Fear...

  

FDR :So, first of all, let me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.

*New York governor Andrew Cuomo, a Democrat,  indicated that New York does not have enough hospital beds to house a potential flood of coronavirus patients, and that only the military would be able to augment existing facilities to house those patients.

*The Federal Reserve made another emergency cut to interest rates on Sunday, slashing the federal funds rate by 1.00 percent to a range of 0-0.25 percent. ... Lower rates encourage more money into the economy, inducing businesses to invest and consumers to spend and borrow. That keeps money flowing through the economy.

*At stores across the U.S., shelves are being picked bare. The coronavirus is spurring panicked shoppers to stock up on products ranging from cleansing wipes to peanut butter as they prepare to hunker down in the midst of the growing pandemic.

*New York City’s schools will close Monday and remain shut till at least April 20 — and possibly the rest of the school year, Mayor Bill de Blasio said Sunday.

However, this time is different. So have some fear and follow the instructions. It is not unknown any more.

Circus...

U.S. hospitals are setting up circus-like triage tents, calling doctors out of retirement, guarding their supplies of face masks and making plans to cancel elective surgery as they brace for an expected onslaught of coronavirus patients.

Depending on how bad the crisis gets, the sick could find themselves waiting on stretchers in emergency room hallways for hospital beds to open up, or could be required to share rooms with others infected. Some doctors fear hospitals could become so overwhelmed that they could be forced to ration medical care. 

The United States is still facing an active flu season, and many hospitals are already running at capacity caring for those patients. The new virus will only add to that burden.

Government health authorities are taking emergency steps to waive certain laws and regulations to help hospitals deal with the crisis. Hospitals, too, are getting ready.

Hospitals are also hiding the freebie surgical masks usually offered to visitors in the lobby, so that doctors and nurses can use them instead if supplies run tight. At Blue Ridge Regional Hospital in the small mountain community of Spruce Pine, North Carolina, respirator masks are locked and under video surveillance.

Doomed...

Doomed if they do, doomed if they don't.

Dire Outlook...

JPMorgan's views of the virus "have evolved dramatically in recent weeks" as the outbreak has spread further, the bank's economists wrote.

The US economy could shrink by 2% in the first quarter and 3% in the second, JPMorgan projected, while the eurozone economy could contract by 1.8% and 3.3% in the same periods.

Technical recession is defined as two consecutive quarters of negative gross-domestic-product growth. The bank's emerging-markets economists haven't updated their growth estimates, but "evolving news on the virus and the material tightening" in those markets' financial conditions make it "reasonable to expect further downward revisions" in global first-half GDP.

The outbreak was initially deemed a short-lived but disruptive shock to world economies, but two key developments led the bank to brace for a "much sharper" contraction in the first half of the year and a "novel-global recession."

The economists first cited the "sudden stop" to economic activity created by quarantines and social-distancing measures around the world.

The cancellations of major sporting, cultural, and business events will further cut into consumer spending, and the uncertainty surrounding the virus will make a coordinated economic restart even more difficult, the economists said.

Financial markets' wild price swings and tumbling asset prices will also contribute to economic contraction over the next two quarters, according to JPMorgan. Financial conditions around the globe are "tightening sharply as perceptions of credit quality" across several assets deteriorate, the economists said. The risk of sovereign and corporate debt crises adds to the firm's already dire economic outlook.

Join...

Hours after declaring a national emergency because of the coronavirus, President Trump suggested the nation look to God for "protection and strength."

On Friday evening, Trump declared Sunday a National Day of Prayer and pointed out how the public has historically found solace in faith during times of crisis. The first Sunday of every March since 1988 has been designated a National Day of Prayer in the United States, but Trump personalized this year's day of prayer to address the outbreak of COVID-19.

“It is my great honor to declare Sunday, March 15th as a National Day of Prayer,” Trump wrote.

I..M...

We tried.

Whadda Ya...

The Covid-19 Virus Saga will create more unexpected winners and loosers, similar to the surprise   Democratic front runner for the nomination of the party.  Just a thought.

Wait...

During his Friday show, Lou Dobbs showed off a printed out chart autographed by President Donald Trump of Friday’s 1,985-point Dow Jones average rise…one day after the same financial index dropped a record 2,352 points.

Recapping the day’s major financial market moves, the Fox Business host touted the $2 trillion bounce-back, which managed to make up 84 percent of losses from Thursday’s nosedive, which was the largest single-day drop since 1987’s “Black Monday.” The financial markets firmly remain in bear territory, however, having fallen nearly 22 percent off their recent highs.

For all who are irritated by this, wait for Monday.  Just a thought.

Swan...

A black swan in markets is an event that has not occurred in the past, thus rendering useless risk management models based on historic data. Such a risk model would assume that all swans were white.

“First, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility,” author Nassim Taleb wrote in his book "The Black Swan."

“Second, it carries an extreme impact.

Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable.”

In the case of the coronavirus, no one predicted a disease would cause more than 60 million people in China to be locked down during the Lunar New Year, the country’s busiest travel period, paralyzing the Chinese economy.

Horizon...

If the bear market that began in mid-February 2020 is average, the market will trade at a new all-time high in February 2023.

Whether you see this as good or bad news depends on your investment horizon. The prospect of three years without new highs will be disappointing if you’re a short-term trader who has been spoiled rotten in recent years by bull-market records being regularly broken.   

How long will it take for the market to recover from its bear-market losses and make it back to where it stood at its Feb. 19, 2020 high?

To find out what light history can shed on this question. Looking at the bear-market calendar maintained by Ned Davis Research, there have been 36 bear markets since 1900. In each case, measuring how long it took for the S&P 500 to subsequently claw its way back to where it stood when the bear market began.

The average across all 36 bear markets was just over three years. SO be prepared.