Daily Briefing – August 6, 2020

Published on
August 6th, 2020
40 minutes

Daily Briefing – August 6, 2020

Daily Briefing ·
Featuring Jack Farley, Ash Bennington, and David Bahnsen

Published on: August 6th, 2020 • Duration: 40 minutes

Senior editor Ash Bennington speaks to David Bahnsen, founder and managing partner of The Bahnsen Group, about the economics of re-opening and the state of the U.S. equity markets. Bahnsen weighs the risks and rewards of reopening the U.S. economy during the ongoing pandemic, using the Swedish "no-lockdown" model as an example. Bahnsen and Bennington also discuss the methodology of calculating GDP change as well as the widening chasm between the S&P 500 and the drastic economy contraction. Bahnsen explains this bifurcation by noting that the GDP looks backward while the stock market looks forward. In the intro, Jack Farley reviews the latest initial claims data and gives a strategic overview of the dramatic price action in the Turkish Lira.



  • BB
    Benjamin B.
    13 August 2020 @ 15:10
    Jack get out there and help your dad water those plants.
  • WM
    William M.
    11 August 2020 @ 04:27
    Well done Jack Farley.
  • MD
    Matt D.
    6 August 2020 @ 23:24
    If that's true - a 99.7% survival rate, then how does that compare to the effectiveness of any present or potential treatment (a vaccine is unlikely)? As well, no one died from a bad reaction to their own immune system. Hopefully we get a chance to chose (vaccination) and even debate this whole conversation.
    • MD
      Matt D.
      6 August 2020 @ 23:30
      The implication being that 99.7% is a reflection of the effectiveness of the average immune system.
    • DS
      David S.
      7 August 2020 @ 00:47
      Matt D. I wish you were correct. Better numbers will not be known until history is written. Even then we will need to go to South Korea, Taiwan or maybe Singapore to find better data. If you are the one dying the statistics do not matter too much. DLS
    • DS
      David S.
      7 August 2020 @ 01:09
      Study of South Korea deaths/totals done at UNC-Chapel Hill shows data up to April 21, 2020. Confirmed cases 10,683 with 237 deaths or 2.2% mortality rate. Today’s update for South Korea show about the same. DLS
    • JW
      Jeff W.
      7 August 2020 @ 01:19
      Where does the 99.7% survival rate come from? John Hopkins U says 18.996m cases with 712k deaths. When I went to school that was a 96.2% survival rate. The US numbers are 4.877m cases and 160k deaths - slightly better survival rate of 96.7%, presumably because of better medical care being available in the US than in many other countries.
    • SL
      Sean L.
      7 August 2020 @ 03:29
      99.7% is probably correct when you take into account asymptomatic cases & others with the disease who haven't been tested. A study of antibodies in blood samples from pathology units in Australia has the incidence of virus in the community at much higher levels than have been reported. It seems the transmission is much higher but mortality rate much lower than 1st thought (they estimate the same as the flu). This is a big reason aged care homes are the location of a large % of clusters not only in Australia but worldwide as residents will definitely show symptoms when they are infected.
    • DS
      David S.
      7 August 2020 @ 09:03
      Sean L. - 99.7% is a fictitious number.DLS
    • DM
      Don M.
      9 August 2020 @ 17:49
      If we get to just 'imagine' all these undiagnosed cases to justify the 99.7% survival rate, wouldn't it logically mean there were many undiagnosed deaths from it?
  • DM
    Don M.
    9 August 2020 @ 17:30
    What a whining, political pile of dog shit. Why would you have a guy on who offers nothing except whining how badly Trump is tweeted. It's also very simple minded. Open up and the people still won't return to previous behavior.
  • SS
    Steven S.
    9 August 2020 @ 03:53
    Points of clarification: 1) The Spanish Flu had a trimodal distribution of mortality with (i) infants, (ii) teens-30 year olds, and (iii) the elderly at the peaks, 2) Ash is certainly correct. COVID-19 is not an acute event. The virus is not going anywhere for a long time. And 3) although Sweden didn't have mandated lock downs, behavior dramatically changed where people essentially voluntarily locked down.
  • GH
    Guy H.
    7 August 2020 @ 09:13
    Writes for National Review, appears on Fox Business and Fox News, sends letter to Trump asking him to pardon Milken - why wouldn't he be a noted epidemiologist as well? That pandemics are costly is a truism, but the assumption we can trade-off on some imaginary scale economic activity against an acceptable amount of R0=3+ virus in circulation takes the kind of intellectual heroism that leads one to "but Sweden" Fox & Friends. I come to RV to get away from Fox and CNBC, but not on this occasion it would seem.
    • SJ
      Sean J.
      7 August 2020 @ 12:32
      Except there is no sustained R0 of 3+ and the analogy to car accidents is totally valid.
    • GH
      Guy H.
      8 August 2020 @ 10:40
      Without social distancing and a raft of other measures R0 is 3+. We agree this interview was a car crash though so that's something.
  • TC
    Timothy C.
    7 August 2020 @ 02:18
    Mixed review 1. Comparing US to Sweden is apples and oranges. Why even go there if you are data driven. 2. Herd immunity, from a data driven standpoint is not feasible. 39% of the population is in what can be considered a risk category in terms of age (45+ is where the knee of the curve bends - not counting other risks). We’d need 80% of the herd immune to resume normal activities and keep R0 declining. 3. PPP while a good idea, was poorly executed and from a capital allocation standpoint, inefficient. A simple perl script mining by NAICS code will tell you that. 4. Stimulative activity targeted to leisure/hospitality/food/beverage. Unless you are talking mom and pop, that space is dominated by PE that has leveraged to the hilt and was going to go bust in a small downturn or a rise in rates. I’m seriously not interested in bailing that sector out. Let it go through a normal process. 5. In terms of bifurcation it’s in equities, NOT the economy. There are a bunch of companies AAPL, MSFT, etc, generating cash and growth, vs. a bunch of other companies trying to “keep up” their image with leverage. Healthy companies should win. You can argue monopolistic competition, but saying bail out garbage is inefficient allocation of capital. Or more correctly, if you want to try to socialize allocation of capital, good luck. 6. Now, if you want to say keeping these garbage companies afloat to support the rest of the economy, I’m going to question that. Inefficiency does not increase employment…. 7. On the economy being good going into COVID-19? Are you kidding me? The MRP of debt has been in a secular decline. You can front run that by dropping interest rates, but productivity is not going up, interest rates are going down. You can argue rates between the two, but a nexus is crossed at some point.
    • DR
      Derrick R.
      8 August 2020 @ 02:00
      You had my upvote at “perl script”, mate
  • PB
    Paul B.
    7 August 2020 @ 23:29
    Good thing I had some shit to do, cause that would have been a waste of 1 hour of my time!
  • TC
    Thomas C.
    7 August 2020 @ 20:09
    Chit chat of no value. Can't finish
  • O&
    Oliver &.
    7 August 2020 @ 18:13
    so far the worst I've seen on RV, no the quality of content I expect
  • ar
    andrew r.
    7 August 2020 @ 15:51
    Also, for the life of me I cannot find a gold skeptic on RV or FinTwit ... I think it's unhealthy to have 100% agreement on something most of us are long. (Right?)
    • AB
      Alastair B.
      7 August 2020 @ 18:10
      Agreed. A time to hold, not buy.
  • DB
    Donna B.
    7 August 2020 @ 17:49
    I expect RV and the RVDB to delve into areas other media sources have not. It's a high bar. I suspect I'm like many subscribers who come to RV with a solid foundation of current affairs, especially business. Jack's piece met expectations. Frankly, the balance of this interview could have heard on CNBC or Fox Business. Judging from the ratio of thumbs up/down, I'm not alone in my view.
  • ar
    andrew r.
    7 August 2020 @ 15:36
    I thought the first time Mr. Bahnsen was on, he was unfairly maligned by the comments section. Even moreso this time.
  • Jv
    Joël v.
    7 August 2020 @ 15:23
    'Per million people, Sweden has suffered 40 percent more deaths than the United States, 12 times more than Norway, seven times more than Finland and six times more than Denmark.' Hit to GDP is 9%
  • LB
    Lukas B.
    7 August 2020 @ 13:46
    Easily the worst video I've seen on DB. Honestly, WTF was this?
  • CG
    Christine G.
    7 August 2020 @ 03:27
    I would like to believe his analysis. But I don't (or more to the point, Fauci doesn't) believe the long term data are in, and some of the information that is showing up is not rosy. Many people have long term damage following covid even if they did not have a severe case, e.g., https://www.healthline.com/health-news/fauci-warns-about-post-viral-syndrome-after-covid-19
    • SJ
      Sean J.
      7 August 2020 @ 12:34
      Fauci 🙄
  • MH
    Martin H.
    7 August 2020 @ 06:22
    Gold is about confidence and opportunity cost, not inflation. If both are low gold runs.
    • SJ
      Sean J.
      7 August 2020 @ 12:33
      Gold is a currency.
  • GH
    Gloria H.
    7 August 2020 @ 11:02
    Bahnsen reminds me of my old boss, loudly pontificating on all topics regardless of his lack of expertise. 9-11 is a sh*tty analogy that doesn’t accommodate the basic issues presented by COVID — the contagious nature and the long-term health effects on those who survive. Please, RV, no more wannabe fox blowhards.
  • RP
    Richard P.
    7 August 2020 @ 09:27
    My 8 year old son has the same view and probably the same colouring books as this David fella. My eyes are rolling like a slot machine at the gold and corporate profit comments. Great to see different and diverse opinions on Real Vision I love it but if anyone knows how this guy is positioned I will happily take the opposite bets
  • II
    Igor I.
    7 August 2020 @ 09:12
    Can't believe what David is talking about? Covid is not about mortality: initial (medical) research results clearly indicates severe long term effects on the human body (quick google search!). When will people understand that this virus is not fully researched and yet fully understood? Also, you can't really compare the US with implemented measures in other countries, where wider population is better protected (e.g. healthcare in Nordics) and where preventive infection measures are much better implemented and followed by the people (e.g. social distancing etc. in Nordics).
  • FL
    Fabrizio L.
    7 August 2020 @ 08:04
    cant listen to this, should be on cnbc
  • PC
    Paul C.
    7 August 2020 @ 07:26
    Who wants to go back to an office described by David. Err..no thanks, when i can have a far better experience WFH.
  • JA
    John A.
    7 August 2020 @ 06:36
    Spoken like a guy who has a corner office and doesn't get stacked together like most office workers.
  • MH
    Martin H.
    7 August 2020 @ 06:23
    Gold has beaten the SPX since 2000.
  • CC
    Cornelius C.
    7 August 2020 @ 05:38
    We appreciate realvision bringing on alternative view points but those view points should ideally be based on reality
  • DB
    Donald B.
    7 August 2020 @ 04:48
    Has this guy looked at the balance sheet of the federal reserve? 7 billionaires have received 170 billion dollars of increased "wealth " since March thanks to "stimulus". Somehow, me thinks that those trillions of dollars spent to blow up this stock market bubble that have not found it's way into this guys favorite bagel shop is by by design not by accident. Comparing Sweden with the USA is like comparing Bangkok with Bermuda. He brings up 9/11...3 buildings 2 planes...NEXT!
  • lf
    liam f.
    7 August 2020 @ 04:19
    I've seen the figures, there were a range of industries sharply decelerating towards the latter half of 2019 even. This guy's comments on the strength of gdp going into the pandemic are out to lunch.
  • pk
    philip k.
    7 August 2020 @ 03:19
    Sweden has an excellent and free healthcare system with excess reserve capacity. It does not have large chunks of population that are uninsured, in poverty, lively in close proximity with no access to the healthcare system. And most importantly they had rapid and iterative testing from the get go. They still put up with a significant number of elderly mortality as a result of younger family members bringing it home to their elders sheltering. So long as you have the kind of healthcare system here with pockets of vulnerable populations. You will have big outbreaks. Think Singapore, they thought they crushed it but forgot the dense, poorly served laborers who number nearly a million. You can only have his fantasy world if we have the kind of testing they only have at the White House. Rapid, iterative testing for all at multiple points in the work ecosystem. And a healthcare system like Germany or Sweden.
  • KV
    Konstantinos V.
    7 August 2020 @ 02:24
    I fully agree with David regarding his stance on COVID
    • KV
      Konstantinos V.
      7 August 2020 @ 02:25
      Also, Ash did a good job navigating his response in a way to not agree nor disagree lol
    • JO
      JOHN O.
      7 August 2020 @ 03:02
      Whether you agree or disagree he does bring up a few interesting points. David made an observation at one point along the lines of - 'if you discount for old age and comorbidity issues' . . . which suggests if the average person wasn't living on the edge to start with - smoking, obesity, diabetes, sedentary lifestyle, etc. The death rates would be much lower. Assuming there is nothing we can do about one's age, maybe one of the louder messages should be 'start being a better steward of your own health and welfare!!' I suspect that message will get lost in the sauce however.
  • JD
    Jesse D.
    7 August 2020 @ 02:54
    He might be right but seems stubborn in his view. I also don’t think corporations are salivating at the thought of opening corporate headquarters again. It seems way more productive and efficient for employees to WFH.
  • HM
    Harold M.
    7 August 2020 @ 02:53
    Would love to see David back on a quarterly basis.
  • CM
    Cory M.
    7 August 2020 @ 01:34
    From the super geek department: Howard Marks agrees and explains the nuance of the -32.9% US GDP print is even more convoluted than you guys describe here. From his most recent memo: "It’s the percentage by which 1Q2021 GDP would be below 1Q2020 GDP if GDP were to decline in the next three quarters at the same rate as it did in 2Q2020. Actual second quarter real GDP (without seasonal adjustment or annualization) was $4.31 trillion. That was down 7.0% from $4.63T in Q1 on the same basis. If the three subsequent quarters were also down 7.0% from quarter to quarter, 3Q2020 would be $4.00T, 4Q2020 would be $3.72T, and 1Q2021 would be $3.46T. (These are figures you’d never see, since they omit seasonal adjustment, annualization and adjustment for inflation. But I think they present a fair if not technically correct picture for these purposes.) It’s that figure of $3.46T for 1Q2021 GDP that – after annualization and adjustments for seasonality and inflation – would be 32.9% below GDP in 1Q2020. Interestingly, after the assumed declines, GDP in the four quarters 2Q2020 through 1Q2021 (as enumerated above) would sum to $15.49T for the year. But that would be down only 18.9% from the actual total of $19.11T in the four prior quarters (2Q2019 through 1Q2020). So, again, the 32.9% reported decline in Q2 is the difference between 1Q2020 GDP and projected 1Q2021 GDP assuming quarterly GDP continues to fall at the 2Q2020 rate. But nobody expects that to happen. Which means the 32.9% is a highly misleading, exaggerated figure. Nothing went down by one-third, and nothing is likely to do so. It’s the same for nominal GDP. The decline in GDP from 1Q2020 to 2Q2020 was reported as $2.15T, or 34.3%, but those also are annualized figures. The $2.15T decline is the difference between 1Q2020 annualized GDP of $21.56T and 2Q2020 annualized GDP of $19.41T. But the decline in actual quarterly nominal GDP from Q1 to Q2 was only $0.38T (from $5.25T to $4.87T), or 7.2%. So what do the reported annualized Q2 declines of $2.15T and 34.3% mean? Also nothing. In the business world, we’d be looking at the relationship between GDP in 2Q2020 and what it was in 2Q2019. As mentioned above, real Q2 GDP fell from $4.76T in 2019 to $4.31T in 2020, for a decline of 9.5%. Nominal Q2 GDP fell from $5.36T in 2019 to $4.87T in 2020, down 9.1%. Obviously, neither of these year-over-year declines bears any resemblance to the reported 32.9% decline." https://www.oaktreecapital.com/insights/howard-marks-memos .
    • AB
      Ash B. | Real Vision
      7 August 2020 @ 02:12
      Great post
    • CM
      Cory M.
      7 August 2020 @ 02:29
      Awww. Thanks, Ash.
  • LP
    Lauri P.
    6 August 2020 @ 23:08
    The mortality rate might be low, but the more worrying aspect is potentially long lasting lung, heart, kidney and neural damage. Good chunk (double digits %) of the so called mild cases have not recovered to pre-sickness health levels after months and many are still not able to return to work.
    • RD
      Riki D.
      7 August 2020 @ 00:06
      You're correct. Inflammation firstly of the lungs as a principle underlying mortality cause and inflammation of other organs which leads to multiple secondary issues in those that survive, including children. The numbers aren't clear on what that looks like or to what extent of magnitude, but definitely something to have on a watching brief.
    • RD
      Riki D.
      7 August 2020 @ 00:18
      Here is an account of a doctor who shares his personal COVID19 experience and the health implications, including a heart scar asa result of the virus. https://www.facebook.com/watch/?v=172794007264647&ref=external. 50yrs old Fit Medically Aware
    • EB
      Evan B.
      7 August 2020 @ 02:26
      Exactly, the data is not fully in, but is by now clear that is a false dichotomy between death and health-- given the fact that asymptomatic Covid carriers might sustain long term health damage (lungs, brains, kidneys, nerves, etc)-- that we just can't avoid or quantify yet.
  • PD
    Paul D.
    7 August 2020 @ 02:22
    Dude shut off the TVs next time. Real Vision viewers don't care about fox and CNBC. Nevermind it's super unprofessional and distracting.
  • SS
    Sheldon S.
    7 August 2020 @ 02:21
    A couple of comments: #1 - With the democrats firmly embedded in New York, city and state, you will be locked down until the election!! #2 - SCREW NEW YORK!!
  • MM
    7 August 2020 @ 01:43
    Data mining Sweden, kids, etc... 911 poor analogy IMO... disappointing, irresponsible! :(... But I do agree that reopening with all we can do to mitigate, aggressively protecting those most vulnerable, is a must, nonetheless. Our analysis had the economy showing real fragility coming into 2020... started hedging portfolios, in fact, late-summer 2019... i.e., totally disagree with his comment regarding the strength of the economy pre-covid... Yes companies come out recessions "leaner and meaner", this time will be no different... Stocks are essentially discounting a return to pre-covid macro conditions relatively soon; zero chance! Can increased productivity fill the gap relatively soon? Remains to be seen... very slim chance.... I agree on lasting dollar weakness; in fact, the state of global carry makes it an absolute must if we're to make it out of this alive, so to speak...
  • RY
    Ron Y.
    7 August 2020 @ 00:45
    This guy is brilliant! Get him back soon. I chuckled when Ash threw out gold's recent "highs" and David politely threw the remarks back in Ash's face. David cut right through the noise and misinformation and put gold prices then and now in the context in which they belong. That exchange gave me a good chuckle. But, seriously, I LOVED the conversation and do get him back on RVTV soon.
    • AB
      Ash B. | Real Vision
      7 August 2020 @ 01:13
      Ron, Just to be clear: I said "getting close to" its inflation adjusted high precisely because gold has made a significant move toward that high in the last 4-5 months. The exact price, in real dollars, depends on how you calculate the inflation adjustment. Using a CPI deflator, the inflation adjusted high in 1980 was $2,247, based on Macrotrends data set. We're at $2,065 now. Check the series. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart
  • TR
    Theodore R.
    7 August 2020 @ 01:13
    For someone who claims to be data driven, imo, this gentleman embarrassed himself. Other viewers have already addressed the flows of his statements, at least for the first part of the video, so no point going over them again. However, guests such as this gentleman, should at least qualify their statements in terms of their ‘empirical’ experience in visiting or leaving in the places they mention.
  • RL
    Ruben L.
    7 August 2020 @ 01:12
    Well done, DLB.
  • DS
    David S.
    6 August 2020 @ 22:49
    Greater Stockholm population 1.2 million. Greater New York population is over 20 million. New York needs to figure this out with there own statistics and leadership, just like every other area of the world. In each pandemic the wealthy flee and the poor suffer. People in New York have already seen the results of being the COVID-19 epicenter. If you move too fast, even with the best intentions, the new brainless apex predator will be waiting. DLS
    • DS
      David S.
      7 August 2020 @ 00:49
      Sorry typing too fast. S/B their statistics. DLS
  • MC
    Michael C.
    7 August 2020 @ 00:12
    I believe WWII is a more apt comparison/model for what has occurred with CV 19 1) It was a world wide event lasting an extended time period compared to 9/11 which was a single point in time in one country. 2) There was suppression of demand with wartime rationing and suppression of production aimed toward consumers; everything was devoted to wartime production. Lockdown/social distancing/financial distress has suppressed demand as well as suppressed production. 3) The Fed suppressed long rates up until the early 50's...very similar to today. 4) Men returning from war did not have jobs...so there was high unemployment coupled with high pentup demand for consumer goods that weren't available...high unemployment and high inflation ensued. re: the 5 companies outperformance. They benefited as the government mandated lockdowns pushed demand to them and throttled their physical bricks and mortar competitors. And who knows when/if significant competitors can emerge to their govt/CV19 assisted dominance? re: Fed. IMO the Fed has papered over the crevasse created by the virus...the aid has not jumped started the economy...the Fed can't create demand or jobs. Certainly the low rates have not stimulated anything as of yet. The happy talk about coming out of this is misguided IMO as the debt will be a drag on the GDP; GDP has grew more slowly after 2000 and 2008...there are suggestions GDP will be 1-1.5%. To suggest otherwise requires some sort of economic/efficient production when worldwide supply lines have been altered and that sufficient demand will emerge when there will be higher unemployment for many years. Normal? no, a new normal which I don't think anyone can predict as yet. Debt/demographics (US aging population with lower demand)/deflation will have big impacts. Haven't even discussed valuations ala Buffett GDP and Shiller CAPE models or potential 2nd waves in the fall.
    • DS
      David S.
      7 August 2020 @ 00:39
      Michael C.- Well said. Mr. Bahnsen's arguments are agenda based which we can sympathize with and wish could happen. Denial leads to wishful thinking. Wishful thinking leads to believing our friends in New York City will have the social norms of our friends in Stockholm. Wishful thinking helps us to forget the large number of elder deaths in Stockholm. I cannot forget the images of the elder deaths in New York City. I am tired of dealing with the pandemic too, but there are miles to go before we sleep. DLS
  • BT
    Brian T.
    7 August 2020 @ 00:39
    I really don’t agree with many points made but I appreciate the view which I would describe as mainstream/consensus. Markets are NOT discounting the future. What they are reflecting is incredibly cheap and available capital to speculate (long) in the markets. Banks are making capital (printed money) available in option markets and other speculative instruments at VERY cheap rates. So long as this continues asset prices can continue to go up. This has nothing to do with fundamentals which are horrible and will likely continue to be horrible. This might stop at some point maybe even soon but maybe not. It has been and will be a function of an ever increasing pile of debt an the Feds ability to make this happen. So he might be right about more positive move in asset prices but it really is not about fundamentals.
  • JF
    Jack F. | Real Vision
    7 August 2020 @ 00:02
    Hi all, to see a written version of my intro about the Turkish Lira, with charts and links, check out this link on the Real Vision blog: https://www.realvision.com/blog/turkish-lira-in-free-fall The Real Vision blog is something we're really excited about - stay tuned.
    • AB
      Ash B. | Real Vision
      7 August 2020 @ 00:24
      Well done, @Jack. Stunning charts.
  • MD
    Matt D.
    6 August 2020 @ 23:45
    Great interview Ash and David. Appreciate the honest discussion, and that you allowed him to put forward his own view (Sweden), which might not be the party line (MSM that is). Value v growth - Joseph Mezrich (yesterday) had a good discussion on that.
  • JH
    Jacqueline H.
    6 August 2020 @ 23:31
    Thank you Ash. Another great job, and an enlightening conversation.
  • IW
    Ian W.
    6 August 2020 @ 23:23
    Why is everyone using Stockholm as a comparison? It’s a terrible match in both size and density. Look at Seoul instead which is similar to NYC in size and density and has been able to function normally because it’s inhabitants take their health seriously.
  • DG
    Dave G.
    6 August 2020 @ 22:35
    When does stimulus become a bail out? Why don't we just call it for what it is, it's a bailout. Question is how long can we or should we be bailing everyone out?