Author Topic: Coronavirus  (Read 255175 times)

Cardboard

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Re: Coronavirus
« Reply #220 on: February 26, 2020, 06:57:26 PM »
Just listened to Mr. Trump's press conference and this is totally under control: 15 people for God sake in the whole USA!!!

Then how long to get a vaccine in this day and age? I have read that test on humans begin in 6 weeks and I would think that the Chinese will start right now if any of this above is even remotely true.


Gregmal

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Re: Coronavirus
« Reply #221 on: February 26, 2020, 07:04:12 PM »
The thing to be careful for here is that the media loves hysteria because it sells. They also hate Trump and realize that one of the only threats to Trump is killing the economy. Thus, a perfect storm of events that have a high likelihood of being dramatically portrayed and incredibly blown out of proportion. This is basically the flu. With the current ratio of 100 Dow points for every 2 new cases, the markets will be at 0 in no time. Just wait a few weeks and then everyone here can pull straws. We can have a fantasy football type draft on who gets to make $1 per share offers to buyout our favorite companies! I call dibs on Disney.

Cardboard

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Re: Coronavirus
« Reply #222 on: February 26, 2020, 07:16:45 PM »
Like I mentioned in a different thread, this would be the perfect weapon for Russia to get rid of pain in the ass Trump and replace with a so much more profitable candidate such as Bernie.

Castanza

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Re: Coronavirus
« Reply #223 on: February 26, 2020, 07:39:04 PM »
I believe someone pointed it out earlier in the thread. But Taiwan and China are pretty bitter enemies. Itís hard to find news coming from Taiwan about China credible. At the very least there is some motive to spread false info. 

Gregmal

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Re: Coronavirus
« Reply #224 on: February 26, 2020, 07:44:00 PM »
There is a point where media can create reality. For instance I spoke with a few folks today and in respect to NYC, traffic is noticeably lower. A friend polled a few Chinatown restaurants and traffic on average was down 40%+. The "money guys" are kind of just sitting on their hands waiting to see how things enfold. This despite what? Like 5 real cases in NY? The media can use their dishonesty to be effective here.

jobyts

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Re: Coronavirus
« Reply #225 on: February 26, 2020, 08:32:14 PM »
Apparently, the video is popularized by the exiled Chinese billionaire and the far right groups. The video looks genuine, unless they staged the whole thing, who knows.

https://www.politifact.com/factchecks/2020/feb/26/facebook-posts/chinese-billionaire-floats-conspiracy-about-corona/


Sharad

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Re: Coronavirus
« Reply #226 on: February 26, 2020, 08:42:18 PM »
I think many people are looking at rates of infection and morbidity rates, which won't give us the true picture of the impact to the global economy and to the stock market, which is (crudely) for which many of us are looking for answers.

My take:

The virus likely has a much lower morbidity rate than the 2% in Wuhan, but the cases were never identified and reported correctly, and they sent people home or people avoided leaving home to deal with it themselves (h/t muscleman for some insight as well). Anyone at the beginning of the crisis that died of pneumonia like symptoms probably was ruled as a death from other sources. Regardless the morbidity rate at the beginning was skewed by the hospital cases, similar to the morbidity rates for people hospitalized for the flu in the US (8-12%, per CDC).

This spiked up morbidity rate clearly spooked the world, and the unknown nature of this virus is enough to scare everyone, so everyone freaked..but the market remained sanguine for two reasons...one, the Fed is in the midst of a massive asset buying spree, the repo markets are wide open, and liquidity has pushed markets into a blow-off top since Powell declared, for all intents and purposes, that the Fed has the markets' back during his Fed press conference in September. China also clamped down hard on the virus, trying to contain it, and, through surprising transparency, shared a lot of data with counterparts in the US, Canada, Europe and Australia, where the first full mapping of the virus' RNA was completed within a few days of receiving the virus sample itself.

While the markets drank the Fed Kool Aid, the tanker and dry bulk markets showed a different story. Rates plummeted, even in the face of IMO 2020 standards for tankers, which basically docked a large percentage of "dirty" tankers, to be upgraded with scrubbers that would reduce sulfur (?) emissions during their travels with petroleum products in a bid for global trade. This should have been the perfect recipe for a massive breakout from a 12 year bear market for rates, and the stocks soared from September to January in anticipation of it. Coronavirus clamped that down. China wasn't receiving their deliveries. The country shut down, stockpiles have built up, and demand for petroleum products declined 25% plus.

The market factored all these things in, and banked on a huge stimulus in China to keep the party going. South Korea dented those prospects, but Iran, and especially Italy, broke the whole thesis down. The moment a bunch of villages near Milan became a prime cluster outside China, all bets of containment were off. In the meantime, we have seen the market reach the apex of a massive blow-off top after a nearly 11 year bull market from the March 6, 2009 bottom. The last 4-5 years have resulted in P/E valuations doubling (or more) for the biggest companies in the S&P 500 (https://www.macrotrends.net/stocks/charts/AAPL/apple/pe-ratio), the massive move to index investing (https://www.cnbc.com/2019/03/19/passive-investing-now-controls-nearly-half-the-us-stock-market.html), and the retail investor returning to the market over the last couple of years (see the increased interest in Bitcoin, Tesla, r/wsb, etc.).

We were likely due for a large market decline when Powell pulled the plug on asset purchses (he declared mid Q2 2020, so let's say April), and that would have likely pushed us down 20%, like the Fed pivot of 2018. Once you factor in the coronavirus, how much further could we fall? Not only should we see the "p" of the p/e ratio fall, but we will also see the "e" fall too (see MSFT today).

Bottom line: IMHO, this is only the beginning. I was holding out hope, but that Italian outbreak changed it all. The Greek fashion designer who contracted it during her time at Milan Fashion Week means that cases will likely pop up everywhere, especially larger markets.

Anyways, I think people shouldn't be evaluating this from the morbidity rates, etc (I am guilty of doing this when we were transfixed by what was happening in China, and far from everywhere else). They should evaluate the destruction of capital flows and trade, and how much wealth that destroys. The destruction of wealth could mean a steeper decline. But the banks are better capitalized, so the upswing should be equally dramatic, whenever that will be. This is going to get much more ugly (consider if the Olympics are cancelled), and I think S&P 2,500 could be in the cards...but I could also see a massive upswing in the summer, when coordinated global stimulus pushes things higher, faster. We shouldn't be comparing this crisis to SARS or any other modern pandemic threat. This should be compared to the 1918 influenza outbreak and the subsequent 1919-1921 market crash and depression.


If you are looking for investments, consider NYSE:NVO (their products are probably the least sensitive to the virus) and Nasdaq:GRVY (Gravity Co Ltd, as South Korean gaming company: SK gaming culture is amongst the most profitable in the world and what the hell else are they going to do there now?).

Sorry for the long response. I was hoping it would help people see the broader picture of the market's moves ahead of the coronavirus, and the moves within the "guts" of the economy at the same time.
"If we are not able to ask skeptical questions, to interrogate those who tell us that something is true, to be skeptical of those in authority, then we are up for grabs for the next charlatan - political or religious - who comes ambling along."
- Carl Sagan

cherzeca

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Re: Coronavirus
« Reply #227 on: February 26, 2020, 09:34:18 PM »
as I write this 2/27 early morning futures on S/P are down such that we may hit during the trading day a 10% correction from the recent high.  I am edging in now buying this dip.  I do this from a position of strength, cash over 50%, but I think anyone who has a horizon that looks out 2-5 years (and believes we wont go into a socialist cesspool) might want to buy into this dip as well if you have dry tinder.  likely will give fed cover to drop rates as well.  just my two cents. 

Liberty

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Re: Coronavirus
« Reply #228 on: February 27, 2020, 05:25:39 AM »
The cases that make it to the hospital or are diagnosed clinically are the worst ones. So 2% of those isn't 2% of ALL cases. A lot of people get a mild form, stay home with a fever, and recover. Not all those will get diagnosed and counted.
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Castanza

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Re: Coronavirus
« Reply #229 on: February 27, 2020, 05:29:14 AM »
Apparently, the video is popularized by the exiled Chinese billionaire and the far right groups. The video looks genuine, unless they staged the whole thing, who knows.

https://www.politifact.com/factchecks/2020/feb/26/facebook-posts/chinese-billionaire-floats-conspiracy-about-corona/

It's certainly not out of the realm of possibility. I mean a brief look at China's past will show many sick things done to their own populations. But conspiracy theories are often a bunch of conjecture and convenient motives, outcomes, and boogiemen being strung together.

But I will say this......those Hong Kong protests have basically halted.