Economic implications of a SARS/Coronavirus outbreak

[rederob]

@qldfrog regularly provides false "facts", as this claim is not true:

"Just a simple science fact: deadly viruses will morth into more contagious and less lethal..you can read such postings i made more than a year ago,"​

Then we have @pozindustrial who I have yet to see display any ability to understand data, and seems to post from discredited websites. For example, while CDC data may show week on week increases in deaths, the fact is that covid deaths have been declining:

As @noirua notes, economies adopting strong containment measures can do reasonably well while covid runs rampant elsewhere.

 

[over9k]

Result:



With the banks reporting this week and the stress tests already completed, buybacks now being allowed, dividends coming out etc etc it's time to strike with the swing play again.

 

[Knobby22]

It's interesting, all the pundits talking up interest rates and then they drop.

 

[over9k]

It's interesting, all the pundits talking up interest rates and then they drop.

Every talking head I ever saw (and I agree with them) was talking about the inflation being transitory for, well, the whole time. So much so it became annoying.

I spent considerable time explaining that it was a supply side issue too?

 

[Knobby22]

Every talking head I ever saw (and I agree with them) was talking about the inflation being transitory for, well, the whole time. So much so it became annoying.

I spent considerable time explaining that it was a supply side issue too?

Yes, you aren't one of them.

I was just listening to a guy and a woman on the radio only last week at different times who said inflation was going to rise and interest rates were going up by the start of next year. Talking heads.
The Reserve Bank governor gave much better info.

Thanks over9k for the decent information/comments.

 

[over9k]

Yes, you aren't one of them.

I was just listening to a guy and a woman on the radio only last week at different times who said inflation was going to rise and interest rates were going up by the start of next year. Talking heads.
The Reserve Bank governor gave much better info.

Thanks over9k for the decent information/comments.

Oh I'm talking U.S based - I don't have anything to do with the ASX except pure degen spec plays.

 

[Smurf1976]

We will have to learn to live with it, another flu.and the first one to realise this will win economically.

The problem I see with that is the political one and in particular the question of how it arose in the first place? There's a huge can of worms there that political leaders are going to be very wary of.

Economically that also has massive implications. If the "lab" theory were found to be correct, and the virus is accepted as being something that can't be eradicated, then it's pretty hard to see that not ending up with some major fallout so far as trade and so on are concerned.

Even if you're 100% correct, I expect there'll be a reluctance for anyone to acknowledge it publicly for that reason, it's opening a can of worms.

 

[qldfrog]

The problem I see with that is the political one and in particular the question of how it arose in the first place? There's a huge can of worms there that political leaders are going to be very wary of.

Economically that also has massive implications. If the "lab" theory were found to be correct, and the virus is accepted as being something that can't be eradicated, then it's pretty hard to see that not ending up with some major fallout so far as trade and so on are concerned.

Even if you're 100% correct, I expect there'll be a reluctance for anyone to acknowledge it publicly for that reason, it's opening a can of worms.

Sooner or later, the truth will pop its head..but yes it will pushed and pushed and the weaker ones will refuse to being wrong .
We could still find communists in the 90s denying gulags/USSR work camps.
In the same way, we will have people in 20y denying the Wuhan origin or the actual low lethality of the initial variants.
I have to put a caveat here as we are breeding the killer one with our response....

 

[over9k]

Edit:

More good banking news:

JPMorgan’s investment bankers notch record quarter on M&A flurry - BNN Bloomberg

JPMorgan Chase & Co.’s investment bankers posted their best quarter ever as a record first half in dealmaking bolstered the bottom line.

www.bnnbloomberg.ca

JPMorgan Chase & Co.’s investment bankers posted their best quarter ever as a record first half in dealmaking bolstered the bottom line.

Fees from advising on mergers and underwriting stocks and bonds soared 25 per cent in the second quarter, smashing analysts’ estimates and boosting net income to US$11.9 billion. The firm released US$3 billion in reserves it had previously set aside for bad loans, almost twice as much as analysts had predicted.

The report marks the banking industry’s first look into the economic reopening in the U.S. made possible by widespread vaccinations in recent months. Pandemic-induced volatility led to a string of banner quarters on Wall Street trading desks, and while that boom is quieter now, mergers and acquisitions surged in the first six months of 2021.

Chief Executive Officer Jamie Dimon said the investment-banking gains were driven by an active market for M&A as well as acquisition financing in debt capital markets.

“This quarter we once again benefited from a significant reserve release as the environment continues to improve, but as we have said before, we do not consider these core or recurring profits,” Dimon said Tuesday in a statement.

JPMorgan shares fell 1.6 per cent to US$155.48 at 6:56 a.m. in early New York trading after gaining 24 per cent this year.

The firm reported US$3.57 billion in investment-banking fees, topping analysts’ expectation of US$3.1 billion. M&A advisory fees rose 52 per cent to US$916 million. Debt underwriting was up 26 per cent to US$1.6 billion and equity underwriting gained 9 per cent to US$1.1 billion.

The bank’s traders generated US$6.8 billion of revenue in the quarter, down 30 per cent from a year earlier but above the US$6.4 billion analysts expected.

 

[Gunnerguy]

Sooner or later, the truth will pop its head..but yes it will pushed and pushed and the weaker ones will refuse to being wrong .
We could still find communists in the 90s denying gulags/USSR work camps.
In the same way, we will have people in 20y denying the Wuhan origin or the actual low lethality of the initial variants.
I have to put a caveat here as we are breeding the killer one with our response....

Yes it’s going to be interesting about the Wuhan Lab.
I think it will take a long time ( years) for the truth to come out especially as the US were directly involved in setting up and sponsoring the lab through personnel and finance. Not 100% obviously as it’s on Chinese soil, but provided funds, IP , and personnel.
Really don’t know how this is going to turn out. The ‘West’ wants the ‘truth’ but the US don’t actually want the truth to come out.
GG

 

[over9k]

And then:



BOOM.

 

[qldfrog]

Yes it’s going to be interesting about the Wuhan Lab.
I think it will take a long time ( years) for the truth to come out especially as the US were directly involved in setting up and sponsoring the lab through personnel and finance. Not 100% obviously as it’s on Chinese soil, but provided funds, IP , and personnel.
Really don’t know how this is going to turn out. The ‘West’ wants the ‘truth’ but the US don’t actually want the truth to come out.
GG

The lab was build by the French and opened by the french prime minister...
A good complete collaboration of the west that the chinese army scientists leveraged to ping pong back covid to us.
purposedly or not,while our leaders used covid for submission and political geopolitical games, China managed to overtake the US in a quarter of the time it would have needed without.
1 y covid and china is now ahead.we will reflect on this in the coming years

 

[frugal.rock]

Remember over a year ago when the degenerates all said that masks were useless and we didn't need them?

I had thought "have none of these pricks been outside in cold weather to see the plume of moisture that you breathe out like a cloud of smoke...and then there's "steaming" with sweat...

I know they were really panicking about a run on masks and then having medicoes people's not having any....

I shut my trap at the time for the better good... however, we were all bald faced lied to.... day dot.

There, I said it. It's off my chest.

I don't think I mentioned I think I had covid in late October 2019 after returning from Beijing....
worst flu ever, woke up a couple of times a bit panicked having trouble breathing (no, not anxiety) but put it down to being a smoker... in retrospect, I had been smoking less than usual though....
In bed for 3 days and took it easy for a couple of weeks, no doctor trip.

 

[qldfrog]

Remember over a year ago when the degenerates all said that masks were useless and we didn't need them?

I had thought "have none of these pricks been outside in cold weather to see the plume of moisture that you breathe out like a cloud of smoke...and then there's "steaming" with sweat...

I know they were really panicking about a run on masks and then having medicoes people's not having any....

I shut my trap at the time for the better good... however, we were all bald faced lied to.... day dot.

There, I said it. It's off my chest.

I don't think I mentioned I think I had covid in late October 2019 after returning from Beijing....
worst flu ever, woke up a couple of times a bit panicked having trouble breathing (no, not anxiety) but put it down to being a smoker... in retrospect, I had been smoking less than usual though....
In bed for 3 days and took it easy for a couple of weeks, no doctor trip.

Yes,seems to match my relatives experience you were lucky,now they would put you in hospital and you'd become a guinea pig,like the poor soul who nearly died of an injection of MRI reactant here in Qld last week.
Then would be locked for your recovery

 

[qldfrog]

I also have lost a lot of trust in Australia.not Morrison or ALP,or the states jokers but the whole country.
People lining for anzac services at dawn but locking its own citizen both in and out,applying USSR style travel restriction with absolute support from the population inc the ones usually crying us a river to let illegal migrants in...
Australia brand has taken a hit and i see this affecting us two ways economically:
Less desirable place to go in the future for the migrants we need to attract, the young scientists, engineers and PhDs;
More exodus from our own brains once the home jail terms are completed.
And much longuer time for tourism recovery.
So in short,we are going to loose brains and tourism $ for decades..
I always ranted on how we had the risk to become the next Argentina.did quite well to avoid this in the last 2 decades but this crisis will be the pivot

 

[pozindustrial]

This is how to get the economy back on track in my opinion. Instead of subjecting Australia to highly questionable, experimental vaccines and lockdowns we could successfully and quickly treat people by listening to medical experts instead of censoring them.

Ivermectin obliterates 97 percent of Delhi cases

A 97% decline in Delhi cases with Ivermectin is decisive - period. It represents the last word in an epic struggle to save lives and preserve human rights. This graph

www.thedesertreview.com

 

[over9k]

Great bit on shipping/containers:

 

[over9k]

Chip demand continues to surge:



But a lot of this is already priced in (is anyone surprised by this?)

 

[over9k]

And here's the effect of printing 3+ trillion dollars, finally:



Just in case anyone was wondering if cash is still trash (it is more than ever now).

 

[over9k]

Alright the financial god-king jpowell just testified to the senate and there was of course all the grandstanding BS from the politicians but there was a handful of key takeaways:


One: That whilst inflation looks mental at the moment, there's massive base effects at play. When you compare it to feb of 2020 (just before the virus and lockdown meltdowns) it's actually only at about 2.5% over the longer trend. Goal is 2%, he noted that 2.5% is a bit above that, but he'd rather be higher than lower, which leads into the next point;

Two: That the fed is going to let inflation run hot and err on the side of "too much" employment and inflation than too little. He's in fact FAR more concerned about employment than he is inflation and his happiness with the unemployment rate is far outweighing his discontent with the inflation rate being 50 points above longer term goal.

Three: That the fed is (sensibly in my opinion) using feb 2020 as its baseline, i.e that it wants to run things on a trend coming from THAT point. For this reason, comparing to june of 2020 after a significant period of deflation gives a massively distorted picture, i.e classic base effects.

Four: That there's still significant product supply side constraints which haven't been alleviated yet and there's only so much he can do about them. The more these things improve, the lower the supply-side inflationary pressures.


So with all of this in mind, what do we think markets have done in response?





So like I mentioned before, the swing play(s) based on these inflation fears ebbing & flowing is well & truly back on the menu. Powell might have even inadvertently given us some forward guidance with a large rotation point being feb of next year


Finally, we might have hit an inflection point in bonds if these fears continue so we need to keep a very close eye on the US10Y:



As there's a pretty obvious "what might be a trend break" that's just begun so we need to watch this like a hawk to work out which holdings (banks and tech) we need to flip in what direction (again).




Fun times ahead!