Tuesday, March 24, 2020

Guest Op-Ed re COVID-19

 “This is the sign of the covenant that I make between me and you and every living creature that is with you, for all future generations: I have set my bow in the cloud, and it shall be a sign of the covenant between me and the earth."  Genesis 9:12-13

Alex Kruysman, a Mayo Clinic worker in Arizona, was taking a break after screening patients for COVID-19 when a rainbow appeared. Source

I realize I'm posting twice in one week's time, but I thought this opinion piece from a friend was fitting.  I realize that on Saturday I was quite dark about the financial heartbreak that could be in store for us.  So, with almost zero sports on TV other than Ultimate Frisbee Championship on ESPN 8 The Ocho! I had nothing better to do than read more about COVID-19 and how things might be looking up.  How about that overtime pay Sarge?

Besides that opening picture, which really filled me with hope, and made me center myself on God, pray to Him, and trust Him, I read a couple positive articles and the piece below.  One was that Singapore and South Korea have done well to flatten the curve there.  As the article states, it's too late for us to use their exact methods of public notification and quarantines, nor is our political system set up to do so, Congress would argue for weeks about whether or not to even bring it up.  Privacy concerns are another factor along with our fierce independence, but things may be different next time a pandemic hits.

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Some other positive points is that we're actually spending quality time with family, cleaning our houses, playing games, taking walks, etc.  My dog LOVES all the attention she's getting from my wife being home (her real-estate office is shuttered for now).  We've also got this washing our hands thing downMaybe next week we can work on using our turn signals everyone!  Social distancing is bringing us closer to those who matter.  Even if the US curve isn't flattening as fast as we may hope, I don't think we're overwhelming our medical system yet, and not everyone with the virus gets sick enough to need respirators.

Here's another article that my wife shared with me that discusses some successful* "curve flatteners."  I had to credit my wife because I can't have you thinking I read Elle Magazine!  That one inspired the search for an appropriate intro photo, because I didn't want to get Sarge in trouble by using the Getty photo.  Another positive aspect just comes from looking at the bright side of the issue- nearly 80,000 have recovered from the virus.  Our medical professionals are not given enough credit, and they are some of the true heroes of this crisis.  I would also have to say the Trump administration informing the nation has been a key factor in pushing states and cities to get Americans to hunker down.  Dr. Fauci deserves a medal for his even-keeled leadership.  While infections will still occur, the quarantines, self isolation, social distancing has to be making a difference.

Source

Anyway, a couple caveats on this Op-Ed-  He's a little darker than me at the beginning. Also, gets a little harsher than I'd like about deaths in Iran, but I think he means that deaths among Iranian leadership may force them to pull back on their external behaviors and a foothold for more moderate leaders to take over.  He is obviously a fierce patriot and sees how this virus can help us regain our international prominence.  Anyway, get yourself a cup of coffee and have a read.

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The world will never be the same. This is the ultimate black swan event. I have never witnessed anything like this in America, and it is hard to wrap your brain around what is happening with whole cities shut down. The speed at which this has happened is astonishing. We went from a booming economy that was growing well, to recession in two weeks. Who could ever have imagined this even two weeks ago. Essentially they have shut down around one-third of the economy.  The supermarket shelves here on many items are stripped clean. When I asked if they were restocking over-night I was told no because the warehouses are far short of enough drivers to keep supplies moving to cover all  the panic buying. I was having a root canal procedure on Tuesday.  My dentist told me I was lucky to have come in Tuesday as the ADA has told all dentists in the US to shut down ALL offices for two weeks. Bet you had not heard that. We are very likely near the bottom now, but it cannot be known yet.  There is no way to forecast the short run since Congress is now the key, and they are never intelligent nor quick in their response to anything. If they quickly pass the $1 trillion  package then the market will begin to recover. If they screw around  like they did with TARP, then there is much more down to go,. Just as with TARP. 

The world is entering a very dangerous place now. Populism will increase in many countries. Politics in places like Italy, France Iran, Spain and China will become less stable. Governments will be overthrown.  It is just a matter of when and how. The good news is it appears the virus is running rampant in Iran including at the highest leadership level. Thousands of Iranians will die, and as a percent of the population it will be very impactful. On top of a collapsed oil price and collapsed economy from sanctions, Iran is going to have major risks of revolution. They will have nothing left to fund their proxies, nor to pacify the populace with subsidies. Xi will possibly be gone in a few years. Putin just made himself leader for life. The next few years will be dangerous. The US will need a huge and powerful military to deal with what might come at us. Cyberwar will likely become the new battlefield, although shooting wars could happen if the world becomes destabilized. Iran is the wild card as that regime is on borrowed time. .

This is the inflection point. Globalism will be materially reduced as it is clear we must have US sources of key materials and products, especially drugs and rare earths and tech components. It is nuts that most drugs come from China and India. Suppose they just stopped supplying them. Rare earths come from China for the military and high tech products. Parts for ventilators are made in China. This will bring several industries back to the US, or maybe Mexico. Companies and production of all sorts will leave China as soon as they can. World trade is going to be reset in major ways, and China is the big loser. China will have economic setbacks of major proportions going forward between the trade war with the US and now the virus forcing a lot of manufacturing out of China.  Phase II of the trade negotiations will be very different. The whole Brexit negotiation will be changed, and the UK will be the winner. The US will be able to force the EU into much different trade terms. The EU may not survive this. The US will develop an industrial policy to require "Made in America" for critical commodities and products.

Fiscal discipline is out the window. Maybe the Treasury will refi the government debt at these low yields with 50 year bonds, which would make a tremendous difference going forward as to the debt service burden on the federal budget. Mnuchin has been pushing this. Notice how the ten year shot from .3% to well over 1%. In a week. Healthcare will be an excellent place to invest for a long time. The EU is now in really bad shape, and recovery for them may seriously raise the issue of, can the EU survive as an governing entity? Can the EU banks survive - likely not, and there needs to be consolidation, along with the major QE the ECB just announced of $800 billion. It is hard to see how Italy can ever economically recover from this. They were insolvent before the virus. Greece is toast. France was in serious trouble, and now will have a real struggle for several years. Without Mamma Merkel, there is no leadership in the EU.  Macron wants to take her place, but France is not Germany. He will not have the same level of influence she had. Do not invest in the EU.

When this is over, the US will be the only nation still strong, even with a short recession. It raises serious question as to whether China can still afford Belt and Road. There is now no way any of the countries that took Chinese loans can pay them back. Iran can no longer afford to fund its proxies. The mullahs are now on borrowed time. There is real risk to them now of a real revolution. In short, the world is in for years of instability, and the US is the only safe haven. The UK with Brexit behind it, is the only other nation that can stand on its own after this. Even Germany is now in recession and is mired in the mess in the EU. With a large poor Muslim population, and its dependence on Chinese buying its cars and machines, and the EU its biggest market, Germany has likely seen its best days. Investing anywhere but the US for the next few years is going to be filled with real risk. Inflation is dead for several years and oil prices will remain relatively low in the $50-$60  range at most once the Saudis and Russians stop their suicide war. The US oil industry is used to boom bust, and will consolidate and survive as the biggest producer in the world. Russia cannot keep up a price war. Their break-even is $54,  Oil is near half that. The Saudis also cannot afford this. The prince is pissing off a lot of powerful people and it would not be a shock to hear one day that he is out. Once again, the US is where to be in this mess.  If all this sounds upsetting, get ready for a very messy world now. Be thrilled you live in America.

Nothing in the economy or the market is predictable right now. The algos and the lack of the uptick rule has made the stock and bond markets totally irrational. The good news is the Fed is feeding huge amounts of capital into the banks, the bond and inter-bank loan markets, and commercial paper. Treasury has initiated new funding support top make sure the debt markets stay on track along with Fed funding. Treasury and the Fed are going all out this time before the crisis hits, to make sure the debt markets function smoothly with sufficient liquidity. Call it the Fed and Treasury put 2.0. They have made sure we do not have a repeat of the financial market shutting down as we did in October 2008. Liquidity for the markets is critical, no matter what the Fed has to do to maintain that. There will not be any bank bailouts as that is not needed now. Rule 13 at the Fed seems to be reinstated despite being ended by Dodd. That rule  allows the Fed to make collateralized loans to major corporations. Boeing will get a major loan so their suppliers can stay working. As happened in 2010, and after, a lot of the loans to industries will get repaid with interest in a few years. It will work and will save the economy. Congress needs to act fast and boldly, and some way needs to be found to allow companies to be subsidized for keeping staff on payroll, and for laid off workers to get enough cash for three months or so until things start to return to normal. If Congress can do that successfully without F-ing it up, (very questionable) then the economy will come roaring back in July or August when it is clear the virus did not kill very many, and almost no productive younger people.  Shutting the borders early saved us, and now the massive containment will work.  The massive communications effort by the White House task force to keep us fully informed, and to get people to stay home and away from each other was a critical step, and will turn the corner in a two to three weeks. Fauci will be the hero of this crisis. Trump is doing all the right things by enlisting the private sector so heavily. The US acted relatively fast and effectively, and closing the borders was essential. Testing will now catch up. There was no way to know to produce ventilators in time no matter what Schumer says. You don’t just buy those by the hundreds of thousands when nobody ever forecast the need.  The internet will have been seen to have made all the difference from anytime in the past. Without the ability to work effectively online, we would have a real crash. We are actually closing a construction loan at the end of March with a commercial bank where the loan officers are working from home certain days, and others in the bank in the other days. That is how a lot of companies are doing it, and it is working. Business is functioning, although at a slower pace. Most people quickly adapted. A lot was learned from 9-11 and 2008, and a lot of plans at large companies, the financial markets, and hospitals were already in place for just this sort of disruption. Treasury and the Fed know what to do. We will get through this better than at any time in history. Therapeutics will be fielded by July or August, and that will solve a big part of the issue.  The US will emerge better than most.

Keep things in perspective. Net of the nursing home there are just 95 deaths in the US over several weeks. Almost all, if not all, were people with serious health issues before. Testing is now ramped up. There are still only 5800 cases and most will recover fine. While the numbers will ramp up in the next three weeks, the massive stay apart and stay home effort should make a massive difference. Possibly in three or four weeks we will see the reduction in cases.

Schumer is a disgrace by making a highly political speech attacking Trump on the floor, just raising unnecessary fears with the public. It was disgusting.

Just stay calm and hold on. We are probably at the worst moment right now waiting for the peak cases and waiting to see if Congress can act responsibly for once. It is darkest before the dawn.  That is where we are right now. Conspiracy theories that China did this intentionally to retaliate and harm the US is utter nonsense. China has been severely damaged by this and that damage will get worse as supply chains are moved out. Xi’s rule has been materially weakened. China was a major loser from the virus. Kim says N Korea has solved the virus problem.  They very likely just shot anyone who got sick. Keep in mind Biden attacked Trump for shutting the travel from China and then from the EU. Had Trump not done that we would be in real trouble. Just imagine if Joe had been in charge right now - we would be in really big trouble.

For perspective.  When I visited Warsaw and Dresden I studied the history and was able to get perspective. Warsaw was obliterated by Russian armies. There were only 1,000 people left in the entire city. There was no food or anything.  Dresden was burned to the ground.  Today both are lovely thriving cities. I then visited Auschwitz and that horrible place. Yet the Jews survived as a people and went on to create one of the most intellectual and advanced nations on earth. Humans rise to the occasion, and the virus in nothing at all by comparison. America is rising up and will be better than ever.

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So, what did you think?  Lots to digest there.  Another positive is that while I'm still working, traffic is an absolute breeze!  And have you seen gas prices?  Ok, I'm done for the week.  Time for a staycation, in my recliner.

*I don't believe that China is successful in the least unless they are just killing victims and not reporting them.

29 comments:

  1. Interesting post Tuna. I don't trust ANY of China's figures, at any time...... CCP lied, people died. Commies do what Commies do....kill people.

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    1. There are reports coming out that the Wu Ping Cough (thanks, Angus McThag, from 'The Abode of McThag' (https://mcthag.blogspot.com/) for that) is now thrashing Communist China like Godzilla on a bender in Tokyo and the ChiComs are just not reporting it. At all.

      Some blogger with friends in Hong Kong (canna remember) has gone all 'Alex Jones' and is believing that ChiCom has sent infected to Hong Kong to plague up that place. Scary thing is... there's enough potential truth for me to almost believe it.

      (by the way, y'all, if you don't read McThag, you should. His perspective on the world of Guns, rebuilding modern Corvettes (the car, not the ships,) Legos, GURPS roleplaying, and other things like following the spread of the Wuhan whoohoos in Florida.)

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  2. This should be proclaimed throughout the land. Unfortunately my technological skills are still a product of the middle twentieth century and I lack the ability to utilize this computer stuff to its potential. Old Guns (I have been accused of living more in the 19th century by certain acquaintances).

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  3. Right on Nylon12. ANY thing they say is to be disregarded. They eat weird stuff and have for eons, and suddenly this happens? Riiiiiiight.

    I got to help smooth the way for testing kits to go to a major lab. That was gratifying.
    My quest for antibodies has made all the female staff run for the exits. Social Distancing achieved.
    Asking everyone how they like the Bernie Sanders presidency practice is going well. I've seen some real thinking happen.

    "Everyone is kung flu fighting. *Koff*, that sneeze was a little bit frightening." Blue Collar Logic hit that out of the park.

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    1. I was exhausted after traveling to Savannah to pack up my daughter's dorm, not sleeping more than a couple hours each night so I was run down. I started coughing late yesterday and of course got the side-eye from a few folks. My wife and I agreed that I'd sleep in the guest room for the night, taking the day off to be sure it wasn't anything. No fever, chills, nose, at all, and the cough was gone today. Glad to not be one of the walking dead, err- infected.

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  4. Most interesting reading.

    (On an historical note, the Nazis leveled Warsaw, not the Russians.)

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    1. The guy has some good points, although a little nationalistic for my tastes, but that's just the way it comes across maybe. Warsaw? Thanks. Damn Nazis.

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    2. Only because the Nazis got there first and did it. Given half a chance, the Russians would have also.

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  5. I had a random thought that might work in smaller towns, or mom & pop stores:
    If you have small item purchases you want to pay cash for, perhaps you could place the cash in a ziplock bag, run cleaner over the bag after it is zipped closed, then mark the date after the cleaner dries off.
    After enough days for the virus to die off, you can take the bag shopping, open it in the cashier's presence after explaining what you did.
    It might ease their minds.
    Probably wouldn't work for some people, and you wouldn't want to have lots of bags of cash sitting around the house :)

    When receiving cash, you could also place it in a bag, then clean hands and bag and mark the date as well.

    Frank

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    1. Good idea, but I'd have to touch the COVID-laced ATM buttons to get the cash! haha.

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    2. The old bag inside out trick. My only time on kp they taught us for food handlers. Used it several times while my dogs were alive and duty done in the wrong place.

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    3. Ahh, yes. I do that nightly with my faithful beast.

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  6. First thing to come to mind is, Thought Provoking, and immediately afterward, Reassuring.
    I pray for those who have contracted the disease.

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  7. Several things have made the Wuhan Communist China Corona Covid-19 bug worse in the United States are:

    1. Previous Administration's rules making the CDC the sole determiner of who and what can be used against a plague. Thus, of the 280,000 labs where testing is done daily, only 5,000 qualified under CDC's regulations. And then the CDC only allowed the CDC to produce a test kit, even though Big Pharma was working on several different tests, including US made variants of the South Korean testing system. The CDC's kits were a failure, as many were shipped with faulty reagents.

    2. Congress. Members of a certain party have been playing fast and loose with the law and the American People, demanding that any government help include mostly funding for non-Flu issues. Three times a certain party of jack-asses has tossed enough pork into a bailout bill that the bills have been either still-born in the House (1st one) or killed by the Senate (2 following ones. Either do something only for the Flu, or, better yet, don't do anything and let the recession burn itself out rather than extending like every other time Congress has 'bailed out' during a recession or depression. That's how recessions work, like a zit, pop it and let it heal. Futz with it with dirty fingers and it just gets worse and persists.

    3. The American Media. 'Nuff said right there.

    4. Self-entitled jackwagons, mostly on the Leftist side of the political spectrum, thinking they are better and more enobled than the rest of us. (Enobled - entitled feeling that one is of the noble party and others are just peasants.) Like here in Gainesgrad, capital city of the glorious student paradise of the Democratic People's Republic of Alachuacountystan. A bunch of under-21 students who are self-entitled jackwagons and worse, decided the whole social distancing thing did not apply to them, and went spring breaking and did the drug-drunk-sex thing. And then brought Comrade Wuhan to our fair city. To top it off, we have lots of actual communist Chinese wandering around the local University, many who went home on winter break, and some with relatives who bugged out to hang with their student relatives here ahead of the supposed quarantine in communist China. Real socialists and communists have shafted us.

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  8. And, Tuna? Great post and great guest article. The masterful mind of a mine-warrior has made more sense, in 1 post, than most of the MSM in 3 months.

    Take care of you and yours. Hope your boy is okay.

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    1. Thanks Beans. Kids are good. Son is bored to tears as his home is on lock down. They asked us not to visit for a bit as well since they have some older residents. Self-entitled Jackwagons. Nice description! They may not get sick, but they are the typhoid Marys of today.

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  9. That was a good post.
    One thing, I'd not count out the US corporate actions if they can save a penny, that penny is what sent the manufacturing away in the first place.
    A month after things are normal again (what ever that looks like now) that saved penny will have them looking at China again.

    Good luck everybody!

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    1. True, and when stock prices fall and CEOs are fired because of it, the race to the bottom of the price barrel begins again.

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  10. Good post and interesting articles Tuna.

    I know I'm an #######, but I swear I'd love to attention-getter ( https://youtu.be/xXFM2PrhmFQ )everyone who parrots the "oh, the world is forever changed" line. Fergoodnesssake, pick up a non-zinnian history book.

    The sickness numbers are tiny, and the panic is enormous. It's the mouse and the elephant. Which is hugely funny until the 15,000 pound elephant steps on your face in its terror-driven rampage.

    This may be a once-in-a-century opportunity to fix a lot of problems imposed on the nation directly by government but indirectly by a lazy and complacent American citizenry.

    As for published numbers, if you look at the way NASA/NOAA/NWS and a host of other government agencies have been openly manipulating data and publishing fraudulent climate information, I would suggest that unless you see the raw data and study methodology and do the work to see if it all stacks up you probably want to believe CDC (and in particular WHO) numbers the same way you believe chinese numbers.

    And can we please keep in mind that this virus isn't killing anyone of itself? It's overwhelming victims who have multiple extant health problems. One of the best investments you can make if you're 50 or over is 30 minutes of cardio a day. You can improve you pulmonary health and resilience a great deal in a very short time with a daily brisk walk.

    A major responsibility of all adult Americans is to act like a grownup. In hard and worrisome times, calm is contagious.

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    1. Great comments. I'd expect some calmer and cooler heads will prevail in the next week or two.

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    2. Go for a walk, and put down the damn cigarettes!! Talk about a lifestyle disease that folks have total control over...COPD would be a classic example!! You would improve your lungs, reduce your chance of 3-4 different types of cancer, cut your incidence of getting colds/flu/respiratory infections of all kinds every winter from now til forever, and save a boatload of money!! Besides, I want to retire at some point.

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    3. I completely concur! Tanks to our jackwagon Governor Evers shutting Wisconsin down, I am unemployed. The resort where I an the Night Auditor shut down,for at least 3 more weeks, perhaps until Memorial day.

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    4. Suz, I resisted a fitbit, but now I'm an addict for getting my steps and staying active. Fortunately I don't smoke, and was a key figure in helping convince someone we know to quit!

      Scott- sorry about the job. Hope we get back to normal very soon. Not that I want anyone to die, but the "at what cost?" question has been raised. Acceptable risk is what we need to find out. Shut the economy down for a year so we can prevent more deaths? Where's the tipping point.

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    5. Scott, that really sucks!

      Tuna - Thank you again.

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  11. Not much to disagree with here.

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  12. Except for one one point. Agreed till you get to, fed coordination. The feds are giving all coordination to the states, which states are taking back, or standing up and saying this was decided in the the 1860's? One government or fifty governments?

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  13. My home city, Szczecin (aka Stettin) was badly mauled by both allied aerial bombing and Soviet artillery at time of "liberation".
    Today it is shiny and new, yet has many finely rebuilt architectural pearls of old.
    It would be a terrible tragedy to see another city go down the path of Warsaw, Dresden, Tokyo...
    Yet look at Aleppo or Grozny. Russians still see city razing as way of war.
    Shudder.
    (also slight technical correction: Soviets did have a hand in destruction of Warsaw, but rather by abandonment than direct action. It was the Germans that demolished it to the ground following the 1944 Uprising...)

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    1. I'm not saying the Russians were innocent, just not directly involved in the destruction.

      They should have done something, but I think the Commies wanted the Home Army destroyed.

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  14. Tuna,

    Really enjoyed your guest op-ed. It was reassuring that some see all of this may have a positive outcome in the long-run. I just pray that the current class of Donkeys gets sidelined by what they have shown; if they don't we will be in deep kimchi.

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Just be polite... that's all I ask. (For Buck)
Can't be nice, go somewhere else...

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