COVID-19 in Italy: Coronavirus Even Puts Italian Football on Quarantine

Dear Reader

The crowd goes crazy as the star player in a blue jersey steps onto the pitch to take the penalty.

It’s all up to him now.

If he scores, they win the championship.

If he doesn’t, well…it’s all over.

He backs up, takes a sprint and kicks the ball…

…and misses.

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The crowd dressed in yellow roars off their seats.

The ones in blue can’t contain their disappointment.

Just like that, Italy had lost the USA 1994 FIFA World Cup and Brazil had won their fourth.

I was lucky to get tickets for the Brazil-Italy final at the Rose Bowl in Pasadena back then, as well as some of the previous matches. It was a great game.

Truth is, it wasn’t too hard, Americans weren’t too much into ‘soccer’ back then, and — except for the final — stadiums were half empty.

It probably would’ve been a different story if the World Cup had been in Brazil or Italy.

See football is big business in Italy.

The Italian league is one of the top five in terms of revenue, after the English, German and Spanish, according to Deloitte. In 2017–18 they made 2.1 billion euros in revenue, mostly through broadcasting but also sponsorships and matches.

But as the coronavirus keeps advancing, even football is on quarantine. Italy has now suspended several football games. Some matches this weekend will be played in closed doors, no crowds allowed.

Italy’s outbreak has been the big surprise this week.

At time of writing, Italy is counting 600 cases, up from 400 on Wednesday.

There are 17 dead, and more than 50,000 people quarantined.

The virus is now spilling over into Spain. It’s been top news here in Spain all week. In fact, people don’t talk about much else…and people are scared.

Shops have run out of face masks and hand sanitiser. People are cancelling their travel plans.

There are all sorts of rumours and conspiracy theories flying around.

But it’s also spreading globally.

At time of writing, there are cases in 47 countries. Official deaths and contagion are climbing every day.

Spanish TV has been broadcasting news about Chinese people boiling money to stop the virus from spreading, images of empty supermarket shelves in Italy and Japan closing schools.

We now have over 82,000 people infected all over the world. But the total number is probably higher.

The problem with this virus is that it doesn’t show any symptoms for at least two weeks. Sometimes there aren’t any symptoms at all.

And tests to check for the virus aren’t very precise…

It’s why Harvard epidemiology professor Marc Lipsitch told The Atlantic he thinks that the virus will keep advancing. As he said:

Lipsitch predicts that within the coming year, some 40 to 70 percent of people around the world will be infected with the virus that causes COVID-19. But, he clarifies emphatically, this does not mean that all will have severe illnesses.

Truth is, we don’t know much about this new, unknown virus.

And while mortality is less than 2%, people are panicking.

I think it’s got a lot to do with the lack of real information and the epic response we’ve seen from authorities.

Markets have now joined the panic. We’ve gone from ‘coronavirus bull market’ to ‘coronavirus bear market’, all in a split second.

The fear gauge, or volatility index, has spiked 42% since yesterday. It’s all a sea of red.

One of the concerns here is how all of this will affect the economy. The big problem is that the economy is standing still, at a time when there is too much risk.

Consumers aren’t working. They are inside their homes, putting off purchases. Confidence is plummeting. And as I’ve mentioned plenty of times before, our whole system is based on confidence.

It could mean a massive contraction in the global economy if the outbreak keeps spreading.

What’s clear is that there will be more stimuli from central banks.

But I think this could also be the trigger for a shift in paradigm, something we’ve mentioned a few times here at The Rum Rebellion.

With global debt at record highs, things slowing and the coronavirus spreading, governments are looking at putting more money into citizen’s pockets.

ING bank reports (emphasis added):

The area in Italy now affected by the outbreak of Covid-19, and consequently subject to particularly restrictive measures on movement and businesses, is only limited to a few municipalities affecting some 50-thousand inhabitants. That’s at least for the time being. But these areas are close to economically relevant neighbours, such as the province of Milan, at the heart of the rich North. As the two affected regions, Lombardy and Veneto, account for 22% and 9% of Italian GDP respectively, the main concern will now be whether the virus can be contained without hitting neighbouring industrial and services’ activities at a time when the Italian economy is already flirting with another technical recession.[…]

Over the weekend, the Italian government was prompted to put in place relief measures to help out households and businesses located in those segregated areas, broadly following procedures after earthquakes. Measures will likely include beefing up the redundancy fund and the deferral of tax bills and of mortgage instalments.

Affected by protests, Hong Kong is looking at more of the same. As the BBC reports:

Hong Kong will hand out cash to adult permanent residents, to help boost spending and ease financial burden.

As part of the annual budget, $10,000 Hong Kong dollars ($1,280; £985) was announced for about seven million people over the age of 18.

Get ready for change.

Get ready for a re-shift in the system.

Get ready for inflation.

Best,


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Selva Freigedo
Editor, The Rum Rebellion
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Selva Freigedo is a research analyst for The Rum Rebellion. Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table. Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default. Selva has also lived in Brazil, Spain and the USA. Back in 2000 she was living in the US as the dot com bubble popped… And in 2008 she was in Spain as the property market exploded and then collapsed… She has seen first-hand what happens when bubbles burst. Selva joined Port Phillip Publishing’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.


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