Coronavirus and Stock Markets - Thoughts?

They’d better!

Airlines are the first to be likely bailed out and some of them have already been halted for trading. Yet, bear in mind that the biggest US airlines spend the last decade 96% of free cash flow on buying back their own shares.

This is turning into corporate socialism. Mismanagement of large companies paid for by the taxes of the little man.

Some light evening reading from the team behind UK modelling:

Perhaps our most significant conclusion is that mitigation is unlikely to be feasible without emergency surge capacity limits of the UK and US healthcare systems being exceeded many times over. In the most effective mitigation strategy examined, which leads to a single, relatively short epidemic (case isolation, household quarantine and social distancing of the elderly), the surge limits for both general ward and ICU beds would be exceeded by at least 8-fold under the more optimistic scenario for critical care requirements that we examined. In addition, even if all patients were able to be treated, we predict there would still be in the order of 250,000 deaths in GB, and 1.1-1.2 million in the US.

In the UK, this conclusion has only been reached in the last few days, with the refinement of estimates of likely ICU demand due to COVID-19 based on experience in Italy and the UK (previous planning estimates assumed half the demand now estimated) and with the NHS providing increasing certainty around the limits of hospital surge capacity.

We therefore conclude that epidemic suppression is the only viable strategy at the current time. The social and economic effects of the measures which are needed to achieve this policy goal will be profound. Many countries have adopted such measures already, but even those countries at an earlier stage of their epidemic (such as the UK) will need to do so imminently

5 Likes

US airlines go through Chapter 11 - bankruptcy/creditor protection - while some of the planes keep flying. During the last decade, only two airlines though emerged from the process in some OK shape or form:

Through the 90s and 00s, Delta, United and AA emerged OK after filing for Chapter 11:

The UK Scheme of Arrangement under the English law allows for similar cases, at least on paper it can work, to make sure operations continue as normal.

However, currently there is almost no business as people aren’t flying, so they can’t segregate the day-to-day ops from the balance sheet reorganisation.

So, when you’re stuck with a choice between investing/building and buying ventilators, supporting millions of people, and bailing out Virgin Atlantic which employs 10,000s, what do you do before May 2020?

In addition to airline workers, there’re already a bunch of coders getting laid off right now, not to mention blue collar workers.

(Source - List of airline bankruptcies in the United States - Wikipedia)

1 Like

@kenny thank you for sharing.

This makes for some incredibly sobering reading.

Note that seems to be the basis of updated policy from HMG.

I don’t remember where I heard,
Rich own stocks and middle class own houses…

From: 💰 Rich Habits - Tom Corley

Silicon Valley has a “shelter in place” order effective Tuesday 12.01am Pacific:

https://www.sfchronicle.com/local-politics/article/Bay-Area-must-shelter-in-place-Only-15135014.php

What is staying open? Grocery stores, food banks, pharmacies, restaurants for takeout food and delivery only, veterinary services, pet-food stores, gas stations, auto repair shops, hardware and other home-supply stores and home repair services, banks and laundry services. Child-care facilities are allowed to remain open as long as rules limiting the size and composition of the groups are restricted. Residential care facilities for adults, children and seniors will remain open as will food banks and other non-profits that serve the needy. Delivery services that take food, goods or services directly to residences are allowed to operate.

https://www.sfchronicle.com/local-politics/article/Bay-Area-shelter-in-place-coronavirus-15135189.php

My bitcoin trading bot works wonderfully. I built it with node.js.

2 Likes

From Jim O’Neil yesterday:

An alternative to QE…

We need coordinated global policy like this to help arrest the continued market dislocation, but I suspect the HMG announcement today will fall (far) short…

1 Like

Another dead cat bounce incoming…

Aaaaaaaand futures have plunged

1 Like

Wow. My bite point was £10 for Shell.

1 Like

I can’t keep up anymore! :crazy_face:

3 Likes

Carnival too!

Just put some stinky bids, my bids were not stinky enough, they got hit, hit bad.

1 Like

Yeah I bought some shares in Shell yesterday under £10. I don’t mind these dividend stocks going down a bit more as I’ll just buy and hold more of them :slight_smile:

Buying less ETFs and more companies now, not my usual strategy but there are some lucrative entry points appearing. Just wish Freetrade would hurry up with the fractional shares already!

8 Likes

VIX now higher than during the GFC. Better strap in, ladies and gentlemen, it’s going to be a frikkin’ wild ride - especially when the bail out request start pouring in.

6 Likes

Sound advice from Teddy Ruxpin.

…Pretty Much !

what’s a ‘stinky bid’ ?

Limit order at what seems to be ridiculous price.

1 Like