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Actually, this is an approach being discussed by the scientific community. The only way to proceed, until a vaccine is available, is to cycle through lockdown periods. In between lockdown periods, case counts will rise, herd immunity will slowly build up, and hospitals will start to be overwhelmed. That will be a signal to enforce the next lockdown until cases drop off. Rinse and repeat. Actually not too different from stock market cycles except that it will be on a compressed timeline - probably 1-2 months per cycle. Subsequent "relaxation" periods should gradually increase in length in direct correlation to the amount of herd immunity being built up.
And yes, people will die. Old people, mostly, but some younger folks as well.
People need to think in terms of population dynamics and not individuals. People need to stop caring about every cute face popping up on their Facebook with a "I got coronavirus and almost died" story. There will be many more stories like it. When was the last time folks cared about the individuals dying in bus crashes in Ecuador or India? Never. This is no different. It's the cold, hard truth.
Even if the whole world was infected, 99% would survive. The 1%? Yes, those are 80 million individuals like you and me, but if we didn't care about the bus crash victims, why would we care any more about them? What makes an attractive 30-year-old blonde woman more deserving of our empathy than those bus crash victims?
I'm not trying to be a jerk, really. Just pointing out uncomfortable facts.
It covers both a one-shot and multiple open-shut cases. Also includes seasonal forcing values.
The reality will be somewhere in the middle.
None of it is great news. I think, because it's sociopolitically unacceptable to say "people will die" even if it's true, that we're going to do the open-shut dance for about a year. That will probably send us into a depression.
Even the "best economic case" scenario, where we hit a goldilocks level of social distancing/economic shutdown, requires hobbling the economy for several more months, and is going to yield a massive second wave of infections that will make the current one look like a sunny summer day. That will freak consumers and workers right the **** out and people will refuse to come out of their homes at all, even if we can get the media to stop fearmongering.
None of it is great news. I think, because it's sociopolitically unacceptable to say "people will die" even if it's true, that we're going to do the open-shut dance for about a year.
We aren't going to do the open-shut dance for a year because it's unacceptable to say people will die. It is unacceptable to say "We're going to allow more people to die in favor of opening the economy." Make no mistake about it, shutting things down reduces the number of deaths.
I thought about getting into the market over time, but I fear it is way too high and you will get burned going in at these levels.
I put $20K into the market on March 9th when the SPX was exactly around today's close, I have not sold that position with this rebound. I was thinking about it but then decided I don't want to get in and out of the market.
I also put $10K into the market at SPX 2480 so that has some gains.... I wanted to Dollar Cost average down as I have about $40K more to invest but I never got a chance as the market went straight back up.
I will put in $20K more at 2100 and $20K at 1900. IF we head down there which is a BIG IF considering the Fed is literally ready to throw as much free money as needed to fix this "issue".
The wall street automated stock traders are not listening to the 'hair-on-fire' talking heads in the media ... and, IMO, neither should individual investors. In this Trump-hating, election year, the left-wing media is totally biased and irrational ... and most people realize it!
The rapid market crash (DJIA) from 30,000 to 20,000 was based on fear and uncertainty stirred up by a unique, once-in-a-lifetime event(hopefully). It was not a result of weakness in market fundamentals or over-valuation of stocks. Not even unemployment numbers are directly linked to company strength or weakness. Remember, before the virus hit, the markets and economy were going like gang-busters!
Therefore, IMO, when it appears COVID-19 is turning, slowing or showing any real signs of control or improvement, the markets and employment picture should bounce back. Granted, it will likely go back-up more slowly and in spurts ... until a clear cure or treatment is apparent, BUT, people will go back to their jobs and the market will turn-around when the central fear-catalyst is mitigated.
This is NOT at all like the 2008 RE bubble or the 1929+ Great depression -which were driven by economic conditions. OTOH, could this pandemic could turn South (with, for example, a strong, second-wave). There's still a lot of pent-up fear and angst ... which the media loves to fan with their "Trump-gotcha" hysteria.
The biggest risk at the moment is NOT opening the economy back up. May 1 is our D-Day... we NEED to open things back otherwise we are seriously in trouble. We can't just shutter everything down and wait the virus out, unfortunately we don't have that kind of luxury... the financial damage will be catastrophic, it's bad enough already.
We will have shuttered everything for 2 months through April 30, that is unprecedented. Doing this past May 1 is crazy talk. I heard someone say it's a good idea to do this until August.... really? There will be major social unrest among other things if this continues for many months more. It just isn't grounded in reality to do those things even though it may be ideal from a medical standpoint.
The virus is bad but I am more concerned about entering another Great Depression if we don't open things up... I am absolutely convinced we will enter a Depression if we keep stuff shut down. I was listening to economist Steven Moore and he said the exact same thing - May 1 or face a potential depression, I could not agree more.
The biggest risk at the moment is NOT opening the economy back up. May 1 is our D-Day... we NEED to open things back otherwise we are seriously in trouble. We can't just shutter everything down and wait the virus out, unfortunately we don't have that kind of luxury... the financial damage will be catastrophic, it's bad enough already.
We will have shuttered everything for 2 months through April 30, that is unprecedented. Doing this past May 1 is crazy talk. I heard someone say it's a good idea to do this until August.... really? There will be major social unrest among other things if this continues for many months more. It just isn't grounded in reality to do those things even though it may be ideal from a medical standpoint.
The virus is bad but I am more concerned about entering another Great Depression if we don't open things up... I am absolutely convinced we will enter a Depression if we keep stuff shut down. I was listening to economist Steven Moore and he said the exact same thing - May 1 or face a potential depression, I could not agree more.
When the biggest bust since The Great Depression hits later this year into 2021, everyone will blame it on the virus. The virus fallout will be the scapegoat even though major liquidity issues were showing back last summer (2019). This stuff has all been building for 10+ years now. 90+% of people will believe the big bust was solely caused by the virus.
The wall street automated stock traders are not listening to the 'hair-on-fire' talking heads in the media ... and, IMO, neither should individual investors. In this Trump-hating, election year, the left-wing media is totally biased and irrational ... and most people realize it!
Nice hyperbole, but srsly? Really.
You don't like the news so it's a left-wing cOnsPiracY!!11!
Unhinged is not a good look on anyone.
Consider the media outside the U.S. It's a big wide world out there, the U.S. is just one country, and despite what some 'muricans think, the U.S. does not control the worldwide media.
You think the media in Europe, South America, etc are trying to sink the current U.S. oval dweller? Were you this concerned about Bush when he was in office? You do realize all media, everywhere in the world, are reporting on the covid-19 pandemic, right? Are you disputing all the news?
We aren't going to do the open-shut dance for a year because it's unacceptable to say people will die. It is unacceptable to say "We're going to allow more people to die in favor of opening the economy." Make no mistake about it, shutting things down reduces the number of deaths.
The number of deaths from covid-19, sure. The number of suicides, overdoses, chronic diseases exacerbated by unemployment, etc. Etc. No.
The economic downturn from closing the economy will kill more, and younger, people than uncontrolled Covid-19. The total number of life-years shortened by the ensuing depression is much higher than the life-years from covid-19.
- Somehow, some way, people are still buying food, consuming it, and buying more food.
- Many employees in companies are working from home instead of going into an office and sitting in their veal-fattening pens...errr...cubicles, on conference calls. Those activities are still happening, the location of the work has changed.
- There's still a global economy, despite 'muricans angry at those who do business outside of 'murica.
- People are still making purchases, albeit less so in a number of segments and more so in others (paper products, etc).
- Businesses have been affected by the restricted movement and at the same time many are being flexible and adapting as best they can, like local restaurants doing take-away and deliveries. It's not ideal by any measurement, and there certainly will be businesses that don't survive, but it's not all that will fail.
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