Daily Briefing – April 1, 2020

Published on
April 1st, 2020
Duration
27 minutes


Daily Briefing – April 1, 2020

Daily Briefing ·
Featuring Max Wiethe, Ash Bennington, and Roger Hirst

Published on: April 1st, 2020 • Duration: 27 minutes

Real Vision's Ash Bennington hosts Roger Hirst to continue their in-depth analysis of the coronavirus crisis. Today, the pair discuss the impact to small and medium enterprises, the value of the US dollar, the "animal spirits" of markets, and the questionable relevance of PMI data during an ongoing crisis.

Comments

Transcript

  • MZ
    Mark Z.
    2 April 2020 @ 03:35
    Timeline of mainstream narrative: This week: Peak doom 2nd wave hitting China causing a new lockdown Psychological 1 million cases hit Psychological 50k people dead unemployment numbers Next week: Hope US infection rate is tapering off =there is hope yet In 1.5 weeks: Doom, complacency Death rate increases (lagging infections) South Africa getting hit hard in the ghettos, and people dispersing. will the rest of africa follow? =some more doom, building a tolerance towards bad news, flu season starts up for southern hemisphere In June: oh my god Our expectations have acclimatized to the situation at hand. "Lets all head back to work", accepting chances of infection. Except there is friction everywhere, and things aren't starting back up anywhere near expected rate. The world is out of sync with rolling lockdowns across the world. We start seeing the full extent of damage the economy as we see interconnected dominoes fall. As people stop focusing on toilet paper, they remember: canadian household debt an issue, knock on effect onto canadian housing.
    • DZ
      Dongbin Z.
      2 April 2020 @ 21:35
      The public always lags behind in understanding just about anything. That includes the majority of the media. For sentiment though, google sentiment meters. There are several companies that do this.
  • SL
    Sean L.
    1 April 2020 @ 23:52
    Once again nailed something really important: Those who need the money the least are most likely to get it because they have the best financial and legal advice. I know that we'll need this money significantly less than most people but we have to apply anyways... we don't know what the future holds - specifically what that looks like for access to capital... we have to do everything we can to ensure our survival. I'm trying to help close friends through the process but all I can think about while I'm doing that is the number of people who need this money and just don't know where to look for it. With regards to the ability to target, I'm not sure why they aren't tackling rent/mortgages. If a business is closed, backstop the mortgage lender, then the landlord, and the relief shows up to the tenant proportional to the size and contribution of the business. The free market already decided how to value the space, why not trust that? In Canada they're pushing $10k on everyone. Well that's great if you have a restaurant with $1,500 per month in the suburbs but I have an $18k/month lease downtown. It doesn't make a dent. Anyways, I'm not really asking for the money I'm just trying to point out the problem with the way the bazooka is being fired. In the US, non-payroll support seems to be coming in the form of loans. As you mention, that simply won't fly. The whole system was already leveraged to the tits - too many were on the edge before and will just walk away. Now that could be a healthy cleansing but I don't think it's what they're going for, nor is it what the market is currently pricing in. To Roger's point about future behaviour shifting from consumption to saving, I think that's also important. Ultimately, this is a good thing because the future economy will be significantly less fragile. This whole situation is going to harden a society that has become much too soft. That's likely to be bearish for medium term growth (1-3 years) but very bullish for the next 30 years if some meaningful changes come (like a harder money)... though that could be another cycle away.
    • DZ
      Dongbin Z.
      2 April 2020 @ 21:31
      $10k in for everyone in Canada? Where please?
  • RK
    Roger K.
    2 April 2020 @ 20:19
    @Milton , Could you please publish these Daily Briefings little bit earlier at least at 22.00 GMT. These "daily videos" are too late for the end of the day viewers from UK and Europe. Thank you!
  • IP
    IONEL P.
    2 April 2020 @ 19:15
    Interesting divergence in the Australian markets, any thoughts on why that might be? Surely it eventually converge.
  • JD
    James D.
    2 April 2020 @ 17:22
    Fast moving and a lot to contemplate. Interesting discussion in very interesting times. Hope Ash's parents are well.
    • JD
      James D.
      2 April 2020 @ 17:31
      Roger's parents..sorry
  • PD
    Patrick D.
    2 April 2020 @ 01:14
    How does the global shut down affect the demand for calories/commodities? Seems deflationary, does anyone have thoughts?
    • JV
      Jan V.
      2 April 2020 @ 16:25
      Uranium demand won't really drop since it's baseload power purchased under LT contracts by utilities. It's more or less a recession proof commodity. Impact on other commodities will be more difficult to predict (both supply and demand being hit).
  • EK
    Edward K.
    2 April 2020 @ 15:22
    Am archiving these transcripts. Lots of good points that can be referenced. Fast moving world!
  • BM
    Beth M.
    2 April 2020 @ 14:02
    This was the best macro view, with all the latest market dynamics, that I've witnessed as a subscriber. Ed and Jim were fantastic...and Jim's knowledge, and the ability to put everything in "layman's terms" is incredibly helpful! More Jim please!
  • KD
    Kaj D.
    2 April 2020 @ 12:21
    Excellent discussion, thanks
  • MG
    Mark G.
    2 April 2020 @ 11:30
    Thanks for these updates RV, keep them coming. A few years ago a friend remarried in Hawaii. It provided the excuse for my wife and I to splurge on a trip that would have otherwise been too expensive for us. We tend to play it safe with our investments, and how way we spend our money. The rehearsal dinner was held at a small microbrewery in Kona, and the beer and food was truly excellent. I remember saying to my friend that evening what a great idea it was to hold the dinner at an independent brewery, to which he replied they were actually owned by one of the large, global players. I mention this because I don't believe the small, independent businesses will go away, or that the mom and pop stores on the corner will disappear. After this crisis, they simply won't be independent anymore, or owned, ultimately, by mom and pop. That playbook was in place in regards the housing market in the US after the Great Financial Crisis, and there is no reason to believe it won't repeat this time again. Which unfortunately is not an economic, but a political problem.
  • OG
    Oscar G.
    1 April 2020 @ 23:00
    If the Sun were to all of a sudden “go dark” it would take about 8.5 minutes for that reality to catch up with us here on Earth. It takes time for the real world to catch up with our perceptions. We will only truly “see” the effect of the near instantaneous shutting down of the global economy in a few months. Strap in and remain smart, measured, safe, and patient.
    • RP
      Ron P.
      1 April 2020 @ 23:26
      Well said!
    • JG
      Johan G.
      2 April 2020 @ 10:26
      Agree, this has an impact on production and value creation of the real economy, i.e. society as a whole will lose and we all get poorer. How much only time will tell, but I do not think it is fully priced in the markets in any way or form.
  • CL
    Charles L.
    2 April 2020 @ 06:32
    It seems money is the only thing thats missing in the economy according to all these arguments and comments madr. But what about the real needs people use on a day to day basis? Aren’t goods and services what we really need and thats the real danger, the lack of these at some point? Money is usefull to pay the existing debts yes, but in my humble opinion (this of course is open to debate) the real danger is the breaking of supply chains. That to me would be the tipping point for the end of deflation which to me is linked to an obsession with money as if it was the only valuable thing. It isn’t.
    • GH
      Galen H.
      2 April 2020 @ 10:21
      Good point. While the global economy is "closed for repair", the longer it stays so, things like food security and other essential services surely bubbles to the top of government minds and with that increased some increased protectionism. Add some MMT ("Cause if it walks like a duck and quacks like a duck it must be MMT" - lol), you get inflation (for a time at least). But I don't know. Maybe the supply chains of essentials (enter AMZN) continues to run as normal once they've adjusted. Guess we'll soon see.
  • JM
    James M.
    2 April 2020 @ 09:31
    IMO this Hirst fella is the best RV has and doin a great job on the refintiv daily update. Cheers mate!
  • wj
    wiktor j.
    2 April 2020 @ 08:18
    Spot on!
  • RZ
    Richard Z.
    2 April 2020 @ 07:05
    Fantastic discussion
  • ns
    niall s.
    1 April 2020 @ 22:46
    Everybody can find updated Coronavirus stats broken down country by country on this website : https://www.worldometers.info/coronavirus/#countries It looks like Italy and Spain are about to turn lower although the same cannot be said for the Uk and France ,. The USA had 706 deaths today and has 4759 in total , so its hard to see it making the 240,000 total quoted by Ash and Trump any time soon , to be honest I don't see how responsible journalists can quote such a number when Europe which is further along in the cycle and has a larger population than USA has had 35,000 dead so far . If we are taking about years and tears then perhaps but most people and interested in what happens in the next month. I find RV presentations overly skewed to doom and gloom on the subject of the Coronavirus and would appreciate a more balanced approach backed up by more than opinion . For those seeking some balance try this : https://www.youtube.com/watch?v=Xe_yBevHjFg
    • JL
      Jack L.
      2 April 2020 @ 05:05
      Do you consider 2 to 3 weeks from now to be "any time soon?" https://www.wired.com/story/how-fast-does-a-virus-spread/ Title / Subtitle: "How Fast Does a Virus Spread? Let’s Do the Math Infectious diseases grow exponentially, not linearly. The number of cases seems small—until they're not, and then it's too late."
  • KS
    Kevin S.
    2 April 2020 @ 04:21
    Great show like always! I appreciate your perspective.
  • OC
    Otto C.
    2 April 2020 @ 04:19
    Historically, gold drops in bear markets because it gets liquidated in order to pay for margin calls and other expenses. The only difference is that gold bottoms around 3 months before markets do.
  • WM
    William M.
    2 April 2020 @ 02:44
    These daily briefings are outstanding...thank you guys so much!
  • AS
    Ash S.
    2 April 2020 @ 02:13
    Roger is one of my favorite RV commentators. Can we hear more from him please. TBH everyone is good...
  • TC
    Thomas C.
    1 April 2020 @ 23:42
    Great commentary from Roger, Ash is a little un-precise, general and emotive. Forget about Roubini - he's always negative and is write once you wait long enough (although you miss lots on other side)
    • SL
      Sean L.
      1 April 2020 @ 23:54
      Disagree on Ash... his SMB commentary throughout these months will age very well.
    • BE
      B E.
      2 April 2020 @ 01:59
      Couldn't disagree more - Ash is great, every single day.
  • SM
    Shivani M.
    2 April 2020 @ 01:21
    Suggestion for reading from the screen: Instead of reading sentences, try an app that lets you read one word at a time from the same place on the screen, like Spritz https://play.google.com/store/apps/details?id=com.ausichenko.spritzbubble&hl=en_US. This way viewers don't see your eyes scanning the page.
    • EF
      Eric F.
      2 April 2020 @ 01:39
      Suggestion for comments - how about focusing them to stuff that is actually important?
  • JK
    James K.
    2 April 2020 @ 00:46
    I wonder if the way to think about the China PMI is that it shows some level of stabilization at a lower level? Thoughts?
  • DH
    Dominic H.
    2 April 2020 @ 00:25
    Comparing with previous videos it is evident that Roger is dipping into his wine stash. Sadly my rate of change is rather greater in quarantine!
  • PD
    Patrick D.
    2 April 2020 @ 00:06
    Dont see inflation, the normal velocity of money has been interrupted. The QE is a substitute and will be spent on groceries or housing. Look at the recent helicopter in Japan. People saved it, Possible supply chain inflation but will be short term and not broad based.
  • TS
    Thomas S.
    2 April 2020 @ 00:03
    Great job as always guys!
  • SW
    Sean W.
    1 April 2020 @ 23:50
    Yea! Roger's back! Love the whole crew
  • AC
    Adrian C.
    1 April 2020 @ 23:28
    Love the new location sign Roger, welcome from the Ipswich massive!! First class financial updates live from Ipswich, this virus really is changing the way we work.
  • NI
    Nate I.
    1 April 2020 @ 23:17
    Covid charts galore posted by Raoul on LinkedIn. https://www.linkedin.com/feed/update/urn:li:activity:6651099182008459264/
  • LA
    Linda A.
    1 April 2020 @ 22:48
    Love the update, thank you! So pissed that Nassau County just had the nerve to send us a real estate tax bill with a substantial increase! Shame on you Laura Curran, Nassau County Executive! I will be sure to not vote for someone so cold-hearted.
  • RT
    Rob T.
    1 April 2020 @ 22:19
    Video request: whats going on in the soft commodity space given COVID? For example sugar/coffee etc. Along the same lines of the gold episode with Simon Mikhailovich (which was excellent) but geared towards softs.
  • PS
    Paul S.
    1 April 2020 @ 21:51
    No! We need the coronavirus charts. We have Bloomberg for market close info.