COVID-19 notes:
US Daily New Deaths
Goldman: States
Containing 80% Of The US Population Have Paused Or Taken Steps To Reverse
Reopening
Scientists identify six different types of coronavirus with increasing severity levels
More than half of all COVID-19 patients found to have damaged hearts
WHO warns that coronavirus crisis may get 'worse and worse and worse'
The Covid-19 pandemic is set to get “worse and worse” if countries do not
stick to strict healthcare guidelines, the World Health Organization (WHO) has
warned.
"No Return to the 'Old Normal' for Foreseeable Future," Warns WHO Chief
"If the basics aren't followed, there is only one way this pandemic
is going to go. It's going to get worse and worse and worse."
What to do if COVID-19 is here to stay
We do not yet know whether individuals who recover from COVID-19 can be
reinfected. If immunity wanes, the disease will become endemic, in sharp
contrast to a model in which recovery confers permanent immunity. This column
considers the possibility that immunity is indeed only temporary, and derives a
stylised optimal containment policy to reduce the initial wave of contagion and
then manage persistent infections. In practice, this means
that partial lockdowns and social distancing measures may be the norm for years
to come.
Coronavirus warning from Italy: Effects of COVID-19 could be worse than first thought
The long-term effects of COVID-19, even on people who suffered a mild
infection, could be far worse than was originally anticipated, according to
researchers and doctors in northern Italy. Psychosis, insomnia, kidney disease,
spinal infections, strokes, chronic tiredness and mobility issues are being
identified in former coronavirus patients in Lombardy, the worst-affected
region in the country. The doctors warn that some victims may never recover
from the illness and that all age groups are vulnerable. The virus is a systemic
infection that affects all the organs of the body, not, as was previously
thought, just a respiratory disease, they say. Some people may find that their
ability to properly work, to concentrate, and even to take part in physical
activities will be severely impaired.
Hussman’s Market Comment, Fundamentally Unsound, includes a very readable Public Health Note at the end, that I recommend reading in its entirety:
A final note. Over 35,000 Americans die in vehicle accidents every year.
Seat belt use in the United States is about 90%. Roughly 10% of Americans don’t
wear them. Half of all crash fatalities come from each of those two groups.
That’s another way of saying that unclicking that belt results in a 9-fold
increase in the likelihood a crash will be fatal. Vehicle fatalities are the
leading cause of death between ages 5-34. I’m a big fan of seat belt laws, but
if you choose not to wear a belt, at least you’re not hurting anyone else. When
it comes to public, shared-airspace settings, using a mask isn’t about you.
Refusing to wear one is like unclicking the seat belts of all of your
passengers, and then texting while driving into oncoming traffic.
Regular Related Fare:
The U.S. Set Up These Programs to Offset Covid Hardship. They’re All About to Expire.
It Starts: Mortgage Delinquencies Suddenly Soar at Record Pace
OK, it’s actually worse. Mortgages that are in forbearance and have not
missed a payment before going into forbearance don’t count as delinquent.
They’re reported as “current.” And 8.2% of all mortgages in the US – or 4.1
million loans – are currently in forbearance, according to the Mortgage Bankers
Association. But if they did not miss a payment before entering forbearance,
they don’t count in the suddenly spiking delinquency data.
The onslaught of delinquencies came suddenly in April, according to
CoreLogic, a property data and analytics company (owner of the Case-Shiller
Home Price Index), which released its monthly Loan Performance Insights today.
And it came after 27 months in a row of declining delinquency rates. These
delinquency rates move in stages – and the early stages are now getting hit:
Bank loans, Commercial real estate index, Dining
Regular Fare:
Fertility rate: 'Jaw-dropping' global crash in children being born
Bubble Fare:
Jesse Felder: ‘What Were You Thinking?’ Part Deux
famous Scott McNeely quote
from the aftermath of the Dotcom bust:
“At 10 times revenues, to
give you a 10-year payback, I have to pay you 100% of revenues for 10 straight
years in dividends. That assumes I can get that by my shareholders. That
assumes I have zero cost of goods sold, which is very hard for a computer
company. That assumes zero expenses, which is really hard with 39,000
employees. That assumes I pay no taxes, which is very hard. And that assumes
you pay no taxes on your dividends, which is kind of illegal. And that assumes
with zero R&D for the next 10 years, I can maintain the current revenue run
rate. Now, having done that, would any of you like to buy my stock at $64? Do
you realize how ridiculous those basic assumptions are? You don’t need any
transparency. You don’t need any footnotes. What were you thinking?”
…
even as we find ourselves in
the midst of the worst economic crisis in modern history, there are still more
stocks that trade above 10-times revenues today (37) than there were in March
of 2000 (30), the month the Nasdaq put in its infamous peak before falling 75%
over the subsequent two years.
Weekly Credit Bubble Bulletin: Utmost Crazy
It is a central tenet of Credit Bubble analysis that things turn “Crazy”
near the end of cycles. And with the thesis that
we’re in the concluding (“terminal”) phase of a multi-decade, super-cycle
global Bubble, there’s been every reason to foresee Utmost Craziness.
In the most simplified
terms, Bubbles inherently gather momentum and inflate to dangerous extremes. Mounting fragilities ensure
policymakers employ the increasingly outrageous measures demanded to hold
collapse at bay. Craziness is cultivated by a confluence of late-cycle
intense monetary inflation (i.e. QE and speculative leverage) and deeply
ingrained speculative impulses.
The bigger the Bubble, the
more intense the speculative fervor; the greater the attendant government
intervention; and the more convinced market participants become that officials
won’t allow a bust. Throw Trillions at systems already acutely prone to Bubble
excess and you’re courting disaster (that’s you, Washington and Beijing).
The global nature of Bubble
Dynamics makes this period unique. And while Europe, Japan and EM are important
contributors, the global Bubble is foremost under-pinned by historic U.S. and
Chinese monetary inflation. That these two countries are increasingly bitter
rivals adds unique challenges to Bubble analysis. The irony of it all: China’s
communist party readily promoting the stock market. Do they have much choice?
The Federal Reserve over three decades shifted away from the traditional model
of affecting bank lending – elevating the financial markets to the primary
policy stimulus mechanism. Instead of measured interest-rate reductions, on the
margin, stimulating bank lending, the Fed has resorted to Trillions of
securities purchases (QE) and zero rates to directly trigger market speculation
and asset inflation. This model proved an absolute boon to U.S. markets, the
economic expansion, the dollar and broader U.S. global influence. To compete,
Beijing knew what to do.
…
It’s not unusual for short squeezes to unfold even in the face of
deteriorating fundamentals. There is often a final “blow-off” fueled by a
confluence of speculative excess, panicked short covering, and
derivative-related trading. It’s a key facet of late-cycle Craziness.
That sick feeling in my
stomach returned this week: this is out of control. COVID is out of control.
Market speculation is out of control. And it’s this combination that recalls
the unease I was experiencing back in February, as a speculative marketplace
was content to completely disregard mounting pandemic risk.
It’s difficult to fathom the
almost 400,000 new U.S. COVID infections since the last [bulletin]. Hopes from
just a few weeks ago of a return to a semblance of normalcy have been crushed.
The specter of overflowing ICUs and hospital wards has returned – but instead
of NYC it will unfold in cities and towns across the entire southern U.S. And
it looks like a replay of PPE and COVID test shortages. And what the future
holds appears more unsettled today than even in March and April. Back then we
believed there was a curve to flatten. With shared sacrifice, we’d overcome the
pandemic…. A harsh reality has begun to set in. At this point, no one – or any
model – has a clue as to how many will perish – or even the general trajectory
of this pandemic. The relatively low daily death rate was early in the week
still a talking point for the dismissive. The daily death count surpassed 800
by the end of the week – on the way to 1,000, 2,000 or even higher?
Will the most populated
states in the country be forced to dramatically tighten restrictions? Texas,
Georgia, California and others are contemplating a return to “lockdown”
conditions. Does this widely dispersed outbreak portend a major nationwide
spike in infections – in cities, towns and rural communities? Are we prepared?
Have we procured sufficient supplies?
Stocks are surging, so the economic
recovery must not be at risk, right? Yet it’s difficult to see how the economy
– at home and abroad – isn’t facing serious chronic problems. We’re only weeks
away from the start of a new school year – and there’s little clarity…. It’s
simply difficult to comprehend what a mess we’ve made of things.
Value is Dead.
Long Live Value Investing.
The COVID
Economy In Suspended Animation
(not just) for the ESG crowd:
Biden Outlines $2 Trillion Climate Plan
Quotes of the Week:
Hussman: If someone tells you, “well, stock valuations are high, but high valuations are justified by low interest rates,” they’re actually arguing that passive investors face the worst of all possible worlds. They’re saying “well, future stock returns are likely to be dismal, but dismal returns on stocks are justified because you’re going to get dismal returns on bonds too.” Saying that current stock market valuations are “justified” by low interest rates is like saying that poking yourself in the eye is “justified” by smashing your thumb with a hammer.
Toon of the Week:
xkcd of the Week:
No comments:
Post a Comment