‘It’s Just Everywhere Already’: How Delays in Testing Set Back the U.S. Coronavirus Response[1]
[0]: https://www.vox.com/science-and-health/2020/3/12/21175034/co...
[1]: https://www.nytimes.com/2020/03/10/us/coronavirus-testing-de...
In contrast, Japan, Taiwan, Singapore, Thailand, and Hong Kong got right on top of it, and early. They're also the only countries seeing a flat rather than exponential trend right now. Which means their hospitals are not at threat of being overwhelmed.
Let's not forget screwing up the manufacturing of the test. [1]
[1] https://www.cdc.gov/coronavirus/2019-ncov/about/testing.html
What would a housing correction look like? Demand still outstrip supply in hot markets, so the worst thing that'll happen is that the housing prices will have a slight dip, and that's it. Also, with the Fed lowering interest rates to zero and possibly lower, that'll continue to inflate the value of assets such as houses.
"apt get" -- automatically update your Debian machine.
I don't have a full understanding of the Repo market, but I do get it at a moderate level. I understand that it acts as the "lube" to our financial system and It's obvious it's not functioning correctly. What effect will this happen on the growing corporate debt that's out there? What effect will the lower revenues have on the ability for business' to pay back the debt and interest?
These are questions I have, but don't necessarily have factual answers for. However I don't feel good about the answers to them and for that reason do think were in for a recession.
If S&P drops ratings for many companies, many banks will end up holding bags; in which case, the fed will come to rescue these banks.
I'm not sure I agree with this statement. The repo market may not help or hinder corp debt directly, but I think it very much so effects corporate debt.
Corporations presumably get their loans from banks. What facilitates banks to make these loans? The Repo market. What happens if the repo market collapses / shrinks / endures instability? Banks most likely, would not be able to make as many loans and the rate for future loans would increase due to lower supply and higher demand.
On top of future loans, this could have a negative impact to current outstanding loans held by corps. I'm not 100% sure the terms of corporate loans, but if they have variable rate loans with banks, this shrinking of loan supply coupled with increased demand for liquidity would surely hurt some of these corporations.
What repos do: swap one kind of IOU (I owe you) with another kind of IOU. This doesn't make banks to issue new loans to distressed companies, any more than you/I can give loans to a dead beat. During good times, everyone is happy to issue loans.
Exogenous shocks usually don't provoke recessions but is going to be like a planet-wide tidal wave. Things are going to be very different at the end. Huge, efficient enterprises may well end up even stronger but would the market for a given medium sized enterprise even make sense? We don't know.
Full disclosure: I've been short term short the market for the last three weeks.
You hit the exact peak of the market before deciding to short? Wow. Can you share with us your prognostications on just how "short-term" you expect this to be, or will you update us with hindsight on that, too?
"I've been short the market" after a 30% draw-down is the new version of all prisoners claiming they're innocent. It's never "I started to get defensive 6 months ago" or "I went to half cash expecting a crash near-term". Top tick and went short. Every forum, every time.
This is where /r/wallstreetbets has it right: if you aren't going to post your trade in advance or verify it, don't talk about it.
I just don't tell people that I chickened out and covered on the first rally...
(or that I then put it all into GLD...)
A significant cause for the massive drop today is that indicators out of China are that the disruption is much, much larger than anyone accounted for.
A few days ago there was a guy talking about refinancing his house and putting 20% of the value into the market[1]. He asked whether it was a bad time. I said it was a bad time -- not that it was going up or down but that there is enormous uncertainty and a long way to drop -- and got moderated down to the gray. The non-gray comments were all that this is a great time. Buy 'em on sale is a claim that has been foolishly made again and again.
No, it isn't a great time. Anyone deluding themselves that there is a market "bottom" that it is bouncing off of has been proven wrong repeatedly. Over the past couple of days the federal government has done more to try to fix the markets than they did during the entire housing crash, but compressing it all into a weekend. They have essentially nothing left.
And here we are, staring into the abyss.
Things will improve, and at one point we'll laugh about this and consider it all an overreaction, etc. But there's a lot of downside between now and then. And if history is any example, once we bottom out we'll hang around for a while.
[1] Oh add that we have historic debt levels, bubbled house prices in some areas, and the simple idea of financing the current, elevated value of a house seems risky.
One minor point the Federal Reserve has pulled all of their levers to keep credit moving.
The Federal Government has yet to do any fiscal stimulus, which is what's really needed here. If the US government decided to go into $2T+ of debt over the next few weeks and directed that spending at individuals instead of industry bailouts, then I predict the economic consequences of this event would be much shallower than it would be otherwise. They can borrow this money at damn near zero interest right now.
> And here we are, staring into the abyss.
Just in the Seattle area, we've had 10's of restaurant closures announced. The Tom Douglas restaurant group has laid off a good portion of its 800 employees. So the Seattle area alone has probably lost >2,000 jobs already. That's probably seriously on the low side.
I truly think we're looking at a staggering number of unemployed in this country within a few months. Like, great depression staggering. The GFC was terrible, but every neighbourhood service business did not suddenly have 75% of their business disappear or were forced to close. This is much, much different. These jobs will go away in a flood and come back in a trickle. Without a vaccine, we will need to hold some level of countermeasures for up to 18 months - nobody will go out to eat, etc.
They have very good control of their borders and the (medical) resources to act in case of trouble. Not only that but I think they have learned a few lessons after the 2002-2004 SARS outbreak.
Anecdotal, but while in Hong Kong (2014) there were a few things that stood out:
- they had thermal screening for ALL passengers - while walking towards customs an agent asked me to take my hat off and pointed to the thermal cameras. In contrast, at Bucharest's airport they were set up 3 weeks ago. As of 2019, there were 1.2M Romanian citizens living in Italy, about 600k in the northern part.
- banners against spitting in the trash bin - coming with a big fine. More generally speaking, a general state of cleanliness which can't be found in many EU capitals.
- no toilets in the subway - might be sources of contamination. And when you finally found a public toilet, they were as clean as they can be.
I think there are better odds of finding a cure fast than for Europe to contain this. Note, the evening before the Milan area lockdown people were rushing to the train stations - Schenghen area is borderless.
The moment I step out of a train arriving at central station it smells like piss and a bunch of drunk homeless people perform a spitting contest.
Of course. Do you think people will stop working, going out, watching movies, buying cars, etc forever?
Every market decline, people think the world is going to end. But the world just keeps chugging along.
During the 2008 financial crisis, people were predicting the end of the world, bank runs, financial collapse, etc. The most recent ebola scare, people were talking about pandemic, every hospital being at capacity, death rate, triage and the end of the world.
In a few years, we'll do this all over again. The markets will be reinflated, the markets will decline, we'll have another crisis, the news will feed panic for ad money and people will go out of their minds. Then things will return to normal.
If these health policies undershoot their targets in term of number of people infected, then we may have to deal with this virus again next fall/winter, so add a few more months of similar pain.
I just don't see how this will not have lasting effects. Even in Dec 2008, at the very worst of the crisis, you had deep discounts in shops, but at least you could consume. But here all malls will be basically closed.
Our state and many others have closed schools, made all restaurants take-out/delivery only, barred gatherings of > 10 people, etc. I don't know how the small businesses are going to survive more than a couple weeks of this.
South Korea, China, Singapore are encouraging and seeing a return back to (almost) normal life. Granted, we're not dealing with this nearly as effectively and there may be a 2nd wave to come. But at this point they seem to make the case for optimism.