Bankers note: Corona virus-Is it a black swan event?

Nasim taleb’s most popular book is black swan . He describe black swan as highly unprobable(rare) & unpredictable event with extreme impact. Human mind is blind for such kind of rare event.

There are known-knowns – there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know . We know risk in first two category & so it’s impact can be reduced . But in 3rd category, risk is unknown & it has large impact. Black swan comes from this 3rd category.

Few days back, world has not hear the word “corona virus”, but now it has impacted entire world. Many entire countries are in shutdown mode. Cross country business is impacted. Tourism sector has taken worst hit. In my city ahmedabad, still not a single case is notified but malls, restaurants, even roads looks empty… People are taking precaution is good sign.

There are lots of fake knowledge available for corona virus in whats up university & you tube university. So let’s have a look on corona virus effects.. Corona virus has definite bad impact on respiratory system but it’s more devastating effect is its contagious growth rate. If we compare it with any other virus , for example swine flue , it’s contagious rate is 3-5 %. But for corona virus(covid-19) , its daily contagious growth rate is 25%. So what happened ,in 3 days infected numbers is doubles. Look at spain’s corona virus cases…

This is main problem of corona virus….it’s growth rate. Not a single country in the world has enough number of beds in hospital to cater such a fast rate growing patients. That’s why we hear news that china has built new hospital or italy has ordered their 80 yr plus citizen to die at home…..healthcare system has not enough capacity. Only option is control it’s spread & that’s why many countries are taking steps to lock down.

Today is 15th march 2020, India has very crucial next 15 days. Approx 100 cases are notified , let’s see how this virus spreads in India…

Indian economy has taken many wounds in last few quarters. Recent YES BANK crisis has created deep wound in indian economy. Now this corona virus will give huge impact on world economy. Many businesses are in shut down mode, currency circulation impacted in a big way…..all these international factors will give it’s impact on indian economy , but how much impact it will give that is still in unknown unknowns mode . Keep finger cross for next 15 days…Hope that this black swan event will impact minimally on indian economy.

This is a live link for corona virus cases worldwide . https://www.worldometers.info/coronavirus/#page-top

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