Thu, 19 Mar 2020 01:16:53 +0000
Jason predicts that the ongoing stock market decline associated with COVID-19 (as of March 18–19, 2020) will reach roughly a 50% correction from prior peak levels before it is over.
“And we are looking like this is going to be, uh, a Uh, a 50% correction or something like that.” View on YouTube
David reports and implicitly endorses Steve Mnuchin’s prediction that if the then-current level of economic shutdown continues, 20–30% of the U.S. workforce will be unemployed by the summer of 2020.
“you can quickly see why Steve Mnuchin, the US Treasury secretary, was saying that we should expect 20 to 30% of the workforce to be unemployed by this summer if we keep this up.” View on YouTube
David predicts that if global food production, processing, and distribution were halted at that point in time, existing stocks would only sustain the world’s population for about 30 days before food shortages create a serious societal crisis.
“The world lives on a 30 day food supply. So if you stop food production today, there would only be 30 days of food for the whole world to eat based on our calorie consumption per day... or else we are going to have problems.” View on YouTube
The true COVID-19 fatality rate in the US will turn out to be between 0.15% and 1.8%, roughly 1-10x worse than seasonal flu, once true infection prevalence (including asymptomatic cases) is accounted for.
“I'd say it's probably somewhere between 0.15 and then call it 1.8%” View on YouTube
Later modeling estimated the true US COVID-19 infection fatality rate at roughly 0.3% to 0.6% by end of 2020 once total infections (including asymptomatic/unreported cases) were accounted for, which falls within the 0.15%-1.8% range predicted.
With a mass population antibody-testing and zone-based reopening strategy, the COVID-19 outbreak in the US could be brought under control within 4-6 weeks.
“we can really you know nip this thing in the bud in a you know four or five six week time frame” View on YouTube
The US never implemented a nationwide mass antibody-testing and zone-based reopening strategy, and the outbreak was not brought under control within 4-6 weeks; COVID-19 deaths continued for years, with roughly 375,000 US deaths in 2020 alone and hundreds of thousands more in subsequent years.
Chamath predicts that if the U.S. rapidly deploys massive antibody testing and zoning as he describes, COVID-19 spread in the U.S. could be effectively brought under control within roughly 4–6 weeks from the start of such a program.
“And we can really, um, you know, nip this thing in the bud in a, you know, 4 or 5, six week time frame.” View on YouTube
Jason predicts that startup founders should expect essentially no new fundraising to be possible for at least the next 3–6 months from March 2020.
“assume it's going to that no money is going to get raised for the next 3 or 6 months at a minimum.” View on YouTube
David implicitly predicts that the COVID-19-driven downturn and funding constraints will last long enough that startups without at least ~18 months of cash runway from early 2020 will be at serious risk of failure.
“if you can get your cash back, your cash to get you to an 18 month runway... you should be doing everything you can to number one, kind of give yourself that breathing room.” View on YouTube
Chamath predicts that within roughly six months from March 2020, LPs and auditors will force significant markdowns in VC portfolios, causing venture capital returns to look very poor.
“when these markdowns are forced to happen, which will take another six months, um, venture capitalists returns will look terrible.” View on YouTube
Chamath predicts that the combined effects of the COVID-19 crisis and capital-market disruption will persist long enough that startups will need at least 36 months of cash runway from early 2020 to be safely positioned.
“So I don't think 18 months is sufficient. I think you need at least 36 months double.” View on YouTube
Chamath predicts that even if COVID-19 is contained quickly (e.g., within ~60 days), the U.S. stock market will not experience an immediate sharp V‑shaped “roaring back” recovery to prior levels.
“It cannot come roaring back.” View on YouTube
David predicts that (1) the immediate backlog and scaling issues around RT‑PCR COVID-19 testing in the U.S. will largely be resolved within about 7–10 days from March 18–19, 2020, and (2) broad distribution of general‑population antibody tests in the U.S. will begin roughly 30–45 days after that, about 45 days from the recording date.
“we got to get over this first hump. I think once we get over this first hump, then you're going to see people distribute and work on this. And I think getting over the first hump is happening in the next. Call it 7 to 10 days. And so then it's probably another 30 to 45 days before we get these tests for general population testing more broadly distributed. So call it 45 days out.” View on YouTube
Chamath predicts that, even in a worst‑case scenario, the U.S. can achieve mass COVID-19 testing capability within approximately 30–60 days from March 18–19, 2020.
“I think mass testing, if, if in the worst cases is 30 to 60 days.” View on YouTube
At some future point following March 2020, the eurozone will collapse as an economic/political construct, and Japan will effectively cease to matter as a major independent economic power, leaving only China and the United States as the two economies that meaningfully matter in the global system.
“this eurozone is going to collapse. Okay, Japan is finished. So there are two economies that matter. There's China and the United States as of today.” View on YouTube
In the years following March 2020, the United States will be able to run federal budget deficits on the order of $5–10 trillion per year without triggering a loss of confidence in the US dollar’s status as the primary global safety asset.
“It could run $5 trillion deficits tomorrow. It could run $10 trillion deficits because it is still the backstop.” View on YouTube
Over the years following the COVID-19 crisis (starting 2020), most countries will shift economic policy away from deep globalization and just‑in‑time global supply chains toward more nationally focused, resilient, and partially nationalized or domestically anchored economies, including more domestic food and critical‑goods production and less dependence on single-country foreign suppliers like China.
“I do think that we're going to swing the pendulum back towards nationalized economies and, um, and away from global economies...We are not going to act the same. Well, it will be different.” View on YouTube
In the years after the COVID-19 shock (starting 2020), Apple will be pushed—by policy and/or public pressure—to relocate a significant portion of its iPhone production capacity from China to the United States or to a more diversified set of countries with a materially higher share in the US, accepting lower margins in exchange for greater supply‑chain resiliency.
“Apple should probably be forced to bring a lot of their production capacity back into the United States...They should rely more on America. It will be less profitable, but it'll be okay and it's the right thing to do.” View on YouTube
Within a few years after the COVID-19 crisis (from 2020 onward), the United States will significantly relax federal healthcare regulation so that (a) right‑to‑try laws are effectively federalized, giving states broad discretion and allowing doctors and patients to use experimental drugs without standard FDA oversight, and (b) a similar loosening will occur for diagnostics and testing, enabling much faster deployment of new tests.
“I think we're going to maybe see a big shift in policy and allow right to try laws that are going to be federalized so states can make decisions about right to try laws. And doctors and patients can try drugs on their own discretion without having a federal oversight body. Perhaps the same will happen with diagnostics and testing.” View on YouTube
Within six weeks of March 17–18, 2020 (i.e., by roughly late April 2020), some US cities/towns will have established ‘green zones’ where people who test negative for COVID‑19 or positive for IgG/IgM antibodies are allowed to interact and dine in restaurants, with entry contingent on showing test results plus ID.
“I am telling you that it's within six weeks from now.” View on YouTube
By approximately six weeks after March 17–18, 2020 (around late April 2020), people in at least some parts of the United States will again be allowed to eat inside restaurants, subject to health checks such as temperature screening and/or proof of COVID‑19 status.
“Six weeks from now will be in restaurants.” View on YouTube
By April 7–8, 2020, the San Francisco Bay Area and broader US West Coast will have started to reopen for business, including allowing people to go out (e.g., to restaurants), ending the strict shelter‑in‑place phase in that region.
“I'm taking the under. I'm taking, um, April 7th or eighth.” View on YouTube
By early April 2020, COVID‑19 metrics on the US West Coast (e.g., ICU utilization, ER wait times, new cases) will show a dramatic decline and an infection fatality rate materially lower than then‑prevailing public projections, enabling West Coast reopening around April 7–8, while New York will remain under severe strain roughly two weeks longer.
“New York is about two weeks behind us. New York is going to be fucked for a little while, but I do think that the West Coast and with some travel restrictions is going to be able to reopen for business probably around April 7th or eighth, because we're going to see a dramatic decline at that point, and we're going to see a lower fatality rate than everyone is predicting.” View on YouTube