a lot of planes to China over the next few decades. But interestingly enough, remote software and technology services, will gain market share.

Then, nobody, it seems, wants to be on a cruise liner right now. The quarantine in Japan is just bad PR. The confirmed infection rate on that ship is growing exponentially every day, until everyone will be infected.

Also, nobody is going into China, but this also means that no one from China, is visiting the rest of the world. This was totally unexpected. I don’t think any forecaster ever saw this coming in their crystal ball. This will impact travel and hospitality, as those companies depended on those precious Chinese tourists. Then, layoffs will happen in those other countries.

Regarding the trade war, the economists were able to mitigate its effects, but the fear and xenophobia from this virus, might cause even more economic damage than imagined. It also doesn’t help that the politicians worldwide have been bumbling idiots for the past month. And the American leadership has been cheering on this virus, in their hopes that it will destroy China from within. I hope they’re ready for the fallout.

Then some are speculating that China will publish their own digital currency, to bypass the American financial system. Then Google is going to take a huge hit in the next few years, as Huawei and the other Chinese Android manufacturers are teaming up, but that loss might be immaterial to them. Then the big one, Qualcomm, which makes over 50% of its revenue from China, is going to take a huge hit, when they can’t sell to Huawei anymore.

But who knows. This is all speculation on my part. If we get another downturn, then the Fed will just drop the interest rates again, and pump another 10 years of QE Infinity into the system. House prices will go up even more, without the increased pay, and it prices most people out of the market. But at some point, QE isn’t going to work as well anymore.