Coronavirus

[Viking]

The cracks are starting to appear around the globe... US housing was the core issue in 2008. What will be the financial cause of the 2020 recession? Yes, the virus is the core issue. Perhaps a decade of negative interest rates has built up instabilities (like global banks reaching for yield) that will make the coming global recession much worse.

 

BOJ warns of potential financial system risks triggered by pandemic

- https://finance.yahoo.com/news/boj-warns-potential-financial-system-121504660.html

 

TOKYO (Reuters) - The coronavirus pandemic, if prolonged, could trigger a negative feedback loop in which a worsening economy threatens to destabilise Japan's financial system, the Bank of Japan warned on Tuesday.

 

Japanese financial institutions have increased lending to middle-risk borrowers, or companies with higher credit risk, in search of higher yields amid years of ultra-low interest rates, the BOJ said in a semi-annual report on the financial system.

 

They have also increased high-risk overseas lending, such as those to energy firms hit by plunging oil prices, making their balance sheets vulnerable to global market volatility, it said.

 

Such exposure to various risks is among factors the BOJ must take into account in scrutinising Japan's banking sector, particularly because some of the loans could turn sour as the pandemic hurts the economy, the report said.

 

"Japan's financial system is under strong stress but remains sound as a whole, with financial institutions providing necessary funds to support economic activity," the BOJ said.

 

"If the economy suffers a prolonged and deep slump, however, that could trigger a full-fledged, banking-sector correction," it said.

[rb]

So what are they saying? That the Japanese banks are the bag holders for US shale?

[Liberty]

Mass confusion, zero coordination!

 

Maryland Buys 500,000 Test Kits From South Korea, Drawing Criticism From Trump

 

Trump was asked during his briefing on Monday about Hogan securing the tests, for which Maryland paid $9 million. The president suggested it was an unwise investment.

 

"The governor of Maryland could've called [Vice President] Mike Pence, could've saved a lot of money," Trump said.

 

"If there were an easier way, we certainly would have taken it," Hogan said Tuesday in an interview on MSNBC's Morning Joe. "The president said the governors are on their own and they should focus on getting their own tests, and that's exactly what we did."

 

https://www.npr.org/sections/coronavirus-live-updates/2020/04/21/839919655/maryland-gets-500-000-test-kits-from-south-korea-drawing-criticism-from-trump

[Jurgis]

Mass confusion, zero coordination!

 

Maryland Buys 500,000 Test Kits From South Korea, Drawing Criticism From Trump

 

Trump was asked during his briefing on Monday about Hogan securing the tests, for which Maryland paid $9 million. The president suggested it was an unwise investment.

 

"The governor of Maryland could've called [Vice President] Mike Pence, could've saved a lot of money," Trump said.

 

"If there were an easier way, we certainly would have taken it," Hogan said Tuesday in an interview on MSNBC's Morning Joe. "The president said the governors are on their own and they should focus on getting their own tests, and that's exactly what we did."

 

https://www.npr.org/sections/coronavirus-live-updates/2020/04/21/839919655/maryland-gets-500-000-test-kits-from-south-korea-drawing-criticism-from-trump

 

Mike Pence would have done 500,000 tests himself! Single handedly! For men only, of course.

[LongHaul]

The cracks are starting to appear around the globe... US housing was the core issue in 2008. What will be the financial cause of the 2020 recession? Yes, the virus is the core issue. Perhaps a decade of negative interest rates has built up instabilities (like global banks reaching for yield) that will make the coming global recession much worse.

 

BOJ warns of potential financial system risks triggered by pandemic

- https://finance.yahoo.com/news/boj-warns-potential-financial-system-121504660.html

 

TOKYO (Reuters) - The coronavirus pandemic, if prolonged, could trigger a negative feedback loop in which a worsening economy threatens to destabilise Japan's financial system, the Bank of Japan warned on Tuesday.

 

Japanese financial institutions have increased lending to middle-risk borrowers, or companies with higher credit risk, in search of higher yields amid years of ultra-low interest rates, the BOJ said in a semi-annual report on the financial system.

 

They have also increased high-risk overseas lending, such as those to energy firms hit by plunging oil prices, making their balance sheets vulnerable to global market volatility, it said.

 

Such exposure to various risks is among factors the BOJ must take into account in scrutinising Japan's banking sector, particularly because some of the loans could turn sour as the pandemic hurts the economy, the report said.

 

"Japan's financial system is under strong stress but remains sound as a whole, with financial institutions providing necessary funds to support economic activity," the BOJ said.

 

"If the economy suffers a prolonged and deep slump, however, that could trigger a full-fledged, banking-sector correction," it said.

 

This is a good question - here is what I see for 2nd and 3rd order effects.

 

1.  Housing bubbles and real estate bubbles around the world.  China, Canada, Aussie, and many more. 

Those are likely to go down a lot with serious hits all around.

2.  Banks tightening with big losses - I would not be surprised if many banks went under from real estate collapsing or country debt problems down the line. 

With 10-20x leverage you don't need much to go under.  Who knows what is in their portfolios.  I don't think the CEO's even know. 

3.  Consumers pulling back on all.

4.  Businesses generally cutting spending especially cyclical ones.

5.  Because the democracies have turned into a bunch of drunken sailors trying to bail everyone out of any kind of misfortune - I expect within the next few years many democracies getting into trouble.  Then all hell breaks loose if the big economies actually have to default, have high inflation and much higher interest rates, etc.   

Why would I loan to these countries when they have no discipline to let individuals and corporations cut way back or go bankrupt?  Country defaults could take years although I read that already at least 2 3rd world countries have defaulted.

 

Where are some safe assets that one can put with a lot of liquidity?  Norweigan bonds?

[Spekulatius]

 

Where are some safe assets that one can put with a lot of liquidity?  Norweigan bonds?

 

You better hedge the currency though . Some of the oily currencies like NOK, MXN or the Ruble lost ~20% against the USD and trade with the volatility of equity

[LongHaul]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

 

[Spekulatius]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

If a million people die (regardless of age) the economy would be trash anyways. Probably worse than it is right now (if that’s possible).

[Dalal.Holdings]

https://www.npr.org/sections/coronavirus-live-updates/2020/04/21/840341224/nih-panel-recommends-against-drug-combination-trump-has-promoted-for-covid-19

A panel of experts convened by the National Institute of Allergy and Infectious Diseases recommends against doctors using a combination of hydroxychloroquine and azithromycin for the treatment of COVID-19 patients because of potential toxicities.

 

But did they consider all the anecdotes and "common sense"?

[tng]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

Also, the question is whether that $2 trillion is a one time cost or if it is a $2 trillion per month cost, because so far there is no obvious way to reopen without most people eventually getting the virus anyways. Are we going to pay $2 trillion a month until there is a vaccine?

[ERICOPOLY]

In the study of 368 patients, 97 patients who took hydroxychloroquine had a 27.8% death rate. The 158 patients who did not take the drug had an 11.4% death rate.

 

https://www.cnn.com/2020/04/21/health/hydroxychloroquine-veterans-study/index.html

[rb]

In the study of 368 patients, 97 patients who took hydroxychloroquine had a 27.8% death rate. The 158 patients who did not take the drug had an 11.4% death rate.

 

https://www.cnn.com/2020/04/21/health/hydroxychloroquine-veterans-study/index.html

That's par for the course of what you get out of doctor Trump. How many doctors prescribed hydroxychloroquine just cause they were afraid they would get sued by trumpers if they didn't because the dude shot his mouth?

[LC]

In the study of 368 patients, 97 patients who took hydroxychloroquine had a 27.8% death rate. The 158 patients who did not take the drug had an 11.4% death rate.

 

https://www.cnn.com/2020/04/21/health/hydroxychloroquine-veterans-study/index.html

That's par for the course of what you get out of doctor Trump. How many doctors prescribed hydroxychloroquine just cause they were afraid they would get sued by trumpers if they didn't because the dude shot his mouth?

Without control for who was prescribed which drug, the study is meaningless.

[KCLarkin]

In the study of 368 patients, 97 patients who took hydroxychloroquine had a 27.8% death rate. The 158 patients who did not take the drug had an 11.4% death rate.

 

https://www.cnn.com/2020/04/21/health/hydroxychloroquine-veterans-study/index.html

That's par for the course of what you get out of doctor Trump. How many doctors prescribed hydroxychloroquine just cause they were afraid they would get sued by trumpers if they didn't because the dude shot his mouth?

Without control for who was prescribed which drug, the study is meaningless.

 

I wonder if the bright bulbs who were arguing against controlled studies because it was unethical to withhold hydroxychloroquine will suddenly agree that this study is meaningless because there it is no random control?

 

Or the MAGA crowd who fell in love with a small, uncontrolled French study?

 

Also, should be noted that the remdisivir study that caused the market to spike was not controlled.

 

Maybe we should just listen to Fauci?

[Spekulatius]

In the study of 368 patients, 97 patients who took hydroxychloroquine had a 27.8% death rate. The 158 patients who did not take the drug had an 11.4% death rate.

 

https://www.cnn.com/2020/04/21/health/hydroxychloroquine-veterans-study/index.html

That's par for the course of what you get out of doctor Trump. How many doctors prescribed hydroxychloroquine just cause they were afraid they would get sued by trumpers if they didn't because the dude shot his mouth?

Without control for who was prescribed which drug, the study is meaningless.

 

I wonder if the bright bulbs who were arguing against controlled studies because it was unethical to withhold hydroxychloroquine will suddenly agree that this study is meaningless because there it is no random control?

 

Or the MAGA crowd who fell in love with a small, uncontrolled French study?

 

Also, should be noted that the remdisivir study that caused the market to spike was not controlled.

 

Maybe we should just listen to Fauci?

 

Too many conclusions are drawn right now based on quick and dirty study results. Some feel like Hail Mary‘s and get egos attached to them. Not much good comes out of those situations, especially when lives are at stake.

[Guest cherzeca]

just heard from a pulmonologist critical care MD from outside NYC who responded to a plea for help from NYC hospitals a few weeks ago.  true mensch. spent a couple weeks getting accredited on their medical records system etc. was to go to Lincoln hospital in bronx to work in ICU.  then just told, never mind, all much better, no need to come

[Gregmal]

just heard from a pulmonologist critical care MD from outside NYC who responded to a plea for help from NYC hospitals a few weeks ago.  true mensch. spent a couple weeks getting accredited on their medical records system etc. was to go to Lincoln hospital in bronx to work in ICU.  then just told, never mind, all much better, no need to come

 

They must have gotten Elon's ventilators.

[Investor20]

For those that feel strongly we should track and trace how would you go about that? I'm not arguing against it but the man power needed, the time for testing, and the tracking really would border on unfathomable.

 

I think what you are really asking is this: is it important. And if so how important?

 

The US decided it was important to go to the moon. With leadership, planning, experts, resources, money and effort they made it happen. Yes, there were set backs; learn, iterate and keep going.

 

The virus is killing the global economy (not just the US). And it is costing lives. I think one can make the case that this is the biggest economic/health issue to hit the globe since the great depression. So i think we can all agree that dealing with the ‘virus’ is massively important.

 

So it then follows that governments would do everything in their power to deal with it. One would expect the government to mobilize all necessary resources no different than when it fought WW1, WW2 or when it decided to go to the moon. And the leadership HAS to come at the national level. It also needs massive international coordination.

 

Imaging fighting WW1 or WW2 without international coordination? Or how about if the US presidents at the time said ‘we are going to fight a world war and the states individually can manage the the war effort as they chose as per the loose guidelines as set forth by the Federal government.’ And then the President then said that all people who do not support the war should let their governors know and actively demonstrate in their state. And the states were also short on ammunition; production of which was controlled by the government who said when they asked for more ‘you have enough...’

 

Some countries have decided that dealing with the virus is of the utmost importance: Taiwan and South Korea. It has taken great political leadership, a national approach, has required individuals to give up some personal freedoms. Most importantly it required a vision, planning, trust in science, excellent communication, resource mobilization (people and medical), cooperation, strong execution.

Is it important? If so, how important?

Yes its important. And important enough to fund research.

Weird you highlighted giving up personal freedoms, but did not include science.

 

The Stanford study has some weird aspect.  They did the study with antibody with individual donations.  Federal government after printing 2 trillion dollars did not have 200K which Dr. Jay Bhattacharya who led the team for this study says it costed. Neither did Newsom with 100 billion dollar budget.

 

It came to individual donors to fund to do research to understand how much the infection spread, how many asymptomatic to symptomatic Covid infections are there. Of course high asymptomatic patients means control measures are different.

 

Particularly giving up individual freedoms are not going to do anything in a scenario of 90% asymptomatic, because 90% of people don't even know they themselves had infection. 

How does giving up your freedoms help when you don't even knew you had infection?

You cannot test and track with so many asymptomatic.  There is no way to test millions every day and then track whom they met.

 

This is not about going to moon.  This is asking going to pluto and coming back in a day without funding research.

 

https://www.medrxiv.org/content/10.1101/2020.04.14.20062463v1

Funding Statement:

          We acknowledge many individual donors who generously supported this project with gift awards. The funders had no role in the design and conduct of the study, nor in the decision to prepare and submit the manuscript for publication.

[SnarkyPuppy]

just heard from a pulmonologist critical care MD from outside NYC who responded to a plea for help from NYC hospitals a few weeks ago.  true mensch. spent a couple weeks getting accredited on their medical records system etc. was to go to Lincoln hospital in bronx to work in ICU.  then just told, never mind, all much better, no need to come

 

Imagine not being able to conceptualize high sensitivity to key variables in models (R0 a key variable has incredibly high sensitivity.  R0 of 2.1 = 1mm infected; R0 of 2.3 = 10mm infected) for a novel virus with incomplete information.  Obviously conservative actions in the face of a fast moving virus with significant incomplete information was appropriate.  Imagine not being able to understand that # of ICU cases with shelter in place < # of ICU cases without shelter in place. 

 

You've been reverse engineering what you want to be true for 2 months now.  Politics has such an wild impact on the human brain and this whole coronavirus thing is just another intense display of how the mind goes to shit when you're thinking in terms of right/left. 

[nodnub]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

If a million people die (regardless of age) the economy would be trash anyways. Probably worse than it is right now (if that’s possible).

 

Can you expand on this?  If a million people die... would the economy necessarily be trashed? 

 

I'm interested in thoughts on this.

 

 

--

I suppose if we got to point of 1million dead, we would have completely overwhelmed the health care system, and a lot more doctors and nurses would sicken and die from COVID.  And many people would die from untreated heart attacks (et al) due to lack of medical care.

 

 

 

 

[Investor20]

https://news.yahoo.com/117-million-children-face-measles-risk-covid-19-103601597.html

117 million children face measles risk from COVID-19 response: UN

 

Around 117 million children worldwide risk contracting measles because dozens of countries are curtailing their vaccination programmes as they battle COVID-19, the United Nations warned Tuesday.

 

Currently 24 countries, including several already dealing with large measles outbreaks, have suspended widespread vaccinations, the World Health Organization and the UN's children's fund UNICEF said.

 

 

[Dalal.Holdings]

New York City will throw the “biggest, best” ticker-tape parade for its health care workers and first responders once the city reopens from the coronavirus pandemic, the mayor announced Tuesday.

 

“We will honor those who saved us,” Mayor Bill de Blasio said. “The first thing we will do, before we think about anything else, is we will take a time, as only New York City can do, to throw the biggest, best parade to honor these heroes.

 

“This parade will mark the beginning of our renaissance,” he added. “But it will also be, most importantly, a chance to say thank you to so many good and noble people, so many tough, strong people.”

 

This schmuck wants to throw a parade—Like the one Philly threw during 1918 Flu... :o

 

His stupidity knows no bounds.

[Investor20]

https://www.usnews.com/news/world/articles/2020-04-16/un-warns-economic-downturn-could-kill-hundreds-of-thousands-of-children-in-2020

 

 

UNITED NATIONS (Reuters) - Hundreds of thousands of children could die this year due to the global economic downturn sparked by the coronavirus pandemic and tens of millions more could fall into extreme poverty as a result of the crisis, the United Nations warned on Thursday.

[LongHaul]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

If a million people die (regardless of age) the economy would be trash anyways. Probably worse than it is right now (if that’s possible).

 

Can you expand on this?  If a million people die... would the economy necessarily be trashed? 

 

I'm interested in thoughts on this.

 

 

--

I suppose if we got to point of 1million dead, we would have completely overwhelmed the health care system, and a lot more doctors and nurses would sicken and die from COVID.  And many people would die from untreated heart attacks (et al) due to lack of medical care.

 

If 1 million people die over 6 months or 1 year that is 30 bps of the US population.  But the US population was growing around 70 bps per year so still some slight population growth.

 

I don't know how much the economy would go down in a no stay at home situation (probably less though).

 

 

[Investor20]

BTW - math on cost per life is very high for the US government. 

 

My assumptions (just guesses)

 

Number of people would have died from Covid if just kept everything open:  1 million

 

Incremental cost to economy:  $ 2 trillion

 

Cost per life:  $2 million

 

I am not sure if the average age but it may be  ~76-80

 

It is interesting because I am guessing the market value in a court settlement would be much less.

 

If a million people die (regardless of age) the economy would be trash anyways. Probably worse than it is right now (if that’s possible).

 

Can you expand on this?  If a million people die... would the economy necessarily be trashed? 

 

I'm interested in thoughts on this.

 

 

--

I suppose if we got to point of 1million dead, we would have completely overwhelmed the health care system, and a lot more doctors and nurses would sicken and die from COVID.  And many people would die from untreated heart attacks (et al) due to lack of medical care.

 

If 1 million people die over 6 months or 1 year that is 30 bps of the US population.  But the US population was growing around 70 bps per year so still some slight population growth.

 

I don't know how much the economy would go down in a no stay at home situation (probably less though).

 

Covid response is not about money vs lives. 

 

Its lives vs lives. 

 

See above two postings about warnings from UN about Childrens deaths.

 

Even for an adult, if they cannot buy insulin or other medicines or cannot get good nutritious food, as they lost employment, those are also lives.

 

The life expectancy in US started going down after Great recession and only recently started going up.  Obviously, economy has effect on how long we live.