Why It May Be Too Late For A Vaccine

About three blocks away from where I’m writing this Moowsletter, there’s a self-serve, 24hr, dry cleaner.

And going by the rows of expensive threads hanging from their racks, it seems there are plenty of peeps out there who use it.

At least, that was up until about six weeks ago.

I was on my way to work one morning at about 6am when I noticed the doors had been chained up and a sign in the window…

‘TRESSPASSERS WILL BE PROSECUTED’.

The premises had been repossessed and the business put into administration.

And then I stood there for a moment, looking through the windows at the racks of clobber (including wedding dresses that were now out of bounds), wondering…

What the hell happened?

Because prima facie, this business looked like it was cleaning up, even during lockdown.

But this is what I reckoned happened…

Before COVID, there was already a stack of businesses in trouble. Hence the reason interest rates have been in an aggressive ‘cutting cycle’ over the past two and half years.

The RBA cash rate is now one tenth of what it was at the beginning of 2018! It’s gone from an eye-watering 2.5% to 0.25%

But still, cutting rates wasn’t enough to save this blokes washing machines and ironing boards.

You see, when the Government introduced Job Keeper in March this year, it also amended the Corporations Act to include a ‘Safe Harbor’ clause for insolvent businesses.

Meaning, if a business was already insolvent (not able to meet its repayments), it could continue trading insolvent until September 25, 2020.

Ordinarily, it’s an offence for a business to trade while insolvent.

And I reckon this bloke just couldn’t hang on any more. He’d simply run out of money and energy.