I know this Friday will be good.
I’ll let you think about that one. By the way, markets are closed then.
For a decade we’ve written about the way the stock market has disconnected from reality. Nothing lays bare the truth like a Pandemic. More on that later.
First I’ve got to get something off my chest.
I’m not a doctor. But ModernIR is as good at the physiology of American equities as those medically trained are with humans. We’re experts at threshing dense, complicated information for central tendencies, patterns.
We’ve studied and validated data around this Pandemic. The Centers for Disease Control reports (statistics as of 2017) that in New York annually more than 4,500 people die from the flu and pneumonia.
I saw a headline yesterday saying New York City Covid-19 deaths had surpassed those on Sep 11, 2001, as if the two were related. At least seven morbidities kill more New Yorkers every year.
I’m proud of my fellow Americans for their indefatigable patience. And I’m also tired of hysteria, propaganda turning mask-wearers against non-mask-wearers, false correlations.
Over 115,000 New Yorkers die per annum, chiefly from heart disease (a co-morbidity with Covid-19) and cancer. And 3.5 million Americans die every year.
Now we find that our rush to respirators for a Coronavirus response may be wrong. Read about Cytokine storms. See this. We put our haste to confront a threat ahead of understanding it.
You know viruses are inanimate? We think they’re “bugs,” malevolent living things. In fact they’re hunks of protein, sequences of RNA or DNA coated in a fatty lipid layer. They’re inert unless they encounter susceptible hosts like mucosal cells.
In the truest sense, computer viruses are like human viruses, both meaningless unless they encounter code to corrupt, incapable of corrupting otherwise.
Healthy skin is impervious to them. Alcohol dissolves lipids, proteins decay under foamy soap. Sunlight and air are also enemies of proteins.
One could say, “Yeah Quast. But they’re transmitted by people.”
True. Viruses replicate in host cells and spread through human contact. As ever. Karen and I joke that every time we board a plane we leave our little antibody bubble world.
Fifteen million people die yearly around the globe from viruses. The CDC offers vastly greater numbers falling ill from virally triggered maladies. It’s always true and will be tomorrow as much as today. We’re ever walking into someone else’s sneeze cloud.
This paper’s opening salvo says: “Influenza-like illness (ILI) accounts for a large burden of annual morbidity and mortality worldwide (WHO 2020). Despite this, diagnostic testing for specific viruses underlying ILI is relatively rare (CDC 2019). This results in a lack of information about the pathogens that make between 9 million and 49 million people sick every year in the United States alone (CDC 2020).”
Yet we’re telling people, “Trust the government. We’ll find a vaccine.” Coronaviruses cause the bulk of the one billion common colds in the USA annually. Look it up.
“Big Short” Michael Burry, an MD turned hedge fund manager famed for betting against mortgage securities before 2008, says our response to Covid-19 is worse than the virus.
A bigger sneeze cloud.
We stipulate that any Presidential administration would be excoriated for less than pulling out all the stops, whatever that phrase means.
Today it means monetizing any economic deficiency. Or in English, having government compensate loss with money it borrows or creates. Yet government has only the money the people surrender to it.
So the government instead reaches far into the future through the central bank and hands the future the Coronavirus and takes from the future its money, for us.
We might laugh and say, “Suckers!”
But the Constitution that’s ostensibly the supreme law of this land prohibits taking private property for public use without just compensation. No scepter for any mayor or governor or other official exists under it. There is no authority to order people to do anything unless the people first agree to it. That’s the bedrock of self-government.
In this crisis we’ve taken millions of businesses for public use (here, safety) without just compensation, offering people who expended their lives building restaurants, bars, salons, hotels, stores, gyms, on it goes, on which they depended for retirement, inheritance to pass on to children, a loan.
I’m heartsick. It will take a generation to recover, not a quarter or two.
Most people think viruses are alive and it’s untrue. Most people think the stock market is a barometer for economic outcomes, and it’s untrue. Too many suppose government can save us from life, or death. And it’s untrue.
In a way, the stock market is a sneeze cloud. Trillions in Exchange Traded Fund transactions aren’t counted as turnover (thus Blackrock is unchanged in your 13Fs when it trades frantically). Half the volume is borrowed. Fast Traders set prices. Arbitrage dominates trading. You can’t trust what it signals.
We’re going to show you the behaviors driving stocks during this Pandemic next Wed Apr 15 via a NIRI-sponsored webcast. We’ll post details at our website, or visit NIRI.org. If you want an email update sent to you, let us know.
I can live with sneeze clouds. Or die. We all do someday. I can’t live with our markets, monetary policy, crisis-response, as masquerades. We can do better. And we better.
