Economic implications of a SARS/Coronavirus outbreak

[sptrawler]

I wonder what Greta has got to say about that?
Kill the mink, because they may infect us, wow we really are an interesting species.
We will rant and rave about killing the planet, because we use too much energy, but don't have any problem killing millions of little animals because they may infect us.
We are a strange species , it is all about us IMO

 

[over9k]

Ski resorts etc can pencil in a lost season.

And as if like clockwork:



COME ON BLOOMBERG KEEP UP

 

[over9k]

At least governments are getting their stimulus/support together in a timely manner now:



Expect a LOT more of this "X closes one day, support package for X announced shortly after" stuff over the coming months. Should produce a LOT of troughs & peaks to buy & sell on.

I also expect even more of the "stay at home" type trade now that people are physically stuck indoors as well as legally - furniture, appliances, videogames, toys, internet & streaming usage, online ordering of absolutely *everything*, you name it.

Disclosure: I have loaded up my positions in fang, fedex, ups, wayfair, whirlpool, at&t, square, semiconductors, international paper, best buy, and mattel in anticipation. Combined, they are now 70% of my portfolio. I have chosen these because they were the best performers during the first lockdown wave so it stands to reason that they're going to be the best performers this time around too. You'll note that there are some conspicuous absences like ebay & paypal for that reason.

The rest are infrastructure plays in anticipation of big infrastructure packages being announced (which ALWAYS happens in economic downturns), pure growth speculation like nio, and work from home like zoom.

I own nothing to do with oil, aviation, or healthcare, and am very unlikely to for months.

 

[over9k]

And in today's least insightful analysis...





I CANNOT POSSIBLY THINK WHAT THE CAUSES COULD BE

 

[over9k]

I'd expect a pretty serious correction to come after today's madness as the market realises that we have winter to get through and the approval + rollout process of this virus is going to take months.

Edit:

Blackrock's Kate Moore already on the news 10 minutes into the open saying "don't get ahead of yourself, this winter wave is still going to happen and so we have some very tough months ahead of us:

 

[over9k]

Another new york lockdown is a virtual certainty, with other states (and countries) to follow.

 

[over9k]

And it begins.

 

[over9k]

Here's the megatech vs small caps over the year just for context. Today's just that tiny blip at the end there.

 

[over9k]

Even higher end bricks & mortar continues to hang by a thread.

 

[moXJO]

View attachment 114297

Oil consumption is loooow and the world has capacity to produce/supply at a rate far higher than is being burnt at the moment, so all the storage tanks are brimmed whilst vanishingly little is actually being pumped.

Does anyone know if Australia is stocking oil reserves lately?

I heard we were. Probably a good time to do it.

 

[over9k]

The Government has splashed the cash for oil but how much have we bought?

The Energy Minister says the Australian taxpayer has got a great deal, and the country's oil reserves have been boosted, but just how much oil is now in storage is unclear.

www.abc.net.au

It does actually cost to store oil in tanks etc. The yanks store the big amounts underground in old salt deposits.

It's actually really cool how they do it:

The salt caverns are created by drilling wells into massive salt domes and injecting them with freshwater to dissolve the salts. The dissolved salt is then pumped back out and either piped several miles offshore or reinjected into disposal wells. This process, called solution mining, creates caverns of very precise dimensions that can hold anywhere from 6 to 35 million barrels of oil. The average cavern can hold 10 million barrels of oil, and at 200 feet (61 meters) wide by 2,000 feet (610 meters) high, it's big enough to comfortably fit Chicago's Sears Tower inside.


While underground caverns may not seem like the best place to store an emergency oil supply, they're actually very secure. For one thing, since they're 2,000 to 4,000 feet (610 to 1,219 meters) underground, the extreme pressure prevents cracks from forming and leading to leaks [source: DOE]. Also, the natural temperature difference between the top and bottom of each cavern encourages the oil to circulate, which maintains its quality - meaning you don't have to spend money pumping to circulate the oil, it just sits there naturally churning around and kept from going stagnant through simple thermodynamics. So after the initial drilling and setup, you have a storage facility that's almost completely cost free and has an almost 0% possibility of some kind of accident or incident.

What is the Strategic Petroleum Reserve?

The oil reserve managed by the U.S. federal government helps maintain price stability in the event of a disaster. Learn about the oil reserve.

science.howstuffworks.com

.


Apparently AU doesn't actually have a lot of these, so we just rent them from the yanks: https://crudeoilpeak.info/australia-outsources-its-oil-reserve-problem-to-the-us

 

[over9k]

View attachment 114402

I'd expect a pretty serious correction to come after today's madness as the market realises that we have winter to get through and the approval + rollout process of this virus is going to take months.

Edit:

Blackrock's Kate Moore already on the news 10 minutes into the open saying "don't get ahead of yourself, this winter wave is still going to happen and so we have some very tough months ahead of us:

View attachment 114403

Yep, big tech & semiconductors are straight back on the menu, exactly as predicted:



It's almost as if producing & then building the infrastructure to deploy ~8 billion doses of a vaccine that needs to be stored & transported at -70 degrees is going to be a pretty difficult & time consuming thing to do and nothing is therefore going to change for quite a while.

Who would have thought?

 

[over9k]

Alright, big post coming up:


If you were to believe the quants, you'd think we were just in a widening market and had simply hit resistance no worries m8 everything's normal:




This is not so. The world (specifically, the northern hemisphere) is about to see a third wave that is going to be several factors worse than what we've seen so far. Do NOT pay attention to the technicals, they are NOT relevant in this market. This market IS the virus and there are a lot of dinosaurs and quants with their heads in the sand trying to figure things out using their number-crunching thinking that this is going to tell them what's going on like it usually does. It isn't. In non-normal market conditions, almost all financial modelling and quantitative analysis goes out the window. If you don't believe me, just ask the guys at long term capital management what I mean.

We also actually have data showing how the quants are doing vs the rest of us. Retail traders have actually traded the pandemic better than the dinosaurs running the hedge funds:



And we are doing so precisely because these are people that cannot see the forest for the trees and can only see their formulas and technical analysis - analysis which does not work in these market conditions. Lately (over the past few weeks) they've been banging on about a rotation from growth into value, which they've only just realised, days (weeks really) after it stopped, is no longer happening.

As a result, you now get headlines like this:



Followed up by ten minute segments talking to whatever talking head they can get on and asking questions like "can this rotation rotation continue?"

(yes, they really asked that, and yes, his answer was really just a long winded way of saying he had no idea)


This market is and has always been since the pandemic started, the virus. And the virus's worst hit is yet to come.

Global cases have just hit 50 million:



And the northern hemisphere's third wave, which actually began a month ago, is now well & truly under way:





Let me be clear here: This one is going to be much, much, MUCH worse than the other two and far more lethal on account of the cold's effect on both infectiousness and lethality. Ten minutes on google or five minutes talking to any epidemiologist will show you the exponential difference that environment makes to both.

Governments, it would seem, are actually ahead of the markets on this one though and aren't messing around this time.

New york's just announced shutting of bars etc:



Sports are done for:



Even sweden, the country all the morons were banging on about being a model response that we should all emulate is going back into lockdowns:



Russia's also absolutely shitting bricks and even halting food exports, and when you think about the winters they have, I'd be doing the same thing too:

 

[over9k]

And all of this comes together to see the previous move back into growth (and by growth I literally just mean big and stay-at-home (SAH) tech):



As all the stuff that went bananas on monday after the vaccine announcement gets massacred when everyone realise we're not going to actually have the vaccine until at least APRIL:



And europe starts to batten down the financial hatches:



Thus in completely unsurprising news, alibaba (the asian amazon) hits a new sales record:



And I fully expect similiar results to be mirrored in all of the megatech, stay-at-home tech, amazon et al.


I also mentioned a few pages back that governments always go on massive infrastructure binges in times of economic downturn and thus bought some caterpillar, and the czech's have just announced an infrastructure package just as expected:




My play from here on out is to expect exactly what we saw in the first virus waves, but amplified (and that goes for everything - cases, deaths, tech gains, everything) and I have therefore positioned in full expectation of a massive case of deja-vu, except worse (or better, depending on how you look at it).

What the morons on the news and running the hedge funds have missed is that this movement between growth and value has paralleled the virus cases. As virus cases have increased, the market has moved into growth (big and SAH tech) and as they have subsided, the market has moved away from them and back to value again.

What I am saying is that this market is the virus. Understand the aforementioned effect(s) the virus has on the market and you will understand what the market's going to do in this next wave which is not going to happen, but rather, is already underway.

 

[over9k]

Nahhhhh... you think?


Expect stacks of headlines like this over the next few days.

 

[moXJO]

The Government has splashed the cash for oil but how much have we bought?

The Energy Minister says the Australian taxpayer has got a great deal, and the country's oil reserves have been boosted, but just how much oil is now in storage is unclear.

www.abc.net.au

It does actually cost to store oil in tanks etc. The yanks store the big amounts underground in old salt deposits.

It's actually really cool how they do it:

The salt caverns are created by drilling wells into massive salt domes and injecting them with freshwater to dissolve the salts. The dissolved salt is then pumped back out and either piped several miles offshore or reinjected into disposal wells. This process, called solution mining, creates caverns of very precise dimensions that can hold anywhere from 6 to 35 million barrels of oil. The average cavern can hold 10 million barrels of oil, and at 200 feet (61 meters) wide by 2,000 feet (610 meters) high, it's big enough to comfortably fit Chicago's Sears Tower inside.


While underground caverns may not seem like the best place to store an emergency oil supply, they're actually very secure. For one thing, since they're 2,000 to 4,000 feet (610 to 1,219 meters) underground, the extreme pressure prevents cracks from forming and leading to leaks [source: DOE]. Also, the natural temperature difference between the top and bottom of each cavern encourages the oil to circulate, which maintains its quality - meaning you don't have to spend money pumping to circulate the oil, it just sits there naturally churning around and kept from going stagnant through simple thermodynamics. So after the initial drilling and setup, you have a storage facility that's almost completely cost free and has an almost 0% possibility of some kind of accident or incident.

What is the Strategic Petroleum Reserve?

The oil reserve managed by the U.S. federal government helps maintain price stability in the event of a disaster. Learn about the oil reserve.

science.howstuffworks.com

.


Apparently AU doesn't actually have a lot of these, so we just rent them from the yanks: https://crudeoilpeak.info/australia-outsources-its-oil-reserve-problem-to-the-us

I heard (before internet times, not sure if it's true either) that the Russians drilled down deep and let off a couple of nukes to create caverns to store oil. Something about the oil being radioactive though.

 

[Garpal Gumnut]

View attachment 114498

Nahhhhh... you think?


Expect stacks of headlines like this over the next few days.

@over9k

Basically as I said somewhere before on this thread re the course of markets through until 2022.

Ask the Virus, forget the analysts.

They are called analysts for a good reason, because they speak through their a$ses.

gg

 

[Dona Ferentes]

I heard (before internet times, not sure if it's true either) that the Russians drilled down deep and let off a couple of nukes to create caverns to store oil. Something about the oil being radioactive though.

I remember that. Last sentence can be challenged. Heat? Half Life?

Buy SND

 

[Smurf1976]

I heard (before internet times, not sure if it's true either) that the Russians drilled down deep and let off a couple of nukes to create caverns to store oil.

The US tried it a long time ago in an attempt to get naturally occurring oil and gas to flow in situations where conventional technology couldn’t get out of the ground.

It was claimed that it worked as such but with a lot of cost and downsides as you’d expect.

 

[wayneL]

Von Mises Institute view of proceedings, FWIW