61 thoughts on “Sobering Thought Of The Day

  1. The coronavirus came at a great time for 2020 elections. It gives Trump the opportunity to demonstrate his gut feeling based leadership.

    Unfortunately, this will expose the weakness in America’s healthcare system — lots of people with high copays/deductibles and lots of people uninsured. Ie., many people will avoid going to see a doctor even though they suspect Covid-19. This makes the transmission easier than in countries with “socialized” medicine. And it may help Bernie in November.

  2. As of today, according to the CDC, “Fourteen cases have been diagnosed in the United States, and an additional 39 cases have occurred among repatriated persons from high-risk settings, for a current total of 53 cases within the United States.”
    No one in the US has died of the virus.
    Also, according to the CDC, the 2019-2020 flu season has so far resulted in between 18,000 and 46,000 deaths due to non-coronavirus flu.
    Perspective, Emery. Perspective.

  3. Trump again downplayed the virus. He said he doesn’t think we need to spend much to prepare. Then he cited China’s exorbitantly costly response as effective. They closed down cities, banned travel, tested door to door, built new hospitals, and still had 2700 deaths in two months.

  4. Emery, you are proving my point.
    Deaths in China to coronavirus are one-sixth to one-sixteenth of all flu deaths in the US in the 2019-2020 season.
    You are drinking the koolaid.

  5. Larry Kudlow is offering stock tips on Fox Business: “Stocks look pretty cheap to me.”

    Propping up the stock market with rate cuts is how we got to this point!

    I’ve been saying for a while now that the Fed has basically been the only thing holding this house of cards up. I always received a lot of
    derision on STiD (particularly from Woolly) for those comments, but we are running out of anything left to cut. At some point the fundamentals do matter.

  6. “I always received a lot of derision on STiD (particularly from Woolly) for those comments”
    Not from me, ever.

  7. I have no idea why the DJIA increases or decreases, other than the obvious truth that rising values mean that investors believe stocks are under priced, and falling values mean that investors believe stocks are over priced.
    And Emery knows no more than I do.

  8. Not from me, ever.

    Oh, OK, I’ll take the blame. I’d like to step up and take credit for deriding the little weasel every chance I get.

    investors believe stocks are under priced

    Those stocks. Those 30 stocks that make up the DJIA. Most of my investments are not found in that index – side note, in case you’re interested, three of the 30 are MN companies. There are other indices, the components of which may or may not have been as affected by the downturn, but most have.

    Times like this when, as I think Buffet said, there’s blood in the streets, are great for people like me who are quite happy to buy shares the more excitable.

  9. Here is what I think is happening: the coronavirus threat is overhyped for a number of reasons. People are willing to take the profits they’ve made in the last six months. The selloff won’t continue for long, because stocks are as cheap as they were six months ago & US financials are sound. The sell off is driven by uncertainty about coronavirus (that’s China’s fault, not Trump’s fault), and a willingness to take profits.
    If monetary policy was responsible for building a “house of cards” DJIA, than the same monetary policy we’ve had for nearly two decades has failed at the same time as coranavirus and the latest record uptick in equity values.
    But I could be wrong. If you disagree, go short.

  10. Our economy is so strong that it needs historically low interest rates. Best economy ever growing at 2% GDP (Obama levels). Markets so epic that one virus (that Trump’s supporters call a cold) is destroying the market.

    We have pretended for a long time that we can create wealth by cutting interest rates. Now we shall pretend that we can also cure disease.

  11. Personally I think the market was at least 15% inflated by the tax cuts. The sugar high is over. Now the market will average the effects of the coronavirus and the recessions that will hit China and probably Europe. It doesn’t look as though the market is going to bounce back quickly. I think the market will go down another 10% and begin a very slow rebound. We’ll see. But I am waiting this one out. It promises to be very volatile.

    Buy on the dip if you are convinced that the virus will be contained and that supply chains and behavior will soon go back to “normal”. You must also brush off the rising evidence that globalization has an awful lot of thoroughly unpleasant downsides and be sure that markets entered this non- financial crisis fairly priced.

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