Daily Digest 4/27 – Making Sense Of The Stock Market, What 5 Models Say the Next Month Will Look Like

Economy

What 5 Coronavirus Models Say the Next Month Will Look Like (Adam)

These models use different techniques to project the future. But most of them share an important basic assumption: They are built around the notion that the current regimen of stay-at-home orders and social distancing will continue. And almost all of them cut off their predictions after two months or less, even though epidemiologists believe that the coronavirus pandemic will be with us for far longer.

Making sense of a stock market just 16% off its high while a pandemic costs 26 million jobs (Adam)

Cantor Fitzgerald strategist Peter Cecchini last week argued, “The equity market just isn’t getting the joke. Three factors make this rally appear somewhat ridiculous because the likely extent of the slowdown will be severe relative to historical experience for three reasons: 1) a pandemic whose duration is unknowable, 2) an oil shock whose impacts on earnings will be deflationary, and 3) an already fragile economy as indicated by an inverted yield curve and already contracting loan volumes.”

Economic damage from the coronavirus is hitting the lowest level of wage earners hardest (Roger B.)

In a paper released a few days ago, they projected final demand in food, leisure and hospitality to drop by 75%. In all, they project consumer spending to fall an average of 3% but consumption to slide by 5% in the bottom income rung. That tells some of the story about the consumer impact, but “perhaps more important, these consumption declines are deeply unequal — hitting those living in areas of highest financial distress the hardest,” the economists said.

How Shutdowns Will Keep Killing The Economy, Even When They’re Over (CleanEnergyFan)

This problem has a name: “regime uncertainty.” Economic historian Robert Higgs defines it as “a pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights.”

Broadly understood, of course, “investing” isn’t just a matter of people putting money in mutual funds or buying municipal bonds. “Investors” are people who buy and manage apartment buildings. Investors include doctors and dentists who invest enormous amounts of time and money into a private healthcare office. Investors are people who put their life savings into starting a new restaurant or tavern.

“Immunity passports” in the context of COVID-19 (Adam)

WHO has published guidance on adjusting public health and social measures for the next phase of the COVID-19 response. Some governments have suggested that the detection of antibodies to the SARS-CoV-2, the virus that causes COVID-19, could serve as the basis for an “immunity passport” or “risk-free certificate” that would enable individuals to travel or to return to work assuming that they are protected against re-infection. There is currently no evidence that people who have recovered from COVID-19 and have antibodies are protected from a second infection.

El-Erian Says Fed Buying Stocks Will Lead to ‘Zombie Market’ (Herman J.)

Mohamed El-Erian, chief economic adviser at Allianz and a Bloomberg Opinion columnist, discusses the impact of the Federal Reserve’s stimulus efforts on markets and the likelihood of defaults in Europe and emerging markets.

Unicorn Companies Account For High Number Of Layoffs (Adam)

The industries most impacted for this cohort are in food, real estate, transportation and travel. However, job losses are not limited to just a few sectors. Other industries represented are in fitness, aerospace, recruiting, logistics, finance, marketplaces, construction, data, marketing and more.

The ‘Undertaker Of Silicon Valley’ Stays Busy As Startups Lay Off Thousands (Adam)

That zero-sum approach is now being reimagined as the coronavirus pandemic, which has spared no industry, rips across the technology sector.

Now, with cash reserves drying up and investors scarce, tech startups have put their business plans on ice. Hundreds of startups have shed workers. Other firms have had to fully liquidate.

New UW Medicine clinical trial to treat COVID-19 outpatients with hydroxychloroquine (Rhonda B.)

“We are trying to treat the symptoms of COVID-19 and to prevent the complications of needing to go into the hospital. By treating early, the study is a bit different than other studies than in the media –where many times they are already treating patients in the hospital and are very sick. So, our goal is to see if we can interrupt that process by treating earlier,” said Dr. Christine Johnston, the co-investigator with the UW Medicine clinical trial.

Usefulness of Ivermectin in COVID-19 Illness (Ryan B.)

Results: The cohort (including 704 ivermectin treated and 704 controls) was derived from 169 hospitals across 3 continents with COVID-19 illness. The patients were matched for age, sex, race or ethnicity, comorbidities and a illness severity score (qSOFA). Of those requiring mechanical ventilation fewer patients died in the ivermectin group (7.3% versus 21.3%) and overall death rates were lower with ivermectin (1.4% versus 8.5%; HR 0.20 CI 95% 0.11-0.37, p

Is Quercetin a Safer Alternative to Hydroxychloroquine? (Fram Petit)

Seventy-five COVID-19 patients at 16 Chinese treatment centers received 1,200 milligrams of hydroxychloroquine in addition to standard of care for the first three days of treatment, followed by a maintenance dose of 800 mg per day for two weeks in mild to moderate cases and three weeks for severe cases. Another 75 patients received standard of care only.

The Coming De-Urbanization Of America (CleanEnergyFan)

We will get through this crisis in a year or two. But we have no guarantee that additional pandemics aren’t waiting for us further along in this decade, or the next one, or the one after that. Maybe we’ll be lucky and the fudging-the-numbers-slightly meme declaring that we face a terrible plague once a century, in years ending in ’20, will turn out to be right.

Tens of thousands descend on beaches amid Southern California heat wave (Sparky1)

Orange County is the only county in the area where beaches remain open, as counties north and south of it have shut down their public spaces in the fight against the coronavirus pandemic. California Governor Gavin Newsom has temporarily closed some of the state’s parks and beaches to the public, and closed vehicle access at all 280 state parks. People aren’t restricted from going to beaches that remain open under the states stay-at-home order issued back in March.

Reports to U.S. Poison Control Centers: How many people rely on Poison Control each year? (newsbuoy)

Across all ages, there were 631 poison exposures reported per 100,000 population. The highest incidence occurred in one- and two-year-olds (7,189 and 6,936 exposures/100,000 children in the respective age groups). For ages 50 years or older, 250 exposures were reported per 100,000 population.

Mortgage bailout balloons by half a million more loans in one week (Sparky1)

On Wednesday, the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, announced the servicers would be bound to make these payments for 4 months. Fannie Mae usually requires payments be made for up to a year. Regardless, servicers of GSE-backed loans could still face more than $7 billion in advances, given the number of loans in forbearance thus far. Some said the move is not enough help for servicers.

According To CDC Data, It’s NOT COVID-19 Coronavirus That Is Causing All The Severe Lung Deaths (Peter S.)

In the next graphic (below) the top chart indicates mortality from pneumonia and influenza only for 2016-2020 with a dramatic up-spike (red line) in early 2020. The bottom chart displays data for total deaths from COVID-19 coronavirus in addition to pneumonia and influenza for Oct. 2015-April 2020 with a sharp increase in the third and fourth months of 2020 (red line). When both charts are compared, it is obvious that the reported increase in deaths is largely due to pneumonia or influenza, not COVID-19.

Whistleblowing ER Docs Urge “Open Up Society Now” Because “Lockdowns Are Weakening Our Immune Systems” (reader)

Nobody talks about the fact that coronavirus lives on plastics for three days and we’re all sheltering in place. Where’d you get your water bottles from? Costco. Where did you get that plastic shovel from? Home Depot. If I swab things in your home I would likely find COVID-19. And so you think you’re protected. Do you see the lack of consistency here? Do you think you’re protected from COVID when you wear gloves that transfer disease everywhere? Those gloves have bacteria all over them. We wear masks in an acute setting to protect us. We’re not wearing masks. Why is that? Because we understand microbiology; we understand immunology; and we want strong immune systems. I don’t want to hide in my home, develop a weak immune system, and then come out and get disease.

The Daily: A Glut Of Oil (jdargis)

Something weird happened last week. It was something that millions of people who have faced years of painful prices at the gas pump never expected: The cost of a barrel of oil dropped into the negatives.

Today, we explore why this happened, and what it reveals about the state of the economy.

‘The food supply chain is breaking,’ Tyson says as plants close (Adam)

Tyson Foods, which employs roughly 100,000 workers, closed its pork plants in Waterloo, Iowa, and Logansport, Indiana, last week so that workers in those facilities could be tested for the virus.

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