The COVID 19 World Crisis
Postings Starting March 13 to Who Knows
We have entered uncharted waters. This virus was largely unknown three months ago. Back then Corona was just a beer from Mexico. However, the virus is on everybody’s mind now. I want to observe what happening, so I am going to keep some notes. I have seen lots of things which I haven’t seen before. Like most people, I am trying to understand as much as I can. I found the World Health Organization’s detailed data on a website (www.ourworldindata.org/coronavirus). You can check their bona-fides, which look very good to me. Each day I will post what I think is accurate data so we can see trends. Early on, I was told the UK has done a very poor job of dealing with this, so I will post the number of confirmed cases and deaths in the US and UK. In addition, our financial markets have reflected the scare, so each day I will report the change in the DJII from the prior day. Let’s see where this takes us.
3/13/20
Day -3 Strong Warning Signs
Measure USA UK
Confirmed Cases 1,264 594
Deaths 36 8
DJII +9.4%
Usually, I am not a suspicious person. However, I realized something was definitely up. In the morning when I shot my worst round of golf on an otherwise beautiful day. Felt great, played lousy. I got home at 1 PM, and Carol told me she was unable to shop. The crowds of people getting ready for “whatever” translated into no parking places. Period.
I volunteered to go, and started at Target. We needed toilet paper, sanitary wipes, etc. I was shocked to see many shelves were completely bare. This isn’t Russia, our free market works. However, when people hoard, the system gets balled up. That is exactly what was happening. Then to Berkeley Bowl and Whole Foods for food. Their shelves were often bare, as well. It took 90 minutes each to check out of these mobbed stores. People in line seemed to be bracing for the unknown. There was no six feet of separation.
The radio warned of acute shortages of toilet paper, as people bought up everything on the shelves. And, forget about getting the N95 masks, personal sanitizers (Purell), and sanitary wipes.
3/14/20
Day -2 Confirming More to Come
Measure USA UK
Confirmed Cases 2174 707
Deaths 47 10
DJII N/A
The flood of cancellations started quickly. No NCAA March Madness is crushing to me. That is perhaps my favorite sporting event. I am sorry that red hot teams like the Dayton Flyers have lost their chance to show everyone how good they really are. The Olympics, which are scheduled to start in July, are “going forward”, so far. Non-essential flying was discouraged. Everyone watched the daily charts which states showed the quickest increases. Washington and California are off to a “bad” start.
Non-essential group meetings have been discouraged. That really made me laugh. During my career I hate to estimate how many non-essential meetings I attended. A very savvy boss of mine once told me if I am not in front of a client, or working on a financing, I was not doing my job. In this case and many others, he was more right than wrong. One other maxim of Ben’s was “business is personal”. To succeed, your co-workers, clients and advisors need to know you. That means spending social as well as deal oriented time with them. It was my good fortune, he often concluded that meant us having Friday lunch dates at the PU club playing backgammon, or dominos. Quality time, and that buffet had just about anything you might like.
3/15/20
Day -1 Last “Free” Day
Measure USA UK
Confirmed Cases 2,951 1,140
Deaths 57 21
DJII N/A
As explained above, I will track COVID 19 in the UK and USA. They are perhaps our closest ally. It has been painful to watch as they have worked to extricate themselves from the EU. I am in the minority and think this can be a good thing for them, but there is much to do. Today the UK population is 66.4mm, or about 20% of our 327mm. Fifty years ago their population was 27% of ours. During that time, their population grew 11mm (20%), while ours grew 122mm (nearly 60%). That is a profound difference, which doesn’t bode well for them.
3/16/20
Day 0 It Starts Now
Measure USA UK
Confirmed Cases 3,774 1,140
Deaths 69 35
DJII -13%
With all sorts of directives expected, we filled up our cars, did one last shopping (but didn’t buy ice cream), got cash from the ATM, and ordered out dinner from a favorite local spot. It’s official, starting tomorrow, the rules kick in big time.
I attended my last in person meeting for the next few weeks. (Going forward our committee will use Zoom which is great.) Anticipating things wouldn’t get back to normal, our Rector proposed “Easter in June”, knowing it won’t happen as now scheduled on April 12. This is horrible news for me for a couple of reasons. Lent has never been my favorite time of year. The music of the period is depressing to me. No Joy. Making Lent longer is bad news. It also means delaying the fantastic music of Easter.
3/17/20
Day 1 Stay in Place
Measure USA UK
Confirmed Cases 4661 1543
Deaths 85 55
DJII +5%
So, what’s so hard in this new world after just one day?
· Can’t go to the Exercise facility where I work out most days. (that also means no steam room, which I love.)
· Can’t putt the 36 balls I putt at the beginning of each day. In fact, no golf period.
· Can’t (shouldn’t) jump in the car to do errands.
· Turning on the TV is guaranteed to have bad news: either COVID 19, the election, or the markets. This too shall pass.
· Can’t see friends.
· I have not felt like I have an ankle bracelet on, yet.
Working out now means going out for long walks. It is usually cold when I go out, often before the sun has risen. Very quiet, not many people out. It is actually a pleasant way to start the morning. I listen to classical music, podcasts, or rock & roll. All have their place. Yes, I wear one of those bright worker’s vests so cars can see me. Traffic on roads is visibly lower than usual.
I read that Zoom had 300,000 new customers in one day, as people learn more about their terrific video conferencing product. It is truly great, but we have all seen lots of good products whose companies aren’t a good investment. Schwab reports Zoom’s PE is a modest 1,800. (At least that means they are making some money.) Today’s PE is a bargain compared to their peak of a bit over 2,200. It appears the stock is up 50% in the last month. Again, using Schwab data, all major rating sources which cover ZM rate it as a HOLD. Caveat Emptor.
Poor Ohio. The governor and other officials wanted to postpone their scheduled primary, but 11th hour jockeying was needed to postpone. Biden won all the states today, including a one sided win in Florida (76%-22%). What could go wrong? Who knows?
Spent part of the afternoon planting beautiful small flowers in our new terraced side area. Our Bacopa are light purple and white, the colors of our local high school. Also cleaned out our outdoors garden storage room. Surprising that never got to the top of the “to do” list. You could eat on the counters now.
Italy, Spain, and other countries are “locking down” key cities or their country. Many countries have stopped allowing people to come into their country.
In the USA, we are told to wash our hands in hot, soapy water for 20 seconds. That is the time it takes to sing Twinkle, Twinkle Little Star or Happy Birthday twice. It is also the same time it takes to see all the highlights of the Democrat’s presidential debates of the last 12 months. (We have got to change the way we elect our president!)
3/18/20
Day 2 Self Isolation
Measure USA UK
Confirmed Cases 6427 1950
Deaths 108 55
DJII -6%
The Dow is bouncing around like a rubber ball. Usually valuations change fractions of a percent in a typical day. These aren’t typical days. Are program traders accentuating this volatility?
Our local Episcopal diocese (essentially about 60 churches in the bay area) announced all services are cancelled, other than those done electronically. Can you imagine a couple who had set their wedding date for this coming Saturday, only to have this come up? What about memorial services? Life goes on. We will see what we will see.
Carol and I are taking great satisfaction in doing projects around the house. Carol has cleaned out her cloths closet. I finally crossed the bridge by recognizing the 100 LPs, and more cassettes aren’t essential anymore. I hope wherever they end up, they are enjoyed as much as I did. You Tube allows me to hear just about anything, any time. If you haven’t tried this, you should. Pick your favorite piece and view it.
Here are two pieces which I think will bring joy to your day:
· Handel’s “As Steals the Morn” (L’Allegro HWV 55) performed by Voices of Music (SF based) featuring Amanda Forsythe and Thomas Cooley performed 11/4/19
· Mozart’s “Laudate Dominum” performed by Bel Canto Choir Vilnius performed 3/1/11
(An interesting option of the same piece is the performance by Barbara Hendricks dated 11/2/17.)
So long as I have access to music like this, I can get through anything.
3/19/20
Day 3 Self Isolation
Measure USA UK
Confirmed Cases 9415 2630
Deaths 150 103
DJII +1%
Note US numbers were restated by 50% upward in last few days. This can’t be surprising since our healthcare system is so decentralized and this is such a fast changing situation. Expect more of this. Likely in all cases, it will be increases from previously reported levels.
As of today, world-wide confirmed cases totaled 213,254, while deaths confirmed were 8,843. That is a rate of 4.1%. However, that is likely overstated since many may have the virus but not be confirmed in the morning.
You all know “older” people are more at risk. Guess who they are talking about? I learned of senior shopping time (usually when a store opens and remains for two hours). The intent is to minimize crowding for those most at risk. In search of the holy grail (sanitizer wipes, gloves, and toilet paper) I got to Safeway 15 minutes after it had opened. All the toilet paper which had been delivered the night before was gone. (At least I saw people with TP!) I asked a clerk about gloves, and he took me to a shelf which had them!!! Awesome. My first instinct was to grab them all but decided to just take one package of 2 pair. Shortly there-after the same clerk came to me and asked if I was interested in a small Purell. Having only seen pictures for the last week, I thanked him and took it. A final deal sealer, he agreed to hold some TP for me tomorrow morning. America is great. (It turns our Carol found 8 rolls in our storage area. Fade out to We’re In The Money.
You know things aren’t normal when the ironing board comes out. Has it come to this? Carol has done hours of ironing. I am guessing every house has some drawer where stacks of clean, un-ironed napkins, and the like live. They don’t see the light of day much before the afternoon of a dinner party. Think of ironing as getting ready to re-socialize. I can hardly wait.
I heard today that half of the cases in the USA are in 3 states and 10 counties. California, Washington, and New York, are the states. The map demonstrates huge concentrations.
Tonight, our governor ordered the state is on shut down. Everyone is to self-isolate. This is a dramatic and bold step. By drastically limited contact with others, the spread of the virus should slow. However, this is going to mean economic hardship for many, many people. I can’t imagine the scale of this devastation will take.
3/20/20
Day 4 Self Isolation
Measure USA UK
Confirmed Cases 14250 3277
Deaths 150 144
DJII -5%
For the past few days, when walking, I have seen young families with their kids biking, walking, or whatever. School is out so parents have their hands full 24x7. I hear about groups which are forming shared teaching situations. Awesome.
More importantly, it’s what I don’t see these days which is great. Way less traffic. This translates into less noise, but the pace of life seems to slow down with less cars. I can’t tell how much traffic has decreased in Oakland and Piedmont. I would guess something like 50%. We get so use to traffic in our area we take it for granted. Thus, I can’t tell you how far back one needs to go to have this as our traffic level.
Face it, the bay area has lost a lot of its appeal in the past several years. Harder to drive around. Restaurants are more crowded, and more expensive. People move a bit faster and are more often rude or ignore those around them. More hassles. And of course, crime and homelessness hasn’t improved things.
BTW, did you notice for the past 6 trading days, the DJII had alternated from a day up to a day down. However, during those days, the measure has lost 10%. Added to losses in February the equity markets are off about 1/3rd through today.
March 21, 2020
Day 5 Self Isolation
Measure USA UK
Confirmed Cases 19624 3983
Deaths 260 177
DJII N/A
On my walk this morning, I got to thinking about isolation. I grew up with three siblings, and always shared a bed-room with one of both of my brothers. Throughout college I had room mates, culminating in my last year in college when I roomed with three other guys. They turned out to be my best friends. And, I have been married for over 50 years. My jobs always involved working with small groups of people, and then interfacing with clients. Thus, not much time on my own.
The closest to isolation happened at boy scout summer camp. Each summer our, quite active, Berkeley troop had a three week camp experience on a PG&E lake near Big Bear. We had to hike about 6 miles in to get to the camp site. When I was 14, two other scouts (about the same age) and I left camp. We had our packs stuffed with clothing, food, a sleeping bag and tarp, and very importantly a topo map and compass. We were taking our 20 mile hike, which would complete the hiking merit badge. Ruy, Art, and I were on our own for probably three days and two nights. I am happy to report it all went without a hitch, because of our growing knowledge, an abundance of caution, and good luck. (I looked online today and most of that beautiful area has succumbed to drivable roads, camp sites, and lots of people. When we were there, it was highly unusual to see anyone other than our troop and dads.
3/22/20
Day 6 Self Isolation
Measure USA UK
Confirmed Cases 22767 5018
Deaths 340 233
DJII N/A
Most Episcopal churches had some sort of virtual church service. I watched a few, and all had something to offer. (Unfortunately, music is largely missing, and that is why I go to church.) Toilet paper has been in very short supply in the East Bay, and elsewhere. Starting 10 days ago or so, a “run” started on TP. I have learned the US produces about 7 billion rolls per year. (I assume we don’t import additional supply.) Seven billion equates to an average of about two rolls per month per person. Note, manufacturers has quietly shrunk the typical size of TP from 4.5”x4” (1999) to 4”x3.7”. That’s nearly a 20% drop is size. I am going to stick my neck out and bet prices didn’t drop. It seems reasonable to assume the demand for TP is usually very stable. Thus, stores probably keep no more than a few days’ supply are on the shelves most of the time. I conclude, it doesn’t take too many people to hoard, to goof up the supply chain. I would guess a few hundred at each store would do the trick.
3/23/20
Day 7 Self Isolation
Measure USA UK
Confirmed Cases 35206 5683
Deaths 471 281
DJII -4%
We had our first virtual lunch today. We chatted with our good friends the Bonds, as we swapped funny stories, discussed the virus, while having lunch. It is great to see friends during this time of isolation.
3/24/20
Day 8 Self Isolation
Measure USA UK
Confirmed Cases 41442 6650
Deaths 590 335
DJII +11%
Face it, Congress has suffered from grid-lock for some time. They have failed to reach compromise in many critical areas, as “business as usual” continues. (I am always heartened by the quote attributed to the comedian Will Rodgers who said, “Be glad we not getting all the government we’re paying for”.) Well COVID 19 got the congress on the same page in a few days. The Senate passed an 880 page bill while is filled with financial aid to groups in need. (How many people actually read this bill?) Two trillion is about one month of our GDP. Many are saying this colossal bill is just the first step. I certainly agree drastic steps like this (and bold initiatives by the Federal Reserve) are essential to keep the economy from going off the tracks. Even with this, some predict a double digit unemployment rate in a month or so. In addition, a drop in GDP growth may be as high as 30% annualized.
If I remember correctly, the original size of this bill was about $1 trillion, so lots was added as the sausage was made.
