Investor panic isn't a result of the novel coronavirus, but of the hysterical government reactions around the world. For two months, the virus ran rampant, and the markets were apathetic.
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Only when governments started limiting travel and flights were canceled en masse did we see the markets in Israel and abroad respond. It appears that investors aren't expressing much faith in how governments are coping. It's unlikely that the decision-makers considered these costs when they choked global air travel and tourism.
Governments worldwide are doing nothing to calm the stress from the unknown. Rather, they are encouraging it. The public doesn't listen to words but understands actions. Officially, world travel has not been banned, but it has become impractical.
Take, for example, a group of journalists from Germany who had been planning a three to four-day visit to Israel. They canceled the visit after realizing that their visit would start with two weeks in quarantine. Does the number of COVID-19 cases in Germany justify these measures? Have they been weighed against the price we will pay for the loss of business from Europe's big economies?
US President Donald Trump tweeted on Tuesday, "So last year 37,000 Americans died from the common flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life and the economy go on. At this moment there are 546 confirmed cases of [novel] coronavirus, with 22 deaths. Think about that!"
World Health Organization researcher Maria Van Kerkhove appears to agree with Trump. In the past few days, she has been trying to persuade the public to focus on the facts and stop panicking – there aren't many instances of asymptomatic carriers infecting others, she says.
The vast majority of coronavirus patients have been infected by people who are currently ill, not by virus carriers.
It looks like the outbreak is already dying down in Asia. Van Kerkhove knows the virus very well, having handled the SARS outbreak, and she expects it to pass by the end of winter.
The huge losses the world is suffering right now are not the result of a force majeure, but the actions of governments. Many people in Israel are temporarily unemployed – tens of thousands in the aviation and tourism industries, and more from the hospitality industry, and related fields.
Governments, in Israel and abroad, cannot make up for these losses. As hoteliers say, "We can't sell the room we didn't sell yesterday."
