You’ew still putting way too much stock in one situation where we can’t know the details.

We know that one Chinese woman spread it to 8 people when it appeared she had no symptoms, and that 5 of those 8 people apparently had no contact with the woman yet got it anyway.

Tiredness and muscle pain are meaningless as symptoms. especially in someone jetlagged after a long international flight. No one is seeing the doctor or isolating for that. This woman was highly infectious (spreading to 8!) before coughing or sneezing.

Furthermore, tiredness and muscle pain aren't even symptoms. From the Lancet study of 99 patients in China, only 11% had muscle pains. None had tiredness. It's not even a symptom.

If she's not coughing or sneezing (and 5 got it while not even being in the same meetings) that means there's a powerful vector of transmission before people cough. I'm assuming surfaces spread by nasal secretions. That's way worse than asymptomatic transmissions imo.

So much fun being short the S&P watching it swing from my breakeven point to a sixty point profit and back again. Lol.

Glad I took a third off last friday. Further, I still don't think the selling is done yet. This market, hopefully, is sucking in a few more bulls before we trade down again.

Edit: BTW I looked at the data for everytime a government bans short selling (like China currently). It is almost always a negative going forward a couple weeks to months. There were some instances were it was successful. I think Turkish banks, just recently, were the exception.

Covering my ES short here at Breakeven. Safe is better than sorry and can probably find a better opp to be short even if it is down a little lower.

shuffle would you be worried about the markets w a sanders presidency?

serious question

Official cases +18.4% on yesterday. Zhejiang now has more confirmed cases than Hubei had on 23 Jan (day to day growth a bit lower)

Yep, virus is still growing along the worst-case path (remember that much of China is locked down). There's no question they're running into problems with testing shortages now as well, and undercounting deaths.

We need an international outbreak before the panic sets in. At 170 and growing, it probably needs another week before it becomes obvious this will or won't be contained.

I agree.

There's enough infected in China that the new numbers reflect nothing but the rate of increase of testing capacity imo

Yeah, agreed that the numbers from China don’t mean much right now. At least not more than the fact they have a major problem. I don’t buy at all that the death rate is going to be anywhere near 5%. At this point I wouldn’t be surprised if it ends up being sub-1%.

Globally things are looking better. Definitely not out of the woods or anything but seems like a decent chance it can be contained.

Starting back with a small short at 3297.00

I got to be right one of these days.

https://www.bbc.com/news/world-asia-51381594

Cruise ship in Japan quarantined with ~3700 on board.

273 have been tested for coronavirus, 31 results are back with 10 positives.

This was bound to happen at some point. At least we'll be getting some reliable (hopefully?) data.

Currently short RCL and NCLH via puts.

Yeah it's just too early. I'm amazed at how little the markets have moved as a consequence of this, I panic sold like a week and a half ago and am like 60-70% in cash.

If I had to guess now, I would say the most likely case is that China manages to sort of contain this internally (maybe spreads to HK), but that we are able to prevent it from becoming a global pandemic. I feel like if sustained spread was going to happen somewhere outside of China, that probably should have started by now.

That having been said, if this does turn into a global pandemic that would be unbelievably bad (obviously from a human cost, but more pertinent to this thread, to people's portfolios as well) as there is going to be a panic rush to the exits. That could still happen, which IMO means this is a very good time to be taking chips off the table.

But even if China does manage to contain this, a global recession could still very well result from this. China is obviously an important player in the global economy. Commodity prices are going to go down, which means a lot of people out of work in oil, mining, etc. Supply chains are going to be disrupted. I'm not an economist, but I'm sure there are a lot of potential second and third order effects from that.

It just seems like people are way too complacent about the potential risks here, focusing on the "most likely to occur" event rather than the expected value of this situation.

if that ends up being the coronavirus low, i guess that's 3 for 3 on economist front page articles on pandemics happening on the stone bottow of the low, lol.

regardless i feel like we're in an air pocket where the people infected by corona are still a week away from realizing their approximate death rate. it has zero sign of stopping in wuhan.

most important figures going forward next 10 days are the non-wuhan cities and if theyre able to avoid the spread to ~10k cases per city w 2% death rate. if those rates get realized then at some point we're gonna see some businesses being closed temporarily and more PBOC action. maybe that result ends up in another dip that needs to get BTF'd.

and again, any outbreak in a major US city, cya. fed can maybe say that one of their projected 2020 hikes is to deal with any offset slowing in growth but i would venture they are not gonna specifically address this cuz it's like trying to do surgery with a bazooka.

You were saying this, what, when we were 3% lower than we are now? I think 3% is generous...

Again, you're making the same argument gold bugs made in 2011. Look at how they are doing now. Gold is finally a decent buy a decade later. The market is very ripe for a correction. Speculation is rampant by any measure. You should be talking money off the table or, at worst, hedging. The only way this market trades higher is if we go into a complete blow-off. Nothing is 100%, but we are a like 80% to get a year or longer correction.

28,200 cases right now, still growing 20%/day despite the main virus city 1.5 weeks into heavy lockdown. Death rate stable at 2% /565 total (without question now in the thousands, but the undiagnosed mild cases are also higher), hospitalization rate stable at 15%.

This article from Mini Mike Bloomberg gives a good overview of how this is far, far worse than the flu. Hospitals were overflowing many times over in Wuhan already on Jan 24 when the outbreak was a fraction of the size. Hospitals don't overflow that much with pneumonia during a city-wide flu epidemic. Do the math.

Bloomberg has another article about how many experts think this won't be contained and is a guaranteed epidemic.

U.S. Readies for Coronavirus Pandemic Some Experts Now See as Likely

Put are very cheap with this low volatility. This is an amazing mispricing.

The market has been living under a false belief that the global numbers so far with only 1 death are a good sign, when they're actually meaningless. This is quite a gift that we're at all time highs when a serious global pandemic is underway and probably unstoppable.

IMO there's about 30% chance at this stage of a widespread US pandemic with death rates in the hundreds of thousands to millions and major economic disruption and a >20% market correction. And that number is only so low because of the possibility of rushed mitigation - an early (not properly tested) vaccine, antiviral drug combos, or a less dangerous mutation becoming the major spreader (this happens quite often with viruses), displacing the more dangerous version.

Wait, what?

Does that mean you think it's a lock the death toll in China reaches 6 figures?

Let's say for a moment you are right re: the US; what should people do? Go to cash and buy canned goods and ammo?

Also, if there is a US death toll in the hundreds of thousands to millions isn't a 20% correction super low? Shuffle Asteroid Thesis notwithstanding.

I would wait until 3400 SPX before considering the short.
So far, nothing has disproven that Fed > virus. 80b in repos over the weekend and we erased Friday and then some.

And now you have Fed + the central banks of the entire planet vs. virus.

On one hand it sucked that I got stopped out on lever long SPY on Friday. OTOH it gave me a lot of dry powder to shoot TSLA in the back today.

Nothing has happened yet with the virus in terms of tangible impact. Give it time. Market is irrationally optimistic imo.
2% death rate isn't the end of the world. A lot of >65yos die, mostly, which is very sad but not terribly economically disruptive. SARS killed 50% of 65+, 15% of 45-64, 6% of 25-44, and <1% of <25. This is about 1/5 as lethal it seems if 2% is correct (error bars: ~0.4% death rate to 8% death rate).

It will mean a lot of economic disruption and overflowing hospitals if it happens, but not societal collapse. The pointless efforts to contain it will be more disruptive than the actual illness which is probably best to let run its course. The main thing that matters from a stock market perspective is sustained shutdown in China for many, many weeks to come and then some weeks later a shutdown in other countries. S&P 500 company profits will plummet from the disruption, they'll have an impact already from the (current) certainty of a prolonged China shutdown. We're at all time highs and the market is pricing in a 0% chance of this happening, which is very irrational.

The market thinks the virus will blow over and have zero economic impact. The repos are a minor tilt on the scales, if the virus spreads with a >0.4% death rate, it's a 100 pound rock dropping on the other side and no amount of QE will stop people exiting. In the end the market is about expected corporate profits, and not the fed or anything else. The fed merely provides a nice environment to keep corporate profits going provided everything else is fairly stable. If corporate profits sink then the market sinks too.

Not that I think Corona-chan is going to result in a 10% dip in US stocks, like Tooth suggests, but if it happened, I think bonds (something like BIV) would be a better hedge than cash.

You realize a million is only like 1% of China's population? I don't think he is talking about mass hysteria.

His argument is likely more that it will have a dramatic effect on global markets and movement of products if you have to quarantine etc. to keep the disease in check. The U.S. cutting off Chinese travel definitely has an impact on global business. Whether that moves the market or not is another question.

lol

Another consideration is because of the central banks and Fed, everything is negative yielding except for US stocks. So if there is a panic, one possible outcome is all the money flees into the all mighty SPX.

It also looks like shorty just got run over and margin called again into the AH, so I'm guessing we gap up tomorrow. Wonderful.