Covid-19

[weijian]

Some interesting numbers/observations from a quant. We are probably past the worst case in terms of infections and have to get ready for secondary and higher order effects now.

Secondary and higher order effects have to be assessed probabilistically due to the real time feedback loops between what will happen and then how Gov policies respond to what "they think will happen". It is definitely not easy to discern all of them correctly. End of the day, if one is able to get it fully right, it is probably luck more than skill.

While no one hates timing the market, it is probably still more luck than skill for most of us. Ie. the odds are not on our side for doing that.

As the saying goes, the cure for high prices is high prices. So we invert that, and we will get the cure for low prices is low prices. A low price is the catalyst for the investor of businesses with conservative balance sheets and sound business models.

Continuing An Optimistic Assessment of COVID-19

https://alephblog.com/2020/04/01/continu...-covid-19/

[weijian]

Green shoots of recovery i would say?

CapitaLand sees encouraging signs of recovery in China

- Residential sales offices registered strong sales after reopening
- All CapitaLand malls in China shut during lockdown have reopened
- At least 80% of tenants in CapitaLand commercial and business park properties in China have resumed operations

https://links.sgx.com/FileOpen/News%20Re...eID=605082

[holymage]

Open letter from REIT Association of Singapore (REITAS) to MAS, IRAS, the Ministry of Finance and the Ministry of Law.

Seems to me that S-REITS are less incline to share the burden with their tenants, without financial assistance from the government. Could be good news or bad news depending on your point of view and time horizon. Copying selected passages here.

https://www.reitas.sg/wp-content/uploads..._final.pdf

Deferring the contractual rental obligations of our commercial tenants effectively transfers the cash flow constraints from tenant to landlord. A 6-month deferral of rent would essentially deprive the REIT of its predominant source of distributable income for up to 6 months. Even with the best of intentions, it is also not realistic to expect our tenants to accumulate 6 months of rent and promptly pay the landlord thereafter. As a result, significant strain is placed on the S-REIT's ability to service its own financial and operational obligations. Lower rental cashflow will also impact REITs’ quarterly GST payments. This financial stress is made more acute by S-REITS having to pay out 90% of their annual distributable income in order to qualify for tax exemption, resulting in minimal financial flexibility to absorb a cash-flow disruption of this magnitude.

We respectfully request our regulatory stakeholders, including the MAS, IRAS, the Ministry of Finance and the Ministry of Law to ensure that the spirit of the legislation is faithfully and equitably discharged, and to urgently review and implement measures to address the issues set out above. Such forms of intervention could include similar circuit breaker mechanisms for key regulatory and credit metrics directly impacted by rental deferrals, and a level of underwritten financial support from the government that is proportional to the deferment of rental income, which in turn is passed on to unitholders.

[karlmarx]

Because it is highly contagious, the spread of the virus will only be eliminated when either almost everyone has it, or almost everyone is vaccinated.

Since not all countries are doing 100% lockdowns to identify positive cases, the virus will continue to spread in those countries.

Countries with looser the lockdown mechanisms and weaker medical response systems will hence take a longer time to clear the virus completely. The longer it takes, the greater the damage to not only the country's economic productivity, but also the other economies which it trades with.

And until the virus is completely eliminated, borders cannot be re-opened to international travel, as that may (quickly) re-introduce the virus to a 'virus-free' country. LHL's 1 year or longer time frame for recovery from virus seems realistic.

China has a 1.3b population but its domestic economy is not able to sustain the kind of growth rates it expects. Until US and EU return to full economic activity, Chinese exporters will continue to be hit. Which means Chinese domestic consumption will remain weak.

[Behappyalways]

No real lockdown in European nations, says China's top respiratory expert
https://www.youtube.com/watch?v=aeep3oRQ850


八点最热报 05/04/2020 居家隔离令当耳边风？ 英国民众外出享受阳光
https://www.youtube.com/watch?v=hehuYl9ODBM

[holymage]

Didn't expect this to be the reason behind advertising withdrawals. Didn't expect "Trump" to be so influential either. In the coming 2 quarters and beyond, we will get to see how negative operating leverage works in the favour of advertising platform giants.

The coronavirus pandemic has inspired an unprecedented surge in news readership. But it hasn't created a concurrent surge in advertising revenue — starving news organizations of the resources they desperately need in a time of crisis. Advertisers are pulling back what they are spending, and refusing to allow their ads to be placed next to stories that report on the pandemic.

Fears that its ads would appear next to news stories about the coronavirus pandemic led one major global brand to drastically reduce the number of digital ads it placed on the websites of the New York Times, CNN, USA Today, and the Washington Post in March, according to internal data obtained by BuzzFeed News. In total, more than 2 million ads were blocked from appearing on these sites in the first three weeks of the month.

Many advertisers use lists of sensitive or controversial keywords to avoid placing ads — and spending their ad dollars — adjacent to content they consider unsafe for their brands. But the addition of coronavirus-related terms to these keyword blacklists has choked off revenue as publishers struggle to capitalize on soaring audiences amid catastrophic revenue declines.


Coronavirus is now the most-blocked keyword in the IAS system, recently surpassing “Trump.” As of the middle of March, the system had over 3,000 advertisers blocking the term "coronavirus," according to a company spokesperson. IAS blocked 1.36 billion ads so far in March, up from 64 million in February.

https://www.buzzfeednews.com/article/cra...re-than-35

[url=https://www.buzzfeednews.com/article/craigsilverman/news-sites-need-ads-to-survive-the-coronavirus-more-than-35][/url]

[tanjm]

Some interesting numbers/observations from a quant. We are probably past the worst case in terms of infections and have to get ready for secondary and higher order effects now.

Secondary and higher order effects have to be assessed probabilistically due to the real time feedback loops between what will happen and then how Gov policies respond to what "they think will happen". It is definitely not easy to discern all of them correctly. End of the day, if one is able to get it fully right, it is probably luck more than skill.

While no one hates timing the market, it is probably still more luck than skill for most of us. Ie. the odds are not on our side for doing that.

As the saying goes, the cure for high prices is high prices. So we invert that, and we will get the cure for low prices is low prices. A low price is the catalyst for the investor of businesses with conservative balance sheets and sound business models.

Continuing An Optimistic Assessment of COVID-19

https://alephblog.com/2020/04/01/continu...-covid-19/

As someone who has done some modelling, let me tell you that measurement error and model parameters/factors are going to be real important sources of divergence. His graphs look waaaay too clean (measurement vs model) and he didn't state what his model was (and in fact, it is likely each country needs its own model due to nature of govt response and cultural and other factors). I'm not inclined to take any credence.

[weijian]

hi tanjm,
I think he updates his logistic curves with new information every time. So this is the reason why you see past data fitting nicely - Past data was used to derive the new parameters for the new logistic curve and hence give a new prediction curve for the future. One could jolly well imagine he is using some sort of "bayesian statistics" principle of updating the model with new information.

[BRT]

Didn't expect this to be the reason behind advertising withdrawals. Didn't expect "Trump" to be so influential either. In the coming 2 quarters and beyond, we will get to see how negative operating leverage works in the favour of advertising platform giants.

The coronavirus pandemic has inspired an unprecedented surge in news readership. But it hasn't created a concurrent surge in advertising revenue — starving news organizations of the resources they desperately need in a time of crisis. Advertisers are pulling back what they are spending, and refusing to allow their ads to be placed next to stories that report on the pandemic.

Fears that its ads would appear next to news stories about the coronavirus pandemic led one major global brand to drastically reduce the number of digital ads it placed on the websites of the New York Times, CNN, USA Today, and the Washington Post in March, according to internal data obtained by BuzzFeed News. In total, more than 2 million ads were blocked from appearing on these sites in the first three weeks of the month.

Many advertisers use lists of sensitive or controversial keywords to avoid placing ads — and spending their ad dollars — adjacent to content they consider unsafe for their brands. But the addition of coronavirus-related terms to these keyword blacklists has choked off revenue as publishers struggle to capitalize on soaring audiences amid catastrophic revenue declines.


Coronavirus is now the most-blocked keyword in the IAS system, recently surpassing “Trump.” As of the middle of March, the system had over 3,000 advertisers blocking the term "coronavirus," according to a company spokesperson. IAS blocked 1.36 billion ads so far in March, up from 64 million in February.

https://www.buzzfeednews.com/article/cra...re-than-35

[url=https://www.buzzfeednews.com/article/craigsilverman/news-sites-need-ads-to-survive-the-coronavirus-more-than-35][/url]

ya its quite interesting to see some effects of a world run by algos. having watched many youtube videos on covid topic, some original content providers are deliberately avoiding using covid related keywords in their titles and videos as they would get less revenue per view. creative game of taboo as they go around the topic with "the thing going around", "the condition", "the outbreak" etc.

[soros]

The latest figures of deaths due to virus posted on worldometer website on 8 April (5 April )( 2 Apr 2020 ) ( 29 Mar ) (26 March ) ( 24 Mar 2020 ) are :

Italy : 17,127 (15,362 )( 13,155 )(10,023 )(7,503 ) (6077)
Spain : 14,040 (11,947) (10,003 ) (6,528 )(4,089 ) (2696 )
Iran : 3,872 ( 3,452 ) ( 3160 ) (2,640 )(2,234) (1934)
France : 10,328 (7,574 ) ( 4,032) (2,317)(1,331 ) ( 860 )
USA : 12,857 (8496 ) (5,115 ) (2,488 )( 857 ) ( 525 )
UK : 6159 ( 4,320 ) ( 2,921) (1,021 ) (422 ) (335 )

All above figures are still rising. USA death toll up 51% from 3 days ago.