alwaysdrawing

There will be no inflation. Massive deflation.

Here is a thread about the current situation in Seattle. So it begins. This was foreseeable a week ago. Please take more action now to help prevent this from happening all over the US and the world. https://twitter.com/scott_mintzer/status/1239290389963714562?s=20

Trevor Bedford has put together an excellent thread to estimate the current number of cases (not confirmed testing, but a model of where actual cases might be). Some relevant quotes: The full thread is worthwhile, and his posts are generally helpful. I believe the cases you were seeing in the ED during January and February were normal cold and flu, not COVID19.

The willful ignorance, and people ignoring the data is wild. Italy has taken drastic steps to contain the virus, and even so, much of the spread is "baked in" from before the draconian measures were taken. The US must take similar actions ASAP, as Italy's course is increasingly "baked in" to our next few weeks, and without mitigation, it will be even worse. The pictures of hundreds of people at spring break in Florida, over-crowded airports, and filling bars for St. Paddy's celebrations in NYC, Boston, Chicago, and cities around the country are evidence that many people just don't get it. There are signs of promise though, as schools around the country start to shut down, more companies restrict travel and implement work-from-home, and individuals start to socially distance. Here is a map of school closures around the US: https://www.edweek.org/ew/section/multimedia/map-coronavirus-and-school-closures.html That map indicates progress is being made, although more needs to be done. We will start seeing the effects of strain on hospitals in the hardest hit areas (likely Seattle, NYC, and Boston) in the coming week or two weeks, as many more cases progress to serious levels. The stats show 80% mild cases, 15% hospitalizations, and 5% ICU. For those patients who need hospitalization and supplemental oxygen, it's vital to keep hospitals below capacity. For those who need ICU level care, it's even more vital, as we've seen in Italy how triaging ventilators can cause the mortality rate to rise precipitously.

Taleb on Why you are harming others by not "overreacting" https://t.co/iSDperUx8g?amp=1

By the way, I would guess cancer surgeries will continue for some time unless things get really bad at the local hospital. Elective surgeries, which I would expect to start cancelling soon, would be stuff like hernias, tubal ligations, and cosmetic surgeries. While cancer surgeries are semi-elective in that they are non-urgent, and they might be able to safely be delayed, I think many would still happen unless the hospital is truly overrun. I think it would be up to the surgeon and patient to figure out the risks and benefits, as well as hospital policy. This is from the American College of Surgeons two days ago: https://www.facs.org/about-acs/covid-19/information-for-surgeons Source: my wife is an OB/Gyn that performs surgeries every week.

Here is a Medium post where a data scientist models when NYC hospitals will likely be overwhelmed. Approx 8-10 days from now: https://medium.com/@donnellymjd/covid-19-new-york-will-be-the-next-italy-but-doesnt-have-to-be-54a5c8137d42

NYC is going to have a bad time. This link plots the incidence of ED visits per day for Influenza Like Illness (ILI). https://weinbergerlab.shinyapps.io/NYC_syndromic/ Most likely normal seasonal cold and flu season was responsible for the large jump in cases in Nov-March, however the current large spike is most likely related to coronavirus. We shall see--if orthopa starts seeing deaths from URI/LRI patients, then that would fit with coronavirus, and his previous experience would fit with normal seasonal cold and flu season (with no deaths). If you look online, you can see pictures of full bars and restaurants in NY, so it's clear social distancing isn't being done on a widespread scale. From OpenTable data, you can see major cities have had reductions in restaurant reservations of around 40% from 1-2 months ago, and over 60% in Boston/NYC/Seattle. That's just the beginning--many many small businesses will fail when the death counts start growing in the US and people pull back more. https://docs.google.com/spreadsheets/d/e/2PACX-1vRbPuAyJy74UmbF6kLXFGXDk2eX3N6zvRLzxPamG8FAA3E-SVqMOMSIht-eYEF_4qrNGOJuPbDjTsPD/pubhtml# We are likely 1 week away from large clusters in NYC and Seattle starting to hit hospitalization, which will be followed by other cities as clusters grow. The Washington Post has a helpful simulator on how various levels of social distancing help with flattening the curve: https://www.washingtonpost.com/graphics/2020/world/corona-simulator/?itid=hp_hp-top-table-main_virus-simulator

When mass graves for people being killed from this virus doesn't impact you, that's pretty wild. Burying a mass of bodies in 100 yard trenches is not like the seasonal flu... I am afraid, and not of financial markets falling. I am afraid too many people are not taking this seriously.

I think being a medical professional is a red herring. Physicians are not trained in population level health policy, they are trained to treat patients. We need to listen to epidemiologists, who are saying to close down. Hopefully we do so broadly soon. There have been big changes this week in sentiment, and hopefully that leads to communities being more proactive.

Yes, it's time. Wait until you see what happens in Seattle in the next two weeks. We can't have that happen all over the country. I'm far from a medical expert, but it seems to me that the virus is probably all over the place by now. Based on that assumption, locking down small areas for two weeks seems like a half-hearted solution, because new cases will just come in to the small area after the two weeks are up, even if transmission is substantially slowed within the small area during the local partial lockdown. Totally agree. Must be done all over now, so we can assess how bad the problem is, and to prepare our health system for things to get worse. I only mention Seattle because that is almost certainly the worst hit place currently, and where within two weeks, we may see their health care system become overwhelmed.

I'm fearful that life ahead will become very difficult, and even though most people make it through, many will not, and the scars will remain for a long time.

Yes, it's time. Wait until you see what happens in Seattle in the next two weeks. We can't have that happen all over the country.

You think Iran is digging burial pits that can be seen from space because of perception of risk? WASHINGTON POST Coronavirus burial pits so vast they’re visible from space Iranian authorities began digging a pair of trenches for victims just days after the government disclosed the initial outbreak. Together, their lengths are that of a football field. https://www.washingtonpost.com/graphics/2020/world/iran-coronavirus-outbreak-graves/ The government will not be bailing out common shareholders.....how can you people not see this?

This is a metric to track: How many new coronavirus burial pits can be seen from space WASHINGTON POST Coronavirus burial pits so vast they’re visible from space Iranian authorities began digging a pair of trenches for victims just days after the government disclosed the initial outbreak. Together, their lengths are that of a football field. https://www.washingtonpost.com/graphics/2020/world/iran-coronavirus-outbreak-graves/ ARE YOU GUYS AWAKE?????

I welcome the criticism. What I've learned over time is my inability to have any edge in market timing, and have decided to drip in to average over time. It may be flawed but it beats what I would achieve otherwise. If you have better ideas would love to hear - my main goal is to find out where I'm wrong so feel free to let loose. You went wrong when you estimated the cash flows of tomorrow will look like yesterday, or projections based on last year. There has been a gigantic hit to the economy....a gigantic hit to humanity. DCFs are for normal times, not during the beginning of a global pandemic which will cause companies to fail, employees to be laid off, and massive disruptions to the economy.

FXI could lose 90+%. I have hundreds of puts on FXI

Italy is triaging patients such that older and sick people cannot access ventilators because their hospitals are overwhelmed. Do you have to see it in NYC and Seattle to believe it? The bad news is that we will likely see those hospitals become overwhelmed within weeks...

From 3 days ago. Selling some VIX calls, adding puts on some life insurers and banks. Market still doesn't understand the risk of a pandemic.

Yes--this is the right attitude. This is the calm before the storm.

I hope so too... We all have a rough road ahead, and I don't mean with respect to investing. That said, there are still companies going to 0 that have puts available, and people are still saying this is just the flu. Going long seems very far away to me.

It's amazing so many people cannot see this, and are not preparing for what's coming. The next few weeks will all be brutal---this is not the time to buy the dip!

Invert it--what do you think the upside is? I think there will be many, many opportunities for sure thing multiple bag winners on the long side before long....stuff like WMB holds no interest to me, where even in a good case of the world where things return to normal, it doubles? At best, I'd say wait until the horizon isn't looking much darker in the immediate future. Risk assets still have not sold off much compared to where I think things will go.

KJP, you've been helpful to me in the past....don't you think there will be better opportunities than this over the next few months???

Anyone else need a 15 minute breather? Might have to take a couple of these today.