Where were you during 9/11?
At the time I was in Boston, working. Our offices were located close to Logan Airport, from where flights 11 and 175 took off and later crashed into New York’s World Trade Centre.
I had just arrived to work when I heard the news of the first plane striking the north tower, and in a meeting when the second one hit.
The whole office congregated around an old TV no one had ever had much use for. That is, until that day.
I remember the tense silence filled with unspeakable horror and disbelief. I remember people crying.
It was around midday that we were all told to go home.
I remember the streets lined with tens of thousands of people walking home, too scared to take the subway. There was a strange silence there too, with none of the familiar sounds of planes taking off or landing.
9/11 turned into a ‘where were you’ moment. One where everyone can recall exactly where they were or what they were doing when it happened.
It was a moment that changed the world.
For one, air travel was never the same.
Before then, you could walk into the terminal and up to the gate to either greet passengers or say farewell. There was no need to take your shoes off or separate liquids to go through security.
The US government launched the Patriot Act, and the Department of Homeland Security. And the US went into war with Afghanistan.
Today with the COVID-19 outbreak we are living another ‘where were you’ moment, a moment that will change the world as we know it.
It already has.
If I had told you last New Year’s Eve that in only in a few months world air travel would practically end, that coffee shops and restaurants would be closed, that much of the population would be locked at home, would you have believed me?
I wouldn’t have believed myself.
It’s crazy to think about the speed of this. As of Wednesday, a third of the world’s population is in lockdown.
What’s interesting to me is that the virus is accelerating trends that we were already seeing.
Like Brexit. One of the main points about it was freedom of movement around the European Union, and now Europe is in lockdown.
Or the US presidential election of Donald Trump. Trump wanted to bring manufacturing back to the country. For months we worried about the effects of a trade war between the US and China, and then the virus hit.
The virus is impacting supply chains, and demand. It’s brought a sudden stop to globalisation…much faster than setting up tariffs.
Countries are starting to realise that they may be too dependent on other countries for manufacturing. There is already a struggle to get material from China, so they are stepping it up.
Some Australian companies are already shifting production into building ventilators, producing hand sanitisers, masks.
In particular, securing parts of the economy that are deemed vital, like food.
Bloomberg reported this week:
‘It’s not just grocery shoppers who are hoarding pantry staples. Some governments are moving to secure domestic food supplies during the coronavirus pandemic.
‘Kazakhstan, one of the world’s biggest shippers of wheat flour, banned exports of that product along with others, including carrots, sugar and potatoes. Vietnam temporarily suspended new rice export contracts. Serbia has stopped the flow of its sunflower oil and other goods, while Russia is leaving the door open to shipment bans and said it’s assessing the situation weekly.
‘To be perfectly clear, there have been just a handful of moves and no sure signs that much more is on the horizon. […]
‘Though food supplies are ample, logistical hurdles are making it harder to get products where they need to be as the coronavirus unleashes unprecedented measures.’
It will take time and make things more expensive, but I expect that trend will continue.
To be clear, I’m not saying that globalisation and global trade are ending, but changing.
On the plus side, this could create more jobs.
This virus is changing our world
At the same time, the role of the government is increasing. There are already talks in several countries of universal income.
And this virus is also changing the way we live our lives. We as consumers, are redefining what we deem essential. Remember, consumer spending makes up for 60% of Australia’s GDP.
The bases our economic world is built on are changing and reconfiguring as we speak. Once we come through to the other side, I expect the world will look different.
In times like this of big change, it’s easy to be paralysed with fear. Things are changing by the minute, and so is our future outlook.
The important point here is not to panic, to stay calm.
Start looking for investments that may benefit in this new world.
Some companies will collapse, others will do great, or adapt.
In my view, some of the biggest winners when this is over could be in areas like manufacturing, production, logistics and infrastructure.
This reconfiguration of the world could bring in a unique chance to get value investments at discounted prices.