It's interesting that all of the current activity is speculation and the actual impact of supply chain disruption really hasn't started to hit yet. Given that we're at record levels of corporate debt, I would think we are likely to see a lot of ripples.
Apple, for example, already announced they will miss sales targets due to supply chain disruptions, so the market is going to factor that in whether or not the expected delivery was missed.
But I think the impact is already being felt -- ports are already reporting a drop in container ships.
Los Angeles isn't huge. Arrivals in Shanghai/Shenzen/Ningbo (and to a lesser extent, HK) are definitely down and vessels are staying in port but the world hasn't stopped. Busan is fine, Singapore is fine, Jebel is fine, Rotterdam is fine, etc. Maybe the virus gets worse somehow but when things resume, they will resume quickly.
If you look at traffic stats for the Chinese cities above, you will see they improved last week...last Monday Shenzen was actually back to normal. Again, maybe the virus gets worse but the evidence is that we have stabilised.
I don't know what qualifies as "huge", but around $300B worth of cargo passes through the Port of Los Angeles every year. And other ports are also reporting slowdowns.
It takes about 2 weeks for a cargo ship to reach the USA from China, but it can take 30 days or longer to get a shipment through the entire cargo chain from start to finish, so even if things are recovering on the China side, we're still in for at least a few more weeks of disruption.
And since cargo is stacking up on both sides, it'll probably take months to get everything back on track.
The top port does something like 4x the volume. Los Angeles is in the top 20 (just #17) but it isn't large.
I just told you what the volume is (you can check for yourself, all of this is public information) for other ports.
It won't take months. That is just not factually accurate, it takes a day or two to load the largest container ships, and they load more than one at once. It isn't "stacking up", that isn't how ports work...if you can't get space, you don't stack your stuff at the port, you just don't send it.
Evidence is also that the virus just isn't that bad, it's the same order of magnitude as a bad seasonal flu. We definitely didn't know this at the start, so the reaction was justified, but evidence is showing us that this is both (a) likely not a virus we can contain in part because it's just not that bad and (b) that shouldn't really matter to us. Longer term, we'll have a vaccine and it'll be added to the usual seasonal flu vaccine package.
Time to accept it: we're all going to get the coronavirus, and you know what? The vast, vast majority of us are going to be just fine. [1]
So we're clear, the seasonal flu has killed 80,000 people so far this year vs 3,000 from nCov-19.
The transmission rate is a bit higher than H1N1, the fatality rate is a bit higher than H1N1 (0.6% vs 0.45%). Treating this as some sort of ebola pandemic where we're all going to die is a massive overreaction.
From the WHO report almost half of people are asymptomatic.
Death rate for people under 7 is 0%.
Under 40 is 0.2%.
Under 50 is 0.4%.
For older folks or the immunocompromised, it's naturally higher, because they're older and immunocompromised. Data shows the H1N1 flu is 10% fatal to old folks, too.
The thing is where is the balance in response to this? I too agree that it's going to just be one of those things we deal with every year like the flu, but the difference between it being manageable vs. out of control relies on everyone collectively having a set of standards.
If everyone uses some common sense, washes hands, is on top of their symptoms and goes to the hospital, etc. everything will be fine.
If everyone just acts like nothing is wrong you could have cluster outbreaks and seriously affect pockets of people. The fear factor plays in here.
The fact that we haven't tested nearly as many in the USA and are acting as more of a passive observer gives me concern.
If everyone uses some common sense, washes hands, is on top of their symptoms and goes to the hospital, etc. everything will be fine.
Is that true though? Half the country gets a flu shot, yet between 10M and 50M still get the flu each year. And to be honest, I'd be very reluctant to go to a hospital for any reason right now unless I felt I was in danger of dying since everyone that thinks they might have coronavirus is going to be sitting in the waiting room beside me.
Is simple handwashing enough top stop the spread of this coronavirus, or is stronger isolation needed? China seems to have a handle on the infection growth but as far as I know, many areas are still on lockdown.
What would you do if we ran out of flu shots? Military lockdowns of cities? Of course not. We'd work to get vaccines while washing our hands with soap, and not paying any mind to it.
Wash your hands. Avoid touching stuff in public. Use hand sanitizer, wipes or wash your hands as promptly as possible if you have to touch stair rails, door knobs, etc.
Don't touch your face.
Don't touch your face.
Please stop touching your face
Wash your hands if you need to blow your nose or cough into your hands.
For God's sake, don't wipe your nose with your hand and then touch other stuff.
Don't lick your fingers to help open plastic shopping bags. Impose the death sentence for employees who do this. (Okay, okay. Just fire them.)
If the world at large would stop doing heinous things like blowing their nose at the table in a crowded restaurant or public meeting, my world would be vastly better.
The fact that you include 'going to the hospital' as common sense advice shows you're severely, severely out of touch with the common reality of the average American.
Very few Americans are going to go to the hospital, let alone the doctor if they catch the coronavirus. Because few Americans can afford the costs of healthcare. Even I would be hesitant to go and I have good health insurance because the cost could still be in the thousands of dollars!
So the only people that'll end up going to the doctor are likely those with more severe symptoms while those with more mild issues will continue to spread it by going to work (because they can't afford taking time off) and so forth. We've dug our own hole and now we get to deal with something we never were prepared for.
i mean, i live in nyc so i'm quite aware how terrible our healthcare is lol. i just meant in terms of coronavirus i would hope they offer some kind of free testing in light of the situation. it's still not in the american psyche to go, though. when i was in korea i was amazed that people would just go for every little thing.
This is a really weird take I keep hearing from people.
Let's say Covid-19 is equal to influenza in every way. That is a disaster. Influenza is one of the worst illnesses we deal with. If we now have another illness continuously spreading in the community equal in impact to influenza, which infects 35 million people annually, resulting in hundreds of thousands and sometimes millions of hospitalizations, and 30,000 - 100,000 deaths each year, that is an absolute calamity.
I don't think anyone thinks we're all going to die from this. But preventing this disease from becoming a permanent addition to the routine illnesses we deal with is a big deal, and people are worried about the necessary social distancing required to contain it.
> (b) that shouldn't really matter to us. Longer term, we'll have a vaccine and it'll be added to the usual seasonal flu vaccine package.
That's a very optimistic take. We have indeed become much better at developing vaccines, but it's not clear that we'll necessarily be able to develop an effective one for coronaviruses. You say that we'll just add it to the seasonal flu vaccine package, but we don't have effective vaccines for influenza. They mitigate risk, but the mutation rate of influenza is such that seasonal vaccines generally only provide a 60% protection, and some seasons much less. And we've been developing these vaccines for decades, with tens of billions spent on flu vaccines and research.
We don't have any vaccine against the common cold, despite massive amounts of research towards that. Most colds are caused by rhinoviruses, but about 15% are caused by species of coronaviruses. And we haven't developed any vaccines against them.
> I don't think anyone thinks we're all going to die from this. But preventing this disease from becoming a permanent addition to the routine illnesses we deal with is a big deal, and people are worried about the necessary social distancing required to contain it.
With 55% of people asymptomatic based on the WHO report, I'd say that ship has long since sailed.
> Let's say Covid-19 is equal to influenza in every way. That is a disaster.
It's not ideal to be sure, but it certainly doesn't mean we should be enforcing lockdowns of cities with drones and tanks. The reaction is way overblown. People are hoarding supplies over the flu.
If it becomes clear that containment can't work, then it no longer makes sense to disrupt the economy and people's lives with social distancing.
But let's be clear about the costs we're talking about. When we talk about the costs of legislation, we usually discuss the ten year cost. Every decade, influenza kills half a million people in the US. It has direct medical costs of $100 billion, and total productivity losses equal to almost a trillion dollars.
There's some evidence that people can be re-infected with coronavirus. If we have another influenza which people can catch again and again every year, this is an absolutely massive problem. If we can avoid that with short-term social distancing, we should, even if that's a major impact on people's lives.
If it's clear we no longer can, then we should stop. I guess our only disagreement is whether, or not containment still has any chance of working. If we believe it does not, then sure, social distancing is largely pointless, and only buys time.
I'm with you that it's sub-optimal, and I'm all for trying -- it does appear to be working in China. The number of cases is down about 33% over peak. I just doubt that it'll hold.
What I'm saying is that the level of panic right now is well beyond where it should be given the risks.
Is it though? Certainly some folks are over-reacting, but the vast majority of the population seems to be going about their normal routines. And considering that it might be possible to push transmission rates lower by educating the public on some fairly basic preventative measures, it probably makes sense to err on the side of caution/over-reaction while also trying to avoid triggering mass panic. Public Health officials are aware of all of this, and I assume they are doing their best to thread that needle as we speak. But I also don't have a ton of confidence in this current administration, so I guess we will see how this shakes out.
Based on levels of pollution China has still not resumed production as of Feb 20-25. You'd think if it was discovered that it was just like the flu, they would have resumed production by now.
A total of 81% of cases in the JAMA study were classified as mild, meaning they did not result in pneumonia or resulted in only mild pneumonia. Fourteen percent of cases were severe (marked by difficulty breathing), and 5% were critical (respiratory failure, septic shock, and/or multiple organ dysfunction or failure).
So from this study, 19% of the cases were severe and required hospitalization. There are 320 million people in the us, lets say 30% get it at once. That's 320m * .3 * .19 = 18 million people. Of course, some of that 18 million will be taken care of by hospitals, but that would account for only a tiny fraction, there are only about 91k ICU hospital beds in the US
Exactly. The equity markets are future predictors.
When someone is self-interested in speculation, that also provides a signal to the broader market about what might unfold. That signal helps others plan as well.
Yes, the prevailing assumption is that "everything is factored in price", including all the irrational (like some aggregate of our prediction of the future, which includes investors thinking like OP).
I guess you don’t talk to people in the construction industry. People have been let go because they can’t get supply. I’ve had multiple first hand accounts just in the past week in different parts of construction (commercial and realestate) saying how bad it is (Australia).
The % of corporate debt rated BBB has also exploded. It is likely these companies should really be junk, but are kept alive by reluctant/agreeable rating agencies and historically low rates.
Yikes. I've been worried that junk corporate debt would be what triggers the next recession, with the financial "innovation" of the Collateralized Loan Obligation where the mortgage based CDOs previously were
Right - I am by no means an expert on this but I feel far more worried about ripple effects than about the disease or even direct effects of supply chain disruption. In October the IMF warned about corporate debt levels which could cause serious issues with a recession half as bad as what we had in 2008 [1]. This seems like a similar kind of systemic risk as what ultimately caused most of the trouble during that recession, but most people are talking only about the direct effects of quarantine and supply chains.
I think they should be planning for a substantial fiscal stimulus. Something like a temporary expansion in medicare, guaranteed free testing, etc. A temporary expansion in funds for paid sick time. Expansion of unemployment benefits.
Or just say fuck it and cut people checks every month for a while.
Plan to have these ready in case they're needed. Health-related ones can probably be activated soon (esp testing).
Interest rates are only in the range of 1.5 to 1.75 basis points... Historically, the Fed has had to cut interest rates by 4 basis points to pull the US out of previous recessions, IIRC. It doesn’t take a math major to tell we have a big issue if this slowdown turns into a recession.
I ended up saving my investment portfolio buying put options on the S&P and getting my portfolio to a yearly high even though my stock holdings dropped in value.
In times like this hedging is an extremely useful tool.
I’m playing with house money at this point, and bought on Friday and Monday/Tuesday before IV got massively inflated.
No good news came out this weekend, if anything it’s only gotten worse. A V shaped recovery is unlikely, but if it does go up this is a hedge, not a bet, and my portfolio is net long.
Hedging is only effective when you don't need it. Sort of like home insurance - you don't buy it when you house is already burnt down - the premiums will skyrocket and it doesn't do you any good.
Last week, and Monday afternoon was probably the last opportunity to buy hedge at a decent value.
The US economy is a house of cards in terms of its ability to withstand the impacts of a real pandemic. Aside from all the supply chain disruption, it’s already fragile healthcare infrastructure and lack of things like sick leave protections are going to make mounting a response that would stabilize markets very difficult. China is continuing to take drastic short term action (and a corresponding hit) to provide a floor to the damage to their economy. The US seems unlikely (maybe even incapable) of mounting a similar response.
Do you have any facts to back that up? Leadership issues aside, the US is clearly the country that is best equipped to deal with a pandemic (see https://www.ghsindex.org/).
All of that is well and good, but just look at the reality of South Korea vs the United States right now. Korea is doing 10,000 test kits per day with drive up stations, while the US has had botched testing, nonsensical requirements for the testing that’s in place, and undetected community transmission for about six weeks with no mitigation plans. There’s likewise been no federal or state level action to do things like curb mass gatherings or strictly enforce quarantines, which are literally the only thing that has proven effective in curbing the spread to ease the strain on healthcare infrastructure.
Also, leadership issues aside is a big aside. Having the most incompetent and corrupt administration in recent US history helming the response to this, including someone who caused a public health crisis in his own state and a self-serving pharmaceutical industry lackey is about the worst you could ask for.
Another comment goes into more detail, but it's not too complicated. In the US, a lot of people are reluctant to seek healthcare because of the high cost. So people in a poor economic situation who are starting to feel the symptoms are forced to take a gamble:
- Go to the hospital, get tested, possibly get quarantined, lose work income, possibly get fired, possibly pay large bill if uninsured
- Don't go to the hospital, hope you recover fine
If it splits half-half, that's a lot of people who are going to be going outside and infecting people.
> "The experts who made this map, and ranked the US in first place, are quick to add caveats to America’s number one status... The US scored well on measures including "biosecurity" and "emergency preparedness," but was near the bottom of the list when it came to "healthcare access... According to the Global Health Security Index ranking, the US comes in 175th out of 195 countries, when it comes to Americans‘ access to healthcare.
>I ended up saving my investment portfolio buying put options on the S&P and getting my portfolio to a yearly high even though my stock holdings dropped in value.
Finance Internet Rule #1: unless you're going to post a screenshot of your account and profits, don't brag about a trade. Everyone's an anonymous stock market genius, you know.
We will either melt up tomorrow (which is basically inevitable at some point given historical performance) or we will start recovering.
Just based on the data I am seeing, last week was a turning point. If things get worse this week, then we will move lower again, but...right now, it doesn't look like likely.
What is the functional difference between a melt up and recovering? Don't they both imply an increase in asset prices with different reasonings? What would indicate one versus the other?
You had a case where the market felt like it was in freefall. People piled into puts and some panicked longs sold their portfolios and sat on cash.
Then, when it was clear the market had stopped falling and was moving up quickly, cash hoarders suddenly piled back into the market in a panicked attempt of buying the dip. Two weeks or so and the market was in an identical place.
People that sold paid taxes on their gains, a huge hit to any portfolio. Everyone that held was better off.
Look at the distribution of equity returns. A melt up would be 3%+ down, and people panicking (we saw panic towards the end of last week). A recovery would be stop falling or gain on the week. I would put the recovery scenario at far better than chance though. It looks like 60-70% to me.
We may sell off more if things get worse later but right now, we have got through the point of maximum panic (just from what I witnessed, this was a December situation...I live in the UK so our December was motivated by Brexit but back then people were talking about stockpiling, etc. it was one of those times where you don't know whether to laugh or cry).
Yeah. Fed was able to intervene in 2008 because it was a financial crisis. This is a physical event that will affect the real economy. You can print all the money in the world, it won't make people go to the restaurant or buy a car.
Last time they dropped it from 5.25% to 0, and still had to print ~$3.7T. With only 1.5% to cut and GDP 50% larger than it was back then, how much QE will they attempt this round?
In 2008+ when they “printed money” via “Quantitative Easing”, they would buy bonds off the market. This puts printed money in the hands of bond holders. Presumably bond holders are very rich. Presumably very rich people already have a good enough car and already frequent restaurants. Now if the Fed printed money and put it in the hands of the middle class, not just the hands of the upper class, I’d bet you new cars would be bought and restaurants would be dined.
The article is dated Feb 25, and mentions that the disbursement has yet to occur, so we don't have any data on the success of the measure, or do I have this wrong?
If you follow the link in the (misleading, in my opinion) “Given that less than 13 percent of Americans have pensions” quote, it says that
“In 1980, more than 148,000 DB plans covered 30 million active workers (38% of the workforce), but by 2008 just over 48,000 DB plans covered 18.9 million American active workers (13% of the workforce). Over the same period, the number of DC plans increased from 340,850 to 669,156 with an increase in active workers covered from 14 million (14% of the workforce) in 1980 to more than 67 million (46% of the workforce) in 2008.”
Years ago in Canada, one province decided to mail $500 cheques to every adult in the province as an economic stimulus after they had an oil and gas surplus. Apparently it helped a lot
I think you're misrepresenting QE. The Bonds the fed bought eventually expire, the money they used to buy the bonds gets repaid to the fed. It's not like they gave the value of the bonds to "very rich people" and said "here buy another yacht on us".
Yes, the original bonds expired, but the Fed has actually resumed buying short-term treasury bonds since Sept 2019. This has offset long-term maturities (e.g., 10Y) rolling off and actually has resulted a net expansion in their balance sheet: https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
My hypothesis has been a supply crunch simultaneous with a demand crunch. We are seeing substantially altered consumer behavior in China. If they are drastic, these events can make lasting changes in people’s willingness to spend money.
If you spend months inside, avoiding gatherings, worrying about your health and that of loved ones, not going to restaurants, postponing discretionary purchases do you immediately snap back to pre crisis levels once it’s over?
What’s the economic activity in locked down areas of Italy right now?
What is the possibility that US escapes unscathed given clown car response at the federal level?
There will be substantial demand side effects as well. People that live in times of uncertainty stay liquid as much as they can. So if they can put off some major purchase that is more likely to happen now than before.
Printing money is just as vital. A financial crisis is when suddenly money isn't accessible, so the economy needs more to keep up with normal demand. A non-financial crisis in the "real" world needs corresponding action in the real world, which means we need to borrow from the future - people need to be assured they will be paid back for what they are doing now. So more money is needed to correspond to the increased activity. It's not the same, but similar.
If you had any sort of disruption in your personal life, you didn't have income coming in or whatever, wouldn't a large loan be really helpful if you didn't have enough savings? It doesn't matter if it's a "real" problem, or just some senseless legal thing.
Why would anyone believe in a bunch of bureaucrats in the first place is beyond me.
They showed tremendous incompetence in letting the crisis happen (laughable oversight, too low rates).
This whole meme "the FED will bail us out" has to die before it dies naturally of fatal failure. The real economy is the real economy, not a bunch of econ PhDs wondering why the Phillips curve is not working any more. But we all know it'll take a fatal failure to remove it from people's minds.
And yes, as of Friday (last closing) the bond market tells the FED very clearly to cut the fed funds twice, already on the next meeting (Mar 18, 2020). Since Dec 2018 when Jerome Powell was humiliated by the markets and also somewhat by the President he dares not to do anything else than what the markets tell him to do, so very good chance for 2 cuts.
(To be clear, I personally don't think the fed will be able to get themselves out of this one. I'm just stating most market participants think they can.)
I certainly agree w/ you that it will take a fatal failure to kill this meme, and I think that failure might be coming up.
Define "too low". The world is awash in capital, no one is going to borrow from you at 5%+. Or are you one of those "we should raise rates so we can lower them later" people?
>you're trusting a bunch of bureaucrats that know no better than to follow what the bond market
The Fed are confined to monetary mechanisms. The rest falls on politicians. But the powers-that-be seem to have decided that they will not allow us to have a deflationary bust again, so they are going to print money and deal with the inflationary consequences down the road.
> Define "too low". The world is awash in capital.
You defined it in the next sentence. Capital should be the judge of prospectuses - i.e. of ideas to implement in the real world. When there's too much capital there's no judge (i.e. it's not really capitalism any more).
All bubbles are a consequence of too much money and too much credit/faith in something.
If the Fed is already often failing to achieve their target inflation rate, wouldn't raising interest rates cause them to undershoot it even further and lower investment / set off a recession?
I think their point is that while it's arguable that rates are too low, congress needs to change fiscal policy for them to be able to raise rates, so it's unfair for the Fed to get all the blame here. They're using the policy tool they have to execute their mandate and the other (maybe better) policy tools are out of their hands.
Exactly, Paul Volker is the last Fed president that actually implemented a policy (of killing inflation), rather than just respond to what the market tells him to do.
He is remembered as a hero. Ray Dalio did an interview with Volker not long before Volker passed away:
It's not about abstract belief in a bunch of bureaucrats, it's about waiting on the very, very large flows of money that these bureaucrats might open or redirect. The investors' pockets don't care if the dollars in them were created by the real economy or the fed.
All short-term market fluctuations are more based on groupthink than on real world business performance. Even when there's a fundamental, strong, unavoidable real world business reason for the price to move significantly, the timing of that price movement will be determined mostly by the groupthink and not the real world business reasons (the classic "the market can stay irrational longer than you can stay solvent").
So if your decisions are of the type "what should I buy and hold in the long term" then definitely real world business performance is key as that will determine where that price will be in a couple years. But if you're not going to hold the same position for long and are trading on markets, well, groupthink is a very, very influential factor that determines the price you're going to get today or tomorrow.
Totally agree. And I do think short term trading gets people in trouble :). At least the vast majority of people. Not everyone is cut out to be a top notch speculator like Soros.
Somewhat counter-intuitively, but didn't Double Line (or some other firm) produce an article that the lower interest rates are, the less affect there is in lowering the rate?
One would assume that a cut from 1% to 0.5% would mean a 50% change in Interest Payments. While a 8% to a 7.5% cut would mean only a ~6% change.
In practice, it's much more complicated than that.
What the fed do will matter little this time, I think. This crisis have been managed very badly by most Western countries, and the markets have started to price that in. I think we're 1/4-1/6 of the way down before this bottoms out. Sold all my stocks at the end of January.
We're going to have serious supply chain issues for the foreseeable future. A few months with decreased production is going to set things back pretty significantly. And with the possibility of 6-18 months of delays and decreased production, i can see it taking 5-7 years to fully recover from.
I think the fed realizes that they can only do so much in a situation like this. Adjusting interest rates is a very crude lever, and it won't really have much of an impact on something like a sudden unemployment spike due to supply chain disruptions and quarantine impacts (at least not in the short term). My main concern is that the White House might put pressure on the Fed to take action, possibly forcing a misstep. It's possible we see a big spike in inflation due to supply constraints, and it feels like monetary stimulus could actually make the situation worse. Or, if the concerns regarding unsustainable debt levels prove true, we could dive head first into a recession, possibly pushing us into a deflationary spiral. At that point, fiscal stimulus would probably be the only real option, but the current administration seems like they would not be capable of getting that one right (more tax cuts would likely be one of the least effective forms of stimulus, and the 'tax reform' bill has left us with a lot less ammo on that front).
I guess what I am getting at, is that I am not really concerned about the Fed. I am way more concerned about the government bungling their response. They cut taxes and pressured the fed to lower interest rates when the economy was doing fine against very vocal warnings that it would be much harder to deal with a future recession. And now that we are faced with a potential recession trigger, I am not very confident they will get this one right.
None of this is going to be resolved this week or month.
THe next big thing to watch out for is the virus spread in the USA.
Now, unless something changes, I am not overly hopeful in containment for the USA. The rumours of poor/non standard testing, and the limited access to healthcare is going to make one hell of a mess.
Could a US person explain who pays for the test/on going healthcare if an uninsured person rocks up to the ER with relevant history and flu like symptoms?
Does the government step in to fund care? or is it left to the hospital to foot the bill?
Depends what you mean. The uninsured person is still technically liable for the price of care, which is why so many people in the US go bankrupt for healthcare reasons (you get a fat bill in the mail that you have absolutely no hope of paying). If they are completely unable to pay, the hospital foots whatever portion of the bill the person was unable to pay.
The person would be billed, but if they can’t pay it, the hospital sicks debt collectors on them and maybe eats it down the road. Hospitals are pretty good at wrecking people’s lives to get their due though.
There have been cases of them putting liens on people’s houses while their still hospitalized if the expected cost of treatment is expensive enough.
> Could a US person explain who pays for the test/on going healthcare if an uninsured person rocks up to the ER with relevant history and flu like symptoms?
> Does the government step in to fund care? or is it left to the hospital to foot the bill?
AFAIK, currently it'd be just like if someone uninsured came in with any other illness: the hospital gives the care, the patient gets a bill they can't pay. The hospital essentially extends credit to the patient.
Hospitals in the US with emergency rooms are not allowed to turn away patients who are sick. Ultimately it's the taxpayers who foot the bill. (Federal, State and Local Governments pay for it I believe.) This also explains why so many private hospitals have shut down their emergency rooms. I also believe that many private hospitals will transfer patients who cant pay to public hospitals.
Actually most of the uninsured in the States are covered by public funds and consume more healthcare than other cohorts. It’s the underinsured and those with high deductible plans that may not go to a doctor due to cost,
The outcome is the same but the health cohort might be a surprise depending on your mental model.
Many people with money but without insurance do go and get b*tch slapped later by their ~$10k-$200k medical bill. It’s a reason why medical debt is the LEADING cause of bankruptcy in the US.
Many people without money or insurance also go but since they don’t have assets, they just don’t pay and the hospitals can’t collect on them. So the hospitals have to raise costs on people with money to pay for people without money.
The second scenario actually caused a hospital I knew of in Dallas Texas to close down because it had (according to the locals) “too many illegal immigrants taking advantage of free healthcare”. Dallas Texas is somewhat close to the Mexico border.
I personally knew of a vagrant woman with a prior medical issue that bragged about happily racking up the hospital over a million dollars in expenses after staying in a hospital bed for a few months. She didn’t express concern about having to pay for any of it since she doesn’t work. I wasn’t sure how to feel about that.
I once paid $8k while my health insurance paid $43k when I spent just half a day in a hospital bed in Colorado after I fell and broke a bone.
> I personally knew of a vagrant woman with a prior medical issue that bragged about happily racking up the hospital over a million dollars in expenses after staying in a hospital bed for a few months.
The on-paper cost and the actual cost are wildly disparate.
It's not uncommon to see a $40k bill get "adjusted" to something like $4k when insurance is present.
>Many people with money but without insurance do go and get b*tch slapped later by their ~$10k-$200k medical bill. It’s a reason why medical debt is the LEADING cause of bankruptcy in the US.
Only 4% of US bankruptcies are because of medical bills https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0... . A tipoff that [insert large percentage here] of bankruptcies aren't actually because of medical costs is that only 6% of bankruptcies by those without health insurance are because of that cause. The biggest cause of bankruptcies is lack of income, which health insurance doesn't affect.
>My citation says 66% of US Bankruptcies are tied to medical issues.
Your citation says
>A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work.
(My emphasis.) In other words, people going bankrupt because health problems = lack of work = lack of income. That does not contradict my citation which states that 4% of US bankruptcies are because of medical bills; that is, bills for health care treatment exceeding available income.
Your article goes on to quote a study author who carefully elides the difference between the two. Oh, by the way, he is a prominent proponent of Medicare for All! Imagine that.
While true the hospitals cannot turn away patients who are sick, it pretty much guarantees anyone who has any form of assets will never do so. U.S. is based on percentages, ie. company may be allowed by law to make only 20% profit. So, the bill is made multiple orders of magnitude higher at first bill. Then, "insurance earns its money" by lowering that bill. Then, you usually have to negotiate the final bill and deal with all the associated third-party charges. Finally, medical bills are very hard to discharge.
The only people who think the U.S. has a good health care system are the rich who can afford anything and the poor who watch the news (propaganda) extolling how good our system is but don't actually take part in it. Even if you have insurance, you have to be very careful about what you use and when.
From my understanding of the viral testing, the CDC distributes the tests to local healthcare professionals, however they don't seem providing enough to get in front of the issue. That is why there is an article floating around that the govn't of British Columbia (Canada) has tested more patients for COVID than the entire USA.
I'm not super informed on the issue, take this with a grain of salt.
This source is old, but maybe someone else will answer with a better one: taxpayers [1]. We just do so at a larger cost because we're willing to publicly fund emergencies but not preventative care.
When you say publicly fund emergencies, do you mean that it is covered, or that you will get a bill in the mail, but you won't be denied care; it's just that you have to pay hundreds of thousands of dollars after the fact?
I mean that federal and state goverments provide subsidies to the hospitals to cover the shortfalls that can't be billed. As an individual you still end up screwed.
> Could a US person explain who pays for the test/on going healthcare if an uninsured person rocks up to the ER with relevant history and flu like symptoms?
They don't. They keep working because there's no way to afford the time off or the sick child care, even if the taxpayer does foot the bill for the ER visit.
Kids keep going to school and adults keep rocking into work.
When you combine high-deductible health insurance plans with no paid sickleave which is really common in foodservice and bars, it’s just asking for something like coronavirus to spread.
Also Coronavirus doesn’t know the difference between someone making minimum wage and $10million/year. This can and will cause an economic downturn, possibly a recession. Hopefully we as a nation get it though our heads that universal healthcare and paid sick leave is something that is needed to prevent further disease outbreaks.
In our BigCo they've already instituted the "tell on your officemate" policy which is easy to do thanks to the beautiful densely packed open floor plan. So we're prepared and will do great.
“ We also expect some institutional investors to start buying the dip on expectation of fiscal and monetary stimulus, virus spread being more contained in the West versus China due to the timely response from the respective health authorities . . .”
That seems overly optimistic as the U.S. has tested about 500 persons as of 03/01 per the CDC.
Because the Japanese Yen is one of the 5 reserve currencies that make up the Special Drawing Rights (SDRs) of the International Monetary Fund (IMF). It makes up 8% of an IMF SDR.
IMF SDRs are important because all of the central banks hold a bunch of them.
The Yen is not weighted higher because Japan’s debt is quite high compared to it’s GDP and Japan could try to print it’s way out of it’s debt. The Yen is not weighted lower because they’re fortune enough to be able to print their way out of their debt if need-be compared to many other countries that hold debt in non-domestically denominated currencies.
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[ 3.2 ms ] story [ 211 ms ] threadBut I think the impact is already being felt -- ports are already reporting a drop in container ships.
https://www.wsj.com/articles/port-of-los-angeles-sees-corona...
And the lack of incoming ships doesn't just reflect a drop in imports, but it's also affecting exports that were waiting on those ships.
If you look at traffic stats for the Chinese cities above, you will see they improved last week...last Monday Shenzen was actually back to normal. Again, maybe the virus gets worse but the evidence is that we have stabilised.
It takes about 2 weeks for a cargo ship to reach the USA from China, but it can take 30 days or longer to get a shipment through the entire cargo chain from start to finish, so even if things are recovering on the China side, we're still in for at least a few more weeks of disruption.
And since cargo is stacking up on both sides, it'll probably take months to get everything back on track.
I just told you what the volume is (you can check for yourself, all of this is public information) for other ports.
It won't take months. That is just not factually accurate, it takes a day or two to load the largest container ships, and they load more than one at once. It isn't "stacking up", that isn't how ports work...if you can't get space, you don't stack your stuff at the port, you just don't send it.
Time to accept it: we're all going to get the coronavirus, and you know what? The vast, vast majority of us are going to be just fine. [1]
So we're clear, the seasonal flu has killed 80,000 people so far this year vs 3,000 from nCov-19.
The transmission rate is a bit higher than H1N1, the fatality rate is a bit higher than H1N1 (0.6% vs 0.45%). Treating this as some sort of ebola pandemic where we're all going to die is a massive overreaction.
From the WHO report almost half of people are asymptomatic.
Death rate for people under 7 is 0%.
Under 40 is 0.2%.
Under 50 is 0.4%.
For older folks or the immunocompromised, it's naturally higher, because they're older and immunocompromised. Data shows the H1N1 flu is 10% fatal to old folks, too.
We've reached peak unsubstantiated fear.
[1] https://www.theatlantic.com/health/archive/2020/02/covid-vac...
If everyone uses some common sense, washes hands, is on top of their symptoms and goes to the hospital, etc. everything will be fine.
If everyone just acts like nothing is wrong you could have cluster outbreaks and seriously affect pockets of people. The fear factor plays in here.
The fact that we haven't tested nearly as many in the USA and are acting as more of a passive observer gives me concern.
Is that true though? Half the country gets a flu shot, yet between 10M and 50M still get the flu each year. And to be honest, I'd be very reluctant to go to a hospital for any reason right now unless I felt I was in danger of dying since everyone that thinks they might have coronavirus is going to be sitting in the waiting room beside me.
Is simple handwashing enough top stop the spread of this coronavirus, or is stronger isolation needed? China seems to have a handle on the infection growth but as far as I know, many areas are still on lockdown.
Don't touch your face.
Don't touch your face.
Please stop touching your face
Wash your hands if you need to blow your nose or cough into your hands.
For God's sake, don't wipe your nose with your hand and then touch other stuff.
Don't lick your fingers to help open plastic shopping bags. Impose the death sentence for employees who do this. (Okay, okay. Just fire them.)
If the world at large would stop doing heinous things like blowing their nose at the table in a crowded restaurant or public meeting, my world would be vastly better.
Very few Americans are going to go to the hospital, let alone the doctor if they catch the coronavirus. Because few Americans can afford the costs of healthcare. Even I would be hesitant to go and I have good health insurance because the cost could still be in the thousands of dollars!
So the only people that'll end up going to the doctor are likely those with more severe symptoms while those with more mild issues will continue to spread it by going to work (because they can't afford taking time off) and so forth. We've dug our own hole and now we get to deal with something we never were prepared for.
Let's say Covid-19 is equal to influenza in every way. That is a disaster. Influenza is one of the worst illnesses we deal with. If we now have another illness continuously spreading in the community equal in impact to influenza, which infects 35 million people annually, resulting in hundreds of thousands and sometimes millions of hospitalizations, and 30,000 - 100,000 deaths each year, that is an absolute calamity.
I don't think anyone thinks we're all going to die from this. But preventing this disease from becoming a permanent addition to the routine illnesses we deal with is a big deal, and people are worried about the necessary social distancing required to contain it.
> (b) that shouldn't really matter to us. Longer term, we'll have a vaccine and it'll be added to the usual seasonal flu vaccine package.
That's a very optimistic take. We have indeed become much better at developing vaccines, but it's not clear that we'll necessarily be able to develop an effective one for coronaviruses. You say that we'll just add it to the seasonal flu vaccine package, but we don't have effective vaccines for influenza. They mitigate risk, but the mutation rate of influenza is such that seasonal vaccines generally only provide a 60% protection, and some seasons much less. And we've been developing these vaccines for decades, with tens of billions spent on flu vaccines and research.
We don't have any vaccine against the common cold, despite massive amounts of research towards that. Most colds are caused by rhinoviruses, but about 15% are caused by species of coronaviruses. And we haven't developed any vaccines against them.
With 55% of people asymptomatic based on the WHO report, I'd say that ship has long since sailed.
> Let's say Covid-19 is equal to influenza in every way. That is a disaster.
It's not ideal to be sure, but it certainly doesn't mean we should be enforcing lockdowns of cities with drones and tanks. The reaction is way overblown. People are hoarding supplies over the flu.
But let's be clear about the costs we're talking about. When we talk about the costs of legislation, we usually discuss the ten year cost. Every decade, influenza kills half a million people in the US. It has direct medical costs of $100 billion, and total productivity losses equal to almost a trillion dollars.
There's some evidence that people can be re-infected with coronavirus. If we have another influenza which people can catch again and again every year, this is an absolutely massive problem. If we can avoid that with short-term social distancing, we should, even if that's a major impact on people's lives.
If it's clear we no longer can, then we should stop. I guess our only disagreement is whether, or not containment still has any chance of working. If we believe it does not, then sure, social distancing is largely pointless, and only buys time.
What I'm saying is that the level of panic right now is well beyond where it should be given the risks.
But it’s a new flu - how much is it worth to stop the spread and not have to deal with it forever
https://scopeblog.stanford.edu/2019/09/16/scientists-close-i...
https://earthobservatory.nasa.gov/images/146362/airborne-nit...
They only reversed course when their hospitals became so overloaded that they had to do something.
People seem fixated on this idea that a 1-2% death rate is going to be mean that 1-2% are going to die, but this ignores hospitals being overloaded.
From: http://www.cidrap.umn.edu/news-perspective/2020/02/study-720...
A total of 81% of cases in the JAMA study were classified as mild, meaning they did not result in pneumonia or resulted in only mild pneumonia. Fourteen percent of cases were severe (marked by difficulty breathing), and 5% were critical (respiratory failure, septic shock, and/or multiple organ dysfunction or failure).
So from this study, 19% of the cases were severe and required hospitalization. There are 320 million people in the us, lets say 30% get it at once. That's 320m * .3 * .19 = 18 million people. Of course, some of that 18 million will be taken care of by hospitals, but that would account for only a tiny fraction, there are only about 91k ICU hospital beds in the US
From: http://www.centerforhealthsecurity.org/cbn/2020/cbnreport-02...
46,500 medical ICU beds in the United States and perhaps an equal number of other ICU beds that could be used in a crisis.
https://www.cnbc.com/2020/02/29/china-pmi-factory-activity-s...
When someone is self-interested in speculation, that also provides a signal to the broader market about what might unfold. That signal helps others plan as well.
I guess you don’t talk to people in the construction industry. People have been let go because they can’t get supply. I’ve had multiple first hand accounts just in the past week in different parts of construction (commercial and realestate) saying how bad it is (Australia).
"At the same time, the lowest rated part of the investment-grade market has grown particularly quickly. Globally, BBB debt makes up over 50% of the market versus only 17% in 2001." - https://www.blackrock.com/institutions/en-us/insights/invest...
[1] https://mobile.reuters.com/article/amp/idUSKBN1WV1N5
This would usually be a good time to talk about fiscal stimulus options.
The market is a fickle beast; there's a chance that a stimulus too early may make future stimulus less effective, since "it didn't work earlier".
Or just say fuck it and cut people checks every month for a while.
Plan to have these ready in case they're needed. Health-related ones can probably be activated soon (esp testing).
Chance of any of this happening: 0%.
In times like this hedging is an extremely useful tool.
If you need the money in 2020, hedging makes sense. If you don't, don't.
Definitely will not lose more than I would’ve if I had done nothing, even if it goes to 0, which is unlikely given the high volatility.
No good news came out this weekend, if anything it’s only gotten worse. A V shaped recovery is unlikely, but if it does go up this is a hedge, not a bet, and my portfolio is net long.
Last week, and Monday afternoon was probably the last opportunity to buy hedge at a decent value.
Also, leadership issues aside is a big aside. Having the most incompetent and corrupt administration in recent US history helming the response to this, including someone who caused a public health crisis in his own state and a self-serving pharmaceutical industry lackey is about the worst you could ask for.
- Go to the hospital, get tested, possibly get quarantined, lose work income, possibly get fired, possibly pay large bill if uninsured
- Don't go to the hospital, hope you recover fine
If it splits half-half, that's a lot of people who are going to be going outside and infecting people.
> "The experts who made this map, and ranked the US in first place, are quick to add caveats to America’s number one status... The US scored well on measures including "biosecurity" and "emergency preparedness," but was near the bottom of the list when it came to "healthcare access... According to the Global Health Security Index ranking, the US comes in 175th out of 195 countries, when it comes to Americans‘ access to healthcare.
Finance Internet Rule #1: unless you're going to post a screenshot of your account and profits, don't brag about a trade. Everyone's an anonymous stock market genius, you know.
Just based on the data I am seeing, last week was a turning point. If things get worse this week, then we will move lower again, but...right now, it doesn't look like likely.
You had a case where the market felt like it was in freefall. People piled into puts and some panicked longs sold their portfolios and sat on cash.
Then, when it was clear the market had stopped falling and was moving up quickly, cash hoarders suddenly piled back into the market in a panicked attempt of buying the dip. Two weeks or so and the market was in an identical place.
People that sold paid taxes on their gains, a huge hit to any portfolio. Everyone that held was better off.
We may sell off more if things get worse later but right now, we have got through the point of maximum panic (just from what I witnessed, this was a December situation...I live in the UK so our December was motivated by Brexit but back then people were talking about stockpiling, etc. it was one of those times where you don't know whether to laugh or cry).
up.
The fact that most people (rightly) assume that fed action is the most significant factor for the market should really give people pause.
Lastly, people should really consider what happens when fed action is no longer enough, and what happens then.
https://www.zerohedge.com/economics/hong-kong-embraces-helic...
https://ftalphaville.ft.com/2020/02/26/1582705518000/Helicop...
I'm not sure that's a safe assumption. These bonds could be held by pension funds etc...
If I am a blue-collar worker nearing retirement, and I find out my pension plan just imploded, it's definitely going to impact my spending negatively.
The median savings for American families whose wage earners are between 56 and 61, is $17,000. [1]
34% of American adults have zero savings (retirement + non-retirement). [1]
Anecdotally, I had a Grandpa with a $60k/yr pension and he was definitely upper class.
[1] https://www.cnbc.com/2017/06/13/heres-how-many-americans-hav...
By “pensions” do you mean defined benefit plans only?
“In 1980, more than 148,000 DB plans covered 30 million active workers (38% of the workforce), but by 2008 just over 48,000 DB plans covered 18.9 million American active workers (13% of the workforce). Over the same period, the number of DC plans increased from 340,850 to 669,156 with an increase in active workers covered from 14 million (14% of the workforce) in 1980 to more than 67 million (46% of the workforce) in 2008.”
Kind of ignoring the root cause of this market sell-off.
And it wasn’t just middle class, but lower too...
https://en.wikipedia.org/wiki/Alaska_Permanent_Fund
I prefer Norway's approach of saving (to the tune of nearly $200k per citizen!) for a rainy day.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
Things are not getting made/made at normal rates, and that's starting to ripple up through supply chains.
Can't buy the car stuck on an assembly line because the widget plant for some key piece is only fulfilling 1/3rd of orders.
https://www.nytimes.com/2020/02/29/upshot/coronavirus-recess...
And for that, you're still right that there's no financial intervention to fix it.
If you spend months inside, avoiding gatherings, worrying about your health and that of loved ones, not going to restaurants, postponing discretionary purchases do you immediately snap back to pre crisis levels once it’s over?
What’s the economic activity in locked down areas of Italy right now?
What is the possibility that US escapes unscathed given clown car response at the federal level?
If you had any sort of disruption in your personal life, you didn't have income coming in or whatever, wouldn't a large loan be really helpful if you didn't have enough savings? It doesn't matter if it's a "real" problem, or just some senseless legal thing.
They showed tremendous incompetence in letting the crisis happen (laughable oversight, too low rates).
This whole meme "the FED will bail us out" has to die before it dies naturally of fatal failure. The real economy is the real economy, not a bunch of econ PhDs wondering why the Phillips curve is not working any more. But we all know it'll take a fatal failure to remove it from people's minds.
Seriously, just think about it - you're trusting a bunch of bureaucrats that know no better than to follow what the bond market thinks (https://www.cmegroup.com/trading/interest-rates/countdown-to...). The blind leading the visually impaired.
And yes, as of Friday (last closing) the bond market tells the FED very clearly to cut the fed funds twice, already on the next meeting (Mar 18, 2020). Since Dec 2018 when Jerome Powell was humiliated by the markets and also somewhat by the President he dares not to do anything else than what the markets tell him to do, so very good chance for 2 cuts.
I certainly agree w/ you that it will take a fatal failure to kill this meme, and I think that failure might be coming up.
Define "too low". The world is awash in capital, no one is going to borrow from you at 5%+. Or are you one of those "we should raise rates so we can lower them later" people?
>you're trusting a bunch of bureaucrats that know no better than to follow what the bond market
The Fed are confined to monetary mechanisms. The rest falls on politicians. But the powers-that-be seem to have decided that they will not allow us to have a deflationary bust again, so they are going to print money and deal with the inflationary consequences down the road.
You defined it in the next sentence. Capital should be the judge of prospectuses - i.e. of ideas to implement in the real world. When there's too much capital there's no judge (i.e. it's not really capitalism any more).
All bubbles are a consequence of too much money and too much credit/faith in something.
I think their point is that while it's arguable that rates are too low, congress needs to change fiscal policy for them to be able to raise rates, so it's unfair for the Fed to get all the blame here. They're using the policy tool they have to execute their mandate and the other (maybe better) policy tools are out of their hands.
https://www.valuepenguin.com/mortgages/historical-mortgage-r...
> Continued hikes in the fed funds rate pushed 30-year fixed mortgage rates to an all-time high of 18.63% in 1981.
He is remembered as a hero. Ray Dalio did an interview with Volker not long before Volker passed away:
https://youtu.be/mMN17uBzCw4
So if your decisions are of the type "what should I buy and hold in the long term" then definitely real world business performance is key as that will determine where that price will be in a couple years. But if you're not going to hold the same position for long and are trading on markets, well, groupthink is a very, very influential factor that determines the price you're going to get today or tomorrow.
One would assume that a cut from 1% to 0.5% would mean a 50% change in Interest Payments. While a 8% to a 7.5% cut would mean only a ~6% change.
In practice, it's much more complicated than that.
We're down ~10%. A 60% drop sounds extreme for how much long-term impact this could have.
We're going to have serious supply chain issues for the foreseeable future. A few months with decreased production is going to set things back pretty significantly. And with the possibility of 6-18 months of delays and decreased production, i can see it taking 5-7 years to fully recover from.
I guess what I am getting at, is that I am not really concerned about the Fed. I am way more concerned about the government bungling their response. They cut taxes and pressured the fed to lower interest rates when the economy was doing fine against very vocal warnings that it would be much harder to deal with a future recession. And now that we are faced with a potential recession trigger, I am not very confident they will get this one right.
THe next big thing to watch out for is the virus spread in the USA.
Now, unless something changes, I am not overly hopeful in containment for the USA. The rumours of poor/non standard testing, and the limited access to healthcare is going to make one hell of a mess.
Could a US person explain who pays for the test/on going healthcare if an uninsured person rocks up to the ER with relevant history and flu like symptoms?
Does the government step in to fund care? or is it left to the hospital to foot the bill?
There have been cases of them putting liens on people’s houses while their still hospitalized if the expected cost of treatment is expensive enough.
> Does the government step in to fund care? or is it left to the hospital to foot the bill?
AFAIK, currently it'd be just like if someone uninsured came in with any other illness: the hospital gives the care, the patient gets a bill they can't pay. The hospital essentially extends credit to the patient.
The outcome is the same but the health cohort might be a surprise depending on your mental model.
Many people without money or insurance also go but since they don’t have assets, they just don’t pay and the hospitals can’t collect on them. So the hospitals have to raise costs on people with money to pay for people without money.
The second scenario actually caused a hospital I knew of in Dallas Texas to close down because it had (according to the locals) “too many illegal immigrants taking advantage of free healthcare”. Dallas Texas is somewhat close to the Mexico border.
I personally knew of a vagrant woman with a prior medical issue that bragged about happily racking up the hospital over a million dollars in expenses after staying in a hospital bed for a few months. She didn’t express concern about having to pay for any of it since she doesn’t work. I wasn’t sure how to feel about that.
I once paid $8k while my health insurance paid $43k when I spent just half a day in a hospital bed in Colorado after I fell and broke a bone.
The on-paper cost and the actual cost are wildly disparate.
It's not uncommon to see a $40k bill get "adjusted" to something like $4k when insurance is present.
Only 4% of US bankruptcies are because of medical bills https://www.washingtonpost.com/blogs/post-partisan/wp/2018/0... . A tipoff that [insert large percentage here] of bankruptcies aren't actually because of medical costs is that only 6% of bankruptcies by those without health insurance are because of that cause. The biggest cause of bankruptcies is lack of income, which health insurance doesn't affect.
https://www.google.com/amp/s/www.cnbc.com/amp/2019/02/11/thi...
You’re quite clever in saying that bankruptcies are caused by lack of income. I suppose more income would solve 100% of bankruptcies lol
Your citation says
>A new study from academic researchers found that 66.5 percent of all bankruptcies were tied to medical issues —either because of high costs for care or time out of work.
(My emphasis.) In other words, people going bankrupt because health problems = lack of work = lack of income. That does not contradict my citation which states that 4% of US bankruptcies are because of medical bills; that is, bills for health care treatment exceeding available income.
Your article goes on to quote a study author who carefully elides the difference between the two. Oh, by the way, he is a prominent proponent of Medicare for All! Imagine that.
what on earth did they do to you to cost that much?
to put that in perspective, your co-pay is the cost of a hip replacement in the UK: https://www.statista.com/statistics/687462/cost-of-bone-trea...
The only people who think the U.S. has a good health care system are the rich who can afford anything and the poor who watch the news (propaganda) extolling how good our system is but don't actually take part in it. Even if you have insurance, you have to be very careful about what you use and when.
I'm not super informed on the issue, take this with a grain of salt.
[1]https://www.ncbi.nlm.nih.gov/books/NBK221653/#_ddd00055_
They don't. They keep working because there's no way to afford the time off or the sick child care, even if the taxpayer does foot the bill for the ER visit.
Kids keep going to school and adults keep rocking into work.
That especially goes for food service workers.
Also Coronavirus doesn’t know the difference between someone making minimum wage and $10million/year. This can and will cause an economic downturn, possibly a recession. Hopefully we as a nation get it though our heads that universal healthcare and paid sick leave is something that is needed to prevent further disease outbreaks.
“ We also expect some institutional investors to start buying the dip on expectation of fiscal and monetary stimulus, virus spread being more contained in the West versus China due to the timely response from the respective health authorities . . .”
That seems overly optimistic as the U.S. has tested about 500 persons as of 03/01 per the CDC.
IMF SDRs are important because all of the central banks hold a bunch of them.
The Yen is not weighted higher because Japan’s debt is quite high compared to it’s GDP and Japan could try to print it’s way out of it’s debt. The Yen is not weighted lower because they’re fortune enough to be able to print their way out of their debt if need-be compared to many other countries that hold debt in non-domestically denominated currencies.
That’s the best answer I can come up with.