Messages

1

Consequences / Re: COVID-19

« on: Today at 08:31:48 PM »

This is like the 100th announcement of a rapid tests that can be made widely available, forgive my disbelief until I see it in action.

Nonetheless. IF and WHEN we have cheap, rapid testing either by Abbot or anyone else, wouldn't you say that the problem is mostly solved? Testing millions of people even every week is far cheaper than an economic collapse. Even your orange-haired friend will understand that

2

Consequences / Re: COVID-19

« on: Today at 08:30:00 PM »

Once you beat the first wave and have a cheap, rapid test, the virus is in effect beaten.

Ain't it so?

Yes, after it is produced by the 100s of millions, distributed to 100s of thousands of locations, testers are trained and organized and you convince a recalcitrant, ill-informed, independent-mnded populace to conform.  Not gonna happen overnight.

Not overnight, but by summer: possibble.
They say:
"The company is deploying 150,000 laboratory tests immediately. Tests already have been sent to hospital and academic medical center labs in 18 states including Illinois, California, New York, Massachusetts and Washington. Abbott is scaling up production at its U.S. manufacturing location to reach capacity for one million tests per week by end of March."

This will easily reach 10-20 million tests produced per month by summer. This will also be licensed with lightning speed to Europe as well. This is THE solution (after the first wave has passed)

3

Consequences / Re: COVID-19

« on: Today at 07:12:11 PM »

Coronavirus rapid test+contact tracing = coronavirus is beaten

I think this is very important news:

https://www.marketwatch.com/story/abbott-labs-receives-fda-approval-for-rapid-covid-19-test-2020-03-27

"The company said that the molecular point-of-care test can be run with one of Abbot's portable platforms called ID Now and will detect a positive result for COVID-19 in "as little as five minutes" and determine negative results in 13 minutes. The portable testing platform weighs 6.6 pounds and is about the size of a small toaster, the company said, and is "already the most widely available molecular point-of-care testing platform in the U.S. today."

Once you beat the first wave and have a cheap, rapid test, the virus is in effect beaten.
 
It really is simple:

Everyone reporting to work or school must have his / her temperature measured every morning and anyone above 37 C is immediately tested for COVID19. If positive, anyone he came into close contact with is also tested and so on. 

This way the virus' spread is extremely slowed down.

Ain't it so?

4

Consequences / Re: Global recession

« on: Today at 07:06:32 PM »

Jim Rogers is a great speaker and a great person. I love that guy. And he - together with George Soros - was in charge of the Quantum Fund in the 70s and 80s when it had stellar returns (30-40%/year). So he clearly achieved something in financial markets. I always watched his interviews on CNBC in the 90s.

However, he has been very wrong about most things he said (he was a commodity permabull, a Chinese stock permabull and bearish on everyhing else...while the exact opposite happened) during at least the past 10 years, so I wouldn't necessarily trust him on this.

5

Consequences / Re: Global recession

« on: Today at 07:23:54 AM »

The Next Financial Crisis: A Collapse of the Mortgage System
https://www.politico.com/amp/news/2020/03/27/mortgage-system-collapse-coronavirus-pandemic-152338

The mortgage finance system could collapse if the Fed doesn’t step in with emergency loans...

But they will. As all other central banks. This time the financial system is not the core of the problem and can be handled relatively easily.

The service sector - which in most recessions a stabilizing factor - is collapsing. We need novel solutions for that problem, eg. (temporary) universal basic income, direct handouts to the population (happening in the US right now), government paying (part of the) wages instead of firms, etc. This is the bigger problem now.

6

Walking the walk / Re: Gardening

« on: Today at 07:20:19 AM »

^^
Your seeds are fed a more nutritious diet than I.
Terry

They have to be fed well as they will feed me

And they pay back the care: I already have some small green tomatoes on my tomato plants planted 7 weeks ago

7

Walking the walk / Re: Gardening

« on: March 27, 2020, 09:17:17 PM »

Most likely "damping off". Fungal disease that suddenly kills seedlings. Google it and you'll see solutions (for next time, these ones are finsihed).

What I do is that I put the seeds into the pot, and water them in with cold chamomille tea (which is a weak fungicide), later waterings are with normal water. After planting I put some freshly ground cinnamon powder on top of the soil (also fungicide and helps plants grow faster). This way even if your soil is not sterile damping off usually does not happen.  Do not overwater.

One more trick (for melon seeds): soak them in milk for one day before planting. Also helps fend off fungal diseases.

Bonus trick for later: you can spray tomatoes, melons, grapes and even apple trees with 1:5 milk-water. This (google it, there are studies) creates good bacteria/fungi on the plants' leaves and there remains no room for the bad guys. it works

8

Consequences / Re: COVID-19

« on: March 27, 2020, 05:52:24 PM »

The current CFR in the U.S. is 1.5%.  That is based on the official number of deaths (1295) divided by those testing positive (85,435).  This is a straight forward number, and easily calculated. 

That assumes that 0% of the non-dead and non-resolved cases would be fatal. That is a low bound of the CFR. Currently in the US about 2/3 recover and 1/3 die of the cases with a resolution. That is the upper bound.

I'd say Americans' mortality (as long as the hospitals are not full to the brim) should not be any different from Germans' or Koreans' for that matter. And that is around 1%. Everywhere you have widescale testing, you get around 1%. Everywhere where you test only the serious cases you obviously get way above 1%. Even the Diamond princess had only slightly above 1% and that ship was full of old folks. Of course if you test only those who get real sick, you can even get 10%. But that will not show you anything. Apples to apples.   

Biggest testers per million population:

https://www.statista.com/statistics/1104645/covid19-testing-rate-select-countries-worldwide/

Mortality for biggest testers (dead vs confirmed case numbers 7 days ago - this should be pretty much right, because serious cases die within a week AFAIK):
Iceland: 0,7%
UAE: 1,4%
Bahrain:1,7%
Norway:0,7%
SKorea:1,8%
Slovenia:2,4%
Australia:1,6%

9

Consequences / Re: Global recession

« on: March 27, 2020, 05:36:34 PM »

My gut feeling says the US$ will crash, loosing essentially all value, during this Coronavirus episode.

Crash against what? Are the alternatives (yen, eur, whatever) any better? NO. Money printing everywhere. It is a beauty contest where only really ugly peopée take part. Which one should win? And why?
Yes, the dollar is overvalued vs almost all major currencies, so it could slide 10-20% easily this year but i would not call it a crash

10

Walking the walk / Re: Gardening

« on: March 27, 2020, 03:51:37 PM »

We're putting in half of our potatoes today nevertheless. Not putting them in exactly, but putting them on the ground and covering them with a thick layer of hay.

That is the best way. I don't have hay though, so I put them into the ground last November and put 20 cm of fall leaves on them. Expecting to see some green soon...did the same with garlics (but put only 10 cm of leaves on them) and they came out 3-4 weeks ago and weathered snow, frost, everything without any problems.

11

Walking the walk / Re: Gardening

« on: March 27, 2020, 09:24:37 AM »

So we got snow (I even had the opportunity to snowboard on the hillside), but temps luckily fell only to -4,3 C which I guess is good news for the apricot and peach trees, but this way I did not have a real test for the mini-solar greenhouse. Inside the greenhouse temperatures were mild, with a minimum of +2 C and daily max of 10-15 C while it was hardly above zero and windy outside. So radishes and lettuces laughed off the cold outbreak. Today it's going to be 15 C so we will make some tortillas outside on the fire and eat some goat cheese and a first harvest of lettuce and radishes.

Life is good!

12

Consequences / Re: Global recession

« on: March 26, 2020, 06:11:21 PM »

Well Tom, my country lost 2/3 of its territory after WW1, tearing apart many families. Then came the Bolshevik takeover in 1919, then the country was invaded by surrounding states, then came hyperinflation in 1920-1921, then the economic collapse of 1929-33, then we became allies of the Germans and lost 10% of our population during WW2, while the Soviets took away everything they found (food, factory-equipment, etc. We started to rebuild from scratch. Then came another Bolshevik takeover and people were sent to gulags. Then came the revolution of 1956 which was brutally supressed by Russian tanks, we fought them with Molotov cocktails, but noone came to help, so we lost. Another 200 000 people left the country. Then came happy times: you had food, and you could live without war. Of course you could not travel, or vote or say anything bad about the Party. Then came 1989 and we fell into a huge economic depression (same size as 1929-33), lost 30% of GDP in 4 years, with 20-30% unemployment. Oh, and then there was the crisis of 2006-13, when for 7 years there was no growth in the country, with a government bond and FX crisis.

So tell me more about the Greatest Depression my people will not be easily surprised

13

Consequences / Re: COVID-19

« on: March 26, 2020, 03:00:25 PM »

Let's get back to COVID19 after this nice distraction of narcissistic chiefs, communist parties and a fucked up planet

14

Consequences / Re: COVID-19

« on: March 26, 2020, 12:38:12 PM »

This is also relevant:

https://www.livescience.com/germany-coronavirus-deaths-so-low.html

Why is Germany's COVID-1 death rate so much lower than other countries?

"Germany has confirmed nearly 34,000 cases of COVID-19 as of Tuesday morning (March 25), but just 171 deaths total. That number — about a 0.5% death rate — suggests the death rate of the novel coronavirus causing COVID-19 is way, way lower in Germany...Germany didn't do mass testing at the highest rates — as was seen in South Korea where 10,000 tests were run a day — but Germany was meticulous about the process, the Post reported. Once an individual tested positive, officials then tracked every one of their contacts and proceeded to test and quarantine those individuals, essentially breaking "infection chains," the Post reported.

In addition, the virus is known to have more severe impacts on the elderly, and to date, most of the diagnosed cases in Germany are in younger individuals: The median age for confirmed cases of COVID-19 is 47 in Germany, compared with 63 years old in Italy"

15

Consequences / Re: COVID-19

« on: March 26, 2020, 12:11:08 PM »

.  The hospitalization rate is somewhere in the 5-20% range.

You are right.
I exagarrated a bit but no more than Sam's 12% mortality


But of those 5-20% (I would think rather 5 given the asymptomatic cases) again, "only"  a third need intensive care, so even if hospitals are totally jammed , not everyone who now gets hospital treatment would die lacking that. Far from it. That is my understanding currently.

Back-of-the-envelope:

Out of 100 infected, 30 asymptomatic, 70 shows symptoms, let's say 7 ends up in a hospital, and cca 2-3 needs intensive care, 1 dies. In my book even with zero hospitals there would not be a mortality of above 4% (which of course is also unacceptable and huge).

some breakdown of hospitalization rates / intensive care /mortality here:
https://www.statnews.com/2020/03/18/coronavirus-new-age-analysis-of-risk-confirms-young-adults-not-invincible/

16

Consequences / Re: Global recession

« on: March 26, 2020, 08:24:46 AM »

Nice chart. I think the 1987 comparison is about right. There we also had a shock, although not external but internal. You could also argue for a 1929-style scenario where a 50% drop was followed by a 50% rally (and then the market turned down).The S&P fell 35% in less than a month (3400-2200). That seems about enough. I think 2 years from now we will be higher, wouldn't bet on 2 months though.

17

Consequences / Re: COVID-19

« on: March 26, 2020, 08:20:34 AM »

One more thing: although it is absolutely true that US authorities are in many cases truly clueless, as case numbers blow up, people will self isolate and that will reduce the spread very much.
In economics classes they often use the term "ceteris paribus" - meaning all else unchanged. But in reality all else is NOT unchanged. When people see what is happening they change their behaviour so that an uncontrolled, quick spread is very unlikely in my view. Besides, as the body count rises, politicians get their shit together and do things that were unthinkable before (see Italy). The world is not static, it adapts...

18

Consequences / Re: COVID-19

« on: March 26, 2020, 07:22:44 AM »

...With the hospitals saturated, death rates go to ~12%.

Holy shit! Now we are at 12% mortality. Soon it will be like the Black Death!

Considering that cca. 5% of cases need hospital care that is a pretty tall order... Also need to consider that many mild cases are not even reported, and we know that there are many asymptomatic carriers (estimated variously between 20-40% AFAIK). So 12% death rate out of a realistic 2-3% hospitalization rate...wow.

I do not want to belittle this pandemic because it is a huge problem and need to be dealt with, but come on, let's get real:

https://www.vox.com/2020/3/5/21165973/coronavirus-death-rate-explained

19

Consequences / Re: Global recession

« on: March 25, 2020, 09:23:39 PM »

A rational investor might invest some money in gold, specifically as a hedge against inflation.  Otherwise, it's a terrible investment, more of a gamble.

People obsessed with owning gold seem to be the source of most calls for "returning to the gold standard."  The idea is completely daft.

I tend to agree. I have never been a gold bug - on the contrary. However, the time to own gold is the time when fiat money is printed like crazy and real interest rates are very low. This is one of those times. But then again, I would rather own stocks

20

Consequences / Re: COVID-19

« on: March 25, 2020, 08:47:43 AM »

I think this is an extremely mistaken study, but anyway:

https://www.standard.co.uk/news/health/coronavirus-half-uk-population-oxford-university-study-finds-a4396721.html

"The coronavirus could have infected as much as half of the the UK’s population, according to researchers at the University of Oxford."

"And the research suggested that less than one thousand of those with Covid-19 became ill enough to need treatment in hospital, with the vast majority developing mild symptoms or none at all."

Now, if 1 in 1000 would get infected and 10% requiring hospital care dies, then at most 1 in 10 000 could die, or even 1 in 20000 given herd immunity. So Lombardy (population 10 million) should have at most 1-2 thousand deaths. they already have 4 thousand.

How can "modellers" disregard reality???

21

Consequences / Re: Global recession

« on: March 25, 2020, 07:06:20 AM »

As for gold:
- it is useful in coins in case of war as my grandparants learnt during ww1 and ww2...you can buy food, or even your life
- as an investment it is useful when real interest rates are negative and becoming more negative (ie. low interest rates+high inflation). As due to forced liquidation real bond yields shot up (see attached table), gold duly fell. As yields started to go down again, gold is rising.

Currently real 10 yr rates are cca -0,1% and as 10 yr nominal yields are 0,8%, this implies that inflation should be 0,9%/yr during the next 10 years. That is obviously way to low, given the extreme money printing we are going to get. The pricing is due to market malfunction and will be corrected during the next months. Real bond yields will collapse and gold will rise - I am saying this although I never really beleieved in gold...

22

Consequences / Re: Global recession

« on: March 25, 2020, 06:58:37 AM »

And there you have it: a stimulus worth of close to 10% of GDP. This is truly huge:

https://www.marketwatch.com/story/senate-talks-continue-on-massive-coronavirus-stimulus-as-final-agreement-proves-elusive-2020-03-24?mod=home-page

Europe should and will follow as they always do

23

Consequences / Re: Global recession

« on: March 24, 2020, 06:31:36 PM »

El CID, 2009 was different, it was the biggest recession since the Thirties and approached some earlier depressions.

Yes it was different. And it wasn't. It is always the same. There is some sort of ****up that is first underestimated and then at the bottom people think that it is the end of the world. The problems are always new but the pattern is the same:

****up---underestimation----realization of truth----panic----government and CB intervention ---- sometimes even more panic ---- "no future, the world has changed forever" sentiment ---- recovery

BTW, US unemployment was bigger in 1982 than in 2009:
https://fred.stlouisfed.org/series/UNRATE

24

Consequences / Re: COVID-19

« on: March 24, 2020, 06:24:49 PM »

If we coordinate, we may be able to eradicate the common cold along with C19.

I don't get this one. How would that be possible???

25

Consequences / Re: Weird Weather and anecdotal stories about climate change

« on: March 24, 2020, 04:43:40 PM »

We are also having a cold outbreak, and 850 hpa temperatures dropped to -12C, although the lowest 850 hpa temp during this winter was only -8 C.

As for 2 m temperatures this winter we dipped to a low of -8 C on Dec 2, 2019 (our average winter low is cca -12 C) and that was the minimum. Yesterday we were down to - 5 C after many sunny days of 15+ C during daytime. My apricot trees started flowering a few days ago and are not very happy now

26

Consequences / Re: COVID-19

« on: March 24, 2020, 04:39:04 PM »

...a partial lock down is the worst of all worlds: you rot in your flat, virus does not stop.

I coudn't agree more.
Hit hard and then you won't need to keep hitting too long

27

Consequences / Re: Global recession

« on: March 24, 2020, 02:19:27 PM »

Is your faith in the ability of the growth dependent global finance system to remain stable in the face of ANY events truly infinite?

Not in ANY event surely, I can imagine scenarios that would make me think that there is no return (at least for many years). At the beginning of this outbreak in January I thought that mortality is 20+% and if that were true I think there would have possibly been civilizational collapse. Also, there are other scenarios that I can imagine that could cause collapse.

But I have seen quite a lot and now can safely draw the conclusions that:

- this virus can and will be beaten
- the recession caused by it is extremely, recordbreakingly deep, but managable
- governments and central banks have the tools to manage the financial system's underlying fragilities

Conclusion: I believe that 2020 will see a global recession but that will not turn into a depression and a breakdown of the financial system. We shall see one year from now who is right.

28

Consequences / Re: COVID-19

« on: March 24, 2020, 02:12:09 PM »

ITALY

A Glimmer of Hope? Yesterday's new cases lower than for the 4 days previously.
Against that the death rate still looks ominously high and still rising.

Deaths should be a (very much) lagging indicator, new cases should be more forward looking (if they were reported well). Nonetheless, with significant social distancing, European new case numbers should be improving quite quickly.

29

Consequences / Re: Global recession

« on: March 24, 2020, 01:21:11 PM »

You can start calming down when you hear : "This time is different". I heard it in 1987, 1998, 2009 (every ten years basically). And now this:

"People will not forget this. This is not 911. It is not 1987."

It is.

30

Arctic sea ice / Re: The 2020 melting season

« on: March 24, 2020, 01:18:12 PM »

Someone did some great charts during the last melting season based on Bremen, average and max thickness. It filtered out the day to day variation. We could use those once again.

However, there really does seem to be serious weakness from the Barents to the Laptev. I would not be surprised to see a record this year (esp. considering aerosols and the snowless winter in Eurasia)

31

Consequences / Re: COVID-19

« on: March 24, 2020, 10:49:41 AM »

On another note, some glaring discrepancies once again

Portugal 23 dead, 2000 cases
Spain     2300 dead, 36 000 cases
Germany  114 dead , 28 000 cases

Either the Germans have the Holy Grail, or the Spanish are seriously undertesting and therefore underreporting cases. Pick your choice

32

Consequences / Re: COVID-19

« on: March 24, 2020, 10:45:25 AM »

So first it was more dangerous to use masks because of face-touching, then when it proved wrong, a new argument came: don't rob the doctors of precious masks. Now, with home-made masks we are back to square one: it is once again dangerous, because you touch your face. I think we should put our masks on and move on from this distraction.

Looking at you blumenkraft

33

Consequences / Re: Global recession

« on: March 24, 2020, 07:16:51 AM »

I'm not here to defend corrupt millionaire senators and their sleazy spouses; but on Jan 26th, and certainly on February and March, the COVID-19 pandemic was a widely known issue and certainly not secret.

Exactly. Yet markets rose in the blind faith that it can be contained in China. Anyone could have sold shares during February or bought put options for pennies (March S&P 500 at the money put options traded for 20-30 points at the beginning/middle of February...they paid out cca 700 points at expiry)

34

Consequences / Re: Global recession

« on: March 23, 2020, 03:57:54 PM »

This thread is about the recession and possibly the recovery thereafter. How deep is the recession going to be, how long, when and why the recovery will start.

I agree that it would be, or rather would have been great if our leaders started strong quarantine measures earlier, would have started mass testing, contract tracing, etc etc. But that is sadly beside the point and belongs to the main COVID thread...where amazingly some people still argue about the usefullness of face masks, which should have been mass produced weeks ago by governments, distributed to all, and made compulsory in public...amazing

35

Consequences / Re: COVID-19

« on: March 23, 2020, 01:42:35 PM »

South Africa : 402
Egypt :  327
Algeria : 201
Morocco : 134
Burkina Faso : 99
Tunisia : 85
Senegal : 67
Cameroon : 56
Nigeria : 36
DR Congo : 30

I would say LOL if it weren't sad. They have not enough tests, hardly any real, quality hospitals, and no help will come from EU or US for obvious reasons. They are truly f**d. Sorry, that is the truth. The above numbers are as false as my own country's numbers...

36

Consequences / Re: Global recession

« on: March 23, 2020, 01:39:03 PM »

Case in point :

https://www.marketwatch.com/story/fed-announces-unlimited-qe-and-sets-up-several-new-lending-programs-2020-03-23?mod=home-page

Fed announces UNLIMITED QE!

No surprise here. There will be an enormous amount of fiscal spending as all bonds will be bought by the Fed. You don't need to worry about government debt as can be seen from the Japanese example of the past few years. Although Japans' gobernment debt to gdp is a gigantic 260% (vs 60-90% average of developed nations), half of it has been bough up buy the Bank of japan, effectively eliminating it.

If you want to know what comes, look at the US monetary regime during and after WW2. The Fed then fixed short term rates near zero and put a ceiling (yield curve control) on longer dated bonds as well. This is a new war, wartime rules apply.

Soon to come: corporate bond buying by Fed and later possibly even stock buying (though I doubt they will use this tool at this time). Also: 10+% government deficit in the USA

37

Consequences / Re: Global recession

« on: March 23, 2020, 11:29:21 AM »

I totally agree. That is why I say that you can quarantine an economy for 2 months but not 9. The economic pain would be too much to bear. They will rather let the pandemic take hold and be done with it

I'm not so sure we can even survive 2 months, El Cid. With the small businesses operating with razor thin reserves and the big businesses putting all their money into stock buybacks even 2 months could kill the economy.

True. That's why you need immediate, huge fiscal spending. And we will get it

38

Consequences / Re: Global recession

« on: March 23, 2020, 08:25:23 AM »

I think this will happen in the next one year:

https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56

39

Consequences / Re: COVID-19

« on: March 23, 2020, 06:56:44 AM »

The Chinese hid 1/3 of infected. Real mortality rate therefore is lower than reported:

https://www.scmp.com/news/china/society/article/3076323/third-coronavirus-cases-may-be-silent-carriers-classified

"More than 43,000 people in China had tested positive for Covid-19 by the end of February but had no immediate symptoms, a condition typically known as asymptomatic, according to the data. They were placed in quarantine and monitored but were not included in the official tally of confirmed cases, which stood at about 80,000 at the time."

also:

"The approach taken by China and South Korea of testing anyone who has had close contact with a patient – regardless of whether the person has symptoms – may explain why the two Asian countries seem to have checked the spread of the virus"

40

Consequences / Re: Global recession

« on: March 23, 2020, 06:49:38 AM »

If/when the crisis is not over soon there also won’t be a quick V shaped economic recovery. This may turn recession into depression.  A depression permanently destroys the production capacity of an economy; it’s like an financial WMD that kills good and healthy businesses along with the bad.

Yes, governments can help but they cannot replace companies’ customer base if demand completely collapses. If this becomes a depression there will be bankruptcies and high unemployment.

I totally agree. That is why I say that you can quarantine an economy for 2 months but not 9. The economic pain would be too much to bear. They will rather let the pandemic take hold and be done with it

41

Consequences / Re: Global recession

« on: March 22, 2020, 09:50:11 PM »

Yes, that is a popular misconception.

1) actually they never did do it fullscale, only halfheartedly
2) even then, japan's per worker gdp (ppp) growth is no worse than usa or europe, see:
https://seekingalpha.com/article/288071-the-myth-of-japans-lost-decade

many think that japan's policies failed but their only real problem is a very quickly aging society

42

Consequences / Re: COVID-19

« on: March 22, 2020, 09:43:51 PM »

My big worry right now is not the 1st but Africa and the Middle East (i know, i am a racist). They have no chance at all, their whole population will be infected (the only saving grace is their young population). And they almost unavoidably will reinfect the EU and the US eventually.

43

Consequences / Re: Global recession

« on: March 22, 2020, 09:07:49 PM »

You basically contradict yourself there, EC. It it is either unlimited or in real terms it will hit a limit. You can't have it both ways. No sense in debating this here.

I am less sanguine than you about central banks' ability to respond.

There is no contradiction. Central Banks can print any amount of money. This can stabilize the economy and panicky markets. However, money printing does not create real goods. If they overdo printing they will risk inflation.
But, when your house is on fire you do not care that you step into a nail. You will deal with the nail later, after putting out the fire. That is what they are going to do. 1st: put out the fire, and then deal with any problems arising.
Expect central banks to start buying huge quantities of government bonds and if needed corporate bonds or even equities. Coming soon!

44

Consequences / Re: Global recession

« on: March 22, 2020, 04:21:04 PM »

The recession will be over this year. It won't last at all. Why would it?

Of course this is just your prediction, that's fine.  What I don't get it what appears to be your blind faith that central banks' and governments' response to this will necessarily be successful.  The ability to stimulate is not unlimited. There is a breaking point. No one knows if we will reach it, but no one knows that we definitely will not.

Yes, you are partly right but partly wrong I believe. This is the great test for Modern Monetary Theory which basically postulates (among other things) that any country which has its own central bank and is not indebted in a foreign currency can spend ANY amount of money. Basically the government issues government bonds and the Central Bank prints enough money to buy it, so the government has as much money as they wish.
If the output gap is negative(meaning we are in a recession like now, for sure) it will not cause inflation - provided that you withdraw the stimulus in time.

In nominal terms most big, developed countries have UNLIMITED funds to be spent. In real terms of course, it would soon hit real economic constraints (eg, you can print billions of dollars but if you don't grow enough food it will only cause food prices to rise). But to manage a crisis, they can spend any amount of money. They can send a cheque of 10 000 dollars for each person if they wish to. It is a brutal, stopgap measure, but works as long as the crisis is short.

Of course, if this virus mutates into something much more evil then it will be no use, but the way things stand, I see absolutely no limit for fiscal spending and countering the economic collapse. The Federal Reserve can buy all the corporate bonds and all the stocks they want to stabilize prices, and the Administration can spend as much money as they wish on any projects.

45

Consequences / Re: Global recession

« on: March 22, 2020, 12:39:25 PM »

El Cid, premise one depends on a lot of unknowns.

We can't know if and how it will mutate (very likely it will, maybe to a less harmful strain, or maybe not!).
Therefore, we can't know if herd immunity will be a thing at all and we can't yet know if it becomes endemic.
We also don't know if there will be treatments or vaccines in a timely manner.

So premise two is obsolete.

Please don't state such things as facts. We can't possibly know!

Interesting thing is, you did not ask Tom not to state such things (" the pandemic will be over in a couple years and four out of five will get through it fine. But the recession we caused to stop the pandemic will go on long afterward and affect everybody") as facts.

Aren't you a bit biased?

I have said before and say this again: you can keep up a quarantine for two months but not 6 or 9. This means that by summer politicians will have either solved this or will let this go through the whole population. Either way, the recession will end this year and we will see recovery in 2021. That is my opinion. But of course I might be wrong, and anything could happen, it could mutate into the next Black Death, or an asteroid might hit the planet. Who knows? The future is unknowable. We should get back to this in 2021 to see who was right.

46

Consequences / Re: COVID-19

« on: March 22, 2020, 10:18:54 AM »

What do people think - Italy has entered lockdown on March 6th, two weeks ago. Assuming actual infection rates went down sharply after that date and considering the lags involved, should we expect the skyrocketing deaths to stop growing and/or start shrinking 3 weeks after lockdown initiation?

Yes, that will most likely happen.

Italy DID NOT go into lockdown until today. Schools closed first and later restaurants but most people still went working. They closed factories only this weekend AFAIK. They did not do the obvious, Hubei-style complete lockdown from the beginning. Result = more, many more dead than they should have had

47

Consequences / Re: Global recession

« on: March 22, 2020, 10:13:22 AM »

This pandemic will be over THIS year. Either thru containment or herd immunity. The recession will be over this year. It won't last at all. Why would it?

48

Consequences / Re: Climate change, the ocean, agriculture, and FOOD

« on: March 22, 2020, 07:56:22 AM »

So you can stand with Belarus' preident Lukashenko

https://www.euractiv.com/section/coronavirus/news/belarusian-leader-proposes-tractor-therapy-for-virus/

"Belarusian President Alexander Lukashenko on Monday (16 Monday) encouraged citizens to work in the countryside and drive tractors as a way to overcome the coronavirus epidemic.

The former collective farm director, who likes to emphasise his connection to the land and rural residents, told officials at a televised meeting that “there shouldn’t be any panic” over the virus.

“You just have to work, especially now, in a village”, he said as the former Soviet country that borders Russia and Poland prepares to sow crops.

“It’s nice watching television: people are working in tractors, no one is talking about the virus,” Lukashenko said.

“There, the tractor will heal everyone. The fields heal everyone,” he added.

Belarus is famed in the former Soviet Union for its tractor production, with the Minsk tractor plant remaining a regional leader.

Neighbouring Russia and the European Union, the country of nine million has so far reported 36 cases of the coronavirus.

Lukashenko is not the only post-Soviet leader to put a personal spin on anti-viral advice.

The isolated authoritarian state has not reported any cases of coronavirus. Russia has sent it testing kits"

49

Consequences / Re: Global recession

« on: March 21, 2020, 03:36:22 PM »

This pandemic  a global catastrophe that will play out over the coming years not months.

This is going to cause a huge recession, many will go bankrupt, big numbers of unemployed, no question about that. But will definitely not take years. You can stop the world for 2 months but not 9. If we can't get anywhere by summer, then the economic pain will be too much to bear and they will just let it rampage thru the population, aka herd immunity. Or we will get a vaccine by autumn. Either way, 2021 is going to see an economic rebound. Besides there is going to be so much fiscal stimulus that noone has ever seen since WW2

50

Arctic sea ice / Re: The 2020 melting season

« on: March 20, 2020, 07:32:52 AM »

Let's not forget that if global land temps go down 1 C that is oftentimes 2-3 C for NH mid and high-latitudes plus cold outbreaks with late frosts that can kill any plants

Well, it's a good job the temperatures are going the other way then, right?

Oh yes, it works like that both ways. 3 C global average temperature rise will mean 6-9 C warmer winters in NH midlatitudes and 3-6 degress warmer summers. We will get there pretty soon...
Putin says good, at least Russians will have to buy fewer fur-coats...

(attached map shows 1C global temp anomaly vs 1950-1980 which implies 2-3 C warmer winters in NH mid and high latitude land)