Daily Briefing – March 30, 2020

Published on
March 30th, 2020
Duration
26 minutes


Daily Briefing – March 30, 2020

Daily Briefing ·
Featuring Jack Farley, Max Wiethe, and Ed Harrison

Published on: March 30th, 2020 • Duration: 26 minutes

Real Vision's Max Wiethe and Ed Harrison connect to discuss the eerie calm in the market as we pass through the eye of the coronavirus storm. Many are in a wait-and-see pattern, but with Yum Brands successfully issuing the first junk bonds since March 4th, it seems as though some market participants are in full risk-on mode. As well, the duo examine the commercial lending market from an anecdotal perspective and areas of the economy like commercial real estate that could leave breadcrumbs for what to expect when the eye of the storm finally passes over.

Comments

Transcript

  • TS
    Tod S.
    1 April 2020 @ 03:13
    Pretty sure Ohio was ahead of many states in terms of quarantine / shelter in place.
  • DS
    David S.
    30 March 2020 @ 23:06
    We can analyze the daily markets to death. The markets have no idea of what will happen either. Do you really think the market is discounting a possible 47 million unemployment number in the US? Obviously not! We should not be focusing on the daily death count and empty streets. We know this. We need to start developing a range of possible economic outcomes. These will be wrong but can be improved as time goes on. Somehow, we need to get a perspective on this thing! This is just beginning. DLS
    • WM
      Will M.
      31 March 2020 @ 15:29
      David could agree more on this. Having been around a long time I am not at all sure anyone really understand the implications of this. One thing I know for certain, the longer this goes on, the more damage to our Western economies will be. The belief that FED induced bailouts will fix the problem is wrong. I strongly recommend David you visit danielamerman.com His neutral fact based and accounting excellence has some implications of government spending that will open your eyes.
    • DS
      David S.
      31 March 2020 @ 23:33
      Thanks Will M. DLS
  • AP
    Ash P.
    31 March 2020 @ 21:23
    This was good thought-provoking content. At this rate you won't need featured guests. I'm going to give this another listen. I agree that commercial REITs will paint a picture of the real economy (let's be honest...they're accident waiting to happen).
  • EH
    Eric H.
    31 March 2020 @ 19:54
    Couldn't you argue more people could potentially eat at YUM Brands restaurants as a more affordable alternative versus typically eating at a different sit down restaurant? Also with how cheap the food is their normal clientele could continue to eat there as much as usual and cut expenses elsewhere. Even in the short term their business might not be as affected as the rest of the restaurant industry with a lot of their . YUM brand revenue only went down 5% in '09 then back to previous levels in '10 during that recession.
  • GM
    George M.
    30 March 2020 @ 22:09
    The closing line to the CV update section should be modified so that it cannot be accused of sounding like "fake news". "These figures change in real time, so by the time you see this, they will probably be higher" - change to "they will probably be different"
    • JF
      Jack F. | Real Vision
      31 March 2020 @ 14:32
      Hi George, thanks for the feedback. The data I was referring to was "Total Confirmed Cases," which includes, Active Cases, Recoveries, and Deaths. So there's no way this figure ever goes down. Your comment is relevant for data on active cases. Going forward we will try and be clearer which specific figures we're referring to, and if we're discussing active cases we definitely will not make any predictions disguised as fact.
  • DS
    David S.
    31 March 2020 @ 13:52
    I am confused by the recent market rally despite the possible long-term economic damage of the Coronavirus Pandemic. It may be a knee-jerk reaction to the Fed and Congress efforts to mitigate the effects of the pandemic and very little to do with net present value of future cash flows of corporations. Is it possible that quants are dominating trade and most of their algorithms are based on short-term daily news triggers? Could markets not look forward anymore with all the passive investments? Are the human market makers also investing in a moment-by-moment news flow quant style? Is it possible that the economy six months from now is just going to be fine with all the pandemic effects behind us? I don’t think so.
    • DS
      David S.
      31 March 2020 @ 13:53
      Posted before I was finished. DLS
  • AC
    Andrew C.
    31 March 2020 @ 03:14
    Is anybody here old enough to remember the 1968 Hong Kong virus? - I am not, but a perspective from somebody who remembers the feelings when 2million people died without the financial calamity befalling us now would be extremely enlightening
    • VH
      Victor H.
      31 March 2020 @ 09:35
      I am not old enough to experience 1968 neither, but I'd say 2020 is way much more Globalized than 1968. Open to other folks' comments too.
    • DS
      David S.
      31 March 2020 @ 13:27
      Wikipedia-"The Hong Kong flu (also known as 1968 flu pandemic) was a category 2 flu pandemic whose outbreak in 1968 and 1969 killed an estimated one million people all over the world. " As shown this flu lasted two years. I do not see a category level for Coronavirus. They may not use the system any more. DLS
  • IP
    IDA P.
    31 March 2020 @ 11:41
    I love Ed Harrison, keep these coming, it is great to start the day with these chats
  • AH
    Amir H.
    30 March 2020 @ 23:52
    Cut your kindergarten level condescending preaching.
    • VV
      Vanessa V.
      31 March 2020 @ 03:41
      Constructive feedback is always valuable, Amir, and we are all entitled to our opinion. However, surely you understand that insulting people to get your point across seldom has a positive effect? It never costs anything to be respectful of others, even when we disagree. May you and your family stay safe at this time - in all ways.
    • RP
      Raoul P. | Founder
      31 March 2020 @ 11:20
      Thanks Vanessa. Yes, we like to keep the comments section for constructive thoughts and debate and the community doesn't tolerate insults.
  • JM
    Jake M.
    31 March 2020 @ 01:30
    China just posted expansion PMI: https://www.cnbc.com/2020/03/31/china-reports-march-manufacturing-pmi-amid-coronavirus-outbreak.html Do you guys think this indicates quick recovery in the US is probable?
    • MH
      Michael H.
      31 March 2020 @ 03:28
      That PMI is a made-up number. Just like Virus cases. Wuhan Morgues recently ordered 40k urns. Covid-19 is going to set back China 20 if not 40 years economically and politically on the global stage. People inside China don't believe what the government is telling them. Going to work only because they have to eat but are extremely careful. Very few are going out to eat, movies, and other forms of entertainment. If we are struggling to contain this virus, do you think China (3rd world nation with nice buildings) all of a sudden got the virus under control after denying its existence for months? No freak'n way.
    • WC
      Wilson C.
      31 March 2020 @ 08:21
      Michael, what you're reading is 1) english media news and 2) possible chinese posting in english media w/ their own agenda (fame, whatever). we get alot of that in HK too. best to get on the wechat / local chinese forums to get a better perspective, unfortunately it's all in chinese. Your comment re: 3rd world nation with nice buildings tells me you probably haven't had the chance to travel extensively in China recently. stay safe.
  • sc
    sung c.
    31 March 2020 @ 04:40
    According to Trump, 1 million tested in U.S. so far. With population of 330 million, we've tested less than 0.3% of the population and already have over 160,000 infected. If just 10% of U.S. population were tested, we would be at 1,600,000 infected. The limiting factor has been the number of tests due to limited test kits, masks, disposable gowns and available testers.
  • JC
    Jon C.
    31 March 2020 @ 02:10
    Would love for crypto and gold to be covered more in these daily updates, for us gold bugs and bitcoin enthusiasts.
  • DM
    Don M.
    30 March 2020 @ 21:42
    Where's the video?
    • NR
      Nicolas R.
      30 March 2020 @ 21:51
      I’m all of a sudden being incorrectly prompted for a subscription that I’ve already paid into...?
    • RA
      Robert A.
      30 March 2020 @ 22:50
      I had this happen to me when RV started the “Essential”, “Plus” and “Pro” new platform. I contacted Milton/Maynard and they were super helpful working me through it (clearing cookies, rebooting, logging out and back in etc.). I have had zero problems since then....reach out to Milton, he’s fantastic and very responsive.
    • RA
      Robert A.
      30 March 2020 @ 22:55
      Don’t know if this will help Don, but the Daily Briefing screen is a “placeholder” so they can fit the video in promptly when it is ready. If you are clicking on it before it’s in place nothing will happen, and when it’s in place you might have to either wait a bit for it to get started or do as I do and hit the Bar a couple of minutes into the video to see if it’s good to go....you can always tap back a bit in case you missed the very start. Hope this helps.
    • DG
      Dave G.
      30 March 2020 @ 23:57
      My question sort of related is when you save a video to "my videos" where do you find them. I looked everywhere on the android app and connot find where my videos are saved.
    • ND
      Noel D.
      31 March 2020 @ 02:05
      Disappearance of My Videos is a temporary problem. I emailed them to ask and they said they will return them at some point. I'm happy to cut them maximum slack.
  • JT
    Jayne T.
    30 March 2020 @ 23:05
    Let’s talk about inflation—not popular I know. But it’s coming because you can’t have deficits like we do. S&P at 8x normalized earnings? That is half of where it’s trading today.
    • DS
      David S.
      31 March 2020 @ 01:14
      How do we know what the S&P profits will be? I will be happy when the corporations get back to normal, but I have no idea of when that will be. What will the market look like with no buybacks and trillions more in debt? Will the Fed bail out all the pensions at the expense of taxpayers who do not have pensions? If so, they will have to do it repeatedly. To many variables not enough grey cells. DLS
  • DL
    Doug L.
    31 March 2020 @ 00:08
    When all are tested and the infected number substantially increases, then "scary" is qualified.
  • OM
    Owen M.
    30 March 2020 @ 23:06
    I am a owner and landlord of about 30 rental properties. My property manager and I have been working on this collection issue the last few weeks. We have tried to get ahead of the issue, giving a slight cushion while still enforcing our collection rules. Also providing tenants the steps to take, if necessary, to file for unemployment, etc. Our primary concern is not for April 1st rents but for May rents...that is where we think it could get hairy. Fortunately the majority of our rentals are to students and young salaried professionals. But we have plenty of retail, restaurant folks that are taking this on the chin...I certainly feel for them and we will work to keep them housed. Most still have a slight cushion for rents right now; not so sure in 1 more month...May 1st is going to be the tell.
  • RA
    Robert A.
    30 March 2020 @ 23:03
    I loved and was very complimentary of one of Max’s very first interviews. He and Ed work very well together and count me as a big Max fan. Where do they get these young go getters? This was a very good meaty daily briefing and it cracked me up watching the “kid” and father Ed interfacing. The juxtaposition between the ages was a nice touch where we can ultimately get the different age reactions (I like reading the comments section where the age difference between the commenters can be 50 years). Whole heartedly endorse the call for Chris Whalen—he would be great and is another knowledgeable, well prepared and articulate communicator.
  • WS
    Will S.
    30 March 2020 @ 22:28
    Thanks, good videos, would you mind posting the source of the articles that the two of you mentioned? It is hard to follow if I cannot see the list of the regional bank.
  • TM
    Timothy M.
    30 March 2020 @ 22:23
    I think Ed and Max are correct. April 1st will bring more talk on another package of gov't backed loans. $2 trillion is a down payment. My guess is the next package will be $4 trillion. Trump will be able to give Jay Powell an elbow tap. On the investment side, the late great Marty Zweig, said "Never fight the Fed." I am long certain stocks with great balance sheets.
  • BD
    Ben D.
    30 March 2020 @ 22:03
    I learned a lot from Chris W when he came on back in December and talked about the state of banking. In a time like this it would be very insightful for someone with the expertise and the first hand experience to come on and talk about the commercial banking sector and RIETs and overall MBS sector. I hadn't thought about the very small banks being unable to offload their loans from very small businesses. Thank you for bringing that up.