Coronavirus - Financial, Health and Other impacts II

[Chuckanut]

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.

One difference may be that my area went through the panic buying about 10 days ago. Then we had a minor repeat a few days later when the school districts announced closures. All the hoarders now seem to be satisfied.

 

[NW-Bound]

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

Maybe even man-eating swan.

 

[Gearhead Jim]

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.

The news reports make me think this is a "change in plan" forced by public and outside medical opinion, not the next phase of the original plan.
Either way, we hope it works well for them.
Our adult daughter came home at Christmas after ending a contract job in London, and is now sheltering I place with us. Glad she's home.

 

[NW-Bound]

We cannot wave a magic wand to create more doctors, nurses, respiratory therapists to staff these emergency hospitals. Nor the equipment such as 02 tanks etc.

I am not sure about equipment, but for staff we can just send people to spend a night at Holiday Inn Express.

 

[Markola]

Remarkable Chart:

https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9261/9261/Pasted Image.jpg

 

[USGrant1962]

Remarkable Chart:

https://fingfx.thomsonreuters.com/gfx/buzzifr/15/9261/9261/Pasted Image.jpg

Wow, I didn't realize the eurozone stocks dropped that much. Makes me think that after this shakes out a little I should move to market weight (~55% US, 45% International) instead of my current 70/30 US/Int equity AA. International stocks were already a better buy per various valuation metrics before COVID-19. I'll need to see where things stand is a few weeks.

 

[harley]

One of our neighbors down here in FL owns an incredibly successful boutique, open 3 days a week. I mean so busy there is a crowd waiting in the parking lot to get in, and once you're in it's shoulder to shoulder shopping and browsing. She serves free cake (she and her husband bake 14 cakes a day). She Facebook posted today that they are disinfecting and spraying everything, and to come on in and shop in safety. She said her store is a lighthouse in the storm. She's very wealthy and could easily close for awhile, but obviously some people just aren't getting it. It doesn't matter how much you disinfect if you are jamming people in close contact.

 

[Markola]

Perhaps a helpful lead for some who are displaced: Amazon suddenly hiring 100,000 workers.


https://www.reuters.com/article/us-...rs-surge-on-coronavirus-worries-idUSKBN2133LB

 

[Alan]

The news reports make me think this is a "change in plan" forced by public and outside medical opinion, not the next phase of the original plan.
Either way, we hope it works well for them.
Our adult daughter came home at Christmas after ending a contract job in London, and is now sheltering I place with us. Glad she's home.

It is a change of plan as a result of research by Imperial College. That was made clear in the briefing. However, there is no exit strategy yet, 70 to 80% of folks are still expected to catch the virus.

https://www.itv.com/news/2020-03-16...r-virus-measures-are-adopted-warn-scientists/

The UK Government has taken "drastic action" against coronavirus because research which informed the decision suggested that unless more stringent measures were taken, Covid-19 could lead to up to 250,000 deaths.

Researchers from Imperial College’s Covid19 Response Team added that the demand for intensive care beds could also have reached eight times capacity.

 

[BeachOrCity]

I do some investing in limited partnerships that typically also have debt. Most of these are one form of real estate or another
Basically most hotels have suspended debt service payments. I am sure this is happening in other industries or will happen such as airlines restaurants etc.

It will be interesting to see if the governments come up with a way to keep businesses afloat as the debt holder has clear rights to quickly take property when debts not paid. And unlike residential debt there is very little law helping out businesses to avoid having the debt holder take your hotel (or airplane, restaurant etc).

Assuming this social distancing continues until summer, to me there will be a choice.
A). Large scale politically unpopular “bailouts”; or
B). economic collapse.

What are others thoughts?

 

[Masquernom]

This morning on Bloomberg, they mentioned the airlines would likely need bailouts. They also pointed out the airlines had made billions of dollars in profits the last few years, and mostly spent the profits on share buybacks.

So, what do you do? Implement stress tests for all US corporations above a certain size in the future?

 

[Chuckanut]

Perhaps a helpful lead for some who are displaced: Amazon suddenly hiring 100,000 workers.


https://www.reuters.com/article/us-...rs-surge-on-coronavirus-worries-idUSKBN2133LB

Local super markets in my area are hiring extra help by the thousands! One market says if you are qualified, you can start the same day.

I just drove through a new development in my area that has assorted shops, a yoga studio, hair salon, and restaurants. Normally finding parking is a hassle. Yesterday, only 20% of the parking slots were occupied.

 

[harllee]

The census in my area is advertising to hire people--$15 per hour and up. I guess no one wants to work for the census and go door to door with the virus. But if someone is laid off and needs work the census is a possibility for temporary work.

 

[sengsational]

It is a change of plan as a result of research by Imperial College. That was made clear in the briefing. However, there is no exit strategy yet, 70 to 80% of folks are still expected to catch the virus.

https://www.itv.com/news/2020-03-16...r-virus-measures-are-adopted-warn-scientists/

It's tempting to be critical of a change in plans as 'proof' of how bad the plan was, but the way I look at it, they're constantly gathering inputs to make sure the original plan is tracking as expected, and making course corrections. As long as it's data driven, it's going to be the best way to proceed. I don't know enough about it to say how much leverage comes from non-science, but I think that at this point, we all are looking for the best thing for the population affected by the plan.

 

[GTFan]

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.

According to this Imperial College study released yesterday, it won't be good enough. UK and US are going to get overwhelmed.

https://www.imperial.ac.uk/media/im...-College-COVID19-NPI-modelling-16-03-2020.pdf

EDIT: just saw your post on this upthread, want folks to check out this study. It's bad.

 

[Alan]

It's tempting to be critical of a change in plans as 'proof' of how bad the plan was, but the way I look at it, they're constantly gathering inputs to make sure the original plan is tracking as expected, and making course corrections. As long as it's data driven, it's going to be the best way to proceed. I don't know enough about it to say how much leverage comes from non-science, but I think that at this point, we all are looking for the best thing for the population affected by the plan.

I’d much rather see plans scrapped or changed based on solid research than stick with an existing plan than is based on data that is either shown to be flawed or superseded.

Egos should be left outside of the decision process.

 

[gwraigty]

Financial impact: DD just texted me that she's being sent home early from her shift at Panera Bread. She was supposed to work 7 to 4. At least she got over 4 hours in today. Better than nothing.

 

[JoeWras]

Financial impact: DD just texted me that she's being sent home early from her shift at Panera Bread. She was supposed to work 7 to 4. At least she got over 4 hours in today. Better than nothing.

Our Gov (NC) just closed all dine-in sections of restaurants.

 

[aja8888]

This morning on Bloomberg, they mentioned the airlines would likely need bailouts. They also pointed out the airlines had made billions of dollars in profits the last few years, and mostly spent the profits on share buybacks.

So, what do you do? Implement stress tests for all US corporations above a certain size in the future?

If i was King, I would make those companies that bought back all that stock just sell it now and use the proceeds to run the business.

 

[Another Reader]

United went bankrupt in 2002 and stayed there until 2006. They continued to fly in bankruptcy. Let these folks go under, and write some guarantees for debtor in possession financing. Claw back/cancel all the executive stock grants (that's where some of the buybacks went, as I understand it) and pay the ones that stick it out and can actually manage a business a reasonable salary.

 

[gwraigty]

Our Gov (NC) just closed all dine-in sections of restaurants.

It'll be that way everywhere. DD said that the door was locked this morning only because they've shortened their hours. 7 AM to 8 PM until further notice. Customers are still allowed inside to order and take it out. Most of the dining room is blocked off with chairs. The bathrooms are closed to the public, which sort of surprised me. She said they had about 1 or 2 customers per hour, which is nothing for them. She was sent home early during what would have normally been a busy lunch rush. Cuts are happening across the board. They're operating with a skeleton crew. Some employees have scribbled notes near the schedule offering to cover for anyone who needs it because they need the hours.

 

[LRDave]

United went bankrupt in 2002 and stayed there until 2006. They continued to fly in bankruptcy. Let these folks go under, and write some guarantees for debtor in possession financing. Claw back/cancel all the executive stock grants (that's where some of the buybacks went, as I understand it) and pay the ones that stick it out and can actually manage a business a reasonable salary.

Socialize the losses and privatize the profits.... that's how big bizness rolls these days.

 

[JoeWras]

It'll be that way everywhere.

And what's significant about it is that Golden Corral is a NC corporation, based in the capital city of Raleigh.

I think they are toast.

Who is going to want to go to a buffet restaurant after this? After all we've learned about transmission from surfaces?

They have a take out business, but I'm wondering if they can survive. This restaurant is going to be one of many corporate stories after this all resolves.

 

[NW-Bound]

If i was King, I would make those companies that bought back all that stock just sell it now and use the proceeds to run the business.

Dang! That means practically all of the large caps of the US market. With them issuing more shares now to dilute out the stocks further, the market will crash hard. Dow 10,000?

One that has done the least of this transgression is Costco.

And then, there are companies who have done a wonderful job of selling their own stocks at a high point. Tesla managed to sell $2 billion worth of stock in early Feb, when its stock is at $900/share when investors were going goo goo gaa gaa over its stock. Smart. It is trading now at $425. Kaching!

 

[Fermion]

If you bankrupt businesses and crash the market, wiping out current shareholders, you are going to wreck the 401Ks of the Genx who largely do not have pensions. They are then going to need SS even more, so essentially you just will have to spend more money on the back end using less tax revenue from the devastated market.