Viking

To decide if the overall stock market is fairly valued (or cheap or expensive) at current levels you need to have an opinion of how deep the recession is and how long it lasts. 1.) china style - 6 week lockdown and slow recovery 2.) Longer lockdown (8+ weeks) and slow recovery 3.) 12 months of shitty economy until vaccine is available My view is #1 is a pipe dream. #2 is possible but will depend on federal government leadership, coordination, planning and execution, so i only give it a less than 50% chance. The situation is very fluid.

Another perspective from Washington State. Perhaps a glimpse into the ‘new normal’. Reinforces the idea that leadership is perhaps the most important ingredient in a successful response. - https://www.nytimes.com/2020/03/27/opinion/coronavirus-seattle.html?algo=top_conversion&fellback=false&imp_id=18775815&imp_id=631755493&action=click&module=trending&pgtype=Article&region=Footer “There really is no middle ground,” said Bill Gates, whose foundation has put up $100 million to blunt the impact of the Covid-19 pandemic. “It’s very tough to say to people, ‘Hey, keep going to restaurants, go buy new houses, ignore that pile of bodies in the corner.’ ” President Trump’s talk of opening the United States for business by Easter is greeted in this precinct of sanity as the heartless bluster of a career con man. The public radio station in Seattle, KUOW, has stopped airing Trump’s live briefings because the volume of misinformation he puts out cannot be corrected in real time.

Here is a summary of where Washington State is at today. Long article but it presents a good summary of all the hard choices and personal hardship. This crisis will be especially devastating for small businesses. - https://www.washingtonpost.com/national/coronavirus-washington-state-leveling-off/2020/03/26/682790e6-6f6b-11ea-a3ec-70d7479d83f0_story.html#comments-wrapper

This is not about humanity though, is it. Humanity will surive this virus whatever we do. It's about individual humans making individual choices and a significant percentage of these humans have enormous trouble listening to any rules now, let alone in a few months. If death % was higher perhaps you'd have chance, but I agree with Castanza any lockdown over a month can't be done because too many individuals will simply no longer obey as they know this virus will most likely never affect them. If that is the case then the virus will win. Pretty straight forward. The virus also won in 1918. Not a pretty picture for many communities and countries. The story of life: you make choices and live with the consequences.

Everyone is trying to understand where we go from here. How long will the economic shut down last? Bill Gates, pretty smart guy, with access to virus experts. No dog in the race. His take is even with the current shut downs in New York and Washington State the virus numbers will not peak there until late April (think about that curve that is shown everywhere). And the shut downs will need to last another month afterwards. And that is if the whole US quickly follows suit. So his take is we might start to be able to open the economy up in early June (and based on what we see in China the restart of the economy is very slow and consumers are slow to spend given continuing fears of catching the virus and fear of job loss). A county by county approach will not work for the simple reason that peoples movements are not controlled. And the counties that go back to work will allow the virus to resume its exponential growth in those areas (their low numbers today will eventually become big numbers). Trying a county by county approach will only extend the economic shut down to even longer than indicated above. Counties that go back to work early will simply start seeding new clusters in their area and they will silently spread to other counties. Again, the movement of people is not controlled within the US. At some point you have to let people go back to work. The government cannot provide stimulus indefinitely. I think society needs to understand there is going to be pain with this....The idea that this could have been handled different with less pain is also not completely accurate (specific to the US). I said earlier it's impossible to lock down a country of this size which relies on personal transportation. I also don't think there is a realistic method (in the US) of squishing down the curve enough to avoid overwhelming a healthcare system which is built for AVERAGES. Tell people over 55 to stay home. If they have jobs provide them a loan which should be repaid. Otherwise let others get on with life. Encourage them to social distance outside of working hours. But, I have a hard time believing individuals are going to stay put for more than a month as it is. I'm sure a lot of you will disagree with this...But frankly I don't care. What's on the other side of a long term lock down is far more scary. With all due respect, it cracks me up when people say ‘can’t do it’. That is a completely false statement. If we have learned anything the last 2,000 years it is that humans survive because they adapt. The virus does not give a shit what you think you can or can’t do. I do know one thing: eventually a country will do what it takes to get the virus under control. They will need to make the pain stop. So they simply will have no choice in the end. All that matters is if you do the right thing or not. Right now you have a model staring you in the face that works: 6-10 week national lock down. If you try a different approach you are likely going to have a much worse health and economic outcome than the 6-10 weeks lock down plan. You just do not know it yet. But you will in another 2 or 3 weeks :-) And the longer you dither the worse the health and economic damage gets. The virus has hit well over 100 countries in the world. We have lots of examples as countries have tried to fight the virus. We also have decades of history of past virus outbreaks that provide useful information (obviously not the same but still useful). Lots is known about how to deal with this virus. Based on what is known once a country gets to the community transfer stage it has two options: 1.) lock down: if done china style, 6 weeks of pain. Radical lifestyle changes and manic testing regime. 2.) no lock down = prolonged shit show

Last sentence is the key one and why I think the piecemeal to turn back the economy County by county doesn’t work. Air travel for example can’t really be turned back on before the US is essentially Virus free. Even if you would allow it, would people actually travel? Some would but many would not I think. It’s even harder with international flights. I guess you could do it Nation by Nation, but how long will this tear. The Airlines are all Toast if this last anywhere more than a few month. China offers some great lessons on how countries and the world will look once they get control of the virus. China is now banning all foreign travel into China. They are essentially walling off their country to ensure foreigners do not bring the virus back to China. Does not sound to me like business as usual for lots of industries even once you get the virus under control.

Everyone is trying to understand where we go from here. How long will the economic shut down last? Bill Gates, pretty smart guy, with access to virus experts. No dog in the race. China’s lock down lasted 6 weeks and then they were able to open up parts of their economy. But their lock down was vicious (resulting in short duration of 6 weeks). He thinks if the US does it well they will need to be locked down 6-10 weeks. To do it well, the US needs: 1.) national lock down 2.) dramatically improve testing (South Korea model) The economic damage is driven by the amount of time the lock down lasts. State by state approach will extent the amount of time it takes and will make economic damage worse. County by county approach will be even worse. His take is even with the current shut downs in New York and Washington State the virus numbers will not peak there until late April (think about that curve that is shown everywhere). And the shut downs will need to last another month afterwards. And that is if the whole US quickly follows suit. So his take is we might start to be able to open the economy up in early June (and based on what we see in China the restart of the economy is very slow and consumers are slow to spend given continuing fears of catching the virus and fear of job loss). A county by county approach will not work for the simple reason that peoples movements are not controlled. ‘Cases will grow exponentially in counties where you do not have a serious lock down’. And the counties that go back to work will allow the virus to resume its exponential growth in those areas (their low numbers today will eventually become big numbers). Trying a county by county approach will only extend the economic shut down to even longer than indicated above. Counties that go back to work early will simply start seeding new clusters in their area and they will silently spread to other counties. Again, the movement of people is not controlled within the US. PS: sorry for all the edits; the 3 minute interview is packed with useful information :-)

I don't know anything in particular about WAsh numbers, but check this story out. https://www.buzzfeednews.com/article/nidhiprakash/coronavirus-update-dead-covid19-doctors-hospitals So what has changed in Washington State in the last 25 days that might explain why they only have 130 deaths? At the end of Feb, Washington State was not testing people, the President was telling people the ‘numbers might be going to zero‘ and Larry Kudlow was telling investor to buy the dip because stocks were cheap. Now i am not a doctor so please take what i have to say with a grain of salt :-) 1.) starting around March 5 local health officials knew they had a serious problem brewing; around this time they started communicating the importance of social distancing and advising people to work from home if they can. Companies directed people to work from home. Schools shut down. Over a fairly short time this morphed to most of the state being essentially locked down. 2.) the state government and health care workers have been woking non-stop for 3 weeks to mobilize. It has been a simply incredible effort. Amazing and all involved should get a medal. 3.) testing became available 4.) it looks like all of the efforts are coming together and an Italy situation may be avoided. That was the initial mission. On March 11 Google advised all people in USA work force to work from home. There were lots of other large companies doing the same thing. It is March 25 today; 2 weeks later; one would expect these efforts to start to dramatically slow the spread of the virus. On March 12 the NBA shut down their season. Every other sports league followed shortly thereafter. All of these actions dramatically slowed the spread of the virus. I think 14 days of isolation is about what it takes to start to have a material impact on total numbers (virus spread). Washington State is perhaps an good example that aggressive measures can help ensure an Italy type situation does not happen. That is great news. Lots of other states like California appear to to be ahead of the curve with measures. This should help materially slow the number of new cases a couple of weeks later. Great news. The challenge moving forward, after an Italy type disaster has been avoided, is what should Washington State do? The war will be waged on a new front and this is what i am trying to understand. I am looking out the front windshield not the rear view mirror.

Yes, where we go from here is the million $ question. Three weeks ago looking at China, South Korea, Iran and Italy provided great insight of what was coming to North America. We got confirmation when the cluster was confirmed in Washington State and a week later in New York. The impact of the virus on a country for the first month or so has been fairly predictable. The challenge looking forward is each country has taken rather different approaches to managing the virus. The asian countries have similar strategies built around testing, contact tracing and some social distancing measures. Europe and North America have executed very different strategies built around limited testing (resulting in rampant community transfer) followed by soft or hard lock downs (depending on severity). Looking forward, i can see the asian countries path forward. They have been able to get control of their destiny. Again, it is built around aggressive testing and contact tracing and social distancing; slowly they will be able to find ways to bring more parts of the economy back on line. So my view is the asian countries will see their economies slowly start to grow again, but still slower than is expected. The virus is still present and strict measures will need to be in place, likely until a vaccine is ready (12-18 months?). What is the path forward in Europe and North America? We are still out of control, with no articulated plan to get in control of our destiny. We also will need time to execute said plan. This tells me we are still in the early stages in our battle with this virus. And we are now losing precious time and falling behind asia in the process of recovering from this epidemic. This means it will take us longer for us to re-open our economy up (compared to asia). Another learning from asia is what your economy looks like once you get the virus somewhat under control. It is definitely not V shaped recovery for the economy. Perhaps L For a couple of months with the prospect of U afterwards. if you do a great job of not letting the virus to get re-established. The economy needs time to adapt to a world where the virus is ever-present and trying to break out again. All of the above leads me to the following conclusion: the time it takes to get control of the virus in Europe and North America is going to be much longer than people think. Therefore the economic impact is going to be worse than currently expected. And once we eventually get control of the virus in Europe and North America the ’recovery’ is going to be slower as The virus will still be with us and it will take time for everyone to adjust (people, companies and governments).

The Gates Foundation has been woking on infectious diseases around the world for more than a decade. Just read their annual reports. There are probably very few people with his combination of real world experience and knowledge of infectious diseases. He will be on a cnn tonite at 8 pm with Dr Fauci. Viking's sarcasm went "whoosh" for this crowd... ::) Thank you for pointing people straight :-)

Does Gates know anything about infectious diseases? Isn’t he just some tech billionaire? What a dummy! Bill Gates on coronavirus: We need an 'extreme shutdown' of 6 to 10 weeks - https://finance.yahoo.com/news/bill-gates-on-coronavirus-161803530.html Philanthropist and billionaire Bill Gates believes that America needs six to 10 weeks of “extreme shutdown” to get a handle on the coronavirus outbreak (or COVID-19), indirectly criticizing comments from President Trump. “It’s very irresponsible for somebody to suggest we can have the best of both worlds,” Gates emphasized in an interview with TED on Tuesday. “What we need is the extreme shutdown, so that in six to 10 weeks, if things go well, then you can start opening back up.”

Liberty, the letter is good news. Testing, science and technology will form the basis of the US response moving forward. Now it just needs to be executed in the coming weeks and months. I am hoping my government (Canada) is paying attention.

The causation of unemployment is very different in this situation when compared to the GFC. One was mandated by government, the other was not. The underlying factors as to why unemployment is spiking is important. “The underlying factors as to why unemployment is spiking is important.” Why? PS: Humpty Dumpty sat on a wall BY MOTHER GOOSE Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall; All the king's horses and all the king's men Couldn't put Humpty together again. Because on the other end of this there will be demand for workers (fill the positions they left). During the GFC there was not. That will be the difference in how the US economy starts back up. The US is a service driven economy. Right now in China some manufacturing jobs have come back but Chinese consumers are not consuming; they are still afraid of catching the virus or losing their job. The virus hits service jobs more than manufacturing jobs. Airlines, hotels, restaurants, cruise, travel; all of these areas employ lots of people and they will not be coming back any time soon. The unemployment claims we see right now could go much higher than people expect. What if they go to 9 or 10 million in the coming weeks and what if it stays elevated for months? And what if the virus comes back in Sept mutated and worse? We are flying blind right now. I am simply trying to understand where this thing is going. News out of China does not support a V shaped recovery. Maybe a U shaped recovery, but it is still too early to tell.

The causation of unemployment is very different in this situation when compared to the GFC. One was mandated by government, the other was not. The underlying factors as to why unemployment is spiking is important. “The underlying factors as to why unemployment is spiking is important.” Why? PS: Humpty Dumpty sat on a wall BY MOTHER GOOSE Humpty Dumpty sat on a wall, Humpty Dumpty had a great fall; All the king's horses and all the king's men Couldn't put Humpty together again.

Agreed. There is lots of volatility right now and this is likely to continue. I find it useful to remember how i feel as the market jumps around. If i regret not doing something i likely will get a similar opportunity again. Patience is key. And then, of course, action is also required :-) The big thing i am trying to understand right now is how does the US look in 4 weeks, and 3 months from now. Right now i really have no idea.

The war analogy that Trump used when describing the virus looks very fitting. The health care workers are the soldiers. The leadership group is not aligned on strategy. We know little about the enemy. As in any war there is lots of collateral damage. Weekly initial unemployment claims increased to 3.3 million in the last week. This number will be going much higher in the coming weeks. And it will stay elevated for ? weeks afterwards. This war is now getting real for the American public. We are entering a new stage. - https://www.calculatedriskblog.com/2020/03/weekly-initial-unemployment-claims_26.html “At the worst of the Great Recession, continued claims peaked at 6.635 million, but then steadily declined. Over the next few weeks, continued claims will increase rapidly to a new record high, and then will likely stay at that high level until the crisis abates.”

This is my favourite post of the last couple of days. I find it is always instructive to understand what is actually happening in the real world. I am trying to understand what is going on today at the hospitals in New York and Washington State. In New York it looks like they are at the edge of the apocalypse. It absolutely amazes me the incredible personal sacrifices health care workers in the hot zones (US and around the world) are making right now. They are putting their lives at risk (not to mention the long term emotional and psychological damage that is being done). Can you imagine what this hospital would look like in another week or two if social distancing measures were not put into place when they were? Holy shit. It looks like it will get much worse in New York before it gets better. Who wants to be a health care worker right now? They are kind of like soldiers being sent off to war except they are about to run out of ammo... And the generals are not aligned on strategy. And little is known about the enemy. They are the heroes in this battle. They need our support (and this includes the policy response).

Canadian media (and federal and provincial governments ) is also in on the plot (to undermine Trump’s presidency) because they are saying the same thing. Europe too. It finally makes sense. Trump has finally figured it out... and everyone in the globe is in on it :-)

Great news! Congratulations :-) Hope mom and baby are doing well.

Interesting article. If the authors are right, it's a game-changer. What's the push-back to this? What are they missing? We all hope there is a way to combat the virus without having to resort to some sort of lock down. The more aggressive the testing (and contact tracing), the softer the lock down. Information and facts informs what you do. Both Canada and the US have not been testing aggressively enough and therefore have limited information so some sort of lock down is the only solution in the near term. My issue with the study is they are simply making a blind guess, which forms the basis of their analysis: “ An epidemic seed on Jan. 1 implies that by March 9 about six million people in the U.S. would have been infected. ” And then they say: “ Given the enormous consequences of decisions around Covid-19 response, getting clear data to guide decisions now is critical.”

Fair enough. What's your take on the Democrat's reluctance to support the stimulus bill? What do you expect of them? The Democrats fully supported passing a stimulus bill. As do all Republicans and the President. I think the bill that is finally passed will be much better for the American people than the one proposed by Senate Republicans on Sunday night. It is $2 trillion and the extra 48 hours looks like time well spent. The Senate, House and President all have roles to play in this drama. As do Republicans and Democrats.

Of course Trump will make that choice! - he is the evil Donald Trump and is a mass murderer. He should have been impeached long ago. While the economy gets destroyed - you guys with good jobs could give 2 shits about Joe/Mary Sixpack that lost jobs and live paycheck to paycheck. Like Trump, they are just greedy money grubbers! Screw 'em. So, yeah - NO debate needed on Trump attempting to save the economy - you guys got it all figured out! You guys are a joke! Everyone sees what happened in Wuhan, Iran and Northern Italy. In these regions it has been a humanitarian disaster for 'Joe/Mary Sixpack' and everyone else involved. It is because people on this board care about 'Joe and Mary' that they expect a lot from their elected leaders. In times like these it is normal to scrutinize what they say and do.

Part of the problem is when regions get to community spread they stop testing (or they are not able). So the reported numbers by region are highly misleading and difficult to compare. I will begin to feel much better about the whole situation once testing is available and executed like in South Korea, Taiwan, Singapore etc. Until then we continue to fly blind. We are moving in the right direction; the question is how bad does it get in the near term as we try and get it figured out. Do we get Northern Italy breakout in other cities?

One would think that a priority of the Leader would be to get the country unified in its approach to dealing with the virus. KISS - keep it simple stupid. I do agree that different regions in the US are at different stages in dealing with the health crisis. The differences are currently of a timing nature (the virus is pretty much the same the world over). Washington State is further along, followed by New York City. The data is pretty straight forward in how the virus is spreading nationally. So i can understand how each region would have a different approach to deal with the outbreak. The real problem with talking about the post-virus world at this very early stage is it will likely cause most average Americans to mentally skip the current reality and ignore what needs to be done today. If we are a few weeks away from the post-virus world who gives a shit about what needs to be done today? Business as usual. By all means discuss the post-virus world with experts behind the scene. But keep it out of the public eye for now. Win the war first before you start planning the victory parade with the public. Imagine the war effort in the UK if two months into the Battle of Britain if Winston Churchill told the public that they should start thinking and planning for getting back to their normal pre-war life. The enormous sacrifices needed to win the war would not have happened. But what if at the beginning of the war Churchill deemed the economic sacrifices of the war effort to be too great? And the psychological effects of the war too great for the people to bear. The UK would have lost WWII. Actually, Chamberlain tried that in the mid 1930’s and they found appeasement did not work out all that well against an enemy like the 3rd Reich. It was a talented, motivated, relentless and vicious adversary. Fortunately the virus is a much lesser enemy. Why Trump's call to restart the economy in April is being derided as 'totally nuts' - https://finance.yahoo.com/news/why-trump-to-restart-the-economy-in-april-is-being-derided-as-totally-nuts-190129407.html

Of course his first priority is himself. He's a narcissistic personality disorder and likely a sociopath. He doesn't care about reopening for "the economy" in general, he knows this current path doesn't lead him to get re-elected, and it's really bad for his hotels and resorts and his debt payments, and if he's out of power it's dangerous that he'll be investigated without pardon power, so he's ready to gamble it all and put all his chips on 15 black and spin the wheel in the hope that this other approach may be better for his election and businesses. He's been incredibly lucky all his life, born to wealth, getting away with all kinds of stuff, becoming president.. He's just gambling with lots of lives and the US healthcare system in the balance that his luck will hold. And he didn't know back then. He's not intellectually capable to have understood the implications when it was still theoretical, and he's surrounded by yes-men and he fires or drives away anyone who's independent-minded pretty quickly. Listen to him talk about any of this and it's just a bunch of word-salad "it's great, going tremendous, big effort"... No real understanding. Even now as people are dying and hospitals are being quickly turned into disaster zones, he's not listening to the people who know what they're talking about, he's driving away Fauci and contradicting his task force on TV and picking petty fights with desperate governors who need federal help. He's likely never even spoke to anyone on the front lines of this and shows zero empathy for anyone dealing with this, only worry for himself veiled in language about "the economy" (which was how he always said he measured his presidency, always talking about stock market records, etc). “word salad” . Had a very good hearty laugh after reading that description of Trump speaking. That will help when i listen to him in the future :-) Thank you Liberty