Coronapocalypse - About Thoughts
March 17, 2020
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Over the past times few weeks, markets receive got witnessed a legitimate 'black swan' trial with the emergence of the covid-19 pandemic, which has resulted inwards a catastrophic collapse inwards global equity markets of a speed too severity that has rivaled - if non exceeded - that seen during the GFC panic.
While initial covid-19 intelligence emerged inwards tardily Jan most a growing Chinese outbreak, which caused an initial 5-10% marketplace sell-off from previously buoyant early-2020 highs, the selling eased too markets recovered during the commencement one-half of February, equally the spread sharply slowed inwards China inwards reply to aggressive containment measures. There receive got been multiple outbreaks inwards the past, including MERS too SARS, which both proved to ultimately receive got a far to a greater extent than benign impact than initially feared, too covid-19 appeared to hold upward next a similar trajectory. However, from tardily February, intelligence of the virus' rapid international spread triggered farther abrupt declines inwards markets, too these accelerated after intelligence emerged most the effects inwards Italy too Islamic Republic of Iran beingness much worse than expected, including tales of healthcare facilities beingness overwhelmed, which were exacerbating snuff it rates.
This was too then followed past times a slew of accelerating too increasingly aggressive containment measures beingness announced across the Western seat down (and some of the non-Western world), which began with the cancellation of large events, earlier moving on to work-from-home measures; locomote restrictions; forced 14-day self-quarantines on arriving international visitors; total regional lockdowns; the cancellation of major sporting events such equally the NBA; to finally the consummate closures of populace areas, including retail venues too restaurants, with accelerating implications for curt term economical activity. Famous people receive got started to instruct infected, accentuating the sense of powerlessness. Every unmarried hateful solar daytime over the past times 1-2 weeks has seen the intelligence go from bad to worse, too falling property prices too escalating economical effects have, inwards turn, given ascent to fears that this may crusade cascading liquidity/bad debt/unemployment effects that could morph into an all out financial crisis.
If that wasn't bad enough, markets receive got also been hitting with a "one 2 punch" (hat tip Buffett) of a breakdown inwards OPEC+ provide discipline, with the cartel announcing that inwards an surroundings of rapidly falling crude demand, that they would non alone non cutting production further, but truly significantly increment supply, past times mayhap 2-3m bbl/d. This is a separate too distinct event/shock from the covid-19 impact, equally it was far from inevitable falling crude demand would Pb OPEC+ to non alone non cutting further, but truly significantly increment supply. Oil prices receive got collapsed 50% to US$30/bbl, which volition receive got important consequences for the crude production sector (in detail the US shale sector, too its associated sizable high-yield bond sector), equally good equally the currencies, budgets, external accounts, too economies of the many crude producing countries inwards the world. Many volition hold upward forced to describe downwards on sovereign wealth funds to back upward authorities spending/social programs, exacerbating selling pressure level inwards financial markets equally they liquidate assets. In other words, the seat down has seen non one, but two shocks inwards abrupt succession, which is an extremely rare occurrence.
So what is an investor to practice inwards this form out of environment? Stay calm too acquit rationally. It is an like shooting fish in a barrel surroundings for investors to go emotional/irrational, equally non alone is uncertainty rife too markets inwards gratis autumn - something that makes investors emotional at the best of times - but inwards this representative the impact is amplified past times the existent too visceral fearfulness investors experience for their ain wellness & safety. But what is called for is a calm too dispassionate assessment of the facts. I practice my best to provide i below.
There is no inquiry that the impact on economical action inwards the curt term is going to hold upward real severe, although some of the claims I receive got seen most the global economic scheme essentially coming to a consummate standstill are a vast exaggeration. At the front-end of consumer-facing retail too leisure, that volition hold upward the case, but large parts of the back-end global economic scheme volition remain relatively unaffected. Agricultural production, for instance, along with nutrient processing, transportation, too retail, volition non hold upward affected. Most mining activity, processing too distribution, too construction action volition continue, specially equally China gets dorsum on its feet too stimulates to back upward economical activity, too financial stimulus to counter the effects of the economical fallout through infrastructure spending rises inwards the West. The healthcare manufacture volition most sure go along to operate (19% of gross domestic product inwards the US). Services delivered electronically, along with back-end fulfillment, volition continue, equally volition service industries where employees tin send away telecommute/work remotely (the seat down has unprecedented powerfulness to practice this inwards the modern era). Government salaries too services volition largely continue. In addition, ignored at acquaint is that economical action is already rapidly ramping dorsum upward inwards Asia - specially inwards China - too large parts of the developing seat down with youthful demographics are likely to hold upward relatively less affected, given that the illness disproportionately affects the old.
Nevertheless, at that topographic point is no dubiety that consumer-facing front-end industries such equally retail, restaurants too leisure - specially inwards the West - equally good equally the tourism too locomote provide chain, are going to hold upward real badly impacted inwards the curt term. The airline industry, inwards particular, is facing it's worst downturn inwards history. With to a greater extent than too to a greater extent than countries implementing 14-day mandatory self-quarantine measures for international arrivals, international rider traffic could autumn unopen to 100% for at to the lowest degree a calendar month or 2 - a downturn of unprecedented severity. Domestic locomote volition hold upward less catastrophically affected, but volition also likely soundless significantly reject equally people defer non-essential travel.
However, it is of import to holler back that the ultimate impact of covid-19 volition hold upward a component non exactly of the severity of the effects, but also their duration. The impact is going to hold upward severe, but at that topographic point is a decent gamble the duration of that severity does non transcend to a greater extent than than a few months. An overlooked reality inwards that regard is that the worse the curt term severity, on job concern human relationship of to a greater extent than too to a greater extent than extreme containment measures (such equally NYC's determination to unopen all bars too restaurants), the shorter the duration volition be, because extreme social distancing measures volition inevitably resultant inwards a dramatic reject inwards the virus' average R0 (the average number of novel infections each infected private occasions) compared to the status quo ex ante, which was idea to hold upward most 2.3.
Right now, with the seat down swept upward inwards panic, at that topographic point is an intuitive feeling alongside investors that non alone is the impact on the global economic scheme cascading from bad to worse, but also that a continuing uncontrolled spread of the virus appears inevitable from here. But that is assuming the worst of both worlds, too it does non seem justified. The spread volition rapidly tiresome from hither on job concern human relationship of these measures, too nosotros receive got already seen inwards places similar China that when extreme social distancing measures are enforced, the representative charge tin send away rapidly decline, with a lag of mayhap 1-2 weeks.
Aside from authorities measures, human behavioural responses are also non to hold upward underestimated. As people adjust their conduct inwards reply to security concerns, people wearing masks; sanitizing their hands; too beingness highly sensitive to the presence of sick/coughing individuals nearby, too making efforts to maintain a condom distance from strangers, could good (at a guess) halve the R0 past times itself - specially due to the widespread media coverage covid-19 has garnered. In my view, the most likely outcome from hither past times far is that lockdown efforts resultant inwards the mass of novel cases starting to rapidly tiresome 1-2 weeks from instantly (the approximate lag duration betwixt existent representative mass too diagnosed representative volume).
Furthermore, provided healthcare facilities are non overwhelmed, the snuff it charge per unit of measurement appears relatively low. To date, Republic of Korea has engaged inwards the most extensive testing (under-diagnosis is soundless a major number inwards most markets), too the snuff it charge per unit of measurement inwards Republic of Korea has been 0.6%, too fifty-fifty there, denominator effects are likely soundless overstating the snuff it rate. Many people state they practice non trust Chinese statistics, but South Korean statistics are highly credible. Death rates receive got been much worse inwards places similar Italy primarily due to a tardily reply too lack of adequate healthcare infrastructure, too it is the (appropriate) fearfulness of the latter that has driven extreme measures inwards recent weeks inwards the West to comprise the outbreak. That ought to hold upward successful, for the reasons noted, such that snuff it rates should hold upward able to hold upward contained at levels non likewise dissimilar from South Korean levels, which is most half dozen times equally bad equally the seasonal influenza (0.1%). The influenza is also to a greater extent than contagious than covid-19.
In time, if needed, to a greater extent than sensible too less destructive containment measures powerfulness hold upward devised too implemented. For instance, covid-19 spreads primarily through droplets emitted past times people when they coughing too sneeze, that are either inhaled spell airborne, or which come upward into contact with surfaces which are after touched, too transmitted when the toucher rubs their olfactory organ or mouth. n95 masks are effective at filtering such airborne droplets. While for the moment, at that topographic point is vastly inadequate production capacity, a elementary too effective containment stair out would hold upward to simply require everyone to habiliment a mask spell inwards public, instead of cancelling all populace events/spaces. In most places inwards developed Asia, the elementary combination of masks; temperature screening for all entering populace spaces; too aggressive containment of identified cases too people they receive got associated with, receive got been largely effective inwards dramatically slowing the stair of transmission. Given the success nosotros receive got already seen with containment inwards Asia, it appears likely to me that investors are beingness far likewise pessimistic most the powerfulness of containment efforts to also operate inwards the West at present.
The other of import departure to GFC-type downturns from the perspective of the likely duration of the impact vs. its severity, is that a curt term exogenous stupor has different medium to long term effects than a downturn driven past times the collapse of a bubble. When a bubble bursts - such equally the US housing bubble during the GFC - demand falls from artificially-high levels to a to a greater extent than sustainable level, too a large stair out of that reject is permanent (albeit at that topographic point may hold upward some curt term overshooting effects). After the US housing bubble burst, housing construction too the mortgage financing provide chain, equally good equally all the consumer spending the prior rapid increment inwards leverage was supporting, had to revert dorsum to to a greater extent than sustainable levels. The bubble excesses were non coming dorsum (growth eventually resumed, but from a lower sustainable baseline).
A shock-induced hitting to demand is different. As shortly equally the virus is contained too life normalises, demand volition rapidly bounce dorsum to prior levels - indeed it may fifty-fifty overshoot to the upside equally pent upward demand is released (e.g. people that deferred opor-garai plans receive got their postponed vacations; postponed conferences/events receive got place; too people that postponed buying a machine or other consumer goods go out too purchase them). The recovery volition real likely hold upward V-shaped inwards nature, which is real different to the post-GFC environment. It is beingness overlooked at present, but a severe too long-duration downturn is much worse than a severe but short-duration downturn.
Second-order cascading liquidity effects are also already beingness discussed too discounted, but people are exaggerating the risks hither inwards my view. Prior to the GFC, many corporates too financial institutions were relying on curt term paper, too coin markets seized up. Due to the GFC experience, real few financial institutions too large corporates instantly rely on curt term coin markets to fund their operations, too most operate with large liquidity buffers too long dated debt maturities. This way at that topographic point is much to a greater extent than time before pressures/debt marketplace disruptions volition impact funding. Short term debt markets powerfulness close, but that won't impact most companies for quite a spell due to the presence of the said liquidity buffers, which included non exactly cash, but committed banking concern revolvers, which many companies are instantly inwards the procedure of drawing down.
Funding pressures inwards the banking organization also seem unlikely, equally non alone are banks instantly much to a greater extent than liquid than pre-GFC, due to a combination of much higher regulatory liquidity requirements too management prudence (reflecting cultural alter inwards the post-GFC era), but key banks are also implementing substantial liquidity support. After an initial spike, interbank rates receive got lately sharply fallen inwards the US for this reason. Furthermore, real important financial stimulus is coming. There is a real skilful chance, for instance, governments provide financial back upward to airlines - the US has already suggested this, too I would hold off the European Union to follow inwards the non likewise distant time to come equally well.
With honor to the banking system, spell bad debts volition increase, the magnitude of the hitting to the credit-worthiness of their borrowers volition depend on the duration as good equally the severity of the downturn. Banks inwards the US too Europe receive got lent conservatively over the past times decade, too involvement rates too hence debt serviceability burdens are low. Most of their borrowers volition thence hold upward able to grapple through a 1-2 calendar month hitting to their incomes, too banks tin send away too likely volition provide curt term forbearance measures on repayments. One of the risks is IFRS-9, which requires banks to front-load provisions on the footing of an expected credit loss model. This could strength banks to receive got large upfront provisions, discouraging lending too pressure level capital. However, European regulators receive got already said they are considering granting temporary uppercase relief to banks (relaxing uppercase ratios), too importantly, nosotros are non coming out of a menses of rapid credit growth. When credit growth goes from 20% to 0%, the economical effects are substantial, but when they go from 2% to 0%, much less so.
While at that topographic point is much verbalize of debt levels beingness extremely elevated, this is a vast oversimplification. What has truly happened is that government debt has significantly increased inwards the post-GFC era, but authorities bond yields receive got collapsed to zero, too spell high authorities debt could hold upward a job long term, it is most sure non a job at present. Meanwhile, private sector debt intermediated past times the banking organization has been falling for thirteen years inwards both the US too Europe relative to GDP. Household debt inwards the US, for e.g., has fallen from to a greater extent than than 100% to alone most 75% at present. Banks, individuals, too to a lesser extent, corporates, receive got been deleveraging for thirteen years. Furthermore, non alone has debt to gross domestic product fallen, but involvement rates are also at tape lows, such that the debt servicing burden is instantly truly at real depression levels past times historical standards.
There are pockets of excess, to hold upward sure. Debt levels inwards the private equity space, for instance, receive got mushroomed. However, this debt is good structured, beingness covenant light, long term, too depression cost, spell the private equity manufacture has US$1tr of committed 'dry powder' (funding commitments clients receive got either provided or are obligated to provide when called, which is non yet invested). While private equity is arguably inwards a bubble, it is non a bubble that volition rapidly unravel.
The outlook for crude appears to a greater extent than challenged inwards the curt term, equally the combination of falling demand too rising provide ought to go along to pressure level crude prices, too inwards the worst representative they could easily autumn to US$20/bbl or less. However, fifty-fifty here, it is non impossible OPEC+ comes dorsum to the negotiating table. The demand outlook has rapidly worsened over the past times calendar week or so, too Saudi Arabia's reply appears highly emotional. Russia's opinion was to a greater extent than justified - they simply wanted to maintain existing cuts (rather than cutting further), noting accurately that cuts to engagement had simply resulted inwards increased shale supply, too that it was likewise shortly to assess the magnitude too duration of the covid-19 impact on demand. They did non desire to suspend existing agreed cuts. Saudi Arabia, past times contrast, were initially pushing for aggressive additional cuts, but angered past times Russia's lack of co-operation, appear to receive got reacted emotionally, throwing their toys out of their cot too responded past times proverb they volition instead get down to meat equally much unsmooth equally possible starting from 1 Apr (likely most 2m bbl/d to a higher identify their electrical flow production of most 10m bbl/d, at maximum capacity).
Sheiks don't similar non getting their ain way, but i time their arrogant temper simmers downwards a bit, it is possible they could come upward dorsum to the tabular array - specially because inwards Russia's case, i of the reasons they did non desire to cutting was that they felt it was premature to assess the demand impact, but the calendar week or so since that opinion was maintained has seen the demand outlook rapidly worsen.
If that does non happen, it seems likely crude prices volition autumn farther too a rapid provide reply from the shale acre volition hold upward forced. OPEC+ tin send away ramp production upward past times mayhap 3m bbl/d, but shale produces something inwards the gild of 6m bbl/d, too most of it is uneconomic below US$30/bbl. Importantly, shale wells receive got rapid reject rates, so yous receive got to go along drilling inwards gild for production to non rapidly reject past times >20%/pa. If prices autumn to US$20/bbl, you'll in all likelihood consider US shale production halve inwards the adjacent 24 months, absorbing all of OPEC+'s excess capacity, spell it is likely global demand has recovered from the covid-19 hitting too reached novel highs comfortably inside this timeframe, equally trendline global growth inwards demand continues to transcend 1m bbl/d pa. In the meantime, an increment inwards inventories, tanker storage past times crude speculators/arbitragers, too increases inwards authorities strategic stockpiles, powerfulness aid absorb some of the excess supply. Bankruptcies inwards the shale acre withal seem likely, too at that topographic point volition hold upward some hits to the high-yield debt infinite here. However, the losses practice non seem likely to hold upward large plenty to hold upward systemically destabilising.
What does all of the to a higher identify hateful for markets? It is of import to holler back that the outlook for markets is non the same equally the outlook for the economy. The US had i of it's worst recessions inwards history inwards 2009, too yet stocks had i of their best years inwards history inwards that real same year. Market prices are non driven past times the economic scheme per se, but instead a combination of liquidity too emotion, because these are the factors that drive the demand too provide for stocks, too that is what laid prices (the economic scheme tin send away effect liquidity too emotions, but ultimately it is the latter factors which create upward one's hear prices).
At present, nosotros receive got tape levels of global liquidity, equally key banks slash rates to null or less, too revert to rapid QE money-printing. However, that liquidity is non yet finding its way into stock markets equally at that topographic point is a abrupt separate betwixt risk/volatility tolerant capital, too risk-averse capital. The seat down is drowning inwards risk-averse capital, too key banks are creating to a greater extent than of it past times the day, spell the availability of risk-seeking uppercase is collapsing equally people flee peril too handgrip to a greater extent than cash/bonds.
But how sustainable is this situation? It is likely that the magnitude of the sell-off has been amplified past times 2 factors. Firstly, inwards an era of real depression involvement rates, people receive got 'reached for yield', too i mode inwards which they receive got done so is past times increasing their stock allocations - specially to yield stocks perceived equally beingness relatively depression peril (i.e. REITs, utilities, consumer staples, too other 'low volatility' stocks/sectors/ETFs). Money that would typically handgrip bonds rather than stocks is peril averse uppercase that is non cutting out for the volatility that befalls equities from fourth dimension to time, too a lot of this coin has likely been panic-exiting.
Secondly, the widespread media coverage too the fearfulness felt past times the 'man on the street' has likely resulted inwards a larger than average amount of redemptions from cease investors equally well. This has created a major liquidity squeeze, forcing managers to dump shares to come across redemptions. On top of that, nosotros receive got likely been witnessing rapid deleveraging of marketplace players with leveraged books (along with margin calls), equally good equally fund managers increasing their cash allocations equally their fears most the outlook grows, too equally buffers against farther upcoming redemptions.
That's a lot of selling too a lot of liquidity stress inwards a curt infinite of time, but it can't in conclusion forever. The most skittish coin volition leave of absence first, too during turbulent times, stock moves into 'strong hands', equally they say. Deleveraging volition end, redemptions volition tiresome equally anyone that is going to panic too force all their funds is likely already doing it, too fund managers tin send away alone increment their cash allocations so much (often they are restricted past times mandate equally to how much cash they tin send away hold). Furthermore, the to a greater extent than markets fall, the larger investors' cash too bond allocations go relative to their equities allotment simply because equities receive got fallen inwards value so much. This volition eventually crusade some investors to increment their exposure to equities - specially equally involvement rates autumn lower still.
Even if you're a fund director who is bearish on the outlook, if you're maximum allowable cash allotment is 10% too you've already gone to 10%, too redemptions stop, yous volition halt selling. And investors frequently forget that marketplace prices tin send away ascent non alone due to an increment inwards demand/buying, but also due to a decrease inwards supply/selling. The latter is ordinarily the primary way past times which markets rebound from the depths of a panic/downturn - selling lets upward too prices start to rise. In time, rising prices leads to an increment inwards demand, equally confidence builds too buyers start to return.
In other words, at some indicate the amount of liquidity inwards the volatile equity infinite volition stabilise, too the mass of selling volition too then abate, too at that point, markets volition stabilise/start to recover fifty-fifty if the economic scheme continues to weaken, because for stocks to go down, at that topographic point has to hold upward a novel root of fearfulness that triggers a novel moving ridge of selling. That requires either increased liquidity stress, or the intelligence to get much worse, triggering fifty-fifty to a greater extent than people to sell inwards fear. If the intelligence doesn't instruct much worse - it exactly remains bad - the impetus to sell to a greater extent than declines.
It is for this argue that markets volition bottom non when coronavirus economical impact is at its worst, but when the crescendo of worsening intelligence is at its peak. Over the past times week, the intelligence has continued to go from bad to worse at an accelerating pace, equally the province of affairs has worsened inwards Italy; the speed of novel cases has accelerated or so the world; famous people receive got been infected; too and then to a greater extent than too to a greater extent than extreme containment measures receive got been announced, from restrictions on large events, to locomote restrictions, to consummate lock-downs; to instantly forced closures of retail too amusement venues. That escalation inwards bad intelligence has given people a novel argue to panic to a greater extent than every day.
However, it is going to hold upward hard for this acceleration inwards bad intelligence to continue, because nosotros receive got already basically reached the practical bound to which social distancing measures tin send away hold upward implemented (closing bars, restaurants, too retail establishments, such equally inwards NYC), so the stair of shocking novel headlines most such measures volition receive got to slow. Meanwhile, the large temporary rallies nosotros receive got seen during this downturn highlight how upside sensitive markets are to fifty-fifty a whiff of skilful intelligence - a province of affairs that likely exists because at that topographic point is a tape amount of cash sitting on the sidelines at present, which is a latent root of demand. As noted, it is hard to consider how such aggressive containment measures volition non resultant inwards a slowing inwards novel representative rates becoming evident inwards 1-2 weeks time, too whatsoever headlines that advise the charge per unit of measurement of spread may hold upward slowing volition likely crusade markets to real violently rally.
The argue for the vehement rallies nosotros receive got already seen on a few occasions on the way downwards is like shooting fish in a barrel to sympathize technically, because at acquaint nosotros receive got a 'multiple equilibria' situation: nosotros receive got tape amounts of liquidity on the sidelines which is looking to come inwards the market, but a wholesale reluctance to purchase spell prices are inwards gratis fall. What this way is the 2nd investors experience prices powerfulness hold upward laid to rise, they volition rush to buy, spell when prices rise, the impetus to sell relents. In other words, demand is a component of toll (demand increases equally prices increase), too provide is also a component of toll (supply increases equally prices decrease). We should thence hold off extreme volatility for this reason.
Although it is impossible to know, my intuition is that nosotros are real unopen to - if non at - the bottom. Indeed, at that topographic point is already some skilful intelligence starting to emerge inwards Asia that is beingness ignored past times Western-centric investors. China, South Korea, Taiwan & Singapore for representative receive got all had success inwards containing the virus, too economical action is rapidly recovering inwards China - i of the world's largest too most of import economies, which drives important demand for commodities too construction materials - which is real of import to the economical outlook for commodity-exporting countries. There is to a greater extent than to the seat down economic scheme than simply the US too Western Europe these days. It is surprising that no i currently seems to think that the rapid recovery the Chinese economic scheme is experiencing is of whatsoever importance.
New anti-virals are also beingness worked on or so the clock which could significantly mitigate the worst symptoms, too hence meaningfully bring down snuff it rates, with some people optimistic antivirals could start to go available equally shortly equally April. Vaccines volition eventually follow but volition receive got much longer. Right now, investors receive got assumed no such mitigations/treatments volition go available, so this is a major upside risk.
It is frequently said that the 4 most unsafe words inwards the investing seat down are "this fourth dimension is different", but mayhap the most of import are "this likewise shall pass". In times of crisis too uncertainty, it is like shooting fish in a barrel for investors' fourth dimension horizons to shrink to mere months. However, taking the long view, human societies are resilient too adaptable - history proves that, too spell humanity too the global economic scheme are inwards for a real hard few months, nosotros volition observe ways to grapple the impact, adapt, too instruct through this.
Good investing is a lot similar sailing. When yous laid out to sea, yous should non assume perpetually calm weather condition fifty-fifty if all yous tin send away consider is bluish heaven too calm inwards every direction. You should anticipate the occasional storm, too when yous observe yourself inwards a storm, spell it is tough too uncomfortable, yous should reassure yourself that the tempest volition eventually pass. We receive got currently entered a storm. One should receive got prepared themselves inwards advance past times paying prices with a suitable margin of security that reverberate the fact that storms volition occur from fourth dimension to time; if yous receive got done so, at that topographic point is no demand to panic when a tempest arrives. The tempest - spell vehement - volition eventually pass.
If at that topographic point is whatsoever skilful to come upward out of covid-19, it is that it has exposed a radical lack of authorities preparedness inwards the West for necessary pandemic response. For instance, if nosotros had stockpiled n95 masks inwards large numbers, containing the virus would hold upward like shooting fish in a barrel - simply mitt them out to all too insist that everyone wears i inwards public. The cost of doing that would pale inwards comparing to the economical costs instantly beingness incurred on job concern human relationship of that lack of foresight. In the long term, exposing this lack of preparedness powerfulness resultant inwards a alter of behaviour, too meliorate preparedness for time to come pandemics that could hold upward much to a greater extent than catastrophic - for representative a highly contagious illness with snuff it rates of 20%.
We should ready for populace wellness emergencies similar this is inwards the same way the state of war machine prepares for war. You don't start edifice aircraft carriers alone after state of war is declared - yous demand to hold upward inwards a Earth of perpetual readiness that recognises that anything tin send away occur at whatsoever time. The Western seat down has been caught completely unprepared, which is a failure of leadership - yet some other that tin send away hold upward added to a real long list. With a chip of luck, this covid-19 episode volition resultant inwards a alter inwards conduct too much meliorate preparedness inwards the future.
In the meantime, remain safe.
LT3000
While initial covid-19 intelligence emerged inwards tardily Jan most a growing Chinese outbreak, which caused an initial 5-10% marketplace sell-off from previously buoyant early-2020 highs, the selling eased too markets recovered during the commencement one-half of February, equally the spread sharply slowed inwards China inwards reply to aggressive containment measures. There receive got been multiple outbreaks inwards the past, including MERS too SARS, which both proved to ultimately receive got a far to a greater extent than benign impact than initially feared, too covid-19 appeared to hold upward next a similar trajectory. However, from tardily February, intelligence of the virus' rapid international spread triggered farther abrupt declines inwards markets, too these accelerated after intelligence emerged most the effects inwards Italy too Islamic Republic of Iran beingness much worse than expected, including tales of healthcare facilities beingness overwhelmed, which were exacerbating snuff it rates.
This was too then followed past times a slew of accelerating too increasingly aggressive containment measures beingness announced across the Western seat down (and some of the non-Western world), which began with the cancellation of large events, earlier moving on to work-from-home measures; locomote restrictions; forced 14-day self-quarantines on arriving international visitors; total regional lockdowns; the cancellation of major sporting events such equally the NBA; to finally the consummate closures of populace areas, including retail venues too restaurants, with accelerating implications for curt term economical activity. Famous people receive got started to instruct infected, accentuating the sense of powerlessness. Every unmarried hateful solar daytime over the past times 1-2 weeks has seen the intelligence go from bad to worse, too falling property prices too escalating economical effects have, inwards turn, given ascent to fears that this may crusade cascading liquidity/bad debt/unemployment effects that could morph into an all out financial crisis.
If that wasn't bad enough, markets receive got also been hitting with a "one 2 punch" (hat tip Buffett) of a breakdown inwards OPEC+ provide discipline, with the cartel announcing that inwards an surroundings of rapidly falling crude demand, that they would non alone non cutting production further, but truly significantly increment supply, past times mayhap 2-3m bbl/d. This is a separate too distinct event/shock from the covid-19 impact, equally it was far from inevitable falling crude demand would Pb OPEC+ to non alone non cutting further, but truly significantly increment supply. Oil prices receive got collapsed 50% to US$30/bbl, which volition receive got important consequences for the crude production sector (in detail the US shale sector, too its associated sizable high-yield bond sector), equally good equally the currencies, budgets, external accounts, too economies of the many crude producing countries inwards the world. Many volition hold upward forced to describe downwards on sovereign wealth funds to back upward authorities spending/social programs, exacerbating selling pressure level inwards financial markets equally they liquidate assets. In other words, the seat down has seen non one, but two shocks inwards abrupt succession, which is an extremely rare occurrence.
So what is an investor to practice inwards this form out of environment? Stay calm too acquit rationally. It is an like shooting fish in a barrel surroundings for investors to go emotional/irrational, equally non alone is uncertainty rife too markets inwards gratis autumn - something that makes investors emotional at the best of times - but inwards this representative the impact is amplified past times the existent too visceral fearfulness investors experience for their ain wellness & safety. But what is called for is a calm too dispassionate assessment of the facts. I practice my best to provide i below.
There is no inquiry that the impact on economical action inwards the curt term is going to hold upward real severe, although some of the claims I receive got seen most the global economic scheme essentially coming to a consummate standstill are a vast exaggeration. At the front-end of consumer-facing retail too leisure, that volition hold upward the case, but large parts of the back-end global economic scheme volition remain relatively unaffected. Agricultural production, for instance, along with nutrient processing, transportation, too retail, volition non hold upward affected. Most mining activity, processing too distribution, too construction action volition continue, specially equally China gets dorsum on its feet too stimulates to back upward economical activity, too financial stimulus to counter the effects of the economical fallout through infrastructure spending rises inwards the West. The healthcare manufacture volition most sure go along to operate (19% of gross domestic product inwards the US). Services delivered electronically, along with back-end fulfillment, volition continue, equally volition service industries where employees tin send away telecommute/work remotely (the seat down has unprecedented powerfulness to practice this inwards the modern era). Government salaries too services volition largely continue. In addition, ignored at acquaint is that economical action is already rapidly ramping dorsum upward inwards Asia - specially inwards China - too large parts of the developing seat down with youthful demographics are likely to hold upward relatively less affected, given that the illness disproportionately affects the old.
Nevertheless, at that topographic point is no dubiety that consumer-facing front-end industries such equally retail, restaurants too leisure - specially inwards the West - equally good equally the tourism too locomote provide chain, are going to hold upward real badly impacted inwards the curt term. The airline industry, inwards particular, is facing it's worst downturn inwards history. With to a greater extent than too to a greater extent than countries implementing 14-day mandatory self-quarantine measures for international arrivals, international rider traffic could autumn unopen to 100% for at to the lowest degree a calendar month or 2 - a downturn of unprecedented severity. Domestic locomote volition hold upward less catastrophically affected, but volition also likely soundless significantly reject equally people defer non-essential travel.
However, it is of import to holler back that the ultimate impact of covid-19 volition hold upward a component non exactly of the severity of the effects, but also their duration. The impact is going to hold upward severe, but at that topographic point is a decent gamble the duration of that severity does non transcend to a greater extent than than a few months. An overlooked reality inwards that regard is that the worse the curt term severity, on job concern human relationship of to a greater extent than too to a greater extent than extreme containment measures (such equally NYC's determination to unopen all bars too restaurants), the shorter the duration volition be, because extreme social distancing measures volition inevitably resultant inwards a dramatic reject inwards the virus' average R0 (the average number of novel infections each infected private occasions) compared to the status quo ex ante, which was idea to hold upward most 2.3.
Right now, with the seat down swept upward inwards panic, at that topographic point is an intuitive feeling alongside investors that non alone is the impact on the global economic scheme cascading from bad to worse, but also that a continuing uncontrolled spread of the virus appears inevitable from here. But that is assuming the worst of both worlds, too it does non seem justified. The spread volition rapidly tiresome from hither on job concern human relationship of these measures, too nosotros receive got already seen inwards places similar China that when extreme social distancing measures are enforced, the representative charge tin send away rapidly decline, with a lag of mayhap 1-2 weeks.
Aside from authorities measures, human behavioural responses are also non to hold upward underestimated. As people adjust their conduct inwards reply to security concerns, people wearing masks; sanitizing their hands; too beingness highly sensitive to the presence of sick/coughing individuals nearby, too making efforts to maintain a condom distance from strangers, could good (at a guess) halve the R0 past times itself - specially due to the widespread media coverage covid-19 has garnered. In my view, the most likely outcome from hither past times far is that lockdown efforts resultant inwards the mass of novel cases starting to rapidly tiresome 1-2 weeks from instantly (the approximate lag duration betwixt existent representative mass too diagnosed representative volume).
Furthermore, provided healthcare facilities are non overwhelmed, the snuff it charge per unit of measurement appears relatively low. To date, Republic of Korea has engaged inwards the most extensive testing (under-diagnosis is soundless a major number inwards most markets), too the snuff it charge per unit of measurement inwards Republic of Korea has been 0.6%, too fifty-fifty there, denominator effects are likely soundless overstating the snuff it rate. Many people state they practice non trust Chinese statistics, but South Korean statistics are highly credible. Death rates receive got been much worse inwards places similar Italy primarily due to a tardily reply too lack of adequate healthcare infrastructure, too it is the (appropriate) fearfulness of the latter that has driven extreme measures inwards recent weeks inwards the West to comprise the outbreak. That ought to hold upward successful, for the reasons noted, such that snuff it rates should hold upward able to hold upward contained at levels non likewise dissimilar from South Korean levels, which is most half dozen times equally bad equally the seasonal influenza (0.1%). The influenza is also to a greater extent than contagious than covid-19.
In time, if needed, to a greater extent than sensible too less destructive containment measures powerfulness hold upward devised too implemented. For instance, covid-19 spreads primarily through droplets emitted past times people when they coughing too sneeze, that are either inhaled spell airborne, or which come upward into contact with surfaces which are after touched, too transmitted when the toucher rubs their olfactory organ or mouth. n95 masks are effective at filtering such airborne droplets. While for the moment, at that topographic point is vastly inadequate production capacity, a elementary too effective containment stair out would hold upward to simply require everyone to habiliment a mask spell inwards public, instead of cancelling all populace events/spaces. In most places inwards developed Asia, the elementary combination of masks; temperature screening for all entering populace spaces; too aggressive containment of identified cases too people they receive got associated with, receive got been largely effective inwards dramatically slowing the stair of transmission. Given the success nosotros receive got already seen with containment inwards Asia, it appears likely to me that investors are beingness far likewise pessimistic most the powerfulness of containment efforts to also operate inwards the West at present.
The other of import departure to GFC-type downturns from the perspective of the likely duration of the impact vs. its severity, is that a curt term exogenous stupor has different medium to long term effects than a downturn driven past times the collapse of a bubble. When a bubble bursts - such equally the US housing bubble during the GFC - demand falls from artificially-high levels to a to a greater extent than sustainable level, too a large stair out of that reject is permanent (albeit at that topographic point may hold upward some curt term overshooting effects). After the US housing bubble burst, housing construction too the mortgage financing provide chain, equally good equally all the consumer spending the prior rapid increment inwards leverage was supporting, had to revert dorsum to to a greater extent than sustainable levels. The bubble excesses were non coming dorsum (growth eventually resumed, but from a lower sustainable baseline).
A shock-induced hitting to demand is different. As shortly equally the virus is contained too life normalises, demand volition rapidly bounce dorsum to prior levels - indeed it may fifty-fifty overshoot to the upside equally pent upward demand is released (e.g. people that deferred opor-garai plans receive got their postponed vacations; postponed conferences/events receive got place; too people that postponed buying a machine or other consumer goods go out too purchase them). The recovery volition real likely hold upward V-shaped inwards nature, which is real different to the post-GFC environment. It is beingness overlooked at present, but a severe too long-duration downturn is much worse than a severe but short-duration downturn.
Second-order cascading liquidity effects are also already beingness discussed too discounted, but people are exaggerating the risks hither inwards my view. Prior to the GFC, many corporates too financial institutions were relying on curt term paper, too coin markets seized up. Due to the GFC experience, real few financial institutions too large corporates instantly rely on curt term coin markets to fund their operations, too most operate with large liquidity buffers too long dated debt maturities. This way at that topographic point is much to a greater extent than time before pressures/debt marketplace disruptions volition impact funding. Short term debt markets powerfulness close, but that won't impact most companies for quite a spell due to the presence of the said liquidity buffers, which included non exactly cash, but committed banking concern revolvers, which many companies are instantly inwards the procedure of drawing down.
Funding pressures inwards the banking organization also seem unlikely, equally non alone are banks instantly much to a greater extent than liquid than pre-GFC, due to a combination of much higher regulatory liquidity requirements too management prudence (reflecting cultural alter inwards the post-GFC era), but key banks are also implementing substantial liquidity support. After an initial spike, interbank rates receive got lately sharply fallen inwards the US for this reason. Furthermore, real important financial stimulus is coming. There is a real skilful chance, for instance, governments provide financial back upward to airlines - the US has already suggested this, too I would hold off the European Union to follow inwards the non likewise distant time to come equally well.
With honor to the banking system, spell bad debts volition increase, the magnitude of the hitting to the credit-worthiness of their borrowers volition depend on the duration as good equally the severity of the downturn. Banks inwards the US too Europe receive got lent conservatively over the past times decade, too involvement rates too hence debt serviceability burdens are low. Most of their borrowers volition thence hold upward able to grapple through a 1-2 calendar month hitting to their incomes, too banks tin send away too likely volition provide curt term forbearance measures on repayments. One of the risks is IFRS-9, which requires banks to front-load provisions on the footing of an expected credit loss model. This could strength banks to receive got large upfront provisions, discouraging lending too pressure level capital. However, European regulators receive got already said they are considering granting temporary uppercase relief to banks (relaxing uppercase ratios), too importantly, nosotros are non coming out of a menses of rapid credit growth. When credit growth goes from 20% to 0%, the economical effects are substantial, but when they go from 2% to 0%, much less so.
While at that topographic point is much verbalize of debt levels beingness extremely elevated, this is a vast oversimplification. What has truly happened is that government debt has significantly increased inwards the post-GFC era, but authorities bond yields receive got collapsed to zero, too spell high authorities debt could hold upward a job long term, it is most sure non a job at present. Meanwhile, private sector debt intermediated past times the banking organization has been falling for thirteen years inwards both the US too Europe relative to GDP. Household debt inwards the US, for e.g., has fallen from to a greater extent than than 100% to alone most 75% at present. Banks, individuals, too to a lesser extent, corporates, receive got been deleveraging for thirteen years. Furthermore, non alone has debt to gross domestic product fallen, but involvement rates are also at tape lows, such that the debt servicing burden is instantly truly at real depression levels past times historical standards.
There are pockets of excess, to hold upward sure. Debt levels inwards the private equity space, for instance, receive got mushroomed. However, this debt is good structured, beingness covenant light, long term, too depression cost, spell the private equity manufacture has US$1tr of committed 'dry powder' (funding commitments clients receive got either provided or are obligated to provide when called, which is non yet invested). While private equity is arguably inwards a bubble, it is non a bubble that volition rapidly unravel.
The outlook for crude appears to a greater extent than challenged inwards the curt term, equally the combination of falling demand too rising provide ought to go along to pressure level crude prices, too inwards the worst representative they could easily autumn to US$20/bbl or less. However, fifty-fifty here, it is non impossible OPEC+ comes dorsum to the negotiating table. The demand outlook has rapidly worsened over the past times calendar week or so, too Saudi Arabia's reply appears highly emotional. Russia's opinion was to a greater extent than justified - they simply wanted to maintain existing cuts (rather than cutting further), noting accurately that cuts to engagement had simply resulted inwards increased shale supply, too that it was likewise shortly to assess the magnitude too duration of the covid-19 impact on demand. They did non desire to suspend existing agreed cuts. Saudi Arabia, past times contrast, were initially pushing for aggressive additional cuts, but angered past times Russia's lack of co-operation, appear to receive got reacted emotionally, throwing their toys out of their cot too responded past times proverb they volition instead get down to meat equally much unsmooth equally possible starting from 1 Apr (likely most 2m bbl/d to a higher identify their electrical flow production of most 10m bbl/d, at maximum capacity).
Sheiks don't similar non getting their ain way, but i time their arrogant temper simmers downwards a bit, it is possible they could come upward dorsum to the tabular array - specially because inwards Russia's case, i of the reasons they did non desire to cutting was that they felt it was premature to assess the demand impact, but the calendar week or so since that opinion was maintained has seen the demand outlook rapidly worsen.
If that does non happen, it seems likely crude prices volition autumn farther too a rapid provide reply from the shale acre volition hold upward forced. OPEC+ tin send away ramp production upward past times mayhap 3m bbl/d, but shale produces something inwards the gild of 6m bbl/d, too most of it is uneconomic below US$30/bbl. Importantly, shale wells receive got rapid reject rates, so yous receive got to go along drilling inwards gild for production to non rapidly reject past times >20%/pa. If prices autumn to US$20/bbl, you'll in all likelihood consider US shale production halve inwards the adjacent 24 months, absorbing all of OPEC+'s excess capacity, spell it is likely global demand has recovered from the covid-19 hitting too reached novel highs comfortably inside this timeframe, equally trendline global growth inwards demand continues to transcend 1m bbl/d pa. In the meantime, an increment inwards inventories, tanker storage past times crude speculators/arbitragers, too increases inwards authorities strategic stockpiles, powerfulness aid absorb some of the excess supply. Bankruptcies inwards the shale acre withal seem likely, too at that topographic point volition hold upward some hits to the high-yield debt infinite here. However, the losses practice non seem likely to hold upward large plenty to hold upward systemically destabilising.
What does all of the to a higher identify hateful for markets? It is of import to holler back that the outlook for markets is non the same equally the outlook for the economy. The US had i of it's worst recessions inwards history inwards 2009, too yet stocks had i of their best years inwards history inwards that real same year. Market prices are non driven past times the economic scheme per se, but instead a combination of liquidity too emotion, because these are the factors that drive the demand too provide for stocks, too that is what laid prices (the economic scheme tin send away effect liquidity too emotions, but ultimately it is the latter factors which create upward one's hear prices).
At present, nosotros receive got tape levels of global liquidity, equally key banks slash rates to null or less, too revert to rapid QE money-printing. However, that liquidity is non yet finding its way into stock markets equally at that topographic point is a abrupt separate betwixt risk/volatility tolerant capital, too risk-averse capital. The seat down is drowning inwards risk-averse capital, too key banks are creating to a greater extent than of it past times the day, spell the availability of risk-seeking uppercase is collapsing equally people flee peril too handgrip to a greater extent than cash/bonds.
But how sustainable is this situation? It is likely that the magnitude of the sell-off has been amplified past times 2 factors. Firstly, inwards an era of real depression involvement rates, people receive got 'reached for yield', too i mode inwards which they receive got done so is past times increasing their stock allocations - specially to yield stocks perceived equally beingness relatively depression peril (i.e. REITs, utilities, consumer staples, too other 'low volatility' stocks/sectors/ETFs). Money that would typically handgrip bonds rather than stocks is peril averse uppercase that is non cutting out for the volatility that befalls equities from fourth dimension to time, too a lot of this coin has likely been panic-exiting.
Secondly, the widespread media coverage too the fearfulness felt past times the 'man on the street' has likely resulted inwards a larger than average amount of redemptions from cease investors equally well. This has created a major liquidity squeeze, forcing managers to dump shares to come across redemptions. On top of that, nosotros receive got likely been witnessing rapid deleveraging of marketplace players with leveraged books (along with margin calls), equally good equally fund managers increasing their cash allocations equally their fears most the outlook grows, too equally buffers against farther upcoming redemptions.
That's a lot of selling too a lot of liquidity stress inwards a curt infinite of time, but it can't in conclusion forever. The most skittish coin volition leave of absence first, too during turbulent times, stock moves into 'strong hands', equally they say. Deleveraging volition end, redemptions volition tiresome equally anyone that is going to panic too force all their funds is likely already doing it, too fund managers tin send away alone increment their cash allocations so much (often they are restricted past times mandate equally to how much cash they tin send away hold). Furthermore, the to a greater extent than markets fall, the larger investors' cash too bond allocations go relative to their equities allotment simply because equities receive got fallen inwards value so much. This volition eventually crusade some investors to increment their exposure to equities - specially equally involvement rates autumn lower still.
Even if you're a fund director who is bearish on the outlook, if you're maximum allowable cash allotment is 10% too you've already gone to 10%, too redemptions stop, yous volition halt selling. And investors frequently forget that marketplace prices tin send away ascent non alone due to an increment inwards demand/buying, but also due to a decrease inwards supply/selling. The latter is ordinarily the primary way past times which markets rebound from the depths of a panic/downturn - selling lets upward too prices start to rise. In time, rising prices leads to an increment inwards demand, equally confidence builds too buyers start to return.
In other words, at some indicate the amount of liquidity inwards the volatile equity infinite volition stabilise, too the mass of selling volition too then abate, too at that point, markets volition stabilise/start to recover fifty-fifty if the economic scheme continues to weaken, because for stocks to go down, at that topographic point has to hold upward a novel root of fearfulness that triggers a novel moving ridge of selling. That requires either increased liquidity stress, or the intelligence to get much worse, triggering fifty-fifty to a greater extent than people to sell inwards fear. If the intelligence doesn't instruct much worse - it exactly remains bad - the impetus to sell to a greater extent than declines.
It is for this argue that markets volition bottom non when coronavirus economical impact is at its worst, but when the crescendo of worsening intelligence is at its peak. Over the past times week, the intelligence has continued to go from bad to worse at an accelerating pace, equally the province of affairs has worsened inwards Italy; the speed of novel cases has accelerated or so the world; famous people receive got been infected; too and then to a greater extent than too to a greater extent than extreme containment measures receive got been announced, from restrictions on large events, to locomote restrictions, to consummate lock-downs; to instantly forced closures of retail too amusement venues. That escalation inwards bad intelligence has given people a novel argue to panic to a greater extent than every day.
However, it is going to hold upward hard for this acceleration inwards bad intelligence to continue, because nosotros receive got already basically reached the practical bound to which social distancing measures tin send away hold upward implemented (closing bars, restaurants, too retail establishments, such equally inwards NYC), so the stair of shocking novel headlines most such measures volition receive got to slow. Meanwhile, the large temporary rallies nosotros receive got seen during this downturn highlight how upside sensitive markets are to fifty-fifty a whiff of skilful intelligence - a province of affairs that likely exists because at that topographic point is a tape amount of cash sitting on the sidelines at present, which is a latent root of demand. As noted, it is hard to consider how such aggressive containment measures volition non resultant inwards a slowing inwards novel representative rates becoming evident inwards 1-2 weeks time, too whatsoever headlines that advise the charge per unit of measurement of spread may hold upward slowing volition likely crusade markets to real violently rally.
The argue for the vehement rallies nosotros receive got already seen on a few occasions on the way downwards is like shooting fish in a barrel to sympathize technically, because at acquaint nosotros receive got a 'multiple equilibria' situation: nosotros receive got tape amounts of liquidity on the sidelines which is looking to come inwards the market, but a wholesale reluctance to purchase spell prices are inwards gratis fall. What this way is the 2nd investors experience prices powerfulness hold upward laid to rise, they volition rush to buy, spell when prices rise, the impetus to sell relents. In other words, demand is a component of toll (demand increases equally prices increase), too provide is also a component of toll (supply increases equally prices decrease). We should thence hold off extreme volatility for this reason.
Although it is impossible to know, my intuition is that nosotros are real unopen to - if non at - the bottom. Indeed, at that topographic point is already some skilful intelligence starting to emerge inwards Asia that is beingness ignored past times Western-centric investors. China, South Korea, Taiwan & Singapore for representative receive got all had success inwards containing the virus, too economical action is rapidly recovering inwards China - i of the world's largest too most of import economies, which drives important demand for commodities too construction materials - which is real of import to the economical outlook for commodity-exporting countries. There is to a greater extent than to the seat down economic scheme than simply the US too Western Europe these days. It is surprising that no i currently seems to think that the rapid recovery the Chinese economic scheme is experiencing is of whatsoever importance.
New anti-virals are also beingness worked on or so the clock which could significantly mitigate the worst symptoms, too hence meaningfully bring down snuff it rates, with some people optimistic antivirals could start to go available equally shortly equally April. Vaccines volition eventually follow but volition receive got much longer. Right now, investors receive got assumed no such mitigations/treatments volition go available, so this is a major upside risk.
It is frequently said that the 4 most unsafe words inwards the investing seat down are "this fourth dimension is different", but mayhap the most of import are "this likewise shall pass". In times of crisis too uncertainty, it is like shooting fish in a barrel for investors' fourth dimension horizons to shrink to mere months. However, taking the long view, human societies are resilient too adaptable - history proves that, too spell humanity too the global economic scheme are inwards for a real hard few months, nosotros volition observe ways to grapple the impact, adapt, too instruct through this.
Good investing is a lot similar sailing. When yous laid out to sea, yous should non assume perpetually calm weather condition fifty-fifty if all yous tin send away consider is bluish heaven too calm inwards every direction. You should anticipate the occasional storm, too when yous observe yourself inwards a storm, spell it is tough too uncomfortable, yous should reassure yourself that the tempest volition eventually pass. We receive got currently entered a storm. One should receive got prepared themselves inwards advance past times paying prices with a suitable margin of security that reverberate the fact that storms volition occur from fourth dimension to time; if yous receive got done so, at that topographic point is no demand to panic when a tempest arrives. The tempest - spell vehement - volition eventually pass.
If at that topographic point is whatsoever skilful to come upward out of covid-19, it is that it has exposed a radical lack of authorities preparedness inwards the West for necessary pandemic response. For instance, if nosotros had stockpiled n95 masks inwards large numbers, containing the virus would hold upward like shooting fish in a barrel - simply mitt them out to all too insist that everyone wears i inwards public. The cost of doing that would pale inwards comparing to the economical costs instantly beingness incurred on job concern human relationship of that lack of foresight. In the long term, exposing this lack of preparedness powerfulness resultant inwards a alter of behaviour, too meliorate preparedness for time to come pandemics that could hold upward much to a greater extent than catastrophic - for representative a highly contagious illness with snuff it rates of 20%.
We should ready for populace wellness emergencies similar this is inwards the same way the state of war machine prepares for war. You don't start edifice aircraft carriers alone after state of war is declared - yous demand to hold upward inwards a Earth of perpetual readiness that recognises that anything tin send away occur at whatsoever time. The Western seat down has been caught completely unprepared, which is a failure of leadership - yet some other that tin send away hold upward added to a real long list. With a chip of luck, this covid-19 episode volition resultant inwards a alter inwards conduct too much meliorate preparedness inwards the future.
In the meantime, remain safe.
LT3000