Covid-19

Am I the only one that can smell an iFAST pump and dump plot.....

@dreamybear, a black swan is an unknown with unknown occurrence and distribution. So we can't rule anything out. End of the day, it is all about probabilities.

@Behappyalways, it is true that all correlations like to go to one during a crisis. There is a multitude of thoughts all over the place because equity markets have been "Fast and Furious". Even for someone as experienced as Howard Marks, look at the sheer magnitude of his memos in the last 2 months to document his evolving thoughts. And then we look at what he is doing (than saying) and i read somewhere that Oaktree is setting up a 15billion fund to buy distressed debt. Of course, setting up a fund has optionality - if u don't invest it, u dont lose anything. But there may be opportunities around in the near future.

As usual, when times are confusing, I always like some Morgan-ism.

Who Pays For This?

As many panicked at our national debt at the end of the war, a 1945 article in The Wall Street Journal was prescient. “There is little likelihood that the national debt will be reduced substantially during the next generation,” it read. “This means that debt management rather than debt reduction is the important problem before the Treasury in the coming years.”

https://www.collaborativefund.com/blog/w...-for-this/

(18-04-2020, 08:53 PM)holymage Wrote: Am I the only one that can smell an iFAST pump and dump plot.....

hi holymage,

It is just the over-enthusiasm of an old VB. Most of us who have been around for some time, we get used to it. Just a difference in styles i suppose. I also do not think the "liquidity in VB" can sway markets. I think sometimes, it might be some sort of confirmation bias or the need to seek social proof - I don't know but from a Moderator's standpoint, at least things are based on facts and numbers (yes, another bias to have the tendency to treat numbers as holy) but I believe most VBs are good enough to separate facts/numbers with the story.

Moderator

https://on.mktw.net/2z1dDdr Check out this article from MarketWatch - The U.S. stock market may enjoy the biggest rally ever when the pandemic is over


The bulls will like the above news


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a) Para 9 of the 17 Apr 20 MOH's announcement stated that 708 have fully recovered

https://www.moh.gov.sg/news-highlights/d...-confirmed

b) Para 10 of the 18 Apr 20 MOH's announcement stated that 38 more cases have been discharged and 740 have fully recovered
https://www.moh.gov.sg/news-highlights/d...-confirmed

c) Para 9 of the 19 Apr 20 MOH's announcement stated that 26 more cases have been discharged and 768 have fully recovered
https://www.moh.gov.sg/news-highlights/d...-confirmed


Somehow, the numbers do not add up, for two consecutive days.

https://www.ccn.com/the-stock-market-is-...y-bullish/

The surging S&P 500 just flashed a signal to the financial crisis, and it's insanely bullish for the stock market.

With QE infinity , the whole stock market has been reset on a bull run again for next decade !!!


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(25-04-2020, 10:42 AM)Curiousparty Wrote: https://www.ccn.com/the-stock-market-is-...y-bullish/

The surging S&P 500 just flashed a signal to the financial crisis, and it's insanely bullish for the stock market.


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Why not? This proved that the US can and will pass all these bonds (losses) to the rest of the World. Transfer of wealth but it is a reverse order. Pay a bit of interest and enjoy first! IOU, forever and ever and ever.

The market is expecting a V-shaped recovery. But it can only happen if economies restart and demand opens up, on the basis of a quick vaccine

The reality is that the lock down cannot last more than 2 months to have a permanent structural impact on demand and fiscal deficit, not to mention monetary policies as it dips into credit markets where losses are real. High unemployment with high fiscal debt and ZIRP are near wits' end if it doesn't resuscitate the patient. The other 3rd order impact is social unrest simply because people have to work to eat. If there is a second wave, which people are monitoring china, I doubt lock down will be viable anymore. It's a grim debate between deaths and the hardship of living; as a commentator remarked: the dead don't vote.

My expectation is the same that over longer term it has to be treated like a more deadly flu virus with low load community immunity as the goal. For example Germany and Sweden is moving towards that.

What most people don't realise is that despite the surge of the cases in Singapore due to extensive testing, the number in ICU did not spike as much. Migrant workers are mostly young; the bigger danger is in old folks' home which is already emerging in US. Like I mentioned before, if everyone is tested I'm pretty sure most countries are under declared, probably by factor of ~10, because only serious cases are tested

SG's mistake to be honest is to leave the causeway open after we knew the seriousness of the KL conference spread and proceeded to close down mosques. Half of Malaysia's confirmed cases is from that conference. And now people question the dorms when 1) we house a lot of those Malaysians in the dorms when they had nowhere to go 2) we arrested the Bangladeshi cluster back in Feb. The diff now is we decided to test everyone rather than the previous protocol of don't test and issue Quarantine to those close contact to confirmed cases (ie symptomatic)

Personally I think the market is too optimistic on the variability of the projections. Indeed this war is going to last longer than 2020. My only hope is that summer will prove effective in curbing the spread

(26-04-2020, 11:29 AM)specuvestor Wrote: The market is expecting a V-shaped recovery. But it can only happen if economies restart and demand opens up, on the basis of a quick vaccine

The reality is that the lock down cannot last more than 2 months to have a permanent structural impact on demand and fiscal deficit, not to mention monetary policies as it dips into credit markets where losses are real. High unemployment with high fiscal debt and ZIRP are near wits' end if it doesn't resuscitate the patient. The other 3rd order impact is social unrest simply because people have to work to eat. If there is a second wave, which people are monitoring china, I doubt lock down will be viable anymore. It's a grim debate between deaths and the hardship of living; as a commentator remarked: the dead don't vote.

My expectation is the same that over longer term it has to be treated like a more deadly flu virus with low load community immunity as the goal. For example Germany and Sweden is moving towards that.

What most people don't realise is that despite the surge of the cases in Singapore due to extensive testing, the number in ICU did not spike as much. Migrant workers are mostly young; the bigger danger is in old folks' home which is already emerging in US. Like I mentioned before, if everyone is tested I'm pretty sure most countries are under declared, probably by factor of ~10, because only serious cases are tested

SG's mistake to be honest is to leave the causeway open after we knew the seriousness of the KL conference spread and proceeded to close down mosques. Half of Malaysia's confirmed cases is from that conference. And now people question the dorms when 1) we house a lot of those Malaysians in the dorms when they had nowhere to go 2) we arrested the Bangladeshi cluster back in Feb. The diff now is we decided to test everyone rather than the previous protocol of don't test and issue Quarantine to those close contact to confirmed cases (ie symptomatic)

Personally I think the market is too optimistic on the variability of the projections. Indeed this war is going to last longer than 2020. My only hope is that summer will prove effective in curbing the spread

market is way too optimistic...

Gilead's highly touted drug seems to be useless.
https://www.bloomberg.com/news/videos/20...rial-video

I suspect other known drugs being trialled and repurposed for covid will fail miserably too.

Given that we know with adequate testing the fatality is about 0.5-1% (this is assuming ICU facilities are not overwhelmed)
There really are only 2 options which i believe govs will gravitate towards finally.

1) Like USA and much of Europe(italy/spain/UK good examples) -> dont really care and let it spread like wildfire then have no choice but to do damage control and lock down entire cities when hospitals get overwhelmed and death rates spiral out of control to thousands dead daily. In which case they will have to print tons of money and economy still goes into a recession. Then reopen the economy in stages once things under control --> likely this will lead to a prolong period of stagflation.. Like in Wuhan we can see they have restarted somewhat with universities still closed and people still having the shadow of the virus hanging over all their activities.

2) Successfully shut down the viral spread like in NZ/Taiwan/South korea/Hongkong and even what looks like Australia becoming successful through lockdowns. this is more practicable in small island nations which can secure their borders. Once they have very very low cases, they can do random community testing to confirm this and implement effective virus tracking apps to quickly track and isolate any potential hotspot. Of course some form of community social distancing will still need to be maintained until either vaccine comes or the virus just dies out locally.

In any case, the solution will be extensive social distancing and bans on large social gatherings at community events like religious ceremonies or concerts or sports games for an extended period of time to allow the virus to slowly work its way through the population. 

Vaccine in 1 or 2 years time is really OVERLY optimistic. SARS since 2003 -> 43 vaccine candidates all failed. MERS-COV also some research continued from SARs in 2013 period and still no vaccine. 

Summer is not going to help as this is not seasonal flu. Lots of equatorial countries like Indonesia is getting it bad. Main thing is population density i reckon. If you can socially distance and let people have space it wont spread so fast.

There will be a second wave of spread in any nation that tries to reopen their economy without implementing some form of social distancing rules as well as protective equipment and screening at work places. 

IMHO we should see another big drop in stock markets over next half year as the viral impacts get priced in from 1Q and 2Q and as more vaccine and drug trials fall apart, i expect the virus spread ramps up in big population nations like USA/South America/Indonesia/India causing massive death toll as well. There might at the end of the year be at least a contraction of 1% in human population which will not be good for global economy. The stock market drop will then become a credit crisis for banks as property and other bubble assets fall apart globally.

V shape? Looking more likely a prolonged decade of recession is coming for the global economy.

the negative oil prices failed to crash the market last week...

the 26mil jobless figure again failed to crash the market last week...

what is pleasantly surprising was that FEDs moved in very quickly this time round to cut interest rate to ZERO, implement QE infinitely, buy ALL bonds (government & corporate).

all these monies will eventually find their way into the stock markets! Who can go against the FEDs and their money printing machines???!!!

Whether it is V shaped , U shaped or L shaped , FEDs will do whatever it takes to prop the economy . Are we brave enough to bet against this money printing machinery of FEDs ?