Corona Relief Brief: Let Them Get Wiped Out

by | Apr 10, 2020 | Market Thoughts

This is a new series idea from a colleague of LaDucTrading, Jay Reynolds, who offers up some timely, relevant and personal vignettes on CoronaVirus news that you won’t likely get anywhere else. 

These posts should be easy to scan and synthesize, with a peppering of biology and market saltiness. Jay’s background is well suited to render a COVID19 perspective. None of it is trading advice. All of it is meant to educate and inform on a topic that holds our collective attention and will very likely shape our lives and economy for years to come. 

For now, this will be sent under the FREE Market Catch email note for non-members but can be found under Market Catch for members. Feedback welcome – reply to this email address if you rather not have the Corona Relief Brief as part of your LaDucTrading world. 

Women Catch a Break

Science Radio (no link)
I was listening to a molecular geneticist this morning explaining why men are more susceptible to COV than women.  Men have one X chromosome, women have two.  Each X chromosome is unique and each carries about 1,000 coding site for immune system activation. You can think of the X chromosome as a unique ‘padlock’ requiring a unique key.
So, infection in men requires the ‘unlocking’ of one padlock, in women two padlocks.

On the Markets: Perspective of a Layperson

Now, that’s a picture.
Wish I owned more physical gold, a good historical store of value.

Speaking of Gold

“Let Them Get Wiped Out”.

Or as Samantha tweeted:

Let companies fail now when there are big buyers (like @chamath) with cash to restructure … versus later when “everything fails” and there isn’t incentive or money… Inflation now or severe Deflation later.

The full interview is controversial and thought-provoking. Here is a badly recorded 30-min version and the official 15-min one that CNBC released, truncated version after promoting an article about it that didn’t even feature the correct interview.
On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are,” 
Chamath goes on to discuss why we need a MARKET-clearing prices for an asset, not Fed-supported ones. The Fed intervention obfuscates pricing by buying credit markets and infusing liquidity “into” equity markets. Cutting checks directly to humans would be a consumer-driven rebound, but these Fed + Treasury programs that provide a phantom high-yield rally in junk bond companies only exasperate the problems.
“When you look at, this is a lie that’s been purported by Wall Street. When a company fails, it does not fire employees–it goes through a packaged bankruptcy . The people who have the pensions inside the companies, the employees of these companies end up owning more of the company. The people that get wiped out are the speculators hat own the unsecured tranches or the folks that own the equity. And by the way, those are the rules of the game. That’s right. These are the people that purport to be the most sophisticated investors in the world. They deserve to get wiped out.”
Someday these assets have to be priced to reality. Plugging the holes of balance sheets does not make US whole.
File Under: Stranger Things

Astrophysicists looking for dark matter invent dirt-cheap open-source ventilator to combat COVID-19 instead

All with off-the-shelf parts that cost hundreds, not tens of thousands, of dollars.

Back Stepping

https://twitter.com/disclosetv/status/1248588497805545472?s=20

Side Stepping

Upsetting

And after US opens back up?

A Dash of Humor  

 

A Dash of Hope

Good Prognostication:   Caitlin Rivers, PhD 
“The next week or two we will start to turn the corner in some places in the US. This will be a triumph that we should all celebrate. But the next phase will bring new challenges. Here is my guess of how things will unfold……There will also be growing agitation about whether staying home was necessary. Make no mistake, it is and was. Any good outcome we observe will have been hard fought. Unlike weather forecasts, which pass no matter what, we directly influence an epidemic’s trajectory.”

A Dash of Pride

My brother’s company donated 50,000 masks to NYC hospitals and 250 new iPads so that patients could better communicate with their loved ones.  No announcement, no fanfare, no PR.  Just did it.  Way to go!

Resources

Best Overall w/ Projections and Historical Lookback: COVID19 Health Projections by Country 

Global and US – Johns Hopkins
Alternative – WorldOMeters with State by State in the US
Specifics By US Metro Area – By city or metro area.

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