Tuesday, March 17, 2020
Sunday, March 15, 2020
The real reason Trump & Co. didn't want you to panic
To avoid the Federal Reserve Bank having to intervene to rescue the economy, that's why. But, too late.
The Fed dropped its benchmark interest rate to 0% this afternoon and will restart QE with $700 billion in Treasury and mortgage security purchases. It knows tomorrow is going to be rough.
The reason isn't to boost the stock market, though there is no doubt they hope that would be a happy by-product of their action.
Because economic activity has dived with all the cancellation going on in order to stop the virus from spreading, there is extreme pressure on overnight funding markets which businesses use to fund their operations. Their income has tanked but they still have bills to pay. Borrowing in the funding markets is critical for the survival of far too many companies. The addition of so many more entities having to go to the funding markets than is usual, and in larger quantity, under these new and dire circumstances means money markets will not have enough liquidity to meet these new demands. So, the Fed will step in to keep things well lubricated.
That's it.
This could have been avoided if Trump had simply shutdown the country on Feb 1 like Xi Jinping shutdown Hubei on Jan 23. China is over the hump on the epidemic there because it acted early to contain the infection. We are just getting started, and unfortunately we are looking more like Italy than South Korea. The virus was still capable of being isolated here on Feb 1. Since then it has spread everywhere because we foolishly permitted travelers to come and go, creating hot zones everywhere. Now it's payback time.
This is going to be really ugly unless Trump acts immediately to do what Fauci wants, which is a 14-day shutdown. People need to shelter in place for a few weeks.
You won't care about an economy in flames if you can't breathe because a killer pneumonia has you gasping for breath.
Saturday, March 14, 2020
Death rate from COVID-19 remains a catastrophe in Italy, China and Iran less so if you can believe them, USA France and Spain form another group, South Korea Switzerland and Germany all are under 1%
The USA is, unfortunately, not looking more like South Korea.
If the USA gets 30 million COVID-19 cases, a mortality rate of 2.15% translates into 645,000 deaths, 21.5 times the number who die from flu in an average year with 30 million influenza cases (mortality rate of 0.1%).
Coronavirus spread in the US and in Michigan
On Tuesday morning there were still 0 cases in my state of Michigan. Late Tuesday there were two. Yesterday we found out there were 12, and this morning we wake up to 25, according to this NYT map.
News broke yesterday that 3 of the cases were right here in my own county of Kent, 2 women and a man, all over 60, all three travelers to international hot spots. Gee what a shock.
At least one of these cases had been up and down a main shopping drag where I do some of my shopping. He or she went to the gym, a pizza joint, a steakhouse, and two (!) submarine sandwich shops between March 6-8. How pedestrian the tastes of these jet-setters.
Trump is criticized by Democrats because of his Feb 1 travel restrictions on China.
I fault him for not going far enough. He has brought Wuhan into my backyard because of what he has not done and easily could have done.
Trump should have shut down all travel on Feb 1, especially by air, to protect America from the spread of this disease and its impact, which has been enormous. Every plane was a missile. Every passenger was a warhead, and now they are all going off all over the place.
Local and state governments are scrambling to shut down everything they can, disrupting the lives of millions because Trump couldn't bring himself to disrupt the privilege of a class of jet-setting globalists, elites and wannabes, among whom the disease is spreading, according to the headlines and in fact. Trump himself may come down with it because of this.
I carry no brief for the Chicoms, but Xi Jinping is the great man Trump only wishes he could be because he did what he had to do to protect his country from the virus by locking down Hubei Province. Who cares what the motivation was, whether it was saving face, saving the power and privilege of the communist party, saving his economy, or some other more broadly understood conception of patriotism. In the end Xi Jinping understood what he had to do to survive and prevail before it was too late for China. It took him about one month. We are going on two months, have an Emergency declaration as of yesterday, but you are still free to move about the country, spreading the disease.
There were just over 1000 cases in the US on Wednesday. This morning over 2000, which will be 4000 in a few days, then 8000, then 16000, and so on. The time for locking down travel is long past, but locking it down even now would help.
University of Washington researchers are finding 7-9% positivity results for coronavirus in their daily testing of sample lots approximating 1000. If that turns out to be the morbidity rate and this virus spreads like the common cold, our country could easily have 30 million SARS-CoV-2 infections, 20% of which will be serious. Those 6 million serious cases will overwhelm our healthcare infrastructure, and many will die because of that. There will simply be too many people to treat effectively.
All for muh freedom.
Wednesday, March 11, 2020
What Dr. Anthony Fauci really said today, contrary to Rush Limbaugh: Many, many millions could die
When pressed by lawmakers for an estimate of eventual fatalities in the U.S., Fauci said it will be “totally dependent upon how we respond to it.”
“I can’t give you a number,” he said. “I can’t give you a realistic number until we put into the factor of how we respond. If we’re complacent and don’t do really aggressive containment and mitigation, the number could go way up and be involved in many, many millions.”
Read.
Rush Limbaugh's ignorance is invincible
He doesn't grasp that a disease 10x more deadly than flu (0.1% vs. 1% in his example) means 10x more deaths.
If flu normally kills 30,000 in an average year in the US (30 million infections times 0.1%), that means 300,000 deaths (30 million infections times 1%).
But hey, no big deal to Rush Limbaugh, because 300,000 dead isn't the old higher estimate of 3% (30 million infections times 3% = 900,000 deaths).
Incredible.
Monday, March 9, 2020
Monday situation summary 3/9/20
The CDC basically urged people 60 and over to become hermits at home to avoid infection with SARS-CoV-2. High blood pressure appears to be the one thing most who die of the virus have in common.
The COVID-19 outbreak in Italy is killing off parents and grandparents at an alarming level because the healthcare system, though quite advanced up north, is overwhelmed by the disease outbreak. Reports say many patients die in hospital untreated, just as in China in the early days of the epidemic there, because of inadequate infrastructure and doctors for so many patients. The quarantine has been extended now to the entire country. That is not being done to make Donald Trump look bad.
Stock market losses today were sizable. The decline in the S&P 500 made the top 20 list for daily percentage losses. The stock market is a confidence game, and valuation has grown to outrageous levels and stayed there for a couple of years already, so it has been vulnerable to a confidence shock. People just didn't believe it was. The virus hysteria is undercutting that confidence.
The price of oil plunged as OPEC failed to agree to production cuts. Expect big trouble for the economy as a result, which was already in decline, which is why OPEC wanted the cuts. Declining demand. Max von Sydow died to mark the occasion. Hint: He played Joubert.
People are afraid to fly and some flights are nearly empty. It's a good thing, too, because a study from China is out indicating infected persons can infect others in enclosed, air conditioned spaces like buses, even after they've disembarked. One person infected 11 this way. This also happened in Japan you will recall, where a bus driver was infected by tourists from Wuhan on his bus.
US cases of COVID-19 soared to 654 from the 15 President Trump said back in February were headed to zero. Can't make this go away with the Power of Positive Thinking.
Saturday, March 7, 2020
Friday, March 6, 2020
There is reason to think this epidemic might result in just 100,000 deaths or so in the US at the very worst
And probably a lot fewer.
The US is too robust compared with places like China and Iran to descend into their chaos, but South Korea's can-do spirit in the face of this epidemic reminds me of nothing so much as Yankee ingenuity. If the bureaucracy in the US can be tamed, we may well have an experience similar to South Korea's.
Wednesday, March 4, 2020
Tuesday, March 3, 2020
Monday, March 2, 2020
Sunday, March 1, 2020
Saturday, February 29, 2020
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