Coronavirus - Financial, Health and Other impacts II

[Alan]

Great in theory. I sincerely hope the UK can manage the spread of this disease with enough finesse to pull it off. That seems a bit of a stretch given how little it appears we know at this point about the actual infection rate of Covid-19.

OTOH, it is becoming increasingly clear what most other countries are doing isn't working all that well.

I have no idea whether the approach will work any better or not, but I thought I would put it out here for info since it is different. Once we are all in isolation what else will there be to talk about.

 

[Alan]

Talked to DD in LA last night. She works in the e-games industry and because the company is launching a new product that she is a lead engineer on she is required to go into work whereas all her colleagues are working from home.

She loves it. No disturbances at work, getting loads of stuff done. The commute in and back has gone from 30 mins and 40 minutes to 14 mins each way. (She had switched from light rail to car for social distance purposes).

The company are concerned that their server farms worldwide may not take up all the additional workload caused by folks spending more time playing their games as outdoor gatherings are curtailed.

 

[JoeWras]

Somewhere earlier in this thread, in a pre-merger, I asked if this is a black swan event. Things were much less advanced then. We discussed it. Opinions varied. Well, I've come around to: if this ain't a black swan, then I don't know what is.

On the health topic. I've been away for a few days on a barrier island only accessible by ferry. Islanders tend to push back against authority and do their own thing. A few Jimmy Buffett songs come to mind...

Meanwhile, I'd look briefly at the internet and it seemed like the world just fell off its axis. On the island, nobody noticed.

 

[ncbill]

We checked on a couple of elderly folks we know, to be sure they were ok, and had toilet paper, and food.
Told them to phone use if they needed any, as the stores are out and we have lots.

Our youngest kid's university moves online this week...their Spring Break was last week.

He's packing up his bedroom in a shared apartment and coming home for the duration.

So we're making him a gofer to take care of whatever our older relatives (primarily my in-laws & neighbors) need...he'll buy it and just drop it off on their porches to minimize person-to-person contact since most of them are over 80.

 

[Chuckanut]

This is an N=1 observation. In my area we are seeing a huge decrease in traffic, people in stores, people out and about in parks, etc. There are simply many fewer people outside of their homes.

I can't help but think this will take a bite out of the spread of CV-19.

The school closings do bother me. They could backfire big time.

 

[Ronstar]

In my opinion, our government is quite capable and can execute projects amazingly well.

It’s my experience that our government can handle anything as long as they pass it off to private sector consultants.

 

[target2019]

It’s my experience that our government can handle anything as long as they pass it off to private sector consultants.

I saw the handoff, but the price always got jacked up, and completion of work was hardly ever completed on time.

 

[garyt]

Not all seniors are taking proper precautions.

I'm having a problem getting my Dad to wash his hands. He hasn't left the house in over a week but I bring him takeout and groceries. He just can't remember. I have signs on the fridge and counter to no avail.

 

[ERD50]

I captured some graphs off Wikipedia to show the progress of the coronavirus spread in 3 countries: Italy, Spain, and USA.

All 3 show an exponential day-to-day increase of 20% to much higher than 50%. At the rate of 25%/day, you double the number every 3 days.

Note that the death rate in the US is quite low, compared to that of Italy and Spain. Let's hope it can stay that way if we do not swamp our hospitals. ...

I've been looking at a lot of these graphs, but to me, it seems very hard to infer much at all. The numbers are small, different countries probably had their first exposure at different dates and in different ways (a single person traveling, and spreading slowly, or a group entering the country and mingling?). With an exponential curve, it's hard to say just where you are on that curve this early on, and that makes a huge difference.

Add to that the probable differences in reporting (I honestly don't know how we determine/compare the number of cases, when testing rates are very different?). IMO, South Korea is the only one I see that has a meaningful trend (and it's a good one!), but again, it's hard to say if that translates to other countries with different situations, controls, demographics, etc.

Hopefully, we get some clarity soon. But right now, it's like reading tea leaves, IMO.

-ERD50

 

[ERD50]

I rebalanced this AM, about half way between current and target. Will take another look if we fall more, or hold steady at some point.

Need to look into making 2020 Roth (not ROTH ) contributions, but I can't exceed DW's W2 income, and who knows when she might call it quits. She doesn't make that much, needs to get to ~ May/June to hit $14,000 gross, and with school closings, and she's part-year hourly, who knows? I guess I could go up to her current YTD.

-ERD50

 

[sengsational]

The short video below shows nicely why the UK is planning to delay the severe quarantine measures until the disease is spread more widely.

Meanwhile the UK scientists (CMO and CSO) have promised to publish the data from their computer simulations later this week. They hope to get it right and avoid overwhelming the health services.


https://youtu.be/nl6tTwxzCi8

Delaying the shut down should allow the UK economy to keep ticking along better than an immediate shutdown, and really what they're trying to do is increase the utilization of their healthcare system (have the level of water constantly high, but not over the top). My personal opinion, though, is that it's quite a brazen position to take because we're dealing with such a course control input (shut down), and such a wild output (exponential spread). The water pouring was linear, not exponential.

I wonder if anyone has come out and put odds on if the UK decision makers will manage the timing to get the result they want. They do have data on other countries, maybe they will. Isn't it the UK where you can bet on anything? They want to fill the hospitals now, up to, but not over capacity. I wonder if there's a reliable method to track how many people who need hospitalization are turned away. If that number stays low, the UK strategy worked. If that spikes, then it was a failed approach.

 

[tulak]

I’ve simplified my portfolio quite a bit. I was tilting to small/reits and had a large international allocation.

I greatly reduced my intl allocation and dumped small/reits. I’m down from seven asset classes to four. Simple is better.

I also rebalanced to 55/45, from 50/50. This is after I went from ~72/28 a couple of weeks ago when the S&P was around 3100. I’m skeptical this is a bottom, but I can’t time the market. So as we drop, I’ll keep increasing my equity allocation back up to at least 70/30. My long term target is 80/20.

I’ve also taken a small amount to build a dividend growth portfolio. Just for fun.

 

[Sunset]

Delaying the shut down should allow the UK economy to keep ticking along better than an immediate shutdown, and really what they're trying to do is increase the utilization of their healthcare system (have the level of water constantly high, but not over the top). My personal opinion, though, is that it's quite a brazen position to take because we're dealing with such a course control input (shut down), and such a wild output (exponential spread). The water pouring was linear, not exponential.

I wonder if anyone has come out and put odds on if the UK decision makers will manage the timing to get the result they want. They do have data on other countries, maybe they will. Isn't it the UK where you can bet on anything? They want to fill the hospitals now, up to, but not over capacity. I wonder if there's a reliable method to track how many people who need hospitalization are turned away. If that number stays low, the UK strategy worked. If that spikes, then it was a failed approach.

It will be interesting, sort of like how the Titanic was interesting

I hope they remembered that they can only fill hospitals to:
Capacity - (Accidents + Heart attacks + illness).

 

[Sunset]

I rebalanced this AM, about half way between current and target. Will take another look if we fall more, or hold steady at some point.

Need to look into making 2020 Roth (not ROTH ) contributions, but I can't exceed DW's W2 income, and who knows when she might call it quits. She doesn't make that much, needs to get to ~ May/June to hit $14,000 gross, and with school closings, and she's part-year hourly, who knows? I guess I could go up to her current YTD.

-ERD50

Always good to set a quota

 

[harley]

This is an N=1 observation. In my area we are seeing a huge decrease in traffic, people in stores, people out and about in parks, etc. There are simply many fewer people outside of their homes.

I can't help but think this will take a bite out of the spread of CV-19.

The school closings do bother me. They could backfire big time.

Just to nullify that, in my area (SWFL) there has been absolutely no decrease in traffic. I went to Costco this morning to get a rotisserie chicken and some vegetables, and the line to get in was hundreds of people long. They were only allowing 1000 people (including employees, I assume) into the store at one time. They had a sign showing that they had no disinfecting products at all, no TP, and no ground beef. Other stuff too, but I forget what it was. Since I was already there I waited and got in in about 15 minutes. Got my stuff, then had to go to the very back of the store to get into the checkout line. It took another 15 minutes. Crazy, but everyone was cheerful and I didn't hear a single cough or sneeze. And they had a lady outside spraying the carts down as the employees brought them in.

Then going home took me about twice as long as usual due to the traffic. I won't be doing that again anytime soon. Did my hazmat disinfection routine when I got home, on myself and the stuff I bought. Now I'm just hanging out eating a rotisserie chicken wrap.

 

[Fermion]

DOW ended today down 3,000. Dang.


Dang.

 

[ExFlyBoy5]

DOW ended today down 3,000. Dang.





Dang.

No doubt. Watching the news is surreal. I'm traditionally a pretty reserved guy, but this is a bad deal. So many people that were already financially fragile. Black swan? Sure seems like it.

 

[Fermion]

No doubt. Watching the news is surreal. I'm traditionally a pretty reserved guy, but this is a bad deal. So many people that were already financially fragile. Black swan? Sure seems like it.

It ain't no black swan, it is a whole damn flock.

 

[JoeWras]

It ain't no black swan, it is a whole damn flock.

Ha ha. Yep. Seems some think only nuclear war is a B.S. I call BS on that. This is a B.S. event.

We didn't go to a store. Don't want to for at least a week. DW is extremely paranoid. So, we went for a walk and were surprised by the significant traffic on the local roads. Where the hell is everyone going? Costco?

 

[GenXguy]

This is an N=1 observation. In my area we are seeing a huge decrease in traffic, people in stores, people out and about in parks, etc. There are simply many fewer people outside of their homes.

I can't help but think this will take a bite out of the spread of CV-19.

The school closings do bother me. They could backfire big time.

It would help if people would actually stay out of public unless absolutely necessary. Younger people aren't concerned as much, but they will spread it to the older more vulnerable. They had large crowds at the bars on St. Patty's day after the governor warned against that.

 

[NW-Bound]

I've been looking at a lot of these graphs, but to me, it seems very hard to infer much at all. The numbers are small, different countries probably had their first exposure at different dates and in different ways (a single person traveling, and spreading slowly, or a group entering the country and mingling?). With an exponential curve, it's hard to say just where you are on that curve this early on, and that makes a huge difference.

The numbers are small relative to the population of the respective countries. However, the rate they are increasing is alarming, and with the infected number being low compared to the total population, it means there's more dry wood to stock the fire.

Obviously, when a large percentage of the population has been infected, the curve cannot go on exponentially (when most of the forest is already gone). But at this point the curve can grow for quite a while, unless something drastic is done to slow it down. Remember the doubling every 3 days.

Regarding the number still being small relative to the population, it is already high enough to cause devastation in northern Italy. People who are interested can search the Web using the terms "Bergamo+coronavirus".

And different countries are indeed at different phases. They did not get "seeded" at the same point in time, and with the same number of seeds. The point is that the weeds all propagate with the same rate.

It has been said that many other European countries are about 1 week behind Italy at this point. One week is not a long time to wait to see if that is becoming true. Italy was unfortunate to have a headstart.

For example, Italy is at 27,980 now on 3/16/2020, while Germany is at 7,272. Will Germany get up to the 28,000 mark next Monday? Note that one week ago, Italy was at 9,172. Eight days earlier than today, on 3/8/2020, Italy was at 7,375, the same as Germany now.

Add to that the probable differences in reporting (I honestly don't know how we determine/compare the number of cases, when testing rates are very different?). IMO, South Korea is the only one I see that has a meaningful trend (and it's a good one!), but again, it's hard to say if that translates to other countries with different situations, controls, demographics, etc.

Hopefully, we get some clarity soon. But right now, it's like reading tea leaves, IMO.

-ERD50

I don't think anyone can say these numbers are over-reported. But whether under or over-reported, when the number of infections grows exponentially respectively at different locations, and northern Italy already runs out of hospital beds a week or two ago and crematorium running 24/7, it should not be surprising that European countries are all shutting down borders and instituting lockdown.

 

[Corporateburnout]

They had large crowds at the bars on St. Patty's day after the governor warned against that.

Warned against it? How about closing the restaurants and bars on St Patty's day as the mayor of Boston did.

 

[GenXguy]

Warned against it? How about closing the restaurants and bars on St Patty's day as the mayor of Boston did.

He did close the bars/restaurants over the weekend after people didn't listen to him about St. Patty's.

 

[daylatedollarshort]

We're in shelter in place now in 6 Bay Area counties, 6.7 million people, until April 7. We're told to stay at home as much as possible, stay 6 feet away from non-household members, essential services and business only open for business.

https://www.sfchronicle.com/local-politics/article/Bay-Area-must-shelter-in-place-Only-15135014.php

 

[Alan]

Delaying the shut down should allow the UK economy to keep ticking along better than an immediate shutdown, and really what they're trying to do is increase the utilization of their healthcare system (have the level of water constantly high, but not over the top). My personal opinion, though, is that it's quite a brazen position to take because we're dealing with such a course control input (shut down), and such a wild output (exponential spread). The water pouring was linear, not exponential.

I wonder if anyone has come out and put odds on if the UK decision makers will manage the timing to get the result they want. They do have data on other countries, maybe they will. Isn't it the UK where you can bet on anything? They want to fill the hospitals now, up to, but not over capacity. I wonder if there's a reliable method to track how many people who need hospitalization are turned away. If that number stays low, the UK strategy worked. If that spikes, then it was a failed approach.

The UK pulled the trigger on the next phase today and are asking everyone to self isolate and work from home where possible, particularly the over 70’s and those most vulnerable, including pregnant women.

They had already announced the cancellation of all elective surgery in the NHS, and have been buying up beds and capacity from private hospitals. In the statement from the health minister he also stressed that this crisis was going to put lives in danger as ERs hit capacity.

It’s a very bleak outlook for sure.