It seems inevitable, but for now everyone’s still all euphoric. Central banks, nothing bad ever happens to me, etc.
Disclaimer: I’m as good at calling markets as Riverman is handicapping sports.
I bailed on stocks last week. This is the Hurricane Katrina of pandemics, the real one that nobody will believe until it affects them personally since the last time they said it was bad it didn’t get that bad.
The only good news is you probably won’t die.
Stonks only go up
The effect of pandemics on stocks is not straightforward. The stock market rose during the Spanish Flu:
Of course, measuring the extent of that rise is not an exact science, since it’s impossible to pinpoint a precise day on which the epidemic began. But the vast majority of the deaths from the pandemic occurred between September 1918 and April 1919. Over this seven-month period, the Dow Jones Industrial Average rose by 12.1%.
That was a disease which actually primarily killed those between 20 and 40 years old, so pretty much a worst case scenario in economic terms. It’s similarly hard to discern any effect of later outbreaks:
There’s no inherent reason that a virus which kills the old and infirm should cause a drop in equities, in fact, it’s probably an economic good. Obviously there might be flow on effects, but if the Spanish Flu didn’t crash the economy, I wouldn’t hold your breath here.
Prob going to move to bonds or cash myself. Like the logical part of my brain knows I can’t time the market but this just seems too obvious.
More people dying means I get to have their stuff.
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Post WW1 there was a lot of other stuff going on, as well as large numbers of unemployed soldiers, so labour market impacts a little different. But yeah, good counterpoint even if a sample size of one.
I think the response could be what is bad for the economy. Restriction on air travel, cancelling of events and concerts, office and factories closing down or being short staffed.
Along with an increase in general political idiocy which is never good for the economy.
The absolute best case scenario at this point is the world’s second largest economy disrupted. With manufacturing and supply chain disruptions that will affect the rest of the globe.
But like I alluded to earlier, central banks have the fire hoses wide open, and investors are still in euphoric FOMO nothing bad ever happens to me mode.
Not gonna get too libertarian bro efficient markets here, you can definitely argue that the market is underestimating the risks of how bad this will get, but I think the above at least is abundantly clear to everyone and therefore already priced in to the best of the market’s ability.
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Smart money lining up suckers before they pull the plug ldo
It’s the second largest economy because its so big. 60 million people on lock down is still less than 5% of the population.
More I think about it, Klob seems like the best candidate to enforce military curfews when this hits America.
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The thing is, there is nowhere else for money to go besides the US stock market. Interest rates are at basically an all time low across the board.
I don’t think that will stop the market from tanking if enough people get shook.
Talked to my mom again. She is still not really worried about Corona virus --although again, she remembers the days of polio and German measles, so it’s hard for me to calibrate what it would take to freak her out. I encourage anyone to talk to old people you know who remember the days of measles and polio and whatnot. Shit was like Biblical plagues coming in nonstop, but people carried on. Grandma confiscated all of the lightbulbs in the house at one point because people thought that had something to do with the measles. No one had any clue back then, they were just scared as fuck but they got by. Anyway, from the perspective of someone who remembers polio and measles and rubella, corona virus is nbd.
One thing that she is on mega-tilt about is a measles outbreak in Africa. I am too now. This is super fucking stupid because we have a goddamn measles vaccine already. Apparently 5,000 people have died in the Congo. Like, that’s way more people than Corona virus has killed and measles is possibly the most highly contagious disease of all time. It’s fucking off the charts. And no one is talking about this shit on TV because no one gives a fuck about thousands of Africans dying from easily preventable diseases.
And it’s wild I’m learning about all of this from my mom, who is retired and hardly uses the internet. Despite me being a massively online person, I still get the best up-to-date information about measles in the Congo or prion disease in North American deer from my mom, like this is some Miss Marple epidemiology shit.
Look at this chart man, this is insane. We know how to stop measles, no one should ever be dying from that shit. We should be pimp slapping the fuck out of this disease instead of letting it run buck wild across the third world.
PS: stop eating venison. And don’t eat the brains of your ancestors no matter how thoroughly you’ve cooked their remains.
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Think I’m gonna keep rolling the dice on this one for the time being. There’s nothing even remotely close to me yet, but my thanks to your mom for the heads up and this is something I will keep an eye on.
Chronic Wasting Disease Among Free-Ranging Cervids by County, United States, January 2020
Even better it is mostly old people dying so millenials are getting their inheritance early and they will spend it which is good for the economy.
As for the reasons these virusses disappear. First of all people get way more careful once a new virus hits the news so transmission goes down by a lot. There is also some evidence that a virus gets less deadly/virulant over time. Possibly because killing the host makes it less likely to transmit as well as killing cells too soon makes it less likely you can replicate enough.
I encourage you to listen to this podcast on prion disease. By god, it sounds like one of the most horrifying ways to die you could ever imagine. You develop extreme insomnia and exhaustion at first and then it takes away your basic motor functions so you’re stumbling around and babbling and drooling but also it seems to leave your higher brain functions intact so you’re acutely aware of everything happening all day long and it takes like over a year to kill you. And there’s no cure whatsoever, 100% fatal. Even untreated rabies is only like 99.999% fatal or whatever. You’re not ever recovering from prion disease.
If you want to make the case for medically-assisted suicide, I really think this is it.
http://thispodcastwillkillyou.com/2019/02/20/episode-20-prions-apocalypse-cow/
I got creeped out about prions from reading a Kim Stanley Robinson book a few years back. But based on the available data the current risk to me is incredibly low. Eating venison doesn’t even crack the top 1,000 list of things I regularly do that might kill me in some horrible way.
It’s just a stupid misfolded protein. It’s so fucking dumb. It has no RNA at all. There’s no way it should be a thing, but it’s still endemic across America. I hate it, it’s just stupid. It just shouldn’t be a thing.
And you’re mad if you think it hasn’t already made its way out West and also you just know the afflicted deer that are stumbling and drooling are the ones who are most likely to get shot by hunters. BSE started because farmers saw some of their cows were stumbling around and acting goofy, so they sent those ones off to the slaughterhouse and a lot of people quietly looked the other way.
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