Daily Briefing – March 31, 2020

Published on
March 31st, 2020
26 minutes

Daily Briefing – March 31, 2020

Daily Briefing ·
Featuring Drew Bessette, Ash Bennington, and Ed Harrison

Published on: March 31st, 2020 • Duration: 26 minutes

Real Vision's Ash Bennington hosts Ed Harrison to discuss the continuing economic and financial impact of the coronavirus crisis. The pair discuss the recent downward revisions to economic forecasts, the reaction of US equity markets, and the trade-offs of policy responses against the backdrop of "a dark night of Knightian uncertainty."



  • BB
    Bhashi B.
    6 April 2020 @ 12:11
  • SK
    Shiu K.
    2 April 2020 @ 04:35
    As tragic as the human lives being lost to COVID-19, comparing it to combat deaths from World Wars doesn't make much sense. Start by comparing it to flu and cancer deaths.
  • CB
    Chris B.
    1 April 2020 @ 20:44
    Ash and Ed, I missed a couple of daily updates due to workload. I found today's update very thoughtful and useful. As you say grim subjects but I look forward to tomorrow's update. Thanks,
  • WM
    Will M.
    1 April 2020 @ 14:20
    Good discussion. My only comment Ash is that more lives will be lost if the economy collapses versus this CV. Once enough of the "threads" of our modern society are broken, those at the bottom will take what those at the top have, either politically or violently. The caring in society will be overwhelmed by majority. Sorry, that the view from someone who has read profusely and been around a long time.
    • AB
      Ash B. | Real Vision
      1 April 2020 @ 14:33
      It's a terrible set of tradeoffs to have to navigate. A collapsing economy will both end—and destroy—lives. In the meantime, the 'unmitigated' or 'unflattened' curve the medical staff showed at yesterday's WH press briefing peaked at 2.2 million deaths. I'm reminded of Rudy's post 9/11 statement “The number of casualties will be more than any of us can bear ultimately.”
    • LS
      Lemony S.
      1 April 2020 @ 14:47
      The problem is that there is no excess mortality. I urge all people to actually look these facts up so that you can have a hope of fending off emotion, bias, and all the other irrational informers of our day to day life. You can look at the UK, Italy (yes even the worst examples) and NY and see that the deaths per day are unchanged compared to recent years, or even [gasp!] improved. We "bear" with the deaths every other year without hysteria, yet for some reason now we shut down nearly the entire developed world's economy. You should be afraid of many things, but this virus --- given our recent history and normal or known reactions to similar situations in nations --- is not one of them.
    • ar
      andrew r.
      1 April 2020 @ 16:10
    • ar
      andrew r.
      1 April 2020 @ 16:13
      Sorry. Thoughtful comments all around. Ash, Ed, I wonder what you think of Holman Jenkins's comment that he's made in two WSJ op-eds now that the CDC is still predicting -- even with the measures we've taken -- that "most of the country" will still be exposed to the virus. Is trying to contain it a quixotic move?
    • SB
      Salvatore B.
      1 April 2020 @ 16:57
      Nothing is more ridiculous than the "but look at deaths for other things!" arguments. This is the same argument made by the same people who claimed it was nothing worse than the flu a month ago. Now that they've been proven wrong there, they have moved on to comparing covid to all other types of deaths. This grows and compounds over time. Car accidents are not contagious. I look forward to your next argument a month from now.
  • ZM
    Zachary M.
    1 April 2020 @ 16:35
    I appreciate the honesty here. Thank you.
  • AW
    Aaron W.
    1 April 2020 @ 01:09
    During the intro why are we including Ether alongside USD, gold, S&P 500, and VIX... Can we at least agree to a market cap threshold here above $100B, or should we get more smallcap or pennystock updates to balance it out? The SEC is actively investigating Ether as an illegal securities offering. I mean to be respectful but guys, it just doesn't make sense to keep talking about these altcoins like they're legitimate. Look into the founding story of any cryptocurrency and you'll find a history of less than a dozen white men who have unloaded tens or hundreds of millions of dollars onto retail investors in exchange for a grand emotional story about a future that hasn't transpired while their tokenholders lose -90%.
    • AW
      Aaron W.
      1 April 2020 @ 01:24
      William Hinman, SEC: 'Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, current offers and sales of Ether are not securities transactions.'
    • WN
      Wubbo N.
      1 April 2020 @ 15:20
      I can get behind the market cap argument. But if you look behind Ether you will find a very from the bottom-up community-driven cryptocurrency. The history of its founder was that he wrote bitcoin/decentralization articles for a few dollars because he's so passionate and to this day still the biggest community driven decentralization evangelist I know of.
  • PS
    Pavel S.
    1 April 2020 @ 15:11
    Ash, I feel for you that it´s hard to talk about deaths as a statistic. I liked the human intermezzo where you expressed it is challenging for you guys. We´re with you. BUT this is a macro channel. Number of deaths is a KPI. Next time just say it and don´t feel bad about it. Just saying it and keeping up with the flow makes the show flow better and thus adds more value to us customers. We already know this is grim and people die. Saying the truth as is - that´s all fine and the right thing to do. Don´t worry about it.
    • PS
      Pavel S.
      1 April 2020 @ 15:14
      So specifically it is completely fine to say "the deaths are lagging a lot behind the active cases, so we will see more severe cases and deaths in the coming weeks". That will add to the negative sentiment.
  • GC
    Gerard C.
    1 April 2020 @ 11:18
    Host has a rug?
    • AB
      Ash B. | Real Vision
      1 April 2020 @ 14:34
      Part of my makeshift home TV studio. It's harder to get a good rug in a crisis than you might imagine...
  • TS
    Tim S.
    1 April 2020 @ 14:29
    Hey Ed, common, share your thoughts about the moral hazard for those airline bastards spending huge amounts of buybacks with income and borrowed money. I won't tell. ;-)
  • Lv
    Liliane v.
    31 March 2020 @ 23:00
    As always a great episode and thank you both. I would appreciate a recommendation. What are suggestions for people as to how to invest in their 401ks, IRAs or other types or retirement accounts? As far as I know, you cannot buy real gold or bitcoin or physical real estate in those? Are cash and the GLD gold fund the answer? For many of us, these kind of accounts are the only investment accounts we have. Any thoughts? Very much appreciated. Thank you
    • BM
      Brook M.
      1 April 2020 @ 01:30
      A portion on your 401K can be invested in precious metal stocks. Just keep in mind that these are extremely volatile.
    • WM
      Will M.
      1 April 2020 @ 14:15
      Agree with Brook. Would be a little worried about the gold funds for the reasons discussed in many other serious financial outlets. I have the miners but expected a 50% haircut and planned to hold for years. However, if the whole house of cards falls, maybe only physical offers a safety net. Of course there is a chance a total reset of everything is coming..... in which case I know even I am screwed.
  • ss
    sam s.
    1 April 2020 @ 02:49
    Ed, I'm having trouble understanding why you are reluctant to share your views on camera regarding the loss of life versus the blow to the economy by the virus response of sheltering in place. Does that mean you question the value of the damage to the economy compared to the value of the lives lost? Ash was pretty clear that he thinks everyone needs to to save lives, but you weren't. Am I misinterpreting your comments?
    • EB
      Evan B.
      1 April 2020 @ 05:18
      Maybe he is just being the consummate professional-- sticking to his wheelhouse of professional economic knowledge rather than opining on something that he is merely equally able to opine on than you and I? To me that suggests modesty and humility not lack of empathy.
    • EH
      Edward H. | Real Vision
      1 April 2020 @ 14:11
      Sam, Evan has it right. I try not to let my own views bleed into analysis or interviews because you're not paying for that. In a situation like this, it's tough though because the human toll is absolutely immense. And we all feel it. Me, I can't even visit my mother who lives a few miles away because she is high risk. I have popped by and stood on the sidewalk. But it's not the same as giving her a hug and sitting down for a chat.
  • LA
    Linda A.
    31 March 2020 @ 22:47
    Things are really bad. Only grocery stores, hospitals & pet hospitals are open. My hair salon (chain) filed bankruptcy. Life will be different. It's such a depressing time. I hope everyone will be able to cope.
    • WM
      Will M.
      1 April 2020 @ 14:11
      Linda people who prepared have a chance. Those who didn't will likely collapse, at least mentally.
  • DT
    David T.
    31 March 2020 @ 22:37
    One of the best Daily Briefings. US will change much more after this crisis than it changed after 911. US version of capitalism is broken.
    • WM
      Will M.
      1 April 2020 @ 14:10
      Of course what we have is not capitalism, its crony capitalism, financialisation, and neo keynesianism. We may end up with either socialism, racism or chaos.....thats what history tells you.
  • ns
    niall s.
    31 March 2020 @ 22:24
    When I heard Ash say there might be 100,000 deaths in USA , as a keen student of worldometer stats I switched this garbage off .
    • AB
      Ash B. | Real Vision
      31 March 2020 @ 22:27
      Unfortunately, that one is a quote from the president... Trump concedes US coronavirus death toll could be 100000 https://www.cnn.com/2020/03/29/politics/trump-deaths-coronavirus/index.html
    • DT
      David T.
      31 March 2020 @ 22:39
      Well, give us your estimate. Tell us why Spain and Italy have thousand of dead. 100K may be exaggeration but, whats'your number the student?
    • AK
      Adam K.
      31 March 2020 @ 22:58
      "Garbage"? When the death rate is in a parabolic accent? You're a bloody peanut mate. An basic extrapolation of Italys death count as a function of the population just at todays date is north of 67,000 for the US. Clearly the US is not Italy, but were not anywhere near done yet. You must be counting on the virus simply giving up due to the superior patriotism of the US vs. RoW. (No hate to Americans btw, just saying now is not the time to be optimistic).
    • PB
      Paul B.
      31 March 2020 @ 23:31
      I think it's a very very conservative estimate in my World
    • JS
      John S.
      31 March 2020 @ 23:47
      If it's only 100k it will be a miracle. You're not paying attention to what's going on.
    • AB
      Ash B. | Real Vision
      1 April 2020 @ 00:56
      Tragically, 100,000 is the low estimate. HED: White House projects 100K to 240K US deaths from virus The Associated Press By AAMER MADHANI, KEVIN FREKING, RICARDO ALONSO-ZALDIVAR "WASHINGTON (AP) — President Donald Trump on Tuesday warned Americans to brace for a “hell of a bad two weeks” ahead as the White House projected there could be 100,000 to 240,000 deaths in the U.S. from the coronavirus pandemic even if current social distancing guidelines are maintained." https://apnews.com/6ed70e9db88b80439a087fdad8238009
    • ss
      sam s.
      1 April 2020 @ 02:56
      Ash, I will humbly submit that you not use Donald Trump's White House for anything you wish to represent as the truth. His number of lies is astronomical. I'm not saying I disagree with you--just use a more reliable source for your data, then we'll all feel better about the validity of your comments. Be safe out there...
    • WM
      Will M.
      1 April 2020 @ 14:07
      Niall, I think your response is out of line, "garbage" feels like a purely emotional response. I am personally somewhat skeptical that the death rate from this virus justifies the effective destruction of the economy associated with the shutdown. However, even 1 million deaths in the US would be much less than 1% of the population. We humans really do forget our mortality when nature chooses to rear the ugly side of its nature be it plagues or natural disasters. What we humans do have a propensity for is .....ignore, scoff, express nervous hopefulness, then PANIC. I think there can be a justifiable debate around how many people dying of CV would have died anyway by summer, by year end, or even next year. I dont think there is any longer any debate that 100k deaths will likely occur by mid year. So please don't whack RVT. Lets just keep watching the facts.
  • JE
    J E.
    1 April 2020 @ 11:16
    The markets do seem to have moderately corrected in light of all the things happening at once. I suppose there is a chance that the Fed reflates assets, but it could send valuations off the charts literally as earnings collapse. Also, what are the societal and political consequences of a reflation on Wall St. as Main St. is lying in the gutter? I'm going to guess not good.
  • JM
    James M.
    1 April 2020 @ 09:28
    'What Ed things is the issue is the health care situation in the USA' ......mmmmmmmmm! Come on mate grow a pair of balls and call it like it is!!!! The USA is a Corporate corrupt criminal cesspool and a collapsing Empire ... You know it....The viewers Know it (should know it) .... We all know it .... So do us all a favor and just call it .... Pleeeeesssssseeeee .......?
  • BT
    Brian T.
    1 April 2020 @ 09:11
    Dear Ed and Ash- Thank you for the daily commentary ! I agree that this looks really, really bad -no matter how much the fed and treasury are willing to inflate things. Is there any way you can maybe address the 'inflation takeoff' due to 'unlimited QE' that was suggested by Tapiero and RP yesterday? Thanks again for giving us some perspective!! God Bless, wash those hands !! BT
  • IP
    IDA P.
    1 April 2020 @ 06:50
  • Am
    Alex m.
    1 April 2020 @ 06:26
    I really liked the buy equity vs junk bond analogy - great briefing
  • AS
    Aki S.
    1 April 2020 @ 05:08
    What are your Twitter handles Ed and Ash? Thanks for the great briefing!
  • AN
    Andrew N.
    1 April 2020 @ 04:40
    Nobody believes numbers out of China. We should just put a question mark next to it instead of a number, or perhaps just assume a 10x premium.
  • sc
    sung c.
    1 April 2020 @ 04:19
    How fast will we recover once the government gives the signal to go back to work and community? Here's what I know. I'm fortunate to be in a very good position, both financially and physically, but still. - I have cancelled my trip to Europe. -I have cancelled my cruises to Bahamas and Alaska. No cruises for at least six months. -I won't be going to Las Vegas anytime soon. -I won't be attending plays, concerts, or even movie theaters for awhile. -I won't go to my gym for a few months. I'll just work out at home. -I won't go to the larger more popular restaurants. If I go out to eat, it will be a the smaller ones with outside dining options. -I won't be visiting my kids and grandkids back East because I don't want to catch anything and I don't want to transmit anything to them from the airplane. -I won't be flying for a few months unless it's an emergency. -I won't be taking my usual weekend trips to different cities for fun. -I won't be using air BNB for a while either. And I don't want to stay in hotels for a while. -I won't be taking cabs or Uber for a while. -I won't be using my club pool or spa. I'm not being paranoid, just prudent for a few months. Now if I have the financial means and think this way, how many who are adversely affected by loss of job will cut out even more stuff from participating in the economy even after they can go out? What do you think?
  • DH
    Daniel H.
    1 April 2020 @ 03:09
    Ash Bennington... any relation to Chester? They look similar.
    • AB
      Ash B. | Real Vision
      1 April 2020 @ 03:45
      Ha. Nope.
  • AT
    Aaron T.
    1 April 2020 @ 03:09
    Great job guys. I've been looking forward each day to these daily briefings since they started. Keep up the great work and stay safe.
  • CH
    Chad H.
    1 April 2020 @ 02:55
    Great and very thoughtful update. Thanks Ash and Ed. Refreshing compared to the unintelligent "news" and headlines I'm ignoring.
  • jr
    john r.
    1 April 2020 @ 02:53
    Hi, good news, we are not losing millions of lives, the animal spirits of the world are being stretched like a 100lb cross bow and we will get this economy roaring like a Ferrari, First gear in 30 days and each month a new gear. we probably go lower first but not 50%, maybe 15%. real vision should start program: Real Help, we all sign up to reach out to 10 people that we know need $, encouragement, hope or all three. The world is united for first time ever in coordinated war against a common enemy, you can already see the beauty if you look for it. Spending quality time with kids, not so focused on rushing out to work, spiritual reflection and deep desire to help others instead of constant distractions. Great program guys, keep up the work.
  • DS
    David S.
    1 April 2020 @ 02:19
    I appreciate the stronger tone about the seriousness of this pandemic both as a human tragedy and in market forecasting. From my point of view the market was way overvalued with passive investing, quants and especially buybacks. A 20% decline may have taken us to a fair value before the pandemic. That is why I feel we have much further to fall. Money can be made in even volatile times, so many subscribers are looking for good trades ideas. I wish them good luck. I am just watching and trying to understand how we are going to get through this. As more and more of us have friends and family contracting the coronavirus, we will all become more sensitive to costs that will have to be paid. On a positive note I am giving blood tomorrow. DLS
  • CD
    Cheryl D.
    1 April 2020 @ 02:17
    Thanks Ed and Ash....you guys do a great job!!!!
  • FG
    Flavio G.
    31 March 2020 @ 22:53
    Completely agree: The level of the SP500 is ridiculous considering all that is happening in the World ... in synch! I wonder what is making it levitate at these ( 2017 ... FFS! ) levels instead of dropping like a rock. Almost needless to say: I am actively short and will add more puts if it touches 2,700.
    • AW
      Aaron W.
      1 April 2020 @ 02:09
      The Fed. QE Unlimited.
  • SL
    Sean L.
    1 April 2020 @ 01:31
    Great chat guys - I couldn't agree more. I'll give you a bit of anecdotal background from the perspective of a moderately successfull small business. I operate a few businesses here in Toronto. One significant misunderstanding I'm seeing in market commentary - a real disconnect from what I'm seeing on the ground - is the idea that this is a government led shut down. In our experience, it's not. It's a market-demand driven shutdown led by the consumer. Example: One of my businesses has been fully booked until 1 am 7 days/week for 5 years. We receive an avg of 50 net new bookings per day. One week before the government mandated our closure, we saw a drop from 50 to -5 (cancellations outpacing new bookings) within a 48 hour period... > 100% down. While I think we are something of an outlier, our situation being exacerbated by the fact that people were especially straying from booking for *next week*, the fact remains that our situation - combined with the Open Table data - shows that this has been a demand driven shutdown of small businesses. One could almost argue that the government had to shut down small business in order to provide them with an excuse for their lack of liquidity. While we have a healthy runway, the VAST majority of small businesses here weren't even able to survive that 1 week drop in demand... several already defaulted on payroll. Ultimately, I was encouraged last week by the extreme measures taken by feds: full payroll support in the US, 75% in Canada along with a forgive-able loan which amounts to a $10k grant meant to support rent. However, today, the Canadian gov't decided to push a major announcement re: the grant's conditions to tomorrow. Most were waiting to decide how they would handle rent and I think many will now simply decide to default. I think that the gov't was already playing with fire by not ensuring that the money was already *in their hands* by Apr first. The govt's aggressive action so far makes me think they will backstop any mortgage defaults but the uncertainty is driving significant negative pressure on employment, loan, and rent decisions. Even with the stimulus, I thought they had just barely done enough *if they were able to roll it out rapidly and without any real hiccups*. Well, I've lost faith that they're going to be able to do that. Coming back to our 'return to work' - Planning for a worst case scenario, I'm currently in the process of designing an aggressive strategy that will accommodate a 75% drop in demand for 6-12 months. With 25% gross margins, you can see what we plan to do to our payroll, rent, and other expenses. This is probably overshooting so let's say a solid scenario puts us at 60% of pre-Mar 7th revenues... If small businesses see this across the board, you'll see a lot of owners pulling hours themselves and not re-hiring staff, negotiating reduced rent with leveraged landlords that don't have better options, etc.. I think you guys are absolutely right - the momentum behind what's happening is being underestimated. I especially like the idea that many are being overly reliant on data - a highly reactive situation... getting predictive based on logical analysis of small business behaviour becomes necessary at some point here if you want to stay ahead of the markets. What I've been expecting so far is this: The gov't makes an announcement of massive stimulus... market rallies, but because the govt is setup to assimilate information related to marginal sector wide *quarterly* changes in business activity, they misfire both in quantity and ability to rollout quickly (it's now been 3 weeks since that demand fell off a cliff). We then see those who are equipped to parse this info - Goldman, BMO, TD, etc.. report more negative info and markets fall... then gov't announces more stimulus, etc... chasing their tail with money when what they're really going to need is a time machine. I think this is more or less what's going to happen. And to be clear, I think they'll succeed at propping the markets (unless I'm missing some financial domino), UNTIL we get sent back to work and the real shock sets in. Small businesses are quiet and embarrassed - we won't know how bad it is until their forced to show their hands. Thanks again guys - you're killing it.
    • SL
      Sean L.
      1 April 2020 @ 01:58
      Just adding to Ed's final point about Arizona, I'm really curious to see their small business numbers through the last two weeks... I have a feeling they won't have gained much ground even in the short term where rent defaults won't be far off the areas that saw full shutdowns.
  • CN
    Christopher N.
    1 April 2020 @ 01:57
    Excellent cogent commentary. You guys are nailing it and highlighting key metrics that matter. As a Real Vision subscriber I really appreciate your focused discussion on some tough topics. It is helping me to form big picture investment strategy going forward.
  • DM
    Dominic M.
    1 April 2020 @ 01:41
    I think this is going to be more of a lightening bolt shaped recovery.
  • SM
    Sean M.
    1 April 2020 @ 00:43
    Going to be interesting how the "snap back" happens by demographics. For many that entered the workforce in the last 10-15 years, this will be the first real setback in employment they have faced.
  • OM
    Owen M.
    1 April 2020 @ 00:24
    Ash and Ed are great.
  • WS
    William S.
    31 March 2020 @ 22:15
    I just want to point out that countries like mine, Canada, as well as European countries etc that have State health care are woefully unprepared for this. Canada is not even equipped to deal with the slow but steady increase of the aging population needing more and more health care. People with COVID here are being told over the phone to self isolate and to spend days and days alone while they can hardly breath. The animal spirits will fare NO BETTER in the State run systems. They may actually fare worse. Health care run by government is awful. I know, I live it.
    • DT
      David T.
      31 March 2020 @ 22:40
      Healthcare has a lot of problems everywhere.
    • PB
      Paul B.
      31 March 2020 @ 23:34
      On the plus side you can legally grow Cannabis. Full Extract Oil use will keep you out of the Hospital system unless you are physically injured
    • UA
      Uzair A.
      1 April 2020 @ 00:18
      Where in Canada? All my friends in healthcare look really well prepared. You can get into the emergency department and get taken care of right away. You're supposed to self isolate if the symptoms aren't that bad that you need a ventilator because there is no point in going to the hospital.
  • sl
    suman l.
    31 March 2020 @ 23:44
    I guess ed Harrison is reading up on macro tourist.
  • MT
    Mark T.
    31 March 2020 @ 23:20
    If you don't hold it, you don't own it. Real financial shields are in the form of physical gold and silver that you have in your possession.
    • Lv
      Liliane v.
      31 March 2020 @ 23:25
      Good point. Too bad the IRS is punishing us with a 10% penalty if we withdraw before we are allowed to in order to buy those physical assets.... :(
    • PB
      Paul B.
      31 March 2020 @ 23:27
      Straight out of Zang's Playbook
  • PB
    Paul B.
    31 March 2020 @ 23:25
    Their Economic Models ignore the role of Personal Credit. Just as they ignore Inflation of Assets
  • DS
    David S.
    31 March 2020 @ 23:11
    Most regular people run out of money in 3 weeks. Criminal banksters run out of money in two days.
  • DL
    David L.
    31 March 2020 @ 22:57
    A good, if sobering, discussion. There was a very good point about the uniqueness of the current situation making it difficult to predict the future. We have seen a little of this already. When markets were first down around 10%, there were a lot of articles about how that was the point when, historically, markets snap back. Clearly that didn't happen.
  • LP
    Lynn P.
    31 March 2020 @ 22:51
    Knightian Uncertainty - Excellent
  • AK
    Adam K.
    31 March 2020 @ 22:44
    Great job guys. Its not an easy talk to have. But its essential for us who want to feel connected to the reality of the situation. I take a lot from this talk just from the frankness of it alone, so thank you.
  • DB
    Darko B.
    31 March 2020 @ 22:35
    The situation is really grim. I believe the market is in la la land, and we're probably only 50% of the way down.
  • MD
    Mike D.
    31 March 2020 @ 22:31
    Good briefing at a hard time for all of us. Well done, and thank you.
  • CD
    Christopher D.
    31 March 2020 @ 21:37
    NB: 6pm EST is now 11pm GMT, home screen still says 10pm GMT
    • rs
      ross s.
      31 March 2020 @ 22:24
      Well done gentlemen.. your two class acts.
  • BA
    Bob A.
    31 March 2020 @ 22:17
    Great job. Thanks.