Author Topic: Let's organize our thoughts about COVID-19  (Read 5716 times)

theolympians

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Re: Let's organize our thoughts about COVID-19
« Reply #50 on: March 23, 2020, 04:06:42 AM »
I think it's good to organize our thoughts about the potential downside from COVID-19, and the positive risks of its resolution. By doing so, we can grasp a wider range of potential impacts and influences, and perhaps identify a point at which we should lever up our market exposure - or not. Please add your own risk/opportunity ideas to the following organized brainstorming list:


Direct COVID-19 Related
     If millions get sick, the workforce contraction would negatively impact GDP.
     Healthcare systems and insurers could be bankrupted. Emergency government measures enacted to keep the system afloat (e.g. emergency Medicare for all).
     Markets could rebound on news of a vaccine or treatment such as Gilead's remdesivir, which has seen success in Japan.
     Markets could rebound if classic public health measures such as social distancing and postponing large social gatherings slow or reverse the expansion.
     If tens of millions of elderly people die, the population curve could shift younger, causing less stability but more economic growth potential.
     Government deficits will exceed 2 trillion in 2020 and 2021.

Consumer Spending / Social Isolation Related
     Drastic quarantine measures reduce consumer spending and production.
     Forced closure of businesses causes widespread small business bankruptcies (restaurants, cosmetics, retail).
     The shift toward online purchasing, even of groceries, accellerates.
     Entertainment habits shift even more away from in-person events, and toward streaming.
     Deflation will occur, with the US potentially going into a deflationary spiral.
     Unemployment will rise from 3% to at least 10% by the end of 2020.
     The U.S. savings rate could skyrocket in the short term.
     Auto repossessions, credit card defaults, and foreclosures could increase as people go without paychecks.

Everything Bubble Related
     Real estate prices could collapse as people hoard resources instead of buying homes.
     The collapse of mortgage assets could tank a few large funds, causing a panic and liquidity crisis.
     Near-zero percent mortgages could become a reality.
     Zero percent interest rates could force retirees to further curtail their spending, accelerating deflation.
     Thousands of BBB/Baa bond issuers could be downgraded one notch to junk, causing forced selling by investors and index funds, causing liquidity to freeze, leading to a panic followed by government intervention.
     Stocks could find a floor with P/E ratios in the single digits, as occurred during the Spanish flu pandemic in 1918 (current PE is 18.7).
     The spread between expected returns on risky assets and safe assets could increase.
         
Cultural Impacts
     If the COVID-19 pandemic persists for over a year, In-person meetings, such as churches, concerts, and theaters will fall out of favor, and new online traditions will emerge.
     Paranoia, conspiracy theories, and a general decline in population mental health could occur as people have less interpersonal contact and more media exposure.
     People whose job skills depend on in-person interaction (waiters, salespeople, clerics, etc.) may have a hard time maintaining employment.
     Work-from-home could become the norm for office jobs. Lots of overbuilt office real estate may go permanently vacant.
     Politics could shift more socially conservative, as concerns over bodily contamination expand to a broader xenophobic, fear-of-death, and threat-oriented mentality.
     Touching another person's cell phone could become taboo.
     If the virus wipes out a large enough percentage of the world's elderly leaders, they could be replaced by younger leaders with more radical politics.
     Democratic traditions such as meeting as a legislature/parliament, voting, and protest could lose public support.
     High savings rates (>20%) could become the cultural norm, as it is in some Asian countries.
   

So many underlying assumptions there. So much would have to line for all of that to happen. That said, everyone seems to be buying off on it. I am awestruck.

This is media driven drivel. Sp we essentially collapse the world for something that might happen (didn't do this for a host of other threats) but what really worries me is next year. What "new" disease is lurking around the corner? What other threat threat will emerge to shut us down hari kari style.

Look how easy it has been. We all just rolled over......

We are giving something up, you just haven't realized it yet.

FIPurpose

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Re: Let's organize our thoughts about COVID-19
« Reply #51 on: March 23, 2020, 08:39:36 AM »

So many underlying assumptions there. So much would have to line for all of that to happen. That said, everyone seems to be buying off on it. I am awestruck.

This is media driven drivel. Sp we essentially collapse the world for something that might happen (didn't do this for a host of other threats) but what really worries me is next year. What "new" disease is lurking around the corner? What other threat threat will emerge to shut us down hari kari style.

Look how easy it has been. We all just rolled over......

We are giving something up, you just haven't realized it yet.

So is the outbreak happening in Italy real or "media driven drivel"?

dougules

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Re: Let's organize our thoughts about COVID-19
« Reply #52 on: March 23, 2020, 08:51:48 AM »
This was posted in the "COVID-19 CONTRARIANS" thread by someone who lives in Northern Italy.  If you go to the orginal post they have a picture of military vehicles lined up to transport the dead out of the city because there are too many to deal with. 

Hi. I'm Italian and live in Italy, I have been reading MMM for a while, I've never written because I had nothing meaningful to add. But now I think it can be useful if I gave some information abount the current situation in Italy, since many people seem (rightly) puzzled.

The official numbers in Italy are completely useless. Currently the only people who get tested are the ones with severe symptomps and people in key roles (health service, military, etc.). We have NO idea on the real extension of the epidemic in the country.
If you are sick but you are in no apparent life treatening situation you are told to self-isolate and no one will test you, even if you live in a badly hit area and you develop an high fever. (I will not go into the reasons behind this policy.)
My guess is that the real number of sick people is at least ten times the official number.
This would partly explain the abnormal mortality rate in Italy and the high median age of the positive tests.

This does not mean that the situation is better than you have been told.
The army trucks in the photo are leaving the town of Bergamo, one of the worse hit in the country. They are taking the remains of I do not know how many people to other towns to be cremated, because the morgues in Bergamo are not coping.

I know that many people outside Italy think we live in the medieval ages, playing the mandolin and eating pizza. We don't. The worst affected area, the region around Milan, is the richest and more developed area in the country, its health system is excellent (and free), comparable to the German or French one. And it is not coping.

We realized that we were in the middle of this crisis too late, too late. Now 5.000 people are dead, many more will die, the country is paralized and the economy in ruins, probabily for many years.
Please, rest of the western world, learn from our mistakes. You are a few weeks behind us, you can stop everything and restart later, with less deaths, less damages to the economy, less trauma.

Cabaka

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Re: Let's organize our thoughts about COVID-19
« Reply #53 on: March 23, 2020, 10:36:18 AM »

go over and look at the site https://www.iceagenow.info/, I have no idea but for some reason he is posting positive stories like in Italy only 1.2% of those that died did not have other existing conditions.

imo, this is like a strong fly and is easily spreadable and over 80% will get thru it in a week without having to see a doctor; why we are shutting down the economy on this is nuts.

bthewalls

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Re: Let's organize our thoughts about COVID-19
« Reply #54 on: March 23, 2020, 11:05:20 AM »
Jesus that a shocking loss of life and is entirely possible...considering too that 3rd world countries have little to no medical support. 

One thing to consider is how dramatically younger most of those countries are.

thats true...might save them

Joe Schmo

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Re: Let's organize our thoughts about COVID-19
« Reply #55 on: March 25, 2020, 08:07:15 PM »
Going with "our"previous thought that 10k cases would be a giant panic sell day (it wasn't) tomorrow the US will surely hit 1,000 deaths. RIP

MustacheAndaHalf

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Re: Let's organize our thoughts about COVID-19
« Reply #56 on: March 26, 2020, 03:11:51 AM »
imo, this is like a strong fly and is easily spreadable and over 80% will get thru it in a week without having to see a doctor; why we are shutting down the economy on this is nuts.
The data I have doesn't support that view, and this data better explains the lock downs you're seeing in Europe.

The flu kills about 1.4% of adults 85 and older.
(see PDF on this page:)   https://www.cdc.gov/nchs/fastats/flu.htm

COVID-19 kills 14.8% of adults over age 80
https://www.cnn.com/2020/03/20/health/covid-19-recovery-rates-intl/index.html