Miscellaneous And Off Topic Subjects

[Jeff Buchanan]

DSL, I realize that ..... question asked and answered.

Now, there is middle ground here between the idiocy of calling the virus a hoax and the idiocy of Melborne. I certainly think Desantis has found that in FL but he is getting hammered by his political opponents for all sorts of things from calling for schools to conduct in person learning to not issuing a state wide mask order from allowing reopening while at the same time failing to understand people won't behave. I've posted FL's data here. Yes, there are deaths but Desantis' focus has been on reopening and managing outcomes although he can't say that becasue it means accepting that management means people will die from this ...... blasphemy.

OTH, his counterpart in CA, Governor Newsom, came close to the idiocy of Melborne - details escape me - but as soon as the left coast starts to re-open the virus will return. Same story just on a different level.

[Dr. Strangelove]

But, but, but ..... DSL will tell you that his sources think the markets are completely disconnected from economic reality.

Granted, we're seeing consolidation in the market place. The big guys are doing well and wealth is accumulating within those companies while small businesses are struggling. But that is how that goes in capital markets but, DSL doesn't like those so he'll whine about it.

I believe that small business is incredibly important to the US economy but the big boys drive the US economic engine and have done so for centuries. I'm fine with that, I'm not fine with redistributive socialism and what that implies as in leveling the playing field.

I do think a strong middle class made up of entrepreneurs and well trained labor is important. There are ways to build a middle class like that through education, tax policy, consumer protections and appropriate regulations. In the mean time, Congress has at it's disposal the means to get small business and the mostly low skill labor force through this if it will get off it's partisan ass and get it done ..... and I am for a huge free money hand-out as fiscal policy from Congress and easy money as monetary policy from the Fed .... for now.

I got bad news for you, buttercup...hanni sort of agrees with me that the markets aren't being quite rational. He and I are both amazed that the market isn't tethered to any particular news right now. It just goes up.

Do you think it's possible that the several trillions of dollars of "redistributive socialism" this country has paid out to people since April has had anything to do with inflating stock prices? Do you think the Fed lowering interest rates to zero, and already saying they have no intention of raising them until at least late 2021, had anything to do with it?

Peak unemployment was something like 22 million. Over the course of May and June something like 7-8 million went back to work. That still leaves A LOT. And the ADP report that came out today said only about 150,000 got their jobs back in July. We know from weekly unemployment claim numbers that unemployment has actually been increasing over the past couple weeks.

At some point problems are coming. Unless you expect we'll just keep passing one relief bill after another until unemployment is down around 5% again.

But if you really think stock prices are closely tied to cold, rational thought, explain Tesla's stock price to me. Tesla had about $25 Billion in revenue last year; Toyota had over $270 Billion. Go and compare their market caps.

[THE_WIZARD_]

Covid is a fucking HOAX. Has been from day 1.

[Tom W]

There's literally no one saying all businesses, schools, and churches must remain closed until cases reach zero. No one. Tell me a Governor who has literally closed everything and refuses to lift any restrictions. Name ONE..

Obviously, you haven’t listened to any school board Q&A sessions. Well, I haven’t actually either ( that’s just too zany for my fatigued mind right now) but my wife has. People (sorry, no name given) have actually said that opening schools would KILL children. People have really lost their shit.

[lineygoblue]

Obviously, you haven’t listened to any school board Q&A sessions. Well, I haven’t actually either ( that’s just too zany for my fatigued mind right now) but my wife has. People (sorry, no name given) have actually said that opening schools would KILL children. People have really lost their shit.

Its happened here in our community. Many are saying they will not send their kids to school because they don't want them to die, and they don't want them bringing something home that will kill Dad, Mom, Grandpa, Grandma, etc.

[Dr. Strangelove]

Trump endorsed some no-name Congressman for reelection today which I only mention to explain why I looked the guy up. Someone made a comment in the replies that I wanted to verify for myself

The Congressman is Scott DesJarlais of the Tennessee 4th district. It's a nicely gerrymandered district that takes in some SE Nashville suburbs and a lot of rural Tennessee plus the outskirts of Chattanooga. He was also originally a doctor.

During his divorce from his first wife he admitted under oath to having had multiple affairs, including a drug company rep, three co-workers, and worst of all, two patients. Now I'm not sure how he managed all that sexual activity considering he looks like the uglier brother of Michael Chiklis but that's besides the point. He also admitted to having encouraged his first wife to have multiple abortions before they were actually married. As you can probably guess he is a loud Pro-Lifer today.

This all came out 8 years ago. DesJarlais declared that God had already forgiven him. The good people of Tennessee have returned him to Congress 3 times. He got fined $1000 by the Tennessee licensing board ($500 for each patient he slept with). That seems sorta light to me but I really don't know anything about it.

Anyways, just wanted to introduce you to a lesser known member of Congress.

https://www.timesfreepress.com/news/local/story/2012/nov/16/scott-desjarlais-supported-ex-wifes-abortions/92999/

[Dr. Strangelove]

Oh. The Manhattan DA who is trying to get Trump's taxes already subpoenaed and received loan information from Trump's favorite lender over the past decade: Deutsche Bank

There have been been numerous accusations that Trump routinely inflates the value of his properties when speaking to lenders, while pleading poverty to Uncle Sam. Having both sets of documents would probably confirm the truth of that. Utterly clueless as to what level it has to rise to be considered fraud.

https://www.nytimes.com/2020/08/05/nyregion/trump-taxes-vance-deutsche-bank.html

[lineygoblue]

That's going to be in litigation for years.

Its the kind of case that lawyers love. Lots of billable hours, and a rich client that can pay them.

[THE_WIZARD_]

shaddup

[Jeff Buchanan]

I'm going to leave you alone on your take of the COVID threat. We're apparently not going to see the data the same way. Fine. But THIS deserves a response.

I got bad news for you, buttercup...hanni sort of agrees with me that the markets aren't being quite rational. He and I are both amazed that the market isn't tethered to any particular news right now. It just goes up.

The markets are not always rational and in this unique period where the global economy has been crippled, a case can be made that business consolidation is creating the fundamentals upon which stock prices can rationally rise. Beyond the tech sector that is benefitting from demand created by the shift to working remotely among other factors are larger companies that had huge cash reserves. That, with federal help, allowed them to retain employees and production capacity. They've weathered COVID so far and because they continued to operate at near scale they are now profiting to meet shifting demand as smaller companies falter. To my untrained eye, there's no secret to why Amazon, Walmart and major supermarket brands have become highly profitable and rising stock prices are an appropriate reflection of that. Such as your world view is, you're not going to applaud or recognize those fundamentals.

Certainly there are sectors of the global economy that are hurting badly and aren't going to recover anytime soon. The travel and leisure industries and especially airlines are prime examples. I don't see companies, even some of the biggest, surviving. Great gnashing of teeth will appear as the likes of United, probably the weakest of the US majors,declares bankruptcy. But this has happened before and reorganization occurs and the airline industry in new shape and new form will rise from the ashes. That's because as travel gradually becomes less restricted, demand will surge, money can be made and investors will jump back in. When that occurs is anyone's guess. Right now, things look bleak but it isn't going to stay that way for long. You won't see that either - the future, all of it, is no more than a nuclear winter.

Do you think it's possible that the several trillions of dollars of "redistributive socialism" this country has paid out to people since April has had anything to do with inflating stock prices? Do you think the Fed lowering interest rates to zero, and already saying they have no intention of raising them until at least late 2021, had anything to do with it?

COVID federal relief, in this case, isn't "redistributive socialism." It is a reflection of the drift away from Milton Friedman among other economists and toward Modern Monetary Theory. You should read up on it...... and of course, this well timed and very effective federal relief has kept the economy from nose diving as well as keeping the folks heads above water ...... and spending. Spending produces demand, demand produces profits, profits produce economic expansion ...... never mind.

Peak unemployment was something like 22 million. Over the course of May and June something like 7-8 million went back to work. That still leaves A LOT. And the ADP report that came out today said only about 150,000 got their jobs back in July. We know from weekly unemployment claim numbers that unemployment has actually been increasing over the past couple weeks.

At some point problems are coming. Unless you expect we'll just keep passing one relief bill after another until unemployment is down around 5% again.

First, no, federal aid cannot continue indefinitely to prop up the economy although MMT suggests that printing money works until currency value erodes and we're not close to that. But, with the appropriate application of management strategies to deal with COVID (and the next virus and the next), a level of robust economic activity will return. But make no mistake, COVID has changed the labor market forever.

I have no idea what it will look like in the next three years but companies in advanced economies will rely on less workers, new technology including AI and more automation. Skilled workers will thrive, unskilled workers, while still required to fill labor requirements in agriculture and service sectors, will face tough times as a lot of pre-COVID jobs aren't going to return. The issue of the unskilled unemployed has to be addressed and there are reasonable ways to do that from a federal level that do not involve vast, expensive social give-way programs that are disincentives to the jobless to seek better education that begets a better job.

But if you really think stock prices are closely tied to cold, rational thought, explain Tesla's stock price to me. Tesla had about $25 Billion in revenue last year; Toyota had over $270 Billion. Go and compare their market caps.

Sure, some of the Tesla stock's rise is speculative but most of it is based on solid fundamentals. Back in February, pre-COVID, I saw some NASDAQ analysis that actually compared Tesla metrics to those of Toyota. Toyota certainly had the lead in many of them but it was look back data. What's driving Tesla stock prices beyond speculation is the realty of green economics and electric vehicles. Tesla is already expanding production capacity to meet future electric vehicle demand as countries transition away from carbon based fuel/towards electric vehicles while Toyota isn't. I'd call that a winner. Buy it, not Toyota.

[iam416]

One of the things I loathe about this whole thing is the Media's incessant Blue State v Red State battle. Geraghty lays out some facts: https://www.nationalreview.com/the-m...vid-narrative/

The reality is, as he notes, that humans crave interaction, the virus spreads through interaction, inevitably we think we have shit under contro and let our guard down, cue the "surge" in cases (of course, the surge is all relative).

If your state hasn't had a "surge" you're going to have one. Period. End of story. Doesn't matter if you're run by a sainted D hero Governor or Satanic R governor.

[iam416]

Great post, Buchanan. I really mean that. Easily your best post of probably the last 6 or 7 years. Spot on.

I think DSL's problem is his reliance on CNBC which tends to be gloomy, at least w/ PDJT at the helm. Even pre-Covid the market rise was all a giant bubble.

The reality is that a lot of companies are still, fundamentally, in a good position.

Also, thank you for raking that "redistributive socialism" bullshit over the coals.

[iam416]

Most recent Florida data (through August 4):

15-24 yrs: 20 deaths; 75,737 cases
25-34: 53 -- 96,541
35-44; 164 -- 81,899
45-54: 331 -- 79,507

75-84: 2,185 -- 21,198
85+ : 2,526 -- 12,294

Ages 15-54 Cumulative: 570 -- 333,684 (0.17%)

0-14: 3 -- 27842

Ages 0-54: 573 -- 361,526 -- (0.16%)

[AlabamAlum]

Can you imagine if Trump had said this? Wow. He’s gonna be president. Haha.

[Jeff Buchanan]

Ages 0-54: 573 -- 361,526 -- (0.16%)

You know this but not everyone understands that this is the Case Fatality Rate (CFR) not Infection Fatality Rate (IFR) which is lower still. ..... it is likely that FL has the best death stats among all of the states. How it is determined is transparent, encompases and has overcome the tricky aspects of reporting death stats that confound most state reporting. IOW, it is accurate as it relates to deaths actually from COVID rather than deaths that occurred in persons for other reasons where COVID infection was also present. I know it's accurate because the press isn't complaining about it. They tried but got hammered for doing the math wrong. CFR is also, as one should expect as more data is gathered, quite a bit lower than the CFR was thought to be in January (upwards 0.5%) and in May (0.35%)

Fine. CFR is lowering. IFR is even lower. It can only be estimated because how many infections there actually are in a region can only be estimated. But count on the geeks to come up ways to compute this number and the more data they collect, the more accurate IFR becomes. It is now thought to be closer to 0.25% overall but has a very distinct age related impact.

IFR and, especially it's age distinct characteristics, are very important. Here are the conclusions from a recent study:

The estimated IFR is close to zero for children and younger adults (to age 49) but rises with age, reaching about 0.3 percent for ages 50-59, 1.3 percent for ages 60-69, 4.6 percent for ages 70-79, and 25 percent for ages 80 and above. We compare those predictions to the age-specific IFRs implied by recent seroprevalence estimates for nine other U.S. locations, three small-scale studies, and three countries (Iceland, New Zealand, and Republic of Korea) that have engaged in comprehensive tracking and tracing of COVID-19 infections. We also review seroprevalence studies of 32 other locations whose design was not well-suited for estimating age-specific IFRs. .......... the overall IFR (by seroprevalence) for a given location is intrinsically linked to the age-specific pattern of infections. In a scenario where the (overall) U.S. infection rate reaches 20 percent, our analysis indicates that protecting vulnerable age groups could prevent more than 200,000 deaths.

The point is clear: Officials should implement protection measures and by extension more rigid mitigation measures to the age cohort that is 60y and older. The rest can go about their business with, in the under 45y cohort, at about the same risk of death for normal every day activities and the 46-59 cohort having about the same very low risk of dying in an auto accident. 60y and over combined have - 50X the risk of dying in an auto wreck if you get COVID skewed toward 80 and up. The study points out, it's data analysis varies from several other earlier peer reviewed studies that, based on little evidence, predicted much higher IFRs. One important caveat to the 60y and up cohort's risk of death from COVID: This study admittedly did not differentiate recorded causes of death "from" or just "with" C-19. This has been an ongoing problem for COVID related death stats and if anything, the actual IFR for the 60y and above cohort is probably even lower still. becasue of the skewing, If you're under 80, your risk of dying approaches that of the 60y olds. That's what I keep telling myself! In fact I'm 72 and have a worst case 4.6% chance of dying from COVID if I catch it or a 93.4% chance I'll recover and be just fine.

It's an interesting 53 page study that does a good job with the math but not so good with the caveats above:

https://www.medrxiv.org/content/10.1...895v2.full.pdf