Sun, 15 Mar 2020 02:04:09 +0000
SARS‑CoV‑2 (COVID‑19) will ultimately spread through the general population of the United States rather than being contained; the remaining uncertainty is only the speed and manageability of that spread.
“at this point, I think everybody admits that this thing is going to roll through the population of the United States. What we're basically betting on now is how long that takes and how well that's managed.” View on YouTube
Trump's handling of the COVID-19 crisis (bringing in outside experts after avoiding early alarm) will increase his odds of winning re-election in November 2020 compared to if the pandemic hadn't happened, provided a stimulus package succeeds.
“his odds of getting reelected are actually higher than in the absence of Corona” View on YouTube
Trump did not win reelection in November 2020. Joe Biden won decisively, 306-232 in the Electoral College and by 4.4 points (51.3% to 46.8%) in the popular vote, despite the stimulus (CARES Act) passing.
The true number of COVID-19 infections in the US as of March 2020 is at least 10x higher than the confirmed case count, due to inadequate testing capacity.
“I do still believe that we're probably at least one maybe more orders of magnitude off in our infected population count” View on YouTube
True US COVID-19 infection counts in March 2020 were far higher than confirmed cases. A Clinical Infectious Diseases study found more than 1.3 million actual infections by the week of March 21, 2020, versus only 17,450 confirmed cases that week (roughly 75x), and CDC seroprevalence-based estimates from later in 2020 similarly found true infections were on the order of 10x or more the confirmed case count.
When the White House announces the results of President Trump’s COVID‑19 test taken on March 13, 2020, they will state that his result is negative (no active infection detected).
“I think that the answer, the answer that we will get is that he's negative.” View on YouTube
The White House’s internal COVID‑19 testing protocol around the President’s March 13, 2020 test will involve testing a larger group of approximately 50 White House personnel with anonymized vials sent to the lab so that technicians cannot identify the President’s sample; any positive results would lead to quarantining the entire tested group rather than publicly isolating the President alone.
“here's what they would do, which is they test 50 people in the white House...Then you send it to the lab and you get the results. So no lab tech can ever know if there's even one positive result. You quarantine everybody.” View on YouTube
Tom Hanks and NBA players who tested positive for COVID‑19 in early March 2020, being generally healthy and well‑cared‑for, are very likely to recover and be out of acute illness within about 10 days from March 14, 2020 (i.e., by roughly March 24, 2020). Tom Hanks is expected to publicly characterize the illness as feeling like a bad cold rather than a severe, lasting condition.
“it's very likely that Tom Hanks and these NBA players who are in fantastic health are gonna they're low comorbidity and they're getting great care, and they're going to come out of this thing in the next ten days. And, you know, when Tom Hanks goes back on Instagram and says, like, hey, look like I had a bad cold.” View on YouTube
Total deaths caused indirectly by COVID-19 (via second- and third-order economic and social effects) will exceed the total deaths caused directly by COVID-19 infection itself, over the full course of the pandemic.
“More people, let's be clear, more people will die because of the second and third order effects of coronavirus than these first order effects.” View on YouTube
Over the ensuing roughly nine months from March 2020 (i.e., through late 2020), there will be a widely discussed deleveraging of a multi‑trillion‑dollar global credit bubble. This deleveraging process is likely to be "violent and messy" rather than orderly, resulting in substantial increases in unemployment and causing many businesses to fail or shut down.
“deleveraging is going to be an important term that folks will hear over and over over the next nine months. And that process of deleveraging, this multitrillion dollar credit bubble that we have to hopefully in a, in a in a reasonable way, but probably not. It'll be violent and messy. Unwind will leave. I think a lot of people unemployed. A lot of businesses out of business and or could.” View on YouTube
Over the nine months following mid‑March 2020, public discussion will frequently reference deleveraging as the global economy undergoes a violent and messy unwinding of a multi-trillion-dollar credit bubble, resulting in substantial increases in unemployment and in many businesses shutting down.
“deleveraging is going to be an important term that folks will hear over and over over the next nine months. And that process of deleveraging, this multitrillion dollar credit bubble that we have to hopefully in a, in a in a reasonable way, but probably not. It'll be violent and messy. Unwind will leave. I think a lot of people unemployed. A lot of businesses out of business” View on YouTube
The equity-market drawdown that began in late February 2020 will not bottom within the first month; instead, the market bottom will occur roughly 200–250 days into the decline, i.e., around September–October 2020.
“Travel travel is an 8.8 trillion, $9 trillion economy... when you see drawdowns like this in the stock market... The bottom isn't put in 20 days into a drawdown like this, right? It doesn't happen on day 20... The bottom comes in somewhere between day 200 and day 250. What that means is that September to October” View on YouTube
As public companies report results over the ensuing one to two quarters after March 2020, investors will conclude that the COVID-19-driven economic crisis is substantially worse than the 2008 financial crisis.
“when these public companies do that, the stock market and investors, by and large will realize, wow, this is a much bigger problem than 2008.” View on YouTube
Business shutdowns in March 2020 in the US will likely continue for another 2–4 weeks, and the full economic impact of losing 2–4 weeks of revenue for small, low-cash businesses will become clear over the following few months, culminating in visible, materially negative effects by Q3 2020, and those effects will be severe (“ugly”).
“I do think it's non-linear in terms of that second order and third order effects that we've been talking about. We even if we got back to business as usual in a month, we don't yet know how losing 2 to 4 weeks of cash flow is going to affect every salon... So we won't know for a couple of months... we're talking about Q3 when this all finally kind of comes to bear... what the shutdown that we're in right now and are going to continue to be in probably for another 2 to 4 weeks is going to do, and we're going to find that out over the next couple of months. But it's going to be ugly.” View on YouTube
The United States federal government will ultimately implement on the order of a $3 trillion support program, structured largely as loans or similar financial support that small businesses and unemployed individuals can access, to backstop the economic damage from the COVID‑19 shutdowns.
“Unless the federal government shows up with a $3 trillion loan package that any small business can access and any unemployed person can access, and it really fills the gap... I think that's where we have to end up.” View on YouTube
The Trump administration will implement a very large direct financial support or stimulus program (of the type described: multi-trillion-dollar loans or stipends to individuals and small businesses) in order to protect the economy and thereby improve Trump’s 2020 reelection prospects.
“100%. Yeah, 100% certainty that Trump will do something like this because he wants to save his presidency.” View on YouTube
In the months after mid‑March 2020, COVID‑19 fiscal responses will escalate from an initial $8B US package to (1) a roughly 10x-larger US package, (2) within a few more months, an additional US package of a few hundred billion dollars resembling TARP and focused on bailing out specific industries, and (3) ultimately, globally coordinated stimulus across major economies totaling on the order of one to one-and-a-half years of world GDP, with implementation via the IMF/World Bank for developing countries and large domestic packages (e.g., Germany abandoning austerity) in developed countries.
“we started with an $8 billion package. You know, uh, this last package, I think when we put the numbers together will probably be an order of magnitude bigger. Okay, whatever. You know, we'll wait a few months, and then we'll have a couple hundred billion dollars. It'll be kind of Tarp like. It'll probably be a bailout of a couple of specific industries. ... and, uh, uh, the ultimate package probably needs to be on the order of a year to a year and a half of world GDP spread across all the major countries of the world.” View on YouTube
The probability that COVID‑19 and its economic consequences will be fully resolved and the US will be back to business as usual within a couple of months of mid‑March 2020 is 0%. Instead, (a) the main direct health impacts of the disease will largely be dealt with within 8–12 weeks (by around May 2020), (b) the economic bottom will occur in Q3–Q4 2020, and (c) the S&P 500 index will decline to approximately 2000 or lower during this period.
“Uh, zero? Um, if you I think we deal with the first order effects of the disease in, uh, 8 to 12 weeks. So, you know, probably by May, we'll have a decent handle on the impacts, and we'll be through most of the worst of it. Um, and I think the economic bottom is probably Q3, Q4. Um, and, uh, I think that, you know, we're like, we're going to touch 2000 on the S&P, if not lower.” View on YouTube
Global economic and social activity will remain effectively “shut down” for roughly two months starting from mid‑March 2020.
“we are the world as of now is shut down for two months. The world.” View on YouTube
Following the COVID‑19-induced demand shock beginning in early 2020, global travel demand will take approximately 19 months to recover to its previous (pre-shock) level.
“Whenever there's a demand shock in travel. I like travel, by the way. Just because it's a really good. Another canary in the coal mine... when there's a demand shock, it typically takes 19 months for it to recover one nine months.” View on YouTube