Coronavirus and its Impact on the Markets

[Kim 7,421]

 

I'm opening this topic to discuss the Coronavirus news and how they impact the markets. Feel free to post news, updates and opinions.
 

 

Posted by @agsb :

 

We have only so many people above 80 in long term care facilities. The virus presents no real risk to healthy people of all ages or not even so healthy people below 70. And of course not falling into the mass psychosis and dealing with the crisis like Sweden is doing would have prevented any second wave. Herd immunity that is going to be achieved in Stockholm next week means no second wave.

[TrustyJules 2,915]

11 minutes ago, agsb said:

We have only so many people above 80 in long term care facilities. The virus presents no real risk to healthy people of all ages or not even so healthy people below 70. And of course not falling into the mass psychosis and dealing with the crisis like Sweden is doing would have prevented any second wave. Herd immunity that is going to be achieved in Stockholm next week means no second wave.

Oh look the Monday morning quarterback.

Death rate of the 50-60 range is 1.3% for men its about twice as high. So that would kill 1 in 50 men in that age category. So thats 200,000 dead men in that age category in the US - not that I am taking this personally because I am 53 or anything. Even bigger problem is that these 200,000 and in fact a multiple will require hospital care. There are currently 1,000,000 staffed hospital beds in the US - not even going into the ICU beds question - do you see a problem already?

Sweden has 10M people in a very sparsely populated country with nowhere near the density of population even in its couple of bigger cities. Its also out of the way of major trade and traffic lanes and isolated by sea and unpopulated land areas. The population is also applying a level of self-discipline that is quite unlikely to be found in the US.The so called herd immunity is completely based on models and not on actual testing. They believe that for every confirmed case they have 75 unconfirmed ones but there is zero proof of that. in fact a more likely factor is 15 which is the normal transmission rate without measures. But even with the 75 factor they arrive at 23% immunised population in Stockholm (not elsewhere) which is not enough to be termed real herd immunity. I agree that the numbers touted of 60% are exaggerated but 35% (one third) really is a minimum. They are still by the most optimistic predictions 50% away from that by MID MAY. In the mean time they are accepting outsized death numbers in the higher age categories starting at 50.

A second wave is unavoidable but prior experience shows that with measures in place you can contain it by isolating the cases. Which is what was successful in the predecessor MERS SARS cases but which this time around slipped out of our control.

https://www.theguardian.com/commentisfree/2020/apr/29/us-responses-1918-flu-pandemic-offer-stark-lessons-coronavirus-now

You might want to read that as real experience of what can and cannot be done. Herd immunity is a theoretical concept that does not take into account factors as health care and systemic stress from the deaths and ill people. Already now health care workers are struggling to stay healthy AND work double shifts to deal with the emergency. I agree that we should relax the measures as soon as possible but Sweden and New Zealand's example are about as logical as comparing the Swedish and New Zealand Stock Exchange to Nasdaq and NYSE.

 

[Kim 7,421]

I'm opening this topic to discuss the Coronavirus news and how they impact the markets. Feel free to post news, updates and opinions.

[Kim 7,421]

42 minutes ago, agsb said:

We have only so many people above 80 in long term care facilities. The virus presents no real risk to healthy people of all ages or not even so healthy people below 70. And of course not falling into the mass psychosis and dealing with the crisis like Sweden is doing would have prevented any second wave. Herd immunity that is going to be achieved in Stockholm next week means no second wave.

Their number of deaths per 1M population is actually one of the highest in the world, despite the fact that Sweden has much lower population density than counties like US, and has much less international travel.

Here are few points of view regarding Sweden approach:

https://www.cnn.com/2020/04/28/europe/sweden-coronavirus-lockdown-strategy-intl/index.html
https://www.vox.com/2020/4/28/21240381/coronavirus-sweden-death-rate-cases-new-york

 

So at this point, it is still not clear if Swedish approach really works.

[agsb 41]

11 minutes ago, TrustyJules said:

Oh look the Monday morning quarterback.

Death rate of the 50-60 range is 1.3% for men its about twice as high. So that would kill 1 in 50 men in that age category. So thats 200,000 dead men in that age category in the US - not that I am taking this personally because I am 53 or anything. Even bigger problem is that these 200,000 and in fact a multiple will require hospital care. There are currently 1,000,000 staffed hospital beds in the US - not even going into the ICU beds question - do you see a problem already?

 

The healthcare system in the US is under tremendous stress right now–because the hospitals are empty everywhere with the sole exception of NYC. The hospital workers are furloughed everywhere in the US even in Boston which has a relatively high rate of infection. Flattenning the curve was so successful it turned into a disaster. There was clearly too much social distancing.

In Massachusetts, where I live, the average age of deaths from the coronavirus is 82. 58% of them happened in long-term care facilities. You can see it here. https://www.mass.gov/doc/covid-19-dashboard-april-29-2020/download The document also shows how many hospital beds are available in various parts of the state.

My state was under lockdown orders for more than a month. And yet it has more deaths per 1M population than Sweden.

[Kim 7,421]

5 minutes ago, agsb said:

The healthcare system in the US is under tremendous stress right now–because the hospitals are empty everywhere with the sole exception of NYC. The hospital workers are furloughed everywhere in the US even in Boston which has a relatively high rate of infection. Flattenning the curve was so successful it turned into a disaster. There was clearly too much social distancing.

In Massachusetts, where I live, the average age of deaths from the coronavirus is 82. 58% of them happened in long-term care facilities. You can see it here. https://www.mass.gov/doc/covid-19-dashboard-april-29-2020/download The document also shows how many hospital beds are available in various parts of the state.

My state was under lockdown orders for more than a month. And yet it has more deaths per 1M population than Sweden.

Yes, but in US only 7 states have death rate higher than Sweden. The rest are mostly much lower.

[DubMcDub 122]

10 minutes ago, agsb said:

 The hospital workers are furloughed everywhere in the US even in Boston which has a relatively high rate of infection.

Are you sure you're not thinking of hospital support staff and non-frontline ICU positions being furloughed? I have not seen any evidence that frontline ICU workers are getting furloughed, and I find that very hard to believe. If you some some evidence of that, please post it.

 

There's certainly evidence that plenty of healthcare workers are having to miss work because they're sick with COVID. I have four different friends who are nurses in four different major cities, and they've all caught the virus. 

Edited April 29, 2020 by DubMcDub

[agsb 41]

4 minutes ago, DubMcDub said:

Are you sure you're not thinking of hospital support staff and non-frontline ICU positions being furloughed? I have not seen any evidence that frontline ICU workers are getting furloughed, and I find that very hard to believe. If you some some evidence of that, please post it.

 

There's certainly evidence that plenty of healthcare workers are having to miss work because they're sick with COVID. I have four different friends who are nurses in four different major cities, and they've all caught the virus. 

The positions are furloughed because there's no work and no revenue.

I know people who work in the hospitals around the country (North Carolina, Arizona, California) and they've been saying this for weeks.

https://www.wcvb.com/article/boston-medical-center-health-system-furloughs-hundreds-of-employees/31996394#

BOSTON —

Approximately 10 percent of the workforce of the Boston Medical Center Health System will be furloughed, the company said in a letter to workers Tuesday.

The company said the approximately 700 workers will stop working temporarily but remain in active status with the expectation of returning.

 

The company said the furloughs were occurring in areas where the patient volume or workload has decreased.

Boston Medical Center Health System said the coronavirus pandemic has had a significant impact on the company's financial stability.

"Our decision to significantly cut back elective surgeries and almost all of our ambulatory services means an immediate and major reduction in clinical revenue," the company said in its letter to workers. "As a result, we are currently projecting a very significant operating loss this year. Like other providers, we are in critical discussions with the state about options for stabilizing our finances."

 

[DubMcDub 122]

6 minutes ago, agsb said:

The positions are furloughed because there's no work and no revenue.

I know people who work in the hospitals around the country (North Carolina, Arizona, California) and they've been saying this for weeks.

https://www.wcvb.com/article/boston-medical-center-health-system-furloughs-hundreds-of-employees/31996394#

BOSTON —

Approximately 10 percent of the workforce of the Boston Medical Center Health System will be furloughed, the company said in a letter to workers Tuesday.

The company said the approximately 700 workers will stop working temporarily but remain in active status with the expectation of returning.

 

The company said the furloughs were occurring in areas where the patient volume or workload has decreased.

Boston Medical Center Health System said the coronavirus pandemic has had a significant impact on the company's financial stability.

"Our decision to significantly cut back elective surgeries and almost all of our ambulatory services means an immediate and major reduction in clinical revenue," the company said in its letter to workers. "As a result, we are currently projecting a very significant operating loss this year. Like other providers, we are in critical discussions with the state about options for stabilizing our finances."

 

Yeah, that makes it pretty clear that they're not furloughing frontline ICU people, which is exactly what I thought. So I'm not sure what your point is. Empty hospital wings for elective surgeries and ambulatory care (meaning outpatient care) does not mean we "flattened the curve too much." It means the hospitals reallocated resources toward ICU and patients most likely to die in the short term. 

[Yowster 7,961]

I think the real key will be once we get enough random tests performed that can be extrapolated into the general population of a state/city.   The kind of tests recently performed on LA and NY.   If wider testing confirms what the LA and NY tests found - that many more people have been infected without knowing it.   If that happens....

• It means the mortality rate is much lower than what is computed right now based on case counts and deaths, likely 0.5% or lower.
• We already know the elderly are the most at-risk with the average age of people dying ~80 (give or take).   I live in the one of the hottest areas of Pennsylvania and that is the case here, with a large percentage of deaths being people in long term care facilities.
• Based on this, there will be tremendous pressures on states to open (albeit with social distancing restrictions) with the higher risk people in nursing homes and similar places remaining in tighter lockdowns.   Government stimulus and payouts to citizens can't go on forever.
• Many people will get out an do things, many people won't at first.   This is the critical period as to what happens next.   Are more people getting admitted to hospitals, even those in the assumed lower-risk categories?   And unfortunately, we can't ignore the political aspects of what happens in this scenario - you can be sure that the media will highlight anything negative.  

[pintodave 86]

@Yowster you hit the nail on the head, University of Miami has been doing this in S FL and is finding exactly that. I think factoring that in, it worked out to the same or slightly less than .5% mortality rate. I think this virus has been spreading a lot longer than we were aware of, I'm thinking at least 3rd quarter of last year if not longer. 

 

I am in no way a Covid denier, yes it is serious, but a lot of these numbers are not adding up. Yes we need to be careful, yes large gatherings like sports, concerts, etc should not be happening right now. But I do believe there has been a tremendous amount of number fluffing going on - I am sure some of it is just heat of the battle and will get sorted out later, but I can't help but think some of it is nefarious. You can take that to the bank. Look at NY - oh, if you died at home, clearly you couldn't get to a Dr, so it must have been Covid. No proof, no autopsy, just increase the death count by 3k or 4k or whatever it was. There is financial incentive for hospitals to mark people as covid patients, and more money if they get on a ventilator. "Follow the money". With respect to hospital workers, of course they are not furloughing the front line, but all we heard about for weeks was how every hospital would be overflowing and there would not be enough capacity, not enough medical staff, not enough ventilators, etc etc. That simply is not the case. I'm glad they were wrong, but as a Floridian who has to deal with hurricane season and the media hype that "we will most certainly die this time", I try to strip the fanatical hype from factual data. All I am saying is the data does not match the fear. I am not sure where the saying originated, but it goes something like "there's lies, damn lies, and statistics". Interesting time to be on this floating Petri dish called planet earth. 

 

Rant over and sorry for completely derailing the Uber thread, but too I agree this cannot be good for Uber LOL

Edited April 29, 2020 by pintodave

[porgie 118]

Great idea.

 

As a healthcare provider today was quite remarkable. We finally have some US study data rolling in and do not have to rely as much on data out of China. The remdesivir trial results were the first true potential "game changer" since the outbreak started--especially for critically ill patients although the mortality data did not reach statistical significance there was a clear trend toward lower mortality and further population studies with larger cohorts of patients are needed.

 

In addition the problem literally from day one has been our lack of testing capacity. We were previously only able to "ration" testing to the population with the "sickest" profiles so the denominator was confounded by a low sample size and the most ill patients being tested increased the deaths counted in the numerator--therefore making the death rate appear much higher than it will ultimately be.

 

As an analogy imagine if  no person had ever had an influenza vaccine and a particularly virulent strain circulated in the US--the number of deaths would likely be in the hundreds of thousands, but the overall death rate in all those infected would perhaps be in the 0.2 to 0.4 percent range. This is very likely the Covid-19 scenario--time and additional studies will tell. 

 

"Herd immunity" and/or effective treatments are the key concepts to pay attention to. Thus enough penetration of a population through exposure to a pathogen followed by recovery and immunity or mass vaccination are what is needed. Ultimately we will likely have a "hybrid" of exposed and vaccinated individuals to achieve herd immunity. Interestingly there is a team at Oxford that has a true head start on the vaccine as they have been working on other coronavirus ( SARS and MERS ) vaccines for quite some time and there are already very promising results coming out of that lab which may shorten the timetable to mass vaccination to late this fall.

 

There is another reason for increased optimism--that is antibody treatments. As we can test more individuals for antibodies ( and this is really crucial ) we can develop a global pool of antibody rich plasma to treat very ill patents with and also determine our "herd immunity" status. There is a lab in the San Fran area that has already synthesized an antibody to a Covid-19 receptor protein and this is being studied in trials as we speak. If the synthetic antibody is effective we will have millions of doses to treat patients with. So the progress in the medical war against Covid-19 is developing very rapidly. I think we all have a lot of reason for optimism at this point.

 

As for the markets--many of you are so skilled and talented at looking at them. I am just a rookie. But from a medical standpoint it does appear the market may be pricing in a bet that some of the medical developments along with the Federal Reserve doing everything they can will hasten the recovery. 

 

 

[RapperT 335]

i haven’t seen any  convincing evidence anywhere that CV19 deaths are being over reported.

 

all cause mortality is up significantly in the US and way more in most other countries that have experienced an outbreak.  There is a significant lag with collecting these data in some geos so it will likely only get worse.   To me, that puts a definitive end to the argument around whether people are dying “from or with” the disease.  
 

im not expressing an opinion on the response from bureaucrats,  I don’t know what the perfect answer may be.  But I think caution when facing something unknown like this is warranted.
 

the response in the markets is completely crazy and illogical.  Personally I don’t think we’ve seen the worst of it.  I can’t see how things don’t degrade again, especially when Q2 earnings are reported.  But who knows...

[arrrey 10]

Here is a link to an interesting interview with two Southern CA doctor's. https://www.youtube.com/watch?v=gZuwsEiRG54

Apparently, YouTube does not like the content because every 24 hours or so they delete it and then someone else will upload it again. This is the third, different link to the WHOLE (65 minutes) interview that I've found as I'm sending it to family members and if they don't view quickly, they find that it's been removed.

What I appreciated was the information that they shared was based on the 5000 clients that they have tested. Real data, not model extrapolations. They also discuss the physical and economical effects of extended 'Shelter in place' for the healthy population, not a pretty picture, and why they are advocating for a removal of 'house arrest' as my daughters refer to our current state of lockdown.

[billave 23]

I believe the reported CV19 deaths are greatly inflated in the  US.  Hospitals have a great incentive to classify illnesses as CV19 because the government instituted  new reimbursement  rates 20%  higher  than other illnesses.  During the same period in some areas the death rates for other illnesses are reported to be up to 50% lower than expected levels.  

[RapperT 335]

There’s no flat reimbursement for covid19 treatment.

For  patients utilizing Medicare, CMS groups Covid-19 with other respiratory illness and part of the reimbursement is calculated using what’s called DRG rates which are rates specific to a diagnosis.     There will be a delta between various DRG and final reimbursement will depend on the specifics of treatment and what procedures were performed.

 

commerial insurance would be unaffected in most cases by CMS guidelines.  Approximately 70% of the population utilizes commercial insurance.  Obviously the folks that don’t but have coverage ( Medicaid or Medicare) would likely be disproportionately represented on the high side among covid patients ( elderly are typically experiencing most severe cases). 

 

again, even if we want to argue deaths are being fraudulently calculated (no evidence), we would have to reconcile that belief with the fact that all cause mortality is up significantly in the US since the outbreak started and is up massively in certain other countries.   

[lrfsdad 10]

The county I live in has 2 deaths from the virus out of 48 confirmed cases (937 tests approx 115k residents), both at a nursing home.  I was told last week from a medical professional that both patients were in hospice care, so time was short anyhow, but they got labeled a corona death.  He also mentioned a woman denied care for an ailment not related to corona that and eventually died from her symptoms.  Because the hospital wouldn't take her due to corona restrictions, she was labeled a corona death. 

My routine skin cancer screening was cancelled, the bloodwork we have done for our health insurance was cancelled.  What if I have melanoma or  a co worker of my wife is 3 weeks from a heart attack that could have been prevented?  I fully respect the fear of maxing out hospitals, but until that starts happening, we should continue fighting the health care battles we know we can win.

On a side note, it's great seeing my 4 kids being forced to be siblings again as opposed to being with friends or at activities every night.  I don't think I've wiped a runny nose on our 18 month old either since mid march when the stay at home order started and schools/day care stopped.

[GStrot 8]

An interesting series of tweets from a medical professional not in NYC and the direct and indirect impact of reporting everything as if it was NYC.  Link

[Kim 7,421]

There is definitely a lot of controversy around the coronavirus. The more I talk to people, the more I'm convinced that at this point, we know very little about the virus, the way it spreads and the real numbers. Many experts believe that the real mortality rate is around 0.5%, way lower than the current numbers suggest.

And yes, the situation in most US states and many countries is not even close to what we see in New York, Italy and Spain. But the argument used by those in favor of lockdowns is that we don't want every state or country to become New York or Italy. The argument is that since we know so little at this point, the governments simply don't want to take the risk. Because if they are wrong, the price in human lives will be too high.

Going back to the markets - personally I believe that it will get worse before it gets better. But lets say I'm wrong. Lets say things are not so bad and they will become better. So here is a simple question: does anyone believe that the economy is in the same shape today as it was 6 months ago? I think even the biggest optimists would admit that we are in a much worse shape today, even if they believe things will get better soon. So how the major indexes are around the same levels today as 6 months ago? How the Nasdaq is actually 10% HIGHER today than 6 months ago? To me, it makes ZERO SENSE.

[RapperT 335]

39 minutes ago, Kim said:

So here is a simple question: does anyone believe that the economy is in the same shape today as it was 6 months ago? I think even the biggest optimists would admit that we are in a much worse shape today, even if they believe things will get better soon. So how the major indexes are around the same levels today as 6 months ago? How the Nasdaq is actually 10% HIGHER today than 6 months ago? To me, it makes ZERO SENSE.

I may regret admitting this publicly but I have more shorts on right now than I have at any other point in recent memory.

 

[DubMcDub 122]

1 hour ago, Kim said:

Going back to the markets - personally I believe that it will get worse before it gets better. But lets say I'm wrong. Lets say things are not so bad and they will become better. So here is a simple question: does anyone believe that the economy is in the same shape today as it was 6 months ago? I think even the biggest optimists would admit that we are in a much worse shape today, even if they believe things will get better soon. So how the major indexes are around the same levels today as 6 months ago? How the Nasdaq is actually 10% HIGHER today than 6 months ago? To me, it makes ZERO SENSE.

While I'm not at all confident in what the market will do over the next 6-12 months (like you, I wouldn't be surprised to see another leg down), a few observations here:

• A major (and IMO, underrated) difference between now and six months ago is the fall in interest rates. Six months ago, T-bills were still yielding 1.55%, and long-dated treasuries were yielding around 2.25%. The latter is certainly not a great yield historically, but it was at least enough to outpace U.S. inflation for the past 10+ years. But as of today, T-bills are yielding 0.10% (!) and the 30-year treasury yields only 1.24%. It's hard to imagine why anyone would buy the former, except maybe foreign governments who have to hold U.S. debt for various reasons. And while I won't say there's no reason to buy a 30-year bond yielding 1.24%, the reasons are relatively few. It's certainly not a good value proposition, unless you think we're headed for a long, long period of deflation. 
• The fall in interest rates alone may justify why the equity market is at these levels, despite a much worse economic outlook. All the money in the world--and there's more every day with Fed intervention (see below)--has to go somewhere. With rates this low, bonds aren't attractive, CDs aren't attractive, savings accounts aren't very attractive, etc. So I think a lot of the resilience we're seeing in stocks is just the natural attitude of, "Well, I'm not going to get any yield on my money elsewhere, so I guess I'll buy equities, hold them, and at least earn some dividends while I wait for prices to recover." That's especially true in the sense that people with the big money--the type of money that moves markets--often either can't or aren't allowed to just put it in CDs or high-yield savings accounts. 
• Another factor is the Fed liquidity, which is much higher than it was six months ago. The Fed isn't directly buying equities, but their aggressive purchasing of bonds adds cash to the market that historically has a positive ripple effect into equities.
• This isn't news to probably anyone on SO, but the market isn't pricing today's economy or even next month's economy. It's looking much further out than that.  I have absolutely no idea what will happen, but factoring in the massive monetary and fiscal stimulus, it's not crazy to think that we could be roughly back to where we were in 6-9 months. Some industries surely won't be back that fast, but others may pick up the slack.
• The market dropped so fast and so deeply, I think there's an argument that it basically managed to price in all of the worst economic news in an incredibly short amount of time.
• That said, if what I just said is correct, I think it only applies to economic news. I don't think the market has any way to efficiently price in developments about the severity or mortality of the virus yet, for all the reasons Kim said. So, if it turns out that the mortality rate really is sky high, or if we see a bad second wave later this year, I absolutely think that will hit the markets hard unless we've somehow managed to nail down a really good treatment or a vaccine by then. 

Just my random musings here. Grain of salt, etc. 

Edited April 30, 2020 by DubMcDub

[agsb 41]

51 minutes ago, Kim said:

Going back to the markets - personally I believe that it will get worse before it gets better. But lets say I'm wrong. Lets say things are not so bad and they will become better. So here is a simple question: does anyone believe that the economy is in the same shape today as it was 6 months ago? I think even the biggest optimists would admit that we are in a much worse shape today, even if they believe things will get better soon. So how the major indexes are around the same levels today as 6 months ago? How the Nasdaq is actually 10% HIGHER today than 6 months ago? To me, it makes ZERO SENSE.

The economic damage from the coronavirus crisis is real and profound. We might discuss whether it's mostly due to the severity of the virus or the reaction by the policy makers and the public, but the economy experienced an enormous structural shock that is still far from being fully exposed. However, I remember reading somewhere in 2012 or 13, perhaps in Barron's, that the bear projections of the markets often appeared very reasoned and logical while the bull projections looked flimsy and unsubstantiated. And yet the bulls were more right than wrong. Certainly in the recent years you didn't want to be a bear. Whether it's because we are in the state of QE forever, but I no longer expect from the markets to make any sense.

[rick 49]

 

The market loves stimulus, as if it cures all ills. If anything, this market response, highlights yet again, my inability to predict the market. Knowing market is unpredictable I don’t see any point in having a market opinion at any time but it’s impossible for me not to form one, interpreting and forming opinions is how we navigate the world but I suspect it would work better for me to just trade like back testing, where I’m not aware of the news - trade  following the numbers rather than affected bias from news.

I like going to the gym but my opinion! is, sweaty and breathy and equipment touchy gyms aren’t that a good a place to be going forward and PLNT didn’t warrant trading 15% above its 200day sma when spx was only 5% above, so I opened a put ratio yesterday but it’s one of those ‘loved’ stocks and it feels uncomfortable going directional on a stock like that in this market.

 

[lrfsdad 10]

I'm wondering if economic issues are going to be more Regional.  New York is where all the major media Outlets are so everyday those are the headlines, no one cares about the Midwest where I am.  It's funny, I'm in the construction trades 10 years ago everyone I knew was out of work or short on hours. I had to hire someone to keep up I'm so busy right now. Granted these are contracts that were signed 6 to 12 months ago. I personally don't know anyone out of work other than the lady that cuts my hair.  

 

 

[RapperT 335]

It will be interesting to see what happens when we see Q2 earnings.

 

anyone I know in operations is bearish, nearly everyone with charts or on fintwit is bullish.

 

some of the valuations of these companies are just insane.  If GRUB ( for example) can’t  make money when no restaurants offer sit down service, I’m not sure they ever will.  Yet it still trades over 200 TTM earnings 

[RapperT 335]

2 hours ago, lrfsdad said:

I'm wondering if economic issues are going to be more Regional.  

 

This is a good point and, coupled with the aggressive QE, is making me second guess  a bit on some of my current exposure. 
 

I think it may vary state by state more than anything else. Nevada for example, is completely locked down and hasn’t seen a severe outbreak.  Other states nearby are close to business as usual.  
 

that said I still don’t see how things like commercial real estate, retail,  and restaurants ( etc ) are going to come out of this unscathed.

 

 

[pintodave 86]

40 minutes ago, RapperT said:

If GRUB ( for example) can’t  make money when no restaurants offer sit down service, I’m not sure they ever will.  Yet it still trades over 200 TTM earnings 

You know, this is completely baffling. Companies like GrubHub, Door Dash, Uber, Lyft - how can they not make money????? They are essentially software app companies! I understand there is office overhead, development, other overhead, insurance, etc, but they have no physical product and have no manufacturing risk HOW can they not make money???

[RapperT 335]

13 minutes ago, pintodave said:

You know, this is completely baffling. Companies like GrubHub, Door Dash, Uber, Lyft - how can they not make money????? They are essentially software app companies! I understand there is office overhead, development, other overhead, insurance, etc, but they have no physical product and have no manufacturing risk HOW can they not make money???

GRUB 1.3B in opex in 2019 (on about the same in rev) for an app company....

 

 

[Kim 7,421]

https://seekingalpha.com/news/3566409-chesapeake-energy-preparing-bankruptcy-filing-reuters
https://seekingalpha.com/news/3566116-hertz-falls-bankruptcy-cloud-hanging-over

This is just the beginning.

[Kim 7,421]

https://twitter.com/YahooFinance/status/1255880242239025152

Highlight: “I still think that we’re going to have the worst recession since the Great Depression,” Allianz Chief Economic Adviser @elerianm says. “It will make 2008/2009 look like a flesh wound, which is a huge statement."

[traveller 4]

17 hours ago, arrrey said:

Here is a link to an interesting interview with two Southern CA doctor's. https://www.youtube.com/watch?v=gZuwsEiRG54

Apparently, YouTube does not like the content because every 24 hours or so they delete it and then someone else will upload it again. This is the third, different link to the WHOLE (65 minutes) interview that I've found as I'm sending it to family members and if they don't view quickly, they find that it's been removed.

What I appreciated was the information that they shared was based on the 5000 clients that they have tested. Real data, not model extrapolations. They also discuss the physical and economical effects of extended 'Shelter in place' for the healthy population, not a pretty picture, and why they are advocating for a removal of 'house arrest' as my daughters refer to our current state of lockdown.

I had also watched their presentation a couple of days back. They came across trustworthy and believable, however the American College of Emergency Physicians came out with a ACEP-AAEM Joint Statement on Physician Misinformation which is most likely the reason for youtubes removal.

 

https://www.acep.org/corona/COVID-19/covid-19-articles/acep-aaem-joint-statement-on-physician-misinformation/

 

 

[Kim 7,421]

Commentary from James.A.Kostohryz:
 

One thing that has gotten blown off was Trump comments today regarding making China pay reparations for their role in the global spread of COVID-19. This is going to become a big issue. There is increasing anti-China sentiment in congress. I have TWO WORDS (in reality two names) that I want you to remember every time you hear politicians talk about how they are going to make China "pay" for COVID-19: Smoot-Hawley.

 

Smoot-Hawley is perhaps the key factor that transformed what would have been a relatively normal recession, triggered by the October 1929, crash into the Great Depression. I am not saying we are going to repeat the Great Depression. I am merely telling you to follow this story, because the impact of a global trade war, as a secondary effect of this crisis, would be enormous -- and would profoundly deepen the current economic crisis and would make the bear market significantly worse than my base case. Many ingredients are in place to make this a real risk. 1) High unemployment in US; 2) Long-standing resentment of Chinese for "taking" US jobs; 3) Psychological need for scapegoats. 4) Election year politics drive populism and demagoguery.

 

[agsb 41]

13 minutes ago, Kim said:

https://twitter.com/YahooFinance/status/1255880242239025152

Highlight: “I still think that we’re going to have the worst recession since the Great Depression,” Allianz Chief Economic Adviser @elerianm says. “It will make 2008/2009 look like a flesh wound, which is a huge statement."

24% of the labor force in Massachusetts is out of work. This is the depression level. The governing class, the elites, the experts have committed the most horrendous error in our lifetimes by shutting down the world economy. Locking down billions of healthy people is not a tested and tried way to deal with a new respiratory infection. The coronavirus targets a well-defined group of people at risk, almost all of whom are out of the labor force. They could and should have been isolated. That's a big difference from the 1918 flu that killed young otherwise healthy adults.

The policy makers panicked, made the wrong decision and are now afraid to admit that they were wrong. Aggressive reopening the economy right now could still limit the damage and prevent us from recreating the Great Depression but I'm not optimistic about it at all. Many newly unemployed Americans are getting paid more in unemployment benefits than if they returned to work now. And that will continue until the end of June at least.

[CJ912 133]

Dr Michael Burry, (yes the one from The BIg Short) was quite clear in his views about the entire lockdown and his views caused a major tweetstorm. Quite well summarized by Bloomberg

https://www.bloomberg.com/news/articles/2020-04-07/michael-burry-slams-virus-lockdowns-in-controversial-tweetstorm

[RapperT 335]

1 minute ago, CJ912 said:

Dr Michael Burry, (yes the one from The BIg Short) was quite clear in his views about the entire lockdown and his views caused a major tweetstorm. Quite well summarized by Bloomberg

https://www.bloomberg.com/news/articles/2020-04-07/michael-burry-slams-virus-lockdowns-in-controversial-tweetstorm

should be noted Burry was exclusively long retail at end of Q1 (ouch)...

[CJ912 133]

3 minutes ago, RapperT said:

should be noted Burry was exclusively long retail at end of Q1 (ouch)...

His 13F shows positions in the following:

 

 

ALPHABET INC

BLACKBERRY LTD

CENOVUS ENERGY INC

COVETRUS INC

GAMESTOP CORP NEW

MAXAR TECHNOLOGIES INC

QORVO INC

SPORTSMANS WHSE HLDGS INC

TAILORED BRANDS INC

 

[RapperT 335]

14 minutes ago, CJ912 said:

His 13F shows positions in the following:

 

 

ALPHABET INC

BLACKBERRY LTD

CENOVUS ENERGY INC

COVETRUS INC

GAMESTOP CORP NEW

MAXAR TECHNOLOGIES INC

QORVO INC

SPORTSMANS WHSE HLDGS INC

TAILORED BRANDS INC

 

Typo, Q4.  Don’t think his most recent 13F was out when he sent the tweet storm. 

 

 

Edit:  looks like he closed Bed Bath and beyond etc so I may be wrong about this.  I must’ve been looking at an older 13f

 

q4 13f shows 40% consumer cyclical.

 

mea culpa

[Kim 7,421]

40 minutes ago, traveller said:

I had also watched their presentation a couple of days back. They came across trustworthy and believable, however the American College of Emergency Physicians came out with a ACEP-AAEM Joint Statement on Physician Misinformation which is most likely the reason for youtubes removal.

 

https://www.acep.org/corona/COVID-19/covid-19-articles/acep-aaem-joint-statement-on-physician-misinformation/

 

 

I'm definitely not a medical expert and have no idea who is right. But here is my concern: each time someone comes with an opinion that is different from the "official" point of view and policy, they are condemned and declared dangerous. In my opinion, what is really dangerous is lack of respect to different opinions. What is really dangerous is an attempt to silence people. Where is the freedom of speech? Who put YouTube to be a medical expert and decide what is trustworthy and what should be removed? Do we want to end up in George Orwell's 1984 like world?

[Jjapp 88]

If anyone wants to geek out on the impact of non-pharmaceutical interventions (stay at home etc) during the 1918 pandemic a working paper was recently released that seems pretty good.  There are some potential problems with the analysis due to data constraints  but it is pretty interesting.

 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3561560

 

They find that cities that implemented NPIs earlier and for longer bounced back better.  That being said, the disease was different including who was likely to die from it and the economy was different than.  Still worth reading and thinking about though.

[CJ912 133]

1 minute ago, Kim said:

I'm definitely not a medical expert and have no idea who is right. But here is my concern: each time someone comes with an opinion that is different from the "official" point of view and policy, they are condemned and declared dangerous. In my opinion, what is really dangerous is lack of respect to different opinions. What is really dangerous is an attempt to silence people. Where is the freedom of speech? Who put YouTube to be a medical expert and decide what is trustworthy and what should be removed? Do we want to end up in George Orwell's 1984 like world?

I wholeheartedly agree Kim. My biggest fear was never the virus, but the ease with which a completely dystopian society was created, nearly overnight. It was hardly countered and all becuase it was 'for the greater cause'. I'm no medical expert, but the initial work from Imperial college was shoddy and not peer reviewed. Decisions were made without further consultation and with a pretty narrow vie, given the harshness of the measures taken. 

On a daily basis I see the news making a mess of figures and comparing apples and oranges, which makes it hard to counter with facts as well.

[Kim 7,421]

1 minute ago, CJ912 said:

I wholeheartedly agree Kim. My biggest fear was never the virus, but the ease with which a completely dystopian society was created, nearly overnight. It was hardly countered and all becuase it was 'for the greater cause'. I'm no medical expert, but the initial work from Imperial college was shoddy and not peer reviewed. Decisions were made without further consultation and with a pretty narrow vie, given the harshness of the measures taken. 

On a daily basis I see the news making a mess of figures and comparing apples and oranges, which makes it hard to counter with facts as well.

I completely share this sentiment.

When I asked some of my contacts who work in healthcare the same question, they admitted that the decisions have been made based on very little data and everyone is basically operating in the dark.

However, their argument was that no government was willing to take the risk. They simply watched what happened in Italy and performed all possible steps in order not to repeat the Italian experience.

Now, some would argue that Italy has completely different conditions (older population, population density etc.), but with not enough data and time pressing, the governments are just not willing to take the risk. And honestly, I'm not sure I can blame them. Swedish government did the "experiment" of no lockdowns, and based on the current data, it didn't work very well. 

[RapperT 335]

Plus we have geos in the US that have been hit very hard  even with lockdowns.  Tough situation.  
 

im not sure you can wait around for better data when facing unknown risk that has already resulted in severe outcomes in other places.   
 

i think the uncertainty makes everything worse.  There is risk on both sides ( severe intervention versus doing nothing).

[CJ912 133]

5 minutes ago, Kim said:

I completely share this sentiment.

When I asked some of my contacts who work in healthcare the same question, they admitted that the decisions have been made based on very little data and everyone is basically operating in the dark.

However, their argument was that no government was willing to take the risk. They simply watched what happened in Italy and performed all possible steps in order not to repeat the Italian experience.

Now, some would argue that Italy has completely different conditions (older population, population density etc.), but with not enough data and time pressing, the governments are just not willing to take the risk. And honestly, I'm not sure I can blame them. Swedish government did the "experiment" of no lockdowns, and based on the current data, it didn't work very well. 

Actually I don't think the numbers for Sweden look taht bad. Just to compare Sweden with Belgium, population wise the difference is not huge (Sweden 10M, B11.5M) but the deathtoll in Sweden is 2586 whereas the number for belgium is 7594. I'm sure there are measurement errors, but 300%?

If you include The Netherlands (population 17M) in that mix, which has a lockdown, but much less stringent than Belgium, you'll find a deathtoll of 4795.

 

 

[agsb 41]

One of the explanations why the coronavirus hit countries so differently is the use of a century-old BCG vaccine that was used against tuberculosis in many countries. Look at Figure 2 here. It was not used in most of the Western Europe and North America, while everyone was vaccinated in China, Japan, Korea, the former Soviet Union and Eastern Europe. The countries that never used the BCG vaccine include Italy, Belgium, the Netherlands and the United States. If you look at the Wikipedia article, you'll find that Spain had it for a short period of time, while Finland had it for a long time. In Germany Western states have higher COVID-19 death rates than Eastern states. In South America Ecuador has the highest death rate from COVID-19 according to worldometers https://www.worldometers.info/coronavirus/#countries and it's the only country that didn't have the universal BCG vaccination program.

[CJ912 133]

2 minutes ago, RapperT said:

Plus we have geos in the US that have been hit very hard  even with lockdowns.  Tough situation.  
 

im not sure you can wait around for better data when facing unknown risk that has already resulted in severe outcomes in other places.   
 

i think the uncertainty makes everything worse.  There is risk on both sides ( severe intervention versus doing nothing).

I agree you can't wait for better data and not having hospital beds available for those in need is something no politician can afford. I just wonder why nobody had a scenario ready for something like this. Taleb mentioned this issue in his 2007 book, so he actually sees this as a white swan event and says governments were just ill prepared.

 

 

[RapperT 335]

1 minute ago, CJ912 said:

I agree you can't wait for better data and not having hospital beds available for those in need is something no politician can afford. I just wonder why nobody had a scenario ready for something like this. Taleb mentioned this issue in his 2007 book, so he actually sees this as a white swan event and says governments were just ill prepared.

 

 

Yep agree.  Big miss.  
 

I guess the question is whether or not we learn anything from it.  Most likely not based on past experience.

[EdSeba 34]

57 minutes ago, Kim said:

Swedish government did the "experiment" of no lockdowns, and based on the current data, it didn't work very well. 

 

46 minutes ago, CJ912 said:

Actually I don't think the numbers for Sweden look taht bad. Just to compare Sweden with Belgium, population wise the difference is not huge (Sweden 10M, B11.5M) but the deathtoll in Sweden is 2586 whereas the number for belgium is 7594. I'm sure there are measurement errors, but 300%?

It depends what data you compare. Belgium has the highest death rate in the world apart from a number of tiny countries. I'm surprised people don't talk more about that actually.

I would compare Sweden to its closest neighbors, having a similar climate, maybe quality of healthcare system and so on. Then numbers don't look that great anymore. 

 

 

Edited April 30, 2020 by EdSeba

[mccoyb53 800]

Hi @EdSeba. Do you have a link for that chart. I am in New Zealand right now and they are doing very well along with Australia. It will be interesting when the post mortem is done as to which countries took the right decisions and which didn't. No hiding place then.

[EdSeba 34]

2 minutes ago, mccoyb53 said:

Hi @EdSeba. Do you have a link for that chart. I am in New Zealand right now and they are doing very well along with Australia. It will be interesting when the post mortem is done as to which countries took the right decisions and which didn't. No hiding place then.

Sure, see the below. You can filter and sort at will

https://www.worldometers.info/coronavirus/#countries

 

[ykotowitz 18]

1 hour ago, agsb said:

One of the explanations why the coronavirus hit countries so differently is the use of a century-old BCG vaccine that was used against tuberculosis in many countries. Look at Figure 2 here. It was not used in most of the Western Europe and North America, while everyone was vaccinated in China, Japan, Korea, the former Soviet Union and Eastern Europe. The countries that never used the BCG vaccine include Italy, Belgium, the Netherlands and the United States. If you look at the Wikipedia article, you'll find that Spain had it for a short period of time, while Finland had it for a long time. In Germany Western states have higher COVID-19 death rates than Eastern states. In South America Ecuador has the highest death rate from COVID-19 according to worldometers https://www.worldometers.info/coronavirus/#countries and it's the only country that didn't have the universal BCG vaccination program.

Theory appears to be debunked.

see:https://www.news-medical.net/news/20200423/Link-between-BCG-and-lower-COVID-19-mortality-disproved-by-new-analysis.aspx