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Old 02-28-2020, 12:32 AM   #1
Andrew NDB
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Corona Virus/Dow Jones taking a hit/possible recession

So there's a lot coming out now about the Dow Jones taking a bit hit as a result of the Corona Virus and all, and how this may be Trump's Hurricane Katrina and such.

https://www.investors.com/market-tre...e-beyond-meat/

https://nationalinterest.org/blog/bu...-moment-126862

Will quote a post I've seen elsewhere:

The biggest economic problem with Coronavirus is China's quarantines. 50M people are confined to their homes in and around Wuhan, a further 500M cannot travel outside their town/city. All manufacturers were ordered to cease work, bringing exports from China to a standstill. The quarantines are costing China billions of dollars a day and if we believe their stats they have been only mildly successful at containing the spread of Coronavirus "inside China."

China is giving every Hong Kong citizen $10,000USD to try and quell unrest and help mitigate the fiscal hit citizens are about to take.

Canada "will not quarantine" per the Canadian Government. This is because A) Legally quarantines violate our Charter Rights B) With a 27 day incubation period quarantines are in-effective and C) The economy cannot be allowed to collapse so that Food, Water & Medicine must continue to flow unebated or more people will die.

Markets wouldn't be hit nearly this hard if China didn't quarantine.
While quarantines are effective with certain pathogens that have short incubation periods, China made a catastrophic mistake quarantining over Coronavirus.

Iran is completely over run, the Deputy Health Minister is ill, the Vice President is ill. Iran borders China, Afghanistan and Pakistan. China cannot stop Coronavirus, they can't even slow it.

Now to do something unthinkable in November. Trump's trade war with China forced a lot of American companies to stockpile made in China goods. The trade war also caused a lot of companies manufacturing in China to relocate manufacturing plants to India, Malaysia.

Trump's trade war likely lessened the blow the US is feeling right now from China's economic hardships.


What's your take? Personally, I think it's a crazy situation that would effect any President in exactly the same manner. I also don't think it's terribly more fatal than the regular bout of flu. A bit, maybe, but it seems like the media is exacerbating things in the ole spinjob to try and create a panic and nosedive the economy to do what Russia and impeachment did not, if you catch my drift.
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Old 02-28-2020, 12:51 AM   #2
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I haven't sat and worked out the percentage for chance of death going on the number of cases vs deaths but for this to happen it has got to worse than your average flu death rate.
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Old 02-28-2020, 12:56 AM   #3
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I haven't sat and worked out the percentage for chance of death going on the number of cases vs deaths but for this to happen it has got to worse than your average flu death rate.
It is a bit, though I'm only really seeing blanket numbers thrown about. Not about things like, "of the deaths... how many were elderly, or already immuno-compromised," etc..

Things like this, especially now, make my Spidey sense tingle. Kind of like the faked up "statistics" about second hand smoking deaths numbering in the millions every year suddenly being thrown about when there was a sudden push for a certain agenda (that got what it wanted, by the way)... yet no one has actually met anyone that's died of second hand smoke that I've ever known.

And then articles like this come out...

https://www.washingtonpost.com/opini...1FRgLmG77hq7Xk

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Old 02-28-2020, 09:17 AM   #4
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I haven't sat and worked out the percentage for chance of death going on the number of cases vs deaths but for this to happen it has got to worse than your average flu death rate.
Oh no, this is not the case at all. You don't need a high death toll for markets to respond negatively in an outbreak situation. Before I explain this, the proof is already there - the market drops have been staggering already.

Consider this - the markets respond to productivity declines. When people are sick, there are fewer people out producing all of the stuff that makes markets move. And this includes physical and intellectual property. You don't need a death toll to a market recession to happen. All you need is something that significantly interrupts productivity.
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Old 02-28-2020, 09:37 AM   #5
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Oh no, this is not the case at all. You don't need a high death toll for markets to respond negatively in an outbreak situation.
Right, but the average 70 year-old investor turning on CNN and seeing, "TOTAL CRISIS! Coronavirus coming to your front door probably tomorrow! Riots expected next week!" is probably going to start selling their stocks, or at least seriously considering doing so.
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Old 02-28-2020, 09:53 AM   #6
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Originally Posted by Andrew NDB View Post
Right, but the average 70 year-old investor turning on CNN and seeing, "TOTAL CRISIS! Coronavirus coming to your front door probably tomorrow! Riots expected next week!" is probably going to start selling their stocks, or at least seriously considering doing so.
Well yeah I mean that goes hand-in-hand with exactly what I was describing above. I don't understand the "but" part of your example.... That would happen with or without excessive deaths from Coronavirus. It is happening. I don't even want to talk about my last 3 day losses.
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Old 02-28-2020, 10:55 AM   #7
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There's an old saying that an opportunist thinks: "Never let a good crisis go to waste."
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Old 02-28-2020, 11:25 AM   #8
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There's an old saying that an opportunist thinks: "Never let a good crisis go to waste."
Smart investors will buy when they consider a downturn to be at it's lowest. But I will say that many people have money locked up in 401ks and only in magnitudes of 10's of thousands.

I think it takes a different kind of inner peace during a period of significant loss. To turn around and enforce a buying behavior for people who just lost 40k from 600k especially if they are in a "drawing funds from it" situation, as opposed to something like a 5k loss out of 30k especially if they are in a "I'm in the middle of investing for retirement" situation.

Basically there's economic science versus personal psychology and the personal psychology is strong, man. It's all on the same spectrum as the "buying action figures as a function of addiction without recognizing it's addiction" thing I come back to now and again. Fighting impulse is hard for people, especially when many don't recognize that something is an impulse to begin with.
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Old 02-28-2020, 11:32 AM   #9
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I think, the major problem here is not a virus itself, but a hysteria surrounding it.
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Old 02-28-2020, 11:40 AM   #10
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I think, the major problem here is not a virus itself, but a hysteria surrounding it.
This particular situation it's a little bit of both. This is a more unique situation than most hysteria sell-offs. So let's start by putting the "hysteria" part on lockdown - we agree, we know it's there. the end. Enough said.

There are real time issues right now. China was the epicenter of this. China's productivity has been very diminished by what's going on over there. Many goods and saleable items come from China. And so that impacts markets here not out of hysteria, but out of honest shoring up of resources because there will be, or already is a resource depletion on things that come from China. That's a real time issue.

There are predictive issues right now. Goods and services require mass transportation. The Chicago area is a hinterland for the entire country for example. If people in Chicago get sick then they can't work. They can't forward freight, demurrage piles up, the truck drivers can't transport freight throughout the country. And so that impacts markets not out of hysteria, but out of honest shoring up of resources because if people get sick, then things won't get around throughout the country. That's a valid thing to project as an upcoming issue.

I could go on with more examples. But combine them with the hysteria thing. The hysteria is a function of selloffs to cultivate resources. The hysteria is another factor on top of what happens to a market in a pandemic as I see it, at least. But there are legit concerns outside of hysteria.
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Old 02-28-2020, 12:16 PM   #11
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It'll pass eventually. I'm not sure the point of even claiming that China's quarantines were a mistake. I mean, what option is there that actually gets an entirely different end result? Either you lose production and affect the stock market because you quarantined people, OR you lose production and affect the stock market because you didn't and it spread a lot more like wildfire, everyone got ill and couldn't work, and in some cases died and will never return to work.

At least if quarantines can help slow it down and eventually contain it the production and stock market will still eventually recover and hopefully sooner than if they had not tried to act.


If this continues on through spring, this probably does have the potential of affecting Trump, yes. Esp if his claim of it magically disappearing in April doesn't come true. (Which is hogwash anyhow and he seems to be the only one who thinks viruses actually just cease to exist.) It's that kind of totally unnecessary stuff that he may stupidly set himself up for taking some heat for it later.

The main thing I'm annoyed at him about where this is concerned is how he shoved Pence to the forefront for this. When do we hardly EVER hear about Pence? Maybe he's doing things that don't get much attention, but by and large it's like the man largely exists in the background where he won't steal any of the spotlight. And NOW when the country needs Trump himself to step up and be a leader who can talk to the people and keep things calm and under control over something that's worrying the entire world (no matter if the extent of worry is unfounded or not)...he chooses to hide behind Pence? It's just a little too obvious that on the (hopefully slim) chance this whole thing turns to hell and does become very bad here, it will be very convenient for Trump to point at Pence and throw him under the bus as the one who was put in charge and failed.
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Old 02-28-2020, 12:26 PM   #12
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Originally Posted by IndigoErth View Post
And NOW when the country needs Trump himself to step up and be a leader who can talk to the people and keep things calm and under control over something that's worrying the entire world
Eh, I don't think anyone on either side of the aisle is looking to Trump for soothing words of comfort in this or really any other matter. He's not that guy. Let Pence try and be that guy.
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Old 02-28-2020, 01:08 PM   #13
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Eh, I don't think anyone on either side of the aisle is looking to Trump for soothing words of comfort in this or really any other matter. He's not that guy. Let Pence try and be that guy.
Yeah, but not only that - I can't help but view a criticism that Trump is hiding behind Pence on this as nothing more than more sour grapes mud flinging.

Quote:
Originally Posted by IndigoErth View Post
The main thing I'm annoyed at him about where this is concerned is how he shoved Pence to the forefront for this. When do we hardly EVER hear about Pence? Maybe he's doing things that don't get much attention, but by and large it's like the man largely exists in the background where he won't steal any of the spotlight. And NOW when the country needs Trump himself to step up and be a leader who can talk to the people and keep things calm and under control over something that's worrying the entire world (no matter if the extent of worry is unfounded or not)...he chooses to hide behind Pence? It's just a little too obvious that on the (hopefully slim) chance this whole thing turns to hell and does become very bad here, it will be very convenient for Trump to point at Pence and throw him under the bus as the one who was put in charge and failed.
Oh cmon man, seriously? That's your interpretation of this? The guy is using his personnel (read: personnel not personal) resources and allocating them as contact points. That's called mobilizing. To say anything about it is completely outlandish and to criticize it as a self-centered move is the same opportunism and reality twisting that we've seen from the extreme left now at every turn. Seriously, I wanted to address your interesting talking point about "blowing over" and China, but then you wrote this nonsense.
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Old 02-28-2020, 02:47 PM   #14
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Not sure about it being "Trump"'s Hurricane Katrina? Outside of the stock market, we got a good hold on it compare to other countries. Only 60 cases so far and zero deaths. That's way better than say the likes of Japan/China or Italy. Over all we are in better shape than other nations, so don't believe the Dems argument of Trump poorly handing the crisis.
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Old 02-28-2020, 03:03 PM   #15
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Not sure about it being "Trump"'s Hurricane Katrina? Outside of the stock market, we got a good hold on it compare to other countries. Only 60 cases so far and zero deaths. That's way better than say the likes of Japan/China or Italy. Over all we are in better shape than other nations, so don't believe the Dems argument of Trump poorly handing the crisis.
Exactly. And we are talking about a virus here - it could and probably will get worse. But opportunists will seize any element they can to criticize this. If you ask me all of this behavior is public domain evidence of what people do in any situation where they just don't like someone for any give reason. In office spaces, on teams, any social environment that can be adapted into a personal sabotage environment.

It's disgusting and I hope the people who employ attack via twisted truth or by inescapable conversation piece rather than by reality find themselves victim to it. By the time the dust clears people who want to be opportunistic will never acknowledge what could have happened as opposed to whatever did. It's the negative information thing I went on about in another thread. A criticism of opportunity will use only the clear information regarding however many people succumb to the virus as opposed to what didn't happen because of our checks and balances. That's all you'll hear about from these people once the dust settles. And it is going to get worse.
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Old 02-28-2020, 09:46 PM   #16
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While the market seems to be reacting to corona virus, which is partly true, this is mostly what we call a correction in finance. The stock market had been on a bull run since Trump got elected without much backing up the price, this happens from time to time and stocks fall and are "corrected" to what their real price should be. Convid19 is indeed responsible since markets are uncertain about what's going to happen and many companies rely on china not just in making the products but also buying them and if similar things happen in other countries it could affect the price.

Stocks try to predict what will happen, but things won't go back to normal after the epidemic ends, there is a correction taking place as well and unless there's some new economic policies things won't change.
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Old 02-28-2020, 10:22 PM   #17
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While the market seems to be reacting to corona virus, which is partly true, this is mostly what we call a correction in finance. The stock market had been on a bull run since Trump got elected without much backing up the price, this happens from time to time and stocks fall and are "corrected" to what their real price should be. Convid19 is indeed responsible since markets are uncertain about what's going to happen and many companies rely on china not just in making the products but also buying them and if similar things happen in other countries it could affect the price.

Stocks try to predict what will happen, but things won't go back to normal after the epidemic ends, there is a correction taking place as well and unless there's some new economic policies things won't change.
Are you saying that your opinion, which you've implied is from within the field of finance, is that you view the current significant DOW drop - as large as it was and amidst the fear of a global pandemic in conjunction with a mass-production country being cripple - a traditional correction?

I mean most professionals and street investors will tell you that the 2018 drop was a true market correction. Market corrections are widely considered to be "normalizing events" amidst over value. On the other hand, this last week would only be recognized as a "correction" in the purely academic use of the term in that the market saw a 10%+ dip. And so, what we saw in 2018 was a true correction from an inflated market - which sucked but, in theory, was a normalizing event. But this week's dip was directly correlated to the confluence of current events: social behavior, and the fear of future supply chain issues, a global health event. That's not what most people would call a "normalizing market event".

I'm very curious to hear more about your theory on this. What economic policy is derelict in this regard?
Also in your last sentence you wrote "stocks try to predict what will happen". What do those words even mean? Stocks don't predict anything - stocks are representative constituent parts of organizational value.
Also please address what you mean by saying that "not much was backing the price" across the bull run. Productivity, excitement in investing, and America first policy brought business to moving markets which backed the price.... what are you talking about with that statement?

Please explain or address these things a bit, because you've got me hooked for curiosities sake....
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Old 02-28-2020, 10:26 PM   #18
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Also in your last sentence you wrote "stocks try to predict what will happen". What do those words even mean?
Maybe he meant stockbrokers? That's the way I read that. *shrug*
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Old 02-28-2020, 10:47 PM   #19
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Maybe he meant stockbrokers? That's the way I read that. *shrug*
I thought that too, but even that wouldn't correct the statement to truth..... I mean he's saying "what we call a correction in finance", implying some ownership of the field, but actually a stockbroker would be the first person - the absolutely first person to tell you that you can't time the market (hence "predict").

I've got a lot of questions about that post in the nature of conversation.
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Old 02-28-2020, 11:01 PM   #20
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sorry, sometimes I write long posts, realize I'm getting into things that I don't care to explain and delete paragraphs only to sometimes have stuff that no longer makes sense. So yeah, I don't have much time to get into things, I already deleted half of this post

Short term trading is requires skill, long term trading is a lot easier, so it depends on what you're doing. For the average person, it'll just mean inflation unless you rely on your 401k. As I mentioned corona virus is definitely a factor, especially when countries start reporting lower growth in their quarter reports and other companies do as well. Stocks have been over valued and the bull market has lasted way too long without anything to back it up so yeah people expected them to drop quite a bit, people seem to be taking advantage of this to blame it on convid19. It's also why Bob Iger left Disney for example, timed to do the last damage when the stocks are already getting plummeted. I would expect a bigger drop soonish both because of overvaluation and convid19, Trump's polices aren't good long term so I can't see his bull market lasting a second term but if the pandemic is controlled things could go up again, if say Bernie gets the nomination you can bet the market will react negatively.

But before you decide to buy the dip, remember it's catching a falling knife. Short term trading is difficult, long term is easy since it's cyclical and things will go up eventually, sucks for your 401k but for the average person it'll just mean inflation.

As far as coronavirus, I think people are both exaggerating it and not taking it seriously enough, there has to be a balance. I think for the most part things will be fine, however you can bet I'll be more wary than normal. Better safe than not and having a few extra cans and washing my hands more often is not a bad thing, getting paranoid and doing more extreme things or reading only the news however is just as silly as thinking your invincible and not doing anything.
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