| To: sense who wrote (1973) | 3/5/2020 5:50:23 PM | | From: sense | | | | Huge Market Impact Coming: Ending the Slow-Roll of Coronavirus Risk Perception
The biggest and most predictable trade in history ?
The U.S. hasn't been testing for Coronavirus... and that's OBVIOUSLY a HUGE problem. The impact from not testing has ALREADY ensured the virus expands FASTER, FARTHER as the lack of tests clearly inhibits efforts made in controlling the virus. But, even without any expansion of testing capacity, yet... the number of cases and deaths is now climbing at an accelerating pace.
The President announced, last week, that there would be one million test kits ready to go by last Friday, the 28th of February... that is... one million tests were to be ready by Friday last week...
Were those tests actually ready to go and shipped out by last Friday... that should have meant a huge ramp up in testing occurring, from last weekend, up until today... which, by THIS FRIDAY would have revealed the existence of a vastly larger number of cases in the U.S. than has been reported yet. The case numbers should have started ticking up a bit already even on Monday, and they should have ramped up significantly by Wednesday... yesterday... with big leaps in the numbers.
INSTEAD... now they're pretending the goal for having one million test kits available was for THIS Friday... and they're still saying they're not going to meet that Friday goal... even a week later than announced...
The impact ? The disease DOUBLES cases very rapidly, partiuclarly early on... and by not catching those early cases... the numbers we're getting are falling FAR, FAR behind what's really happening. And when testing does finally BEGIN... those accumulated cases will suddenly start being revealed in VERY large numbers relative to what would have been happening all along in a slower acceleration into a ramp up to much higher numbers. So, when testing does finally begin... the longer it takes us to get there... the more massive the shock in the numbers revealed is going to be. And, the more massive that shock... the more likely it is that people will suddenly "panic"... ie., they will FINALLY "get it"... including being able to see the inevitable impact on the economy that's coming... and then they will start making more rational decisions based on better quality information... including investment decisions...
Note, carefully... early on the doubling period ranges from two days, slowing to no more than five days... so even small delays of a few days will quickly DOUBLE the size of the real problem...
Senators Admit US Virus Test Rollout Goals Won't Be Met: "It's Way Smaller Than A Million"
“There won’t be a million people to get a test by the end of the week,” Republican Senator Rick Scott of Florida said. “It’s way smaller than that. And still, at this point, it’s still through public health departments.”
Bloomberg reports that Scott and other lawmakers said the government is “in the process” of sending test kits out and people still need to be trained on how to use them. “By the end of the week they’re getting them out to the mail,” Republican Senator James Lankford of Oklahoma said. “It’s going to take time to be able to get them, receive them, re-verify them and then be able to put them into use.”
As we noted previously, without the tests, it will take longer for public health officials to figure out how widespread the virus truly is, giving the market a false impression that containment efforts have been a success. The only problem is that containing a virus isn't like negotiating a trade deal. While a certain amount of bluster is acceptable, at a certain point, you actually need to fix the problem.
But, DEATHS don't depend on any "testing" to be reported... but they can still impose reporting delays based on how successful hospitals are in prolonging life, or in delaying the reporting of a death... so, with some adjustments, they can be used as separate metric... as long as medical staff and public officials here don't lie about the numbers of deaths the way they have in China, and probably other places.
I'll watch the numbers of deaths mounting this week... and use them to generate a prediction, from the mortalities, of what the testing "should" show us, once it does finally begin to happen.... |
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| From: sense | 3/5/2020 8:12:47 PM | | | | | | Anecdotal Coronavirus and Economic Perspective Report
I normally do my shopping monthly. I'll buy what I need for a month, and do it again a month later... making a few side trips as needed for fresh milk, fresh salad or veggies, whatever grabs me. And, normally, I'll do that major trip right around the 3rd of every month, which I did again, on Tuesday.
I'll typically start out at Walmart... (sigh) ... and then move on to the two or three other grocery stores that have different offerings that I prefer... maybe fill up with gas along the way. This Tuesday at Walmart... they had almost everything I needed... but that's only because I've always had a good supply laid in of most of those things they ran out of... that everyone else is desperately looking for now.
They were out of flour, they were out of sugar, they were out of bleach, hydrogen peroxide, 70% alcohol, and any hand sanitizer, or things like Clorox wipes that contain bleach. There were also "holes" in their stocks of some frozen foods, and other random things here and there... the pasta was mostly gone... rice and beans... some of the breakfast cereals... oatmeal.
That was a "snapshot" and a one off... but, that was still about a day ahead of the reporting that store shelves around the nation, at least in the cities, are being emptied out. And, I think that's early still, compared to what will happen when "testing" actually ramps up...
One of the other stores I go to is a true "local" that's focused on the local market demand for the mostly vegetarian/organic types... lots of the customers are people, like me, who maintain a healthy pantry and make their own food... lots of staples sold in bulk... best veggies in town... its where most of the local chefs will shop it they need something that wasn't on the delivery truck. They don't sell meat... but we have a really good local butcher near by. And, at that store, they had no obvious shortages of any of the things I was looking for, including things I've looked for recently and not found... So, I did pick up a 50 lb bag of a specific locally milled bread flour (that's not enriched per government standards, so it bakes and tastes better, and stores much longer) as my supply of that was getting low... and that addition topped me off at full capacity again. Didn't check aisles to see about bleach, etc.
But, I think there's something of interest there... that Walmart failed to anticipate the need... when the local store showed, if anything, only a GREATER effort in keeping the shelves fully stocked. How much is the store management... and how much is the different base of customers ? Don't know...
Other than that... I saw a meaningful reduction in traffic in town during the day... maybe half of normal... and right about 6pm... the streets suddenly cleared out by a much wider margin... when only two weeks ago I was noticing traffic lingering much longer than normal, the streets still busy at 11 pm, which I'd not seen here since before the GFC of 2008.
I stopped by my local community college to chat with the directors of programs I support and care about.
They say they are doing fine, thank you, with those specific programs... but the school as a whole has been struggling greatly with generally declining enrollment for a couple of quarters... losing both the tuition money and state support in result, which, they say, is a direct function of employment opportunities picking up... Since last summer, people have been finding jobs without having any need to go the CC route. I assured them that problem will be solved very soon... and they understood.
Personally, I have only one part-time employee right now. This week I asked her to not come in... and to not come in for a while. She flew to Las Vegas last weekend, on a flight routed through Seattle... and then attended a concert in Vegas. But, while she's not working for me, I'm continuing to pay her, only asking that she use the time she would work for me to volunteer instead... which she has agreed to do, and she's arranged to spend the time volunteering with the local Hospice.
Thought it might be interesting to share a bit of personal perspective just now...
I'll update the anecdotal experience as I see significant enough changes occur to warrant the comment. |
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| To: sense who wrote (1978) | 3/6/2020 2:38:10 PM | | From: sense | | | | SQQQ
Up another 8.8% on the day... which is so far away from telling the significance of the move today.
Rates are plunging... investment grade credit not spared. Oil prices are collapsing as OPEC fails to reach agreement. And, at 7:30 this morning, at the same time, the futures market spiked the bid on stocks: predicting the market would be up by 250 points at the open. And, they took gold down hard, losing $40 and silver down $0.35 too. The pundits see that as the Plunge Protection Team stepping in... but IT DIDN'T WORK. Metals are lower on the day, but off the lows. However, stocks opened LOWER...
We're seeing real risks finally exerting control over the markets again. The puppet masters are finding the puppets suddenly aren't cooperating. There's really not even a string left for the Fed to push on right now... so the usual bluster won't cut it. The REAL news from here will take control of markets... and we're going to see real price discovery happening for the first time in more than a decade. For market optimists, things will only gets worse from here as the reality of the virus risks begins to be felt more directly, and as it is realized, the risk being realized will take control of the narrative, obviating the overly optimistic predictions of officials who've expected the virus to obey their commands, without them understanding it at all, and failing by not doing the right things, not using the time they had wisely. Surprised and disappointed now, as things go sideways... they're starting to blame others for their failings.
The reality is... we're still early on the leading edge of the storm that's coming. The markets have priced in a rainy and blustery day. But, there's a Cat 5 hurricane out there... and we're just starting to notice that its getting a bit cloudy and the wind is picking up. The first real squall lines will begin to hit next week... once we start seeing the numbers ramp up as testing begins in earnest. The minor economic impacts thus far... are only a result of people being aware and starting to prepare.
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| From: sense | 3/6/2020 3:02:52 PM | | | | | | "This Is It! The Party's Over" - Will Covid-19 Cause A New Financial Crisis?
The term “black swan event” is increasingly being used to describe this coronavirus outbreak, and many are concerned that what we are headed for will be much worse than what we experienced in 2008 and 2009. Already, we have witnessed a staggering drop in global demand, Wall Street has had to deal with the wildest week in eight years, and people all over the globe are hoarding toilet paper, face masks and hand sanitizer. That may sound like a plot from one of my books, but it is not. This is actually happening, and it appears that we are still only in the very early chapters of this crisis.
It seems like just yesterday that everyone was freaking out because there were a few dozen confirmed cases here in the United States. Now there are 70 in the state of Washington alone…
A cruise ship remains at arms length from San Francisco and the number of confirmed cases of coronavirus in Washington state ballooned to 70 on Thursday – pushing the U.S. total above 220 – as the global struggle against the outbreak intensified.
The nation’s death toll rose to 12, 11 of them in Washington. Fifty-one of the confirmed cases are in King County, home to Seattle, where ten of the deaths have occurred, state health officials said.
As I write this article, the total number of confirmed cases in the U.S. has now risen to 233, but of course that number is going to go much higher now that the U.S. has finally decided to ramp up testing for the virus.
If you live in the Seattle area, you are going to want to avoid public places for the foreseeable future. In fact, officials in King County are already recommending that all businesses “allow their employees to telecommute throughout March”…
A Washington state county, where 31 coronavirus cases and 9 deaths have been reported, has recommended to its 2.2 million residents that they should work from home to help slow the spread of the infectious disease, and further urged everyone over 60 to stay indoors.
Public Health officials in King County on Wednesday recommended that businesses allow their employees to telecommute throughout March in an effort to reduce the amount of face-to-face contact between large numbers of people during this “critical period” in the COVID-19 outbreak.
Unfortunately, other hotspots are starting to emerge as well. The total number of cases in California is up to 53, and the number of cases in New York just doubled…
California declared a state of emergency after a coronavirus-related death and 53 confirmed cases in the state. The number of infections in New York also doubled overnight to 22 as the state ramps up its testing.
Predictably, U.S. stocks plunged on Thursday as the bad news came rolling in. By the end of the trading session, the Dow Jones Industrial Average was down 969 points…
Stocks plunged on Thursday, erasing most of the steep gains in the previous session, as markets remained highly volatile in the face of the fast-spreading coronavirus.
The Dow Jones Industrial Average ended the day 969.58 points, or 3.5%, lower at 26,121.28 after tanking nearly 1,150 at its session low. The S&P 500 dropped 3.3%, or 106.18, to 3,023.94 and the Nasdaq Composite fell 3.1%, or 279.49, to 8,738.60. All 11 S&P sectors finished the day in the red. Stocks turned sharply lower as the 10-year Treasury yield fell to an all-time low below 0.9%.
This is precisely the sort of wild market behavior that we witnessed during the financial crisis of 2008. One day stocks would be way down, and the next day they would be way up. When we see extreme volatility such as this, it is a clear indication that investors are very nervous.
After watching what transpired on Thursday, one trader described the market’s current behavior as “a super-puke”…
Watching the markets today – as The Dow plunged 1000 points, Treasury yields collapsed to record lows, credit markets imploded, and demands for more Fed intervention exploded – has one veteran trader remarking, “this is becoming a super-puke.”
Of course if this coronavirus outbreak starts to fade, it is entirely possible that the markets could settle back down.
But that hasn’t happened so far, and experts are warning that we should expect to see more market volatility ahead. Here is one example…
“We expect markets to remain volatile,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. “The unfolding nature of the coronavirus threat—both real and perceived—is not yet quantifiable, and, as such, the current global policy response can’t immediately be judged as sufficient or insufficient for restoring investor confidence in the short term.”
Meanwhile, the fear that this coronavirus outbreak has created is hitting the real economy exceedingly hard.
In fact, the CEO of Southwest Airlines says that his company “lost several hundred million dollars in a week’s time” because people are so afraid to travel right now…
Southwest Airlines CEO Gary Kelly told CNBC on Thursday that the company has lost several hundred million dollars in a week’s time thanks to a decline in bookings amid increasing fears over COVID-19. Kelly added that the drop-off was “noticeable” and “precipitous” and has continued declining on a daily basis.
We are seeing similar things happen in industry after industry.
So what is going to happen if this outbreak continues to intensify in the months ahead?
Needless to say, we could soon be facing a worst case scenario for the global economy. According to Egon von Greyerz, the party is indeed “over” and we are headed for the worst economic crisis that any of us have ever experienced…
This is it! The party is over. The world is now facing the gravest economic and social downturn in Modern Times (18th century). We are now entering a period of global crisis that will change the world for a very long time to come. This should come as no surprise to the people who have studied history and also read my articles for the last few years. Many others have also warned about the same thing. But since MSM never talks about the excesses in the world or the risks, 99.9% of people are totally unprepared for what is coming next.
Will he be correct?
We shall see.
It would be wonderful if this virus would just go away and life could get back to normal. Unfortunately, this crisis just seems to escalate with each passing day.
On Thursday morning, police were actually called out to a Costco in southern California because “toilet paper, paper towels, and bottled water were out of stock”…
Deputies responded to the Chino Hills Costco at 10.15am on Thursday morning after receiving a report of a disturbance, a San Bernadino County Sheriff’s Department spokeswoman told DailyMaill.com.
On the scene, deputies learned that ‘a large group of customers were upset’ that items such as toilet paper, paper towels, and bottled water were out of stock, said Public Information Officer Cindy Bachman.
All over America, people have been hoarding essential supplies like crazy. If people are this delirious already, how are they going to act once things start getting really bad?
It was inevitable that stock prices would crash from the ridiculously elevated levels that we witnessed earlier this year.
And the next economic downturn has been building for a really long time.
But now events are starting to move at a pace that is absolutely breathtaking, and it looks like all of our lives are about to change in a major way. |
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| From: sense | 3/6/2020 3:03:07 PM | | | | | | "This Is It! The Party's Over" - Will Covid-19 Cause A New Financial Crisis?
The term “black swan event” is increasingly being used to describe this coronavirus outbreak, and many are concerned that what we are headed for will be much worse than what we experienced in 2008 and 2009. Already, we have witnessed a staggering drop in global demand, Wall Street has had to deal with the wildest week in eight years, and people all over the globe are hoarding toilet paper, face masks and hand sanitizer. That may sound like a plot from one of my books, but it is not. This is actually happening, and it appears that we are still only in the very early chapters of this crisis.
It seems like just yesterday that everyone was freaking out because there were a few dozen confirmed cases here in the United States. Now there are 70 in the state of Washington alone…
A cruise ship remains at arms length from San Francisco and the number of confirmed cases of coronavirus in Washington state ballooned to 70 on Thursday – pushing the U.S. total above 220 – as the global struggle against the outbreak intensified.
The nation’s death toll rose to 12, 11 of them in Washington. Fifty-one of the confirmed cases are in King County, home to Seattle, where ten of the deaths have occurred, state health officials said.
As I write this article, the total number of confirmed cases in the U.S. has now risen to 233, but of course that number is going to go much higher now that the U.S. has finally decided to ramp up testing for the virus.
If you live in the Seattle area, you are going to want to avoid public places for the foreseeable future. In fact, officials in King County are already recommending that all businesses “allow their employees to telecommute throughout March”…
A Washington state county, where 31 coronavirus cases and 9 deaths have been reported, has recommended to its 2.2 million residents that they should work from home to help slow the spread of the infectious disease, and further urged everyone over 60 to stay indoors.
Public Health officials in King County on Wednesday recommended that businesses allow their employees to telecommute throughout March in an effort to reduce the amount of face-to-face contact between large numbers of people during this “critical period” in the COVID-19 outbreak.
Unfortunately, other hotspots are starting to emerge as well. The total number of cases in California is up to 53, and the number of cases in New York just doubled…
California declared a state of emergency after a coronavirus-related death and 53 confirmed cases in the state. The number of infections in New York also doubled overnight to 22 as the state ramps up its testing.
Predictably, U.S. stocks plunged on Thursday as the bad news came rolling in. By the end of the trading session, the Dow Jones Industrial Average was down 969 points…
Stocks plunged on Thursday, erasing most of the steep gains in the previous session, as markets remained highly volatile in the face of the fast-spreading coronavirus.
The Dow Jones Industrial Average ended the day 969.58 points, or 3.5%, lower at 26,121.28 after tanking nearly 1,150 at its session low. The S&P 500 dropped 3.3%, or 106.18, to 3,023.94 and the Nasdaq Composite fell 3.1%, or 279.49, to 8,738.60. All 11 S&P sectors finished the day in the red. Stocks turned sharply lower as the 10-year Treasury yield fell to an all-time low below 0.9%.
This is precisely the sort of wild market behavior that we witnessed during the financial crisis of 2008. One day stocks would be way down, and the next day they would be way up. When we see extreme volatility such as this, it is a clear indication that investors are very nervous.
After watching what transpired on Thursday, one trader described the market’s current behavior as “a super-puke”…
Watching the markets today – as The Dow plunged 1000 points, Treasury yields collapsed to record lows, credit markets imploded, and demands for more Fed intervention exploded – has one veteran trader remarking, “this is becoming a super-puke.”
Of course if this coronavirus outbreak starts to fade, it is entirely possible that the markets could settle back down.
But that hasn’t happened so far, and experts are warning that we should expect to see more market volatility ahead. Here is one example…
“We expect markets to remain volatile,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a note. “The unfolding nature of the coronavirus threat—both real and perceived—is not yet quantifiable, and, as such, the current global policy response can’t immediately be judged as sufficient or insufficient for restoring investor confidence in the short term.”
Meanwhile, the fear that this coronavirus outbreak has created is hitting the real economy exceedingly hard.
In fact, the CEO of Southwest Airlines says that his company “lost several hundred million dollars in a week’s time” because people are so afraid to travel right now…
Southwest Airlines CEO Gary Kelly told CNBC on Thursday that the company has lost several hundred million dollars in a week’s time thanks to a decline in bookings amid increasing fears over COVID-19. Kelly added that the drop-off was “noticeable” and “precipitous” and has continued declining on a daily basis.
We are seeing similar things happen in industry after industry.
So what is going to happen if this outbreak continues to intensify in the months ahead?
Needless to say, we could soon be facing a worst case scenario for the global economy. According to Egon von Greyerz, the party is indeed “over” and we are headed for the worst economic crisis that any of us have ever experienced…
This is it! The party is over. The world is now facing the gravest economic and social downturn in Modern Times (18th century). We are now entering a period of global crisis that will change the world for a very long time to come. This should come as no surprise to the people who have studied history and also read my articles for the last few years. Many others have also warned about the same thing. But since MSM never talks about the excesses in the world or the risks, 99.9% of people are totally unprepared for what is coming next.
Will he be correct?
We shall see.
It would be wonderful if this virus would just go away and life could get back to normal. Unfortunately, this crisis just seems to escalate with each passing day.
On Thursday morning, police were actually called out to a Costco in southern California because “toilet paper, paper towels, and bottled water were out of stock”…
Deputies responded to the Chino Hills Costco at 10.15am on Thursday morning after receiving a report of a disturbance, a San Bernadino County Sheriff’s Department spokeswoman told DailyMaill.com.
On the scene, deputies learned that ‘a large group of customers were upset’ that items such as toilet paper, paper towels, and bottled water were out of stock, said Public Information Officer Cindy Bachman.
All over America, people have been hoarding essential supplies like crazy. If people are this delirious already, how are they going to act once things start getting really bad?
It was inevitable that stock prices would crash from the ridiculously elevated levels that we witnessed earlier this year.
And the next economic downturn has been building for a really long time.
But now events are starting to move at a pace that is absolutely breathtaking, and it looks like all of our lives are about to change in a major way. |
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| To: sense who wrote (1981) | 3/6/2020 5:12:31 PM | | From: sense | | | | Things that don't make sense... or, do they... ?
Boeing can't build an airplane that flies the way it should... or, at least, can't build one that flies without the fuel tanks being full of junk, etc. And now, with the coronavirus problem, all of their customers are going broke at an accelerating pace. Airlines are notoriously low margin and highly leveraged businesses... one of the first into the tanks in a downturn... then dropping like a rock to sit on the bottom of the pool for the duration, with the massive leverage from borrowed money to buy airplanes biting them hard. They're going BK all the time just for screwing up competitive business decisions... much less when all the customers decide its safer just to walk instead.
Airbus also builds airplanes... that currently have nothing obviously wrong with them... but, they also have issues with having airlines as customers when the market for air travel turns south...
So, which stock should be hammered the most now... given the recent viral downturn ?
Well, Boeing was ALREADY being hammered because of spectacularly bad corporate management making airplanes that crash... so having the downturn now, only helps them relative to competitors... by giving them some time to sort things out... while competitors now will struggle for reasons that aren't self induced.
But, Boeing also has a far more diversified business... as well as military sales that aren't suffering now, even as Israel just got the nod to buy 8 new Pegasus refueling tankers...
Both still have a long way to go... this is early days, still... the virus not just a "one off" that will be shrugged off when the danger is past... but more of a catalyst exposing systemic weaknesses... so the virus risk ending really won't enable stuffing that genie back in the bottle...
I got the Boeing call right, here, early on... and those long term put options from a year ago ? Wow.
Now only a question of relative advantage... the timing in taking profits... and where to put them then.
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| To: sense who wrote (1982) | 3/6/2020 5:33:59 PM | | From: sense | | | | I use SQQQ here as a placeholder noting my opinion, generally, of the markets over the last years...
The ticker is a useful one to follow as an indicator... but it isn't necessarily the best ticker to ride in a given circumstance... As a concept, though ? Here's a current list of 3X ETF's
Note that, even in a down market that you're betting will go lower... there's inequality in the issues over time... some things go down faster and sooner... others may lag a bit. Timing still matters, and it matters more as you diversify the focus from the general to the specific.
Oil screaming higher, or getting hammered ? There's WTIU and WTID, or OILU and OILD. Down today, and almost a triple this year:
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