alwaysdrawing

Meanwhile, the guys who get it are posting Tolstoy (@vol_christopher):

I have been in this thread very earnestly trying to help people see what's right in front of their faces. At least some of you were able to get some lentils.

Sometimes it's helpful to be scared when bad times are here. In a few weeks, you guys might figure it out...this is predictable and knowable right now.

Funny, ERICOPOLY, as you were a big influence to me the past few weeks. When you made a bag back in the day spending $30k on options or whatever it was, you saw that the world was not what it seemed. Italy is totally locked down. Iran is in chaos. China was on full lockdown and still largely is. South Korea is doing well and testing, and will still have a brutal time. Oil fell 25% in a day, and treasury buyers are flocking to safety. The US is so clearly following the path of the worst hit places, that by the time we get around to quarantines our problems will be enormous. Italy had 3 confirmed cases a few weeks ago! Look what happened to Asian tourist locations after SARS. This is 10x as big and still growing extremely fast. We are just getting started. I actually can't believe the market LACK of reaction the past few weeks. This was three days ago

Didn't you just say: ? Yep---that's the dumbest purchase ever, but if you look up thread a few pages, you can see the previous discussion. I will personally be looking at puts for companies I think are going to zero.

Anyone buy any banks trading near tangible book value?

LOL at the guy using a Damodoran DCF model for the S&P. Good luck buddy. Don't you guys see? Companies are going to revenue comp -20, -50, -80%--how many businesses can survive that? Airlines, theme parks, cruise ships, restaurants by the 1000s are dead companies walking. Hundreds of thousands of people, and 1000s of businesses are going to close. Unemployment is going to skyrocket. The gov't doesn't have enough money to bailout the people, to say nothing of the current crazy plans to bailout hotels and cruise lines. Your stocks--many of them anyway--are going to ZERO. The Democrats control the house--they aren't bailing out big business. BUY FOOD FOR A LONG TERM QUARANTINE. PRACTICE SOCIAL DISTANCING. Stay safe folks. We have a long way to go from here, so strap in.

WASHINGTON (Reuters) - The White House has ordered federal health officials to treat top-level coronavirus meetings as classified, an unusual step that has restricted information and hampered the U.S. government’s response to the contagion, according to four Trump administration officials. This is scary--top officials need to communicate honestly and openly. This will be worse than even I think....we are not ready for what's coming.

This is a thread which translates a note from Italian College of Anesthesia, Analgesia, Resuscitation and Intensive Care: My opinion, which echoes what epidemiologists are saying: The US must quickly adopt Non-Pharmaceutical Interventions (NPIs) like closing schools, churches, cancelling concerts and sports games, and more to prevent our hospital system from getting overwhelmed like this. It does not have to be this bad if we can slow down the spread to keep hospitalizations within (or as close as possible) the hospital capacity. This is vital because if the CFR is 1% in normal times, it will be much much higher if hospitals have to triage patients like this. More people will die if we do not adopt these measures. These are not normal times, and this is NOT the flu!!!

I wonder when the market is going to wake up to the risks here. Every day I think people will wake up, and every day there are only these small moves.

In many many areas, contact tracing will still be useful. In a number of areas where spread has become endemic, that's impossible. Slowing the spread through NPIs has always been part of what I've been saying. At this stage in the United States, we will likely need a major shutdown of events, schools, churches and more to prevent hospitals from being overwhelmed. Some still likely will, but our ability to spread out cases is key to keeping the hospitals from being overrun. I have skin in the game--my wife is a health care worker. I have a child who I have already kept home from school. We all need to brace for what's coming.

Contact tracing will obviously no longer work in the US. That is an opportunity the US has missed. We must start social distancing immediately, including cancelling public events, and reducing exposures to large groups. Marc Lipsitch, the Harvard Epidemiologist has a thread here:

https://www.nejm.org/doi/full/10.1056/NEJMp2003762 Harvard University epidemiologist Marc Lipsitch is predicting the coronavirus "will ultimately not be containable" and, within a year, will infect somewhere between 40 and 70 percent of humanity Threads from Dr. Muge Cevik: Threads from Caitlin Rivers, PhD: Threads from Italian doctors on twitter: Italy is already triaging which people get access to ventilators! Old people likely to die don't get them. Benefit of South Korean interventions (contact tracing, widespread testing, drive through testing, NPIs, social distancing): Why isn't Covid19 taking off outside China? Needs time: Two weeks ago Italy had 600 confirmed cases. Total it's over 10,000, the hospitals are overwhelmed and the entire country has been locked down. Current *confirmed* cases in the US: 808 Log scale confirmed cases: Hopkins Case Tracker: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.html#/bda7594740fd40299423467b48e9ecf6

How about people with symptoms who doctors want to test and haven't been able to? Then the people they have interacted with? Look at the news, look at Twitter, look at the changes in the CDC guidelines. Doctors cannot get symptomatic cases tested. Meanwhile, South Korea has been a model of testing, with contact tracing, 100,000+ tests, mobile/drive through testing,etc. and are seeing results already! The US may already be beyond contact tracing in many locations, due to failures in implementing testing. I've consulted with my friends who are MDs, PhDs. They are already scared of being overwhelmed by shortages in PPE and lack of ICU beds, and every one of them says we must test patients who are symptomatic. How is that controversial?? Wait, and the coming weeks/months will reveal.

Listen, there's no reason to be here arguing with a bunch of dinosaurs who can't see the meteor coming. Keep buying banks at tangible book, and using your 20% off coupons on the market and see what comes. This isn't a primarily financial problem, and unlike 2008, the solutions will not be primarily financial. I believe this is a huge issue, and in all honesty, I wish people would just prepare by social distancing, use soap and hand sanitizer, and stock up on normal groceries in case of a quarantine. Take care of your family, make sure they get RX refills if possible, and make plans to check in on older relatives. If you want, buy puts, or move some to cash. Please please listen about the health issues. Normal people don't die en masse in normal times, and without people taking this seriously that is likely to happen.

Never meet your heros

This has only been a few weeks....look at the curves. This is still exploding and we don't even have accurate test numbers. Add in an incubation period before people need hospitalization and ICU level care, and you can see what's coming. Just wait two weeks and look at Seattle, SF, NYC. Then see who has the next clusters.... Seasonal flu changes because influenza is cultivated by ducks (which are crucibles for changes in the influenza virus) which live near livestock (pigs) that can transmit the flu to pigs, which are intermediate carriers but can transmit the flu to humans. Coronaviruses are primarily from bats, and bats rarely interact with humans (but sometimes do). There may be mutations, but as with many pandemic viruses for which vaccines exist, the conditions for significant mutation do not exist the same way as for influenza. That's not to say that a vaccine is a sure thing, however it's possible (although the development of vaccines is 18-24 months at best). Buying time through social distancing, NPIs, school closures and other measures is the best way to prevent a pandemic from becoming even more massive, and spacing out the spread of cases to keep it within the capacity of hospitals.

You test widely for two reasons: to know the extent of the problem, and to contact trace positive results to know who to test next and quarantine. That is why South Korea is falling off the curve here, as they were able to quickly scale testing and identify cases. The US is not widely testing, and thus we have no idea of the current scale of the problem, and the virus spread will get much worse before we do. We are likely already outside of the ability to contact trace in large cities, and it is likely to shut down the entire US economy similar to Italy if we hope to contain this and prevent the entire US healthcare system from becoming overwhelmed. Italy has more doctors per 1000 residents (Italy 4.0 vs. US 2.6) and more hospital beds per 1000 residents than the US (Italy 3.2, US 2.8). ICUs only have so much capacity, and without taking largescale action NOW, we will see not just the 1% case fatality rates, but many times more than that, as those patients who could have survived with hospital level or ICU care will not be able to access care. Read Gates's article in the New England Journal of Medicine (https://www.nejm.org/doi/full/10.1056/NEJMp2003762), and listen to Marc Lipsitch's (Harvard Epidemiologist) interview on the Deep Background podcast (https://podcasts.apple.com/us/podcast/the-coronavirus-isnt-going-away/id1460055316?i=1000466938203). We must flatten the curve using Non-Pharmaceutical-Interventions (NPIs) to stop this from being truly awful. The US is so far behind the curve, it's crazy. This is not about panic buying toilet paper.

I wonder if the National Guard can deliver food to every town? Does anyone know if there are any neighborhood banks in New Rochelle trading at Tangible Book Value?

Just in economic terms, how many industries have already been hit? Airlines are furloughing staff and flying planes half full at best. Conventions are being cancelled, sports games are being cancelled, people are going out to the movies/restaurants/museums less, theme parks are hurting. THE METEOR HASN'T EVEN HIT. Feel like the only dinosaur with a telescope out here, and the other dinosaurs saying the trees still have leaves. I don't know...maybe we can invest at tangible book value in banks. Interest rates plunging, oil plunging definitely won't affect credits, to say nothing of an entire economy potentially locking down within weeks.

Thanks Viking and btgmf. I couldn't agree more. Even if things do not end up as bad as the worst case, the worst case is clearly depression level, and the best case looks something like Italy, where the whole country is on lockdown. Italy has voluntarily guaranteed a recession to prevent something even worse. And even lockdown may only slow the progression so the healthcare system can manage it--there will likely be future waves of spread, and that will mean longer term effects, not returning to an ex-ante level of flying and going to restaurants, conferences and theme parks. The US will not look like South Korea, where aggressive testing and contact tracing were able to reduce the spread. At a minimum, the US will be Italy, and possibly as bad as Iran (where the facts on the ground show a situation much more dire than official stats). Buying banks at tangible book during a pandemic is wild. Happy to see the market is up today, as I will continue to buy puts in what I see as one of the clearest asymmetric trades of my life.

Funny, ERICOPOLY, as you were a big influence to me the past few weeks. When you made a bag back in the day spending $30k on options or whatever it was, you saw that the world was not what it seemed. Italy is totally locked down. Iran is in chaos. China was on full lockdown and still largely is. South Korea is doing well and testing, and will still have a brutal time. Oil fell 25% in a day, and treasury buyers are flocking to safety. The US is so clearly following the path of the worst hit places, that by the time we get around to quarantines our problems will be enormous. Italy had 3 confirmed cases a few weeks ago! Look what happened to Asian tourist locations after SARS. This is 10x as big and still growing extremely fast. We are just getting started. I actually can't believe the market LACK of reaction the past few weeks.

Adding more puts. Wild that the options market is not reacting more. It's not quite as good as reading tomorrow's newspaper today, but I can't believe people are writing options here.

Selling some calls on Vol, and buying more medium to long term puts on banks, health insurers, hotel operators, restaurants, airlines, junk bonds, market indexes. Market still doesn't understand the risk of a pandemic. Surprised the market isn't down more as this becomes more of a sure thing.

Puts. Cash. Mr. Market not paying attention. People looking at the world like this: https://www.bloomberg.com/opinion/articles/2019-02-14/retail-sales-were-puzzingly-ugly-but-don-t-panic https://www.bloomberg.com/amp/news/articles/2019-02-14/subprime-auto-bond-market-unmoved-by-record-late-loan-payments When they should be looking like this: https://www.alhambrapartners.com/2019/02/14/retail-sales-landmine/ Christmas 2018 was worse than Christmas 2007. December 2018 wasn't a blip--it's the opening salvo. The smart money betting billions that rates will fall in the short term--the short term!. Equity markets looking for any way to explain away the data, but I expect that we will see more volatility, more negative price action, and in all likelihood, a recession within the next 12 months. The world does not look strong: China and emerging markets are slowing (if you even believe the data, especially coming out of China), Europe is slowing and Italian banks and Deutsche Bank looking increasingly vulnerable, Canada and Australia are seeing their property bubbles burst, asset prices are very high and priced for continued growth, corporate and consumer debt levels are very high, and central banks have lessened capacity for handling a crisis with huge balance sheets and still very low interest rates. Market participants seem to both be A) Over-estimating the likelihood of a trade deal, and B) over-estimating the positive impact that a trade deal will have.