8 ms·

The financial hit from this and other event closures, travel restrictions, supply chain disruptions, and lost wages is going to be massive. Asset prices and em

by aazaa 7y ago

The financial hit from this and other event closures, travel restrictions, supply chain disruptions, and lost wages is going to be massive. Asset prices and employment reports do not in any way reflect what's in store.

arcticbull 7y ago
Asset prices are based on forward looking projections of the business, not on current revenues, or even next quarter's revenues. This is why S&P 500 companies trade at an average valuation of 15X their current-year earnings. If anything, they're way oversold already. Nothing's fundamentally or structurally changed in the US economy. There were no bad mortgages. We hit the brakes for a bit, but before you know it we'll be back up on our feet and working our asses off, and if we're lucky, we'll get some mandatory paid sick days added to employment law out of it. [edit] well actually, something has fundamentally changed: the cost of borrowing got somehow even lower meaning an eventual recovery may be turbocharged. The Fed is very unlikely to raise rates as we move past this.
- smidgeoncoup 7y ago
  Well right now the trailing 12 month PE average for S&P is 20. So still above historical norm after this 20% drop. I wouldn't say things are oversold, rather everything was way overvalued. And people are overlooking the fact this is just the herald wave, and probability of a catastrophic 2nd wave this fall/winter is pretty damn high. This isn't going away. This more than likely will move through the population a few times over the next few years until the vulnerable are "sifted through" so to speak. I want to believe in our scientific and technical capabilities but nobody should hold their breath for an effective vaccine in the next year or two. This has the potential to fundamentally and structurally change more than just the economy. But I feel you..99x out of 100 you're spot on. Unfortunately, it's looking like the potential reality we might be facing is something most can't or don't want to comprehend. It at least deserves real consideration and thought.. we'll get through it and move on, but I don't think people grasp or want to believe what might be to come.
  - koheripbal 7y ago
    Multiple vaccine candidates are already in clinical trials. It will take 12-18 months, but it seems like a certainty.
    - DyslexicAtheist 7y ago
      fwiw I doubt we'll see a vaccine anytime in the next years. no doubt China tests very aggressively and trials the drugs on their prison population. They have a head-start because no human rights. (And now they also have more reasons to justify these crimes). I wouldn't want to know how many were disappeared into body bags while they were still breathing just to keep reported numbers down.
      - jkhaui 7y ago
        For a forum of ostensibly intelligent people, it's amusing to see the rise in anti-china sentiment brought about by the coronavirus. Sure, China has a poor human rights record in many regards. But objectively, their handling of the coronavirus has been phenomenal, especially when one considers its hugely dense population. And regarding the fake video supposedly showing a live person being body bagged: even Facebook "verified" the video as fake, and you know that. China's done many things poorly in recent history, but containment of the coronavirus isn't one of them. Resorting to unsubstantiated xenophobia in times like this really says more about you as a person than anything else.
        redis_mlc 7y ago
        > Resorting to unsubstantiated xenophobia in times like this really says more about you as a person than anything else. Give it a rest. Hospitals in Asia generally demand payment before checkout, so I wouldn't want to find myself a semi-conscious plague patient with no cash left. What do I mean by demand? They post a guard outside your door until somebody pays the bill in full. God help you if you say you can't pay, especially if there's a lineup of new patients. You actually could get a bag over your head. If you want to read more about how hospitals work in China, google "big sickness". There's some socialized medicine, but cancer and organ transplant bills are similar to what an uninsured US citizen would face - sign over the house.
- jennyyang 7y ago
  This is a global recession, spending is drying up. You may or may not have seen the dot com bust, but this to me looks like that except across the globe. Many companies will die because they rely on cash flow and that will dry up. Restaurants, and entertainment venues will be dead until May 2021, unless we find a vaccine that treats this. As more and more celebrities get infected and possibly die it will hit the psyche a lot more than the financial crisis ever did. It really is different this time, and it frightens me, not the virus itself but the economic ramifications. The best case scenario is that summer stops the virus from spreading, panic lessens, and then a treatment is found before September that is effective and quick. Then a vaccine comes out next March 2021 and everyone is happy again.
  - Thorentis 7y ago
    > Restaurants, and entertainment venues will be dead until May 2021, unless we find a vaccine that treats this. Just because people over 70 won't be going to them, doesn't mean the rest of us won't be. Besides, once I've had cornavirus - which could well be inevitable - I'll no longer be scared for it and will head back out. So will everybody else. To be honest, the best way to avoid a severe economic impact is to accept you'll most likely get it, and rather than killing businesses by staying inside, just got on with your life, stay fit and healthy, and hope for the best. You're more likely to be killed driving your car, so carry on living!
    - wolfd 7y ago
      Old people in nursing homes don't get out much, and yet they're the ones that are dying. The fact is that the virus spreads because people don't always die from it, and so they go around spreading it to people who will. Most people probably won't know that they have it until they've spread it to 3 more people. Your strategy will probably keep you alive, but the same is not guaranteed for many millions of people that are old or with immune system complications.
      - arcticbull 7y ago
        Well with an R0 of ~2 your speculation of at least 3 is definitely wrong.
erik_landerholm 7y ago
The cure is worse than the disease.

by aazaa 7y ago

arcticbull 7y ago

Asset prices are based on forward looking projections of the business, not on current revenues, or even next quarter's revenues. This is why S&P 500 companies trade at an average valuation of 15X their current-year earnings. If anything, they're way oversold already. Nothing's fundamentally or structurally changed in the US economy. There were no bad mortgages. We hit the brakes for a bit, but before you know it we'll be back up on our feet and working our asses off, and if we're lucky, we'll get some mandatory paid sick days added to employment law out of it. [edit] well actually, something has fundamentally changed: the cost of borrowing got somehow even lower meaning an eventual recovery may be turbocharged. The Fed is very unlikely to raise rates as we move past this.

smidgeoncoup 7y ago
Well right now the trailing 12 month PE average for S&P is 20. So still above historical norm after this 20% drop. I wouldn't say things are oversold, rather everything was way overvalued. And people are overlooking the fact this is just the herald wave, and probability of a catastrophic 2nd wave this fall/winter is pretty damn high. This isn't going away. This more than likely will move through the population a few times over the next few years until the vulnerable are "sifted through" so to speak. I want to believe in our scientific and technical capabilities but nobody should hold their breath for an effective vaccine in the next year or two. This has the potential to fundamentally and structurally change more than just the economy. But I feel you..99x out of 100 you're spot on. Unfortunately, it's looking like the potential reality we might be facing is something most can't or don't want to comprehend. It at least deserves real consideration and thought.. we'll get through it and move on, but I don't think people grasp or want to believe what might be to come.
- koheripbal 7y ago
  Multiple vaccine candidates are already in clinical trials. It will take 12-18 months, but it seems like a certainty.
  - DyslexicAtheist 7y ago
    fwiw I doubt we'll see a vaccine anytime in the next years. no doubt China tests very aggressively and trials the drugs on their prison population. They have a head-start because no human rights. (And now they also have more reasons to justify these crimes). I wouldn't want to know how many were disappeared into body bags while they were still breathing just to keep reported numbers down.
    - jkhaui 7y ago
      For a forum of ostensibly intelligent people, it's amusing to see the rise in anti-china sentiment brought about by the coronavirus. Sure, China has a poor human rights record in many regards. But objectively, their handling of the coronavirus has been phenomenal, especially when one considers its hugely dense population. And regarding the fake video supposedly showing a live person being body bagged: even Facebook "verified" the video as fake, and you know that. China's done many things poorly in recent history, but containment of the coronavirus isn't one of them. Resorting to unsubstantiated xenophobia in times like this really says more about you as a person than anything else.
      - redis_mlc 7y ago
        > Resorting to unsubstantiated xenophobia in times like this really says more about you as a person than anything else. Give it a rest. Hospitals in Asia generally demand payment before checkout, so I wouldn't want to find myself a semi-conscious plague patient with no cash left. What do I mean by demand? They post a guard outside your door until somebody pays the bill in full. God help you if you say you can't pay, especially if there's a lineup of new patients. You actually could get a bag over your head. If you want to read more about how hospitals work in China, google "big sickness". There's some socialized medicine, but cancer and organ transplant bills are similar to what an uninsured US citizen would face - sign over the house.
jennyyang 7y ago
This is a global recession, spending is drying up. You may or may not have seen the dot com bust, but this to me looks like that except across the globe. Many companies will die because they rely on cash flow and that will dry up. Restaurants, and entertainment venues will be dead until May 2021, unless we find a vaccine that treats this. As more and more celebrities get infected and possibly die it will hit the psyche a lot more than the financial crisis ever did. It really is different this time, and it frightens me, not the virus itself but the economic ramifications. The best case scenario is that summer stops the virus from spreading, panic lessens, and then a treatment is found before September that is effective and quick. Then a vaccine comes out next March 2021 and everyone is happy again.
- Thorentis 7y ago
  > Restaurants, and entertainment venues will be dead until May 2021, unless we find a vaccine that treats this. Just because people over 70 won't be going to them, doesn't mean the rest of us won't be. Besides, once I've had cornavirus - which could well be inevitable - I'll no longer be scared for it and will head back out. So will everybody else. To be honest, the best way to avoid a severe economic impact is to accept you'll most likely get it, and rather than killing businesses by staying inside, just got on with your life, stay fit and healthy, and hope for the best. You're more likely to be killed driving your car, so carry on living!
  - wolfd 7y ago
    Old people in nursing homes don't get out much, and yet they're the ones that are dying. The fact is that the virus spreads because people don't always die from it, and so they go around spreading it to people who will. Most people probably won't know that they have it until they've spread it to 3 more people. Your strategy will probably keep you alive, but the same is not guaranteed for many millions of people that are old or with immune system complications.
    - arcticbull 7y ago
      Well with an R0 of ~2 your speculation of at least 3 is definitely wrong.

erik_landerholm 7y ago

The cure is worse than the disease.