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Chart #1
In Chart #1 we see that the Vix hit a peak of 80+ last Thursday, whereas stocks have fallen further since then, This is not an all-clear signal, but it is somewhat reassuring. Panic is subsiding, and concrete solutions are being implemented.
Chart #2
Charts #2-4 show what is arguably the best measure of equity market capitalization. Note that this calculation comes from Bloomberg, and it excludes ETFs and ADRs in order to avoid double-counting (it is also in dollar terms). Note also that although the current crash has been extremely rapid and steep, it is still noticeably less, on a percentage basis, than the financial market disaster of 2008-2009. Back then the world feared the collapse of global financial markets and a global depression. At one point in late 2008, one Wall St. firm calculated that credit spreads were priced to the expectation that something like 25-30% of all US corporations would be out of business within a few years. We are NOT talking about that kind of destruction this time, thank goodness. This virus is almost certainly not going to wipe out a huge chunk of the world's population.
Chart #3
Chart #4
UPDATE: I highly recommend this letter from the Association of American Physicians & Surgeons to President Trump, dated March 21st. Very impressive and encouraging!
UPDATE: as of 12:30 EDT. My forecast above that "we'll see the bottom in stocks sometime in the near future" looks to be coming true just two days later. Here's an updated chart:
Chart #5
60 comments:
>"there are now quite a few therapeutic drugs available".
This is not correct. What is true is that there are a few publications with promising results using existing therapeutics. Even in normal times, there is a publication bias for positive results. Most of these are never replicated. Experts who understand drug development and medical literature do not agree with your statement.
I'm not saying it isn't a promising line of research.
(Think about it this way: If 20 labs test an existing drug, then 1 is likely to see a significant effect at p < 0.05 by chance. What happens unfortunately is that the 1 lab publishes and the 19 others either never publish or do so much later.)
Thanks for the update Scott. With initial claims fore-casted by more than one source to be in the millions and firms like Goldman Sachs forecasting huge GDP contraction of some 25%, it's reassuring to see the market not close down towards or above circuit breaker level. The slightly tighter swings are reassuring to me at the moment.
So just maybe we have priced in some of these huge negative possibilities. Even if we drift lower towards -50% it would be nice to have more moderate swings in the equity market.
Hat tip to Jim the Realtor at bubbleinfo.com
https://www.bubbleinfo.com/2020/03/23/could-we-have-a-quick-recovery/
https://www.bubbleinfo.com/2020/03/23/serological-testing/
That letter from the Association of American Physicians & Surgeons to President Trump is mind-boggling.
I hope Scott Grannis' tempered optimism regarding markets and the economy is correct.
The sooner we go back to work, the better.
A person, a family, a tribe, a village or a nation cannot prosper for long without a lot of work.
That is the oldest rule of all.
Trump's presser today was magical.
Got the feeling that Donald, the businessman, is about to get impatient with the diminutive Doctor, and his efforts to shut down all of America. Great Depression is no good for our health.
Donald said this isn't going to go on for months. AMEN
Daddy has play along long enough. Trump picks his battles.
Best optimism Ive had yet about this insanity.
Baby Doc was a no show at the presser.
Maybe he was back home cooking pasta for Bono, learning about AIDS.
(Google that if you dont know what I mean.)
Friday, I was sad I bought. Today, I kinda like it.
"The Association of American Physicians and Surgeons (AAPS) is a politically conservative non-profit association founded in 1943. It is opposed to the Affordable Care Act and other forms of socialized medicine.[1][2] The group was reported to have about 4,000 members in 2005, and 5,000 in 2014.[3][4][5] The executive director is Jane Orient, an internist and a member of the Oregon Institute of Science and Medicine. AAPS also publishes the Journal of American Physicians and Surgeons (formerly known as the Medical Sentinel).
The association is generally recognized as politically conservative or ultra-conservative, and its publication advocates a range of scientifically discredited hypotheses, including the belief that HIV does not cause AIDS, that being gay reduces life expectancy, that there is a link between abortion and breast cancer, and that there is a causal relationship between vaccines and autism."
From the AAPS letter:
>Our capacity to manufacture antibiotics, vitamin C, protective gear, and most other drugs was outsourced overseas decades ago. Your Administration needs to investigate the reasons for this.
It's called The Invisible Hand, dunce. Either private owners or shareholders made more money doing that than they did manufacturing those things here. No need to investigate anything.
>Got the feeling that Donald, the businessman, is about to get impatient with the diminutive Doctor...
Mass American Graves Assured
From Marginal Revolution:
The Internal Contradictions of Segregating the Elderly
Some reason for optimism on the infection front. Italy's number of new infections went DOWN and US numbers are about flat over day before. This is due to QUARANTINE and testing. no time to stop now.
>Dow soars over 1,000 points at open on hope of a government deal...
Nope...there are no Austrians in a foxhole...it's all prayers to Lord Keynes...
->The Internal Contradictions of Segregating the Elderly
"There are two problems, even internal contradictions, with segregating the elderly and letting others return to work. The first is fairly well known. When you run the numbers, as the British did, you find that a lot of young people would die. If we return to work too quickly it could easily happen that 20-40% of the US population gets COVID-19. Suppose 20% of the population gets it–that’s 66 million people. And let’s suppose the death rate is on the low end because healthy, young people get it rather than the elderly, say half of one percent, .005, then we have 330,000 deaths of healthy, young people."
I don't pretend to be an expert, but I see a lot of skepticism that young healthy people will have a .005 fatality rate. No one has a good handle on the denominator. It's frustrating to see these arguments framed as undeniably factual and in fact conservative. Similarities to global warming where someone is a climate change denier if they don't completely accept the world is doomed because of un-provable projections 80 years out.
What is missing is certainty with fatality rate for people that are not otherwise health compromised. How can you get that rate without random widespread testing where some are positively exposed. And so it goes.
God Bless Donald getting us back to work!
Market loved hearing that last nite from him.
Rick Jones thinks its wonderful for China to manufacture 90% of our essential products like prescription medicine.
Thinks its a "dunce" idea to investigate safety, oversight, security and efficacy.
Given that the Communist Party of China threatened to withhold shipments to America 2 weeks ago, it might be time to bring essential services back home. America could use the work right now in the Fauci-induced Depression.
Might want to investigate who at FDA was paid off to allow such a situation.
Thank God that the AAPS was a strong opponent of ObamaCare. If there had been more rational people in government back then, we could have prevented its passage. We got steamrolled.
"Scientifically discredited" doesnt mean what Rick Jones thinks it does in these times of Fundamental Transformation.
"Science" has been hijacked for politics. Just look at "Climate Change".
Rick Jones wont be around later to defend his claim of mass graves from Chinese Coronavirus when it doesnt happen.
...just like all the doom & gloomers who blather on, and then disappear when their predictions never pan out.
Everybody pray that those little pills work as good as they appear to be! Hundreds of patients so far with perfect cure rate:
https://www.thegatewaypundit.com/2020/03/stunning-ny-doctor-vladimir-zelenko-finds-100-success-rate-in-350-patients-using-hydroxychloroquine-with-z-paks-video/
Dr. Bendavid and Dr. Bhattacharya are professors of medicine at Stanford. Neeraj Sood contributed to this article.
https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464
"If our surmise of six million cases is accurate, that’s a mortality rate of 0.01%, assuming a two week lag between infection and death. This is one-tenth of the flu mortality rate of 0.1%. Such a low death rate would be cause for optimism.
This does not make Covid-19 a nonissue. The daily reports from Italy and across the U.S. show real struggles and overwhelmed health systems. But a 20,000- or 40,000-death epidemic is a far less severe problem than one that kills two million. Given the enormous consequences of decisions around Covid-19 response, getting clear data to guide decisions now is critical. We don't know the true infection rate in the U.S. Antibody testing of representative samples to measure disease prevalence (including the recovered) is crucial. Nearly every day a new lab gets approval for antibody testing, so population testing using this technology is now feasible."
In my mind, the guesses above are just as much as guess as the "conservative" 0.5%. The larger point is it seems really important to find out what that number is. (I'm assuming 2 Stanford professors are not on the payroll of RNC...)
Go Johnny Bee Dawg!
Johnny Bee Dawg,
"Rick Jones thinks its wonderful for China to manufacture 90% of our essential products like prescription medicine."
You misunderstood. He was being cynical. He is saying this is the result of the free market/the invisible hand -- the exact same thing that this religious pseudo-scientific group is pushing for.
"Do not be deceived: God cannot be mocked. A man reaps what he sows."
The mindless push for opening up, for the free market, for less regulation, etc. has led to the fact that indeed 90% of our essential are not locally produced!
The mindless push for smaller government has led to the fact that the entire pandemic team including our man in the epicenter was dismissed!
"Do not be deceived: God cannot be mocked. A man reaps what he sows."
YOU are now sowing the seeds of ignorance and denial. God cannot be mocked.
The article referenced by Randy above is worth reading...and re-reading....
https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464
I am talking way out of school (what else is new?) but I noticed there was not a single death of the 1,100 drew members on Diamond Princess. They ate and lived in common quarters. Not quarantined from each other.
The elderly with co-morbidities appear at risk.
Good luck everyone. Our luck will improve when we go back to work. The oldest moral of all.
Johnny Bee Dawg wrote:
>Rick Jones thinks its wonderful for China to manufacture 90% of our essential products like prescription medicine.
LOL! Dude, in a certain sense what I wrote was a literacy test, and you failed. Now, let me 'splain it to you...
What I was pointing out was the hypocrisy of an avowedly conservative group complaining about the implications of the free market. Because that is why China is manufacturing so many of our critical parts and products: the Invisible Hand of the free market decided it was more efficient to make that stuff in China.
The Invisible Hand is just that: a hand. It has no brain, and hence no memory or imagination. It cannot remember past mistakes, nor can it imagine future problems. And so if owners or shareholders benefit today from outsourcing critical things to China, that's what they will do.
And that is exactly what they did. And now some free marketeers are very hypocritically complaining.
Just like so many free marketeers are hypocritically rejoicing in the Congressional deal that seems to be moving along. The Dow jumped over 2,000 points yesterday...the largest jump in history, I think I read somewhere. Why? Not because of some breakthrough miracle drug or some improved manufacturing process. It jumped because the government is one step closer to resurrecting Lord Keynes and implementing fiscal policies to save the Boeings of the world.
Having spent most of my adult life in the military, it saddens me to see so many Americans not realize the country is -- for all practical purposes -- undergoing a biological weapons attack that must be fought. And it saddens me to see such a lack of resolve in Americans to fight.
The Chinese and the Russians and the Iranians see this, too. They are taking notes, believe me. They see that we would rather give up the lives of our countrymen than give up our dividends and capital gains. And in some way, shape, or form they are all recalling what Lenin allegedly said -- "The capitalists will sell us the rope we use to hang them." -- and factoring that into their plans.
You take care, Johnny Bee Dawg. I will be reminding you of your posts as the spring and summer progress.
So...is this a Chinese biological warfare attack?
Well, there's a lawsuit going on in Texas that seems to say it is...
“COVID-19 was designed by China as a biowarfare weapon”, $20 Trillion Dollar Lawsuit filed against China in US District Court
If true, will we make the same mistake now that we made in Iraq back in 2003? That is to say, are we going to try to fight a war on the cheap while telling America to keep shopping at the malls (or, keep shopping online at this point)?
Rick, great points re free markets and China. Yah, all "free market" people jump into the government intervention mode every time a crisis pops up (well, except for John Tamny).
And Rick, thank you for your service.
Again, SUPER good infection numbers today. The worst may very well be over BUT this is no time for insouciance! Be careful out there people.
Alright, I would love to hear people's feedback on the prospect of bailing out businesses that have poured billions into buying back there own stock-especially the airlines. This is NOT free markets and encourages failure and CEO selfishness. The ONLY viable reason to buyback your stock is to reduce float which artificially improves per share earnings. Truly pisses me off.
Go ahead, kick me Benjamin, Scott, JBD.
> I would love to hear people's feedback on the prospect of bailing out businesses that have poured billions into buying back there own stock-especially the airlines.
I have said this in several other forums...
In the old model, shareholders and debt holders were supposed to assume the risk.
There is apparently a new model in which shareholders, debt holders, and taxpayers assume this risk in certain companies. Often these companies are deemed "too big to fail" or "too important to fail."
If taxpayers are going to assume the risk, it makes us insurers. And like all insurers, we should be able to set the premia for the things we are insuring.
I would be happy to make one of these the premium we charge:
1. Either we regulate such that no industry gets dominated by a small number of giants of such size that the economy cannot afford for them to fail, or...
2. We regulate them such that they must put aside [pick a number: 1, 2, 3, ...] years of operating revenue before they initiate share buy backs or special dividends or management bonuses, etc.
And I would certainly be open to variations on either of those, or even other options.
But the key thing is this: if taxpayers are going to be continually called upon to bail those assholes out because they don't have sense enough to prepare for a rainy day, then taxpayers should get some say in the relevant and appropriate operating rules and regulations.
I'd agree that efforts should be made to reduce the rent seeking, competition reducing, policy influencing, tax preferences, and heads I win, tails you lose executive compensation that very arguably has gone way too far - as business has become more financial engineering than operational and innovation competence. Banks in particular off loading risk to tax payers. These are the real things that contribute to real inequality that tarnishes capitalism. And very much risks undermining support for the economic conservative philosophy, enabling the AOCs of the world to gain traction.
What is reasonable when extending taxpayer support? Yes, limiting buy backs; perhaps executive compensation; insisting on stronger worker support (sick and family care leave, health benefits, etc); sure, perhaps minimum wage (exempting some businesses where it's counter productive).
What's not reasonable? Green energy mandates; quotas for diverse boards; piggy-backing election "reform" riders, etc.
Roy...having a small government who protects individual liberty is the exact opposite of “mocking God”.
The exact opposite.
Re buybacks: To quote from John Cochrane, "Share buybacks and dividends are great. They get cash out of companies that don’t have worthwhile ideas and into companies that do." (read the whole thing here: https://johnhcochrane.blogspot.com/2018/04/buybacks-full-oped.html#more). It's that simple. If a company doesn't have compelling investment opportunities, it would be foolish for them to sit on a mountain of cash. They should give it back to shareholders in the form of buybacks which increase the share price. The shareholders then have the option of keeping the shares or selling them and reinvesting in better opportunities. To attempt to restrict buybacks is utterly foolish. Also, the government has no business dictating limits on compenstation. If a company is paying its execs too much, the market will punish its share price. Let the market figure these things out, not politicians! Ditto for minimum wages; don't mess with compensation.
Hopefully the optimists will reinvest with abandon. The markets will eventually recover and the DJIA will no doubt achieve new records at some point. Be fearless! Return all cash to stocks and bonds now. In the mean time, I'll be watching from the sidelines...
Scott Grannis wrote:
>Let the market figure these things out, not politicians!
Sure. But then let the shareholders and debt holders pay for management's decisions, not the taxpayers.
I say again...
IF the taxpayers are going to be providing insurance for these companies...
THEN the taxpayers get a say in how these companies are regulated.
It's a simple conditional statement. Do you agree with that, Scott?
"If a company is paying its execs too much, the market will punish its share price."
Is there any evidence this is so? Excessive compensation tied to equity with little downside risk to the executive is a hazard. Board oversight is generally a joke. The only place we do see pressure is from some activists like CALPERS. Of course now they are just as interested in the "green" score and board diversity as they are compensation.
"Let the market figure these things out, not politicians!"
My problem with that is there are clearly structural and political advantages that lead to forms of rent seeking, which combined with loss of middle class wage opportunities (due to globalization and automation) are exasperating the unrest of larger parts of the populace. I'm afraid by failing to recognize that, and engaging in some self-policing, we are going to get a majority of voters that no longer believe - and we'll get more Sanders.
To plagiarize from a column in National Review recently about the ideas of Sen. Josh Hawley: "This attention to the common good would mean not a surrender to socialism but rather a way of averting it. In the United States, the socioeconomic disruptions of the high neoliberal era have done more to advance the cause of socialism than have a thousand radical broadsides. Providing a greater sense of economic security could help deflate more revolutionary projects."
I love your FREE MARKET speech there Scott. But where is it as the federal government is bailing out the airlines and others who buy back stock? NO GOVERNMENT ie TAXPAYER bailouts. How can you espouse one and not the other?
I'll always be against government regulation of business' ownership structure and compensation policies. If for no other reason than the fact that politicians and regulators are highly unlikely to make smarter decisions than private sector actors who also have skin in the game.
I'm generally against bailouts also. Perhaps the only time a bailout is justified is now, because the government put the economy in lockdown mode. Some businesses (airlines, restaurants, hotels) are inordinately and very negatively affected by this arbitrary decision. Those same businesses are an essential part of the economy. Do we want them all wiped out?
Bailing out these industries (mostly through loans) is essentially equivalent to making all of us subsidize the disadvantaged. Think economy-wide charity.
And who is it that pays the vast majority of the taxes that will eventually pay for these bailouts? The upper 20% of income earners. From that perspective, this bailout is a progressive's dream.
<>
That's a good and important point. We won't read that in the NYT.
"It's that simple. If a company doesn't have compelling investment opportunities, it would be foolish for them to sit on a mountain of cash."
So, a CEO has two options:
1. Invest the cash the company has now, with a long term view of 10 years.
2. Buyback shares now, so share price goes up and he personally gets a bonus.
It's all about incentives.
I've been investing for years and following companies and this is an obviously rhetorical question. Most CEOs aren't that great capital allocators, for sure are not looking 10 years forward and would buy back shares if they benefit from it personally or get pressured from current shareholders.
Also:
So Waren Buffett is foolish?
Apple should go and buy shares with its 200 billion?
Google are idiots for sitting on cash?
Cash is optionality.
Bottom line: *in theory* share buybacks are a fantastic tool. *in practice* due to human behavior and capabilities it is often abused and misused.
Boeing should not get a bailout because they completely failed with their products. This was shown before all of this started. Right?
All the managerial layer should be fired due to lousy capital allocation: instead of spending on better quality control and R&D, they bought back shares of a company with faulty products. If they were managing a fund, they would be at 0 right now. Right?
Great. We agree. The company now BKs and shuts down.
No worries.
We don't have to buy Boeing planes anymore. Thank God there's China, let's buy their airplanes. It's a great free-market after all! Cheaper too! Also, make sure there are no big government regulation on the safety of planes and all that nonsense, it would just increase prices.
Thank God for the private sector who is always better than anything else.
"Bailing out these industries (mostly through loans) is essentially equivalent to making all of us subsidize the disadvantaged. Think economy-wide charity."
It's a charity for YOU as well.
Why? Because you own Apple (or did). Who exactly is going to buy Apple products if they cannot afford their rent, or food or have any jobs at all?
How many in that top 20% own equity that would have gone to 0 without this bailout?
Charity.
And on a second note, yes, this follows a government order but let's not delude ourselves. Many companies are really bad in the shits because of mismanagement and lousy capital allocation. If it weren't this it would have been something else.
Rick Jones thinks that government forcing millions of businesses to close is an example "free market" capitalism.
Rick, when you are "reminding me" of my posts this Spring and Summer, I hope you wont forget the one where I bought stocks last Friday. We can reminisce about that, while we talk about your predictions of mass graves.
"Johnny Bee Dawg said...
Roy...having a small government who protects individual liberty is the exact opposite of “mocking God”.
The exact opposite."
When one refuses to acknowledge the consequences of their own actions and makeup excuses it's "mocking God". You reap what you sow. You don't vaccinate your kids? Well, they might die. Worse, you might cause a pandemic like we had many years ago. You don't want to apply limits on the markets? Well 90% if your essentials might be produced abroad. You remove the people responsible for handling pandemics in the name of the omnipotent "small government who protects individual rights?" Well, you might cause a pandemic and the people you care about might die. When you do not recognize that, you mock god.
On a side note: in order to prevent an outbreak from turning into a pandemic, you need a group of people, a system in place that catches it from the first moment, before the outbreak turns into a pandemic. This means that for years, you might have this team in place, being paid like they're doing nothing.
P.S. you know what might happen if the system really collapses due to a pandemic? You might get a government of 1. Tiny little government. You know what you can do with your liberties then, right?
Scott Grannis wrote:
>And who is it that pays the vast majority of the taxes that will eventually pay for these bailouts? The upper 20% of income earners.
That's such a red herring, Scott. Very disappointing. I would expect something like that from Johnny Bee Dawg, but not from you.
Again, a simple conditional:
IF taxpayers are going to be providing insurance for companies and industries,
THEN should taxpayers get a say in how these companies and industries are regulated?
I have a serious question for Scott and those with similar points of view.
Let's say we get a very small government and then the rest is up to the private sector.
Can the private sector protect itself and the economy from external large markets that have extremely large governments and concentration of power? What if that external economy is as big as the size of our private sector? Let's say that the external economy decides to focus its power, money and people on sector A. This leading to: very cheap products in this sector. Naturally, this sector dies locally for us. Apply this to ten other sectors and so on. What is the private sector going to do exactly? Would the private sector have any incentive to maintain a dying loser sector just because our lives or progress might depend on it in the future?
What about capital inflows? What can the private sector do about that?
And, what about pandemics, where an outbreak can turn into a pandemic in zero time. Like, how would it work exactly with the private sector? Everyone here keeps saying it's all the big government fault. Can some show how it would work better with a private sector in charge? Thanks.
Johnny Bee Dawg wrote:
>Rick, when you are "reminding me" of my posts this Spring and Summer, I hope you wont forget the one where I bought stocks last Friday.
No Dawg, I won't forget. I remember quite clearly when you announced it:
>Like an idiot, I bought more stocks this week.
Hard to forget that, Dawg. LOL!
But here's the thing...if you want to crow later on down the pike about what a wise and wonderful thing that was, you need to tell us (a) what stocks you bought, and (b) when you get out.
You don't need to tell us the particulars, like how many shares or how much money was involved. But you do need to be more specific than "stocks." Give us some ticker symbols and let us know when you close out your positions. Then we'll know how wise and wonderful are.
Cheers!
Rick, according to JBD he is prescient. You should know that by now.
Scott, respectfully it seems to me you're a libertarian UNTIL business need to be bailed out due to their own myopia and then you magically turn into the thing you hate the most, Keynesian.
@Steve,
>Scott, respectfully it seems to me you're a libertarian UNTIL business need to be bailed out due to their own myopia and then you magically turn into the thing you hate the most, Keynesian.
Let's be fair, Steve, it's not just Scott. So-called libertarians all over the Internet have been throwing up the white flag of surrender. There is now a new version of Psalm 23 in formerly-libertarian circles:
LORD KEYNES is my shepherd; I shall not want.
He maketh me to lie down in calm markets: he leadeth me beside the still VIX.
He restoreth my wealth: he leadeth me down the paths of government spending for his name's sake.
Yea, though I walk through the valley of the shadow of economic slowdown, I will fear no recession: for thou art with me; thy fiscal policies and thy deficit spending they comfort me.
Thou preparest a bailout before me in the presence of the Austrians: thou anointest the markets with cash; my portfolio runneth over.
Surely wealth and prosperity shall follow me all the days of my life: and I will dwell in the house of LORD KEYNES for ever.
Amen.
Steve: you are claiming I am "prescient" because I posted on Friday that I bought stocks that day.
Being "prescient" is not a claim I have ever made, but thank you, nonetheless for the compliment.
I buy when risk/reward indicators get washed out, and begin to improve.
I just follow what the supply/demand indicators show, rather than predicting anything. History of market behavior is my only guide.
I like to buy when fear indicators peak out, and message board commenters make panic posts non-stop.
Public bearishness has always been a good indicator.
Indexes went lower Monday, but the indicators did not. That divergence was a good sign.
We will have to see if there is any follow thru next week with increased trading volume.
Will need to see confirmation.
Time will tell.
Now just imagine if the virus doesnt actually kill millions of Americans like the media tells us non-stop.
Imagine things turn out better than expectations.
We will just have to see.
>Steve: you are claiming I am "prescient" because I posted on Friday that I bought stocks that day. Being "prescient" is not a claim I have ever made, but thank you, nonetheless for the compliment.
Oh...my...God...
I'm 70+, own a business with 5 employees, revenue that will be down ~30% for at least a month; I still work every day, am paid less than any of my employees, and I am worried a lot more about the US economy than about COVID-19. We cannot keep this nation on lock down. We must produce. If we don't get back to work, we're going to dig a much deeper hole than what COVID-19 will cause. Our former governor, Rick Scott, had a theme, "Let's get to work." That's the same theme as "Make America Great Again." Now, let's bring manufacturing back to the USA.
Rick Jones has now suddenly turned religious.
The virus hasn't done a thing to the USA that the normal seasonal flu doesnt do.
The government has smashed us nearly into a Great Depression, however.
At some point, We The People are going to have to decide how we want to balance these things.
GOP is pushing for giving taxpayer money to companies REGISTERED OFFSHORE.
GOPS does not want to spend money on medical equipment because after the epidemic we might be left with a surplus.
What the actual f*** is wrong with you people.
How can Christian people think like this?
What happened that completely corrupted our minds and soul?
@WealthMoney...
>Now, let's bring manufacturing back to the USA.
Can't do that, sport. Ask Scott. The free market dictates that production will get located where it is most efficient, and that has been offshore. Absent government intervention, production will remain offshore unless it becomes more efficient for it to be located in the U.S.
Here's an interesting article about how there are plenty of eggs in England, but no eggs on the supermarket shelves. Why? Because egg cartons are made elsewhere:
Liebig's Law Writ Large
Lenin allegedly said something along the lines of, "The capitalists will sell us the bullets we use to shoot them." And in a certain sense, that's exactly what we've done: by putting profit above all else, we've created an efficient but very non-resilient economy that is having a difficult time withstanding shocks because too much of the supply chain is located "somewhere else."
@Roy...
>GOP is pushing for giving taxpayer money to companies REGISTERED OFFSHORE.
I don't know if Republicans were pushing or not, but whatever the case, I don't think it happened. According to the Washington Post...
Language in the bill passed by the Senate says companies must be certified as 'created or organized in the United States or under the laws of the United States' and have a majority of employees based in the United States.
And according to the same paper, Democrats were pushing for non-virus related things like "diversity on corporate boards."
So bottom line: politicians will be politicians, be they Republicans or Democrats.
One fact remains certain and without argument; covid 19 is spreading unabated across the country with no end in sight. My computational biologist son believes we have reached the point of no return which is to say without vaccination there is NO WAY to stop this thing short of total shutdown which realistically will not happen.
Notice I said nothing about death rates. Also, children under the age of 15 or so are almost completely impervious. Roughly 5% of covid cases require hospitalization. Contrary to popular belief some young people are getting very sick and require ICU care.
The numbers are daunting. By Easter, we will probably have 250,000 or so active covid cases that are diagnosed. No doubt far more UNdiagnosed. By the end of April we could very well have 1M cases.The death rate is the US has actually been going UP not down.
I don't see how we can go back to "business as usual" anytime soon. I just don't see it. I will the first to admit that stocks seem to be shrugging off the worst. For the sake of my five kids I hope that continues and that I am somehow proven wrong.
@Steve:
>...stocks seem to be shrugging off the worst.
This is just a sugar high. It's a knee jerk response to the stimulus. At some point the market fundamentals will need to kick in. If yesterday's unemployment figures are any sort of proxy for how business in general is doing, I doubt this week's spike will last long. Especially in conjunction with the Covid 19 rates you've cited.
"And who is it that pays the vast majority of the taxes that will eventually pay for these bailouts? The upper 20% of income earners."
I'm pretty sure the reason for that is the VAST MAJORITY of income goes to the upper 20%.
I'm also pretty sure that wasn't the case in the 1950's and 60's when America actually was great, when the rest of the world was borrowing money from us, and we had a strong middle class.
We can all make our own judgement as to whether the country as a whole was better off then or now.
@Roy:
>Can the private sector protect itself and the economy from external large markets that have extremely large governments and concentration of power?
The answer to that is playing out right now in the oil market.
Our private companies must compete with state-controlled oil companies, to wit, Saudi Arabian and Russian oil companies. And look what's happening: The Saudis and Russians are in an oil war, so to speak, and American producers are getting clobbered. Scott was almost in tears over this last week. It's not a level paying field by half.
Along with the lack of resiliency that we're seeing in the economic systems of certain countries right now, e.g., England and its egg problem, this thing with the oil points out another fatal flaw in the libertarian economic model. The libertarian economic model only works on paper when all assumptions are met. As we can see just by looking around, it's failing miserably when those assumptions unravel during a large enough crisis.
In my opinion, the $2 trillion dollar "stimulus" bill is really just a bailout for companies. Moreover, the $1,200 payout to lower income taxpayers is just a bribe to win over the masses. I am against this bailout. The dollar is being devalued right in front of our eyes.
PS: Watch for a series of follow up bailouts to emerge. I would not be surprised if the US takes on $6-10 trillion in new national debt in the coming decade. The world of open markets has ended. I more terrified of big government Democrats and military-industrial Republicans than ever. The horror of this bailout is beyond my imagination.
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