Castanza

This is what you happens when you try to combat a viral outbreak by listening to "nudge boy" behavioral economists and pseudoscientists. Rapidly achieving "herd immunity" sounds good on paper, but then you have to actually think about what will happen on the way to getting there... Some people still clearly have not learned the basic "flatten the curve" concept. Thank you for the inputs. Here's another perspective related to the UK situation and the "report": https://www.bloomberg.com/news/articles/2020-03-17/prolonged-social-distancing-would-curb-virus-but-at-a-high-cost FWIW, despite some reserves, I heavily support (indirectly and directly) the pro-active efforts deployed in my provincial jurisdiction which, for various reasons unrelated to the virus or the policies, has been relatively lucky, in terms of spread and impact, at least so far. I guess it is still relevant to ask questions, to adapt and to go for cost effective measures (definitions of "cost" and "effective" remaining open for debate). I just read that government officials announced that economic measures to be taken will prevent unemployment from rising to 20%. They are basically looking to flatten the curve. So a flurry of bailouts are coming and the emphasis has to be on the short term and I'm OK with that, at this point, although Bagehot, long ago, suggested that bailouts should balance the short term against the long term and moral hazard. As an avid follower of the GFC, I remember government officials suggesting then that another great depression could be avoided (although impossible to verify) with various monetary and fiscal bailouts. I would suggest that they tried to flatten the curve in a way but people ran out of will and perseverance and we've had the weakest recovery on record, a glaring absence of deleveraging and, in fact, developed economies have become very weak and compromised economic hosts and now a virus hits. It appears difficult to explain, at least from my humble perspective, why we should be surprised by the eventual course of economic events. I just worry about unintended consequences and wonder if, at least, we can base our decisions on solid data, analysis and rational reasoning that truly balances the short term with the long term? Can we think of (and implement) necessary reforms or do we just need that they become imposed on us the way natural selection can and simply hunker down? The downturn itself is essentially being ordered by the government. This thing would blow through quickly if there were no "social distancing". So given that they are effectively contributing to the severity of the downturn, we already have interference with free market principles before the first check is written. Under that environment, bailouts are fair game and they do not introduce moral hazard. It's very different situation from a financial crisis precipitated by extreme excess and rewarded with a bailout. Well put Eric. Even Justin Amash is in favor of individual bailout. It has to be one or the other. You either force shutdown and provide temporary loans to individuals or you let people stay open. Completely different from 08 as this wasn’t brought in by individuals.

re-entered some GOOG around 1080 Edit: RTN 117

Hitting the bottle early today? I think after noon is social acceptable but I usually start with lighter fare. No haha just picking stuff up while I was out and about. Edit: Looks like I went just in time :p Time to start selling $20 shots to the neighbors (https://www.inquirer.com/health/coronavirus/spl/pennsylvania-coronavirus-shutdown-statewide-governor-tom-wolf-20200316.html)

Stopped by the liquor store during lunch picked up a few bottles of red, Glenlivet 15, Bird Dog, and a case of Founders All Day IPA.....Apparently they are closing liquor stores in PA. Lock down without booze would be miserable....

Free market principles are abandoned the minute the govt says you can't do this and you can't do that. This is a very different situation from past financial crises. I wouldn't have supported bailouts in 2008 for anyone. I agree that individuals should have emergency funds, responsibility is important. You can't lock someone in a jail cell and then tell them to feed and support themselves. Either let stuff stay open and provide no type of assistance or close up shop and provide assistance with stipulations. Can't have the cake and eat it too. Or...tap your 6 months of an emergency fund? To each their own. I know I'll be helping people where I can.

Free market principles are abandoned the minute the govt says you can't do this and you can't do that. This is a very different situation from past financial crises. I wouldn't have supported bailouts in 2008 for anyone. I agree that individuals should have emergency funds, responsibility is important. You can't lock someone in a jail cell and then tell them to feed and support themselves. Either let stuff stay open and provide no type of assistance or close up shop and provide assistance with stipulations. Can't have the cake and eat it too.

I agree, give out a 1-1.5k per month loan at zero percent interest with a 3 year re-payment plan of some type. Or we could let people learn their lessons from overspending and to save? Paul you know as well that I am generally not in favor of bailouts...however I am also not against some type of safety net for a unique situation like this. The fact is if people are not allowed to go out to their job then there's going to be a lot of fallout. I'm fine with it as long as there are stipulations on what you can purchase and that it has to be paid back in full. I'd rather see corporations go under than your average Joe contractor who had his jobs canceled for the next 6 months. If the government is going to cause a shutdown and put peoples livelihood at risk then they should also provide a temporary (loan) safety net.

BRKb at 174

I agree, give out a 1-1.5k per month loan at zero percent interest with a 3 year re-payment plan of some type.

At this rate I'm wondering what's the probability the markets will be shut for a while. Politically I can see Trump wanting to limit the damage, and reopen in 6-8 week when things are on the upswing. I don't know the potential downstream impact would be though when trillions of dollars are tied up and can't be used. I thought about the option and need for a market closure for a few weeks, perhaps even until the crisis is over. There are no catalysts until significant progress is made. Relief rallies on lower cases maybe. But this could go on for months. What happens to people drawing on their 401k? Or just in general, how do you deprive people of their money? Just trying to think of what that would actually look like. It won't happen. Markets were open throughout the GFC. It would be the dumbest move ever. For weeks? It's insanity. The result of that would be a de-rating of EVERY single public company. Public markets exist to provide liquidity. That's all. You can't decide to allow liquidity only when the markets are going up and cut it off when the markets are going down. Moreover it's not even gonna matter. Derivative markets are gonna stay open and they're gonna trade. They're gonna create derivatives as markers for stocks and they're gonna fiddle with the settlement to make the whole thing work. You'll be surprised how quickly it'll happen. Of course the spreads are gonna blow up. To castanza's point, "regular" people with 401Ks and such will not be able to take part in the party because they will either not know what to do or won't be allowed to do it due to the nature of the instruments. They'll only have access to their money when the "regular" markets open and they're portfolio is worth significantly less. Nice work Sherlock! What I was really pointing to is that I think the only way to stop equity values imploding is a market close. If they can't do that for whatever reason, market values go one way in a total economic shutdown. The fed won't work. The fed has no business (imo) controlling equity values. If I'm holding company A and the market gets shut down for one month. What happens to my share value when that company goes to zero when the market is shut down? It becomes way to messy when it's done for any extended period of time. I think they are intending to go all digital as they mentioned it last week.

Why would the Democrats bail out Trump here? The Dems will pass whatever they think will help, and the GOP will take it or leave it, and then face the voters. Anyone who thinks big business shareholders are gonna get bailed out by the Democratic controlled House in an election year...please write puts. Didn’t that recent bill proposed by the House eliminate pretty much all fiscal responsibility to employees for big business?

*RuleNumberOne has entered the chat :P

At this rate I'm wondering what's the probability the markets will be shut for a while. Politically I can see Trump wanting to limit the damage, and reopen in 6-8 week when things are on the upswing. I don't know the potential downstream impact would be though when trillions of dollars are tied up and can't be used. I thought about the option and need for a market closure for a few weeks, perhaps even until the crisis is over. There are no catalysts until significant progress is made. Relief rallies on lower cases maybe. But this could go on for months. What happens to people drawing on their 401k? Or just in general, how do you deprive people of their money? Just trying to think of what that would actually look like.

Will do. Can't believe we have people still saying there is no advantage to acting early when we see countries coming out of this who acted early. And then going on guessing that there will be future outbreaks again and mutations/etc so why bother doing anything (absurd). There was also earlier the "they're old people who were going to die anyway" shocking mentality. The "we're all screwed anyway" mentality makes absolutely no sense (and some of these people were initially saying "no big deal, just the flu". And calling this a supply shock when it is clearly a demand shock... Absurd. Almost as absurd as comparing a passenger in your backseat to a cinder block and saying human bodies become projectiles in car crashes and that's why we have seat belts, but oh well--the absurdities keep coming. 1.) I never said testing or prevention wasn’t important. I said targeted testing is probably best. 2.) I did say testing is a game you’re playing from behind at this point an likely isn’t going to be as effective as if it were implemented immediately. 3.) herd immunity will eventually be an important factor especially knowing a vaccine likely isn’t going to be that effective. 4.) I have agreed this is going to have big economic impacts, there is no denying that. I think it’s wayyy to early to assume that countries who have “tested early” are going to be “way better off” than others. China isn’t anywhere close to being out of the storm yet. For shits and giggles: https://www.google.com/amp/s/abcnews.go.com/amp/GMA/story%3Fid%3D128062%26page%3D1

Is this really comparable to 08? Seems more like a supply chain shock than anything. And I’m genuinely asking.

not just severity is a question, but also the length. i mean, china will have taken a large hit, but considering they seem to be coming back on track (and assuming the virus won't just hit them again) the effects seem rather limited. obviously, if things take longer to play out over here, the damage gets increasingly worse. anyway, might be contradictory, but i really believe locking things down now (as appears to be happening) will save a lot of damage to the economy in the long run. This is where the economic costs of precautionary principle come into effect. China/S Korea/Singapore etc took some upfront costs to mitigate spread early in the disease course. As a result, they are seeing the light at the end of the tunnel. The countries unwilling to bear that initial cost may see protracted crises that will prove much much more expensive over the whole crisis than if they took that initial ounce of prevention. It's like wearing a seatbelt--the initial cost low, the cost of injuries sustained without wearing one much greater and can lead to a lifetime of pain/suffering/debilitation. Wearing a seatbelt is not just about yourself. It keeps you from flying around the vehicle and killing everyone else. So if you want to apply this to current conditions, you have a few countries wearing seatbelts and the rest of the world without them. Unfortunately it doesn’t matter because it’s a global economy. Is Singapore somehow going to weather this global economic shit storm when the US, UK, and other major powers are running on E? If Australia managed to keep every case of covid19 out of their country they are still going to be taken to the woodshed economically because they are almost entirely reliant upon China. This is new information. I always thought in most crashes people hit the dashboard and a seatbelt stops this, not that they are human projectiles ready to hit other humans in the vehicle. Please show me studies on this thanks. ...Also, most cars are occupied by 1-2 individuals on avg. There goes the human projectile theory. At least people will be walking around eating out, doing retail shopping, traveling around within the country for work/personal/tourism reasons in S Korea/Taiwan/Singapore. In places where disease spread continues, this will not be happening. Australia is reliant on China. China is seeing the end of this crisis, so there goes your point about that. Don’t be mad because I poked a hole in your metaphor lol if you don’t believe me go get yourself a cinder block, put it in your back seat, and then slam your brakes. Where do you think that cinderblock will end up? Anywayssss My point was....in this global economy, you’re only as protected from the fallout as much as the next guy. A better metaphors would be a row of townhomes. If I have a sprinkler system and my neighbor doesn’t it isn’t going to help me if they have a house fire. Chances are I’m going to sustain massive fire damage as well. It could buy you a little time, sure. But the fire will run its course and you’ll probably be left with a total loss either way. On China: We don’t trust China in the beginning saying they weren’t being honest with numbers. But now because those numbers are “good” they are to be trusted? ::) My final opinion on this is that covid19 will run its course. I’m not confident that any type of containment is going to slow it enough to buy time for a treatment. Spain, France, Germany, UK, US, etc. The UK is right about herd immunity. The countries that locked down will probably just see new clusters form once they open back up. Unless somehow there is a treatment in place. But so far that estimate is months past the estimated peak of spread.

not just severity is a question, but also the length. i mean, china will have taken a large hit, but considering they seem to be coming back on track (and assuming the virus won't just hit them again) the effects seem rather limited. obviously, if things take longer to play out over here, the damage gets increasingly worse. anyway, might be contradictory, but i really believe locking things down now (as appears to be happening) will save a lot of damage to the economy in the long run. This is where the economic costs of precautionary principle come into effect. China/S Korea/Singapore etc took some upfront costs to mitigate spread early in the disease course. As a result, they are seeing the light at the end of the tunnel. The countries unwilling to bear that initial cost may see protracted crises that will prove much much more expensive over the whole crisis than if they took that initial ounce of prevention. It's like wearing a seatbelt--the initial cost low, the cost of injuries sustained without wearing one much greater and can lead to a lifetime of pain/suffering/debilitation. Wearing a seatbelt is not just about yourself. It keeps you from flying around the vehicle and killing everyone else. So if you want to apply this to current conditions, you have a few countries wearing seatbelts and the rest of the world without them. Unfortunately it doesn’t matter because it’s a global economy. Is Singapore somehow going to weather this global economic shit storm when the US, UK, and other major powers are running on E? If Australia managed to keep every case of covid19 out of their country they are still going to be taken to the woodshed economically because they are almost entirely reliant upon China.

Couldn’t resist and picked up some TRV also. Patients is difficult...

Still holding some SPCE puts. Some are currently in the money. I have a few speculative ones $5 strike price that incredibly could hit.

What percentage of cash are you sitting on? Definitely not easy selling stuff for loss.

Lime, ginger ale, rye

That's all fine and dandy. But we don't exactly have an oversupply of tests....so wouldn't it be best to put them to the most efficient use? High risk individuals.

Gretzky didn't play hockey with a blindfold on. You need to know where the puck is to know where it is going. Testing is preferable to not testing. It really is that simple. It's like saying that not telling sexually promiscuous individuals whether they are HIV positive or not will not impact future spread. This is categorically false and we do not need to go back to 20th century discoveries in medicine each time to address these points that have been shown decades ago. There are some points being made (against testing, action) that can be easily dismissed, but they are brought up almost hourly on here. You both conveniently glossed over the "I'm not disagreeing that there is value to testing (probably only relevant to immediate treatment at this point). Testing is hindsight at this point." (testing for spread containment) Testing to prevent spread is hindsight. I think it's already all over the US. There is probably one or two clusters brewing in every state. By the time someone responds to this comment there is probably a few dozen asymptomatic individuals who just left each cluster zone spreading it further. Targeted testing would be more effective. Testing by risk profile is the only way to get ahead of the spread. Gets tests to high risk individuals and lock down senior care facilities. (the puck is everywhere and it's going to senior homes) Telling people in the 80% that they have covid-19 is a sure fire way to flood hospitals with people who probably don't need any type of significant treatment. I'd rather see the beds we have available left for those who have a high chance of death.

Marketwise I'm not worried. I'm financially secure (very little debt). The emergency fund is flush. The wife and I have solid jobs and I have a good pile of cash for this. It certainly doesn't feel like we are anywhere near the bottom but timing is whatever. I'll probably stick to a bi-weekly allocation (anything of size) from here on out.

The scariest thing is all of the already mentally unstable individuals now being pushed over the edge from this pandemic panic. It's only a matter of time until we see individuals getting mugged, trampled or killed over ridiculous things like the last pack of toilet paper.