Profits And The Lonely Barber
"The vaccine development means corporate America’s earnings power may be greatly under-appreciated," Bloomberg's Lu Wang and Claire Ballentine wrote Friday afternoon, paraphrasing Leuthold's Jim Paulsen.
That sounds like a wholly generic assessment -- something that might have been plucked from a Rolodex of boilerplate, ready-made COVID copy. But it actually strikes at the heart of the problem for market participants trying to wrap their heads around what look like stratospheric valuations.
The math that can be deduced from the COVID charts points to some assuredly horrible COVID-related life and death outcomes for at least the next month. I think we all know the winter is going to be this way. We want not to be fatalistic, instead to have a somewhat sunny disposition on a future that can’t be predicted. And to think it’s not even Thanksgiving. We were warned.
Seems like there are going to be tactical-style lockdowns at the city, county, and state levels. We’ll wait and see what the messaging is.
I’m suspecting that if not enough citizens’ families are eye witnesses to the death and suffering, it’s going to be, say, a governor wants to close bars at 6PM for two weeks, it’s going to be “Lockdowns will destroy the economy.” Point is, unless enough people die and more families are stricken with grief, there is going to be a fight against most every measure that mayors and governors take.
In an alternate universe of a new Netflix series, members of the Red Senate would hold a joint press conference and cajole their constituents to exercise personal responsibility. But, and the argument can be made, these senators, and this applies to many of our elites, regardless of partisan affiliation, don’t exhibit that much thought for the care and well being of their constituents. Provided they retain power, what is their motivation to act on behalf of their constituents? A craven establishment of elites we have. Perhaps we deserve as much.
I guess if granny has a life insurance policy that pays out if she passes, well, who really cares, her time was going to come anyway…granny’s money in the meantime is just going into the pocket of that greedy long-term care facility.
To wit, I just saw a doctor on Fox News providing a bit of a vaccine reality check. He reminded us that the Pfizer vac requires TWO shots. He worried that because the shot is a little painful, many will not return for the second one.
He also reminded us that it requires such special handling that it is unlikely to be widely available at your doctor’s office or a convenient local pharmacy.
So plenty of reasons for the vaccine skeptics not to “bother” with it. I can hear it now, “If everyone else gets it that will protect me as well.”
Now, what sort of dip should I buy to go with those Fritos?
I believe J&J are coming out with a single shot vaccine.
I don’t know how old you are, H, but at 76 I probably qualify as the kind of cannon fodder my younger neighbors see me becoming. I sure don’t want to get full blown COVID as my choice way to go so for me no turkey day, no Christmas and no New Years (the one year anniversery of my wife’s passing). I’ve had bad Pneumonia five times and aucute respiratory anything is a horrible way to go. I hope my over-entitled “neighbors” don’t get a taste of that kind of end, but more than that, I hope they see fit not to give it to me.
Why does the resumption of hyperbole about the virus have so little impact on markets? Is it because there are other offsetting facts like over-the-top conviction in central banks? Or is it belief that the risk of a double-dip recession is low and despite lockdown threat the global economy has significant upward momentum? I don’t really know. As for the virus and the strategy is seems non-sensical with data that shows NPI are relatively ineffective what is the rationale for lockdowns unless of course there is a need to protect the ICU capacity at hospitals. None of this makes any sense to me,
Next week, I had planned to drive out to LA to visit my daughter- who works from home and is staying very isolated. I miss her terribly, but I am now reconsidering my plans, given the worsening covid situation.
A few thoughts:
I’m sure it’s complicated to model, but it is at least possible that pandemic deaths this winter will not be evenly distributed between Democratic voters and Republican voters. Similarly for long-term mortality (and morbidity), if Republican voters are much less likely to be vaccinated. The beauty of a 90% efficacious vaccine (if we indeed end up with one) is that it is strongly protective for the person who gets vaccinated.
I don’t believe there was a strong anti-vax lobby when a significant portion of the population saw their own children die or become paralyzed due to infectious disease. Seeing grandma die from COVID is bad, but there’s the argument that, well, she was old, and she was going to go anyway…. It’s a matter of luck that the current pandemic strikes the old and weak. The 1919 flu was most deadly for younger people with strong immune systems (cytokine storm). The next pandemic (and there will be another one at some point) might not have the profile of COVID-19.
The argument that a divided (dysfunctional) government is good for business is ridiculous and short-sighted. Is it good for business for the country to lose global stature? To devolve into civil war? Those are potential outcomes if our current dysfunctional state continues. Divided, dysfunctional government is like cancer. Markets are forward looking but are remarkably short sighted.
I keep looking at the seasonal flu infections chart by month. Late February is the peak of flu. This suggests an uphill battle with COVID until late winter. A bleak few months are still ahead.
Daily deaths will peak mid-January. April/May 2020 daily deaths were a steep climb and steep reduction. Now begins slow and steady up and slow and steady down. By Nov.30 we should have 264,000 dead first 8 months. By March 1 we may have 439,000 dead from an additional 3 month period and daily deaths will persist through March at levels not seen since May.
Medpagetoday
https://medpage.maps.arcgis.com/apps/opsdashboard/index.html#/c7dafaae988f4c07a13a9ede90e43a47
Poetry in your last paragraph, H.