Daily Briefing – May 21, 2020

Published on
May 21st, 2020
Duration
30 minutes


Daily Briefing – May 21, 2020

Daily Briefing ·
Featuring Nick Correa, Ed Harrison, and Roger Hirst

Published on: May 21st, 2020 • Duration: 30 minutes

Real Vision's managing editors Ed Harrison and Roger Hirst sit down to discuss the latest developments in markets, macro, and coronavirus. Nick Correa talks about the new waves of infections in South Korea and the country's unique challenges in containing and stopping the spread.

Comments

Transcript

  • rw
    richard w.
    22 May 2020 @ 03:57
    Really Really first 5 min was all about LGBTI persecution in Sth Korea? How many non muslims where beheaded in Nigeria today?
    • DS
      David S.
      22 May 2020 @ 05:35
      Too many if even one non-Muslim was killed. The LGBTI issue - I am so old I don't even know what all the letters are for - is important because to track we need good information. Korea is excellent at tracking down who is infected but the people left false names. When people lie on the forms, we are all in trouble. Tracking does reduce the number of people infected in the future, but it must be accurate. Just wait until we really try to track in the US. As usual everyone will want everyone else to be tracked but they will not want to be tracked themselves. DLS
    • MR
      Matthew R.
      22 May 2020 @ 12:54
      Exactly, can we focus on real issues. All this preemptive worrying about potential LGBT victims is a waste of time, in my perspective no one really could care less about LGBT people, and just want them to get on with their lives peacefully, without being attacked, and without making a big fuss. There are real issues around the world such as real humanitarian atrocities in China and Africa for example. South Korea and the US are probably the two of the countries in which we need to be least concerned.
    • DS
      David S.
      24 May 2020 @ 04:50
      Matthew R. - It is about the tracking not the LGBTI issue. DLS
  • PT
    Patrick T.
    23 May 2020 @ 15:57
    Roger mentioned the benefits of a cheaper sterling for exporting UK products and services. Besides the City and oil in Scotland, what services and products does the UK export?
  • EH
    Edward H.
    23 May 2020 @ 00:24
    Great conversation. Always enjoying hearing from Roger and this was particularly insightful whistlestop tour of the markets and macro. Thank you.
  • BH
    Barry H.
    22 May 2020 @ 11:41
    I prefer meat but NZ meat is cool.
    • AT
      Andrew T.
      22 May 2020 @ 15:16
      yeah, I wouldn't call NZ lamb inferior necessarily...
  • DL
    David L.
    22 May 2020 @ 11:58
    Regarding the airline discussion, wouldn't an alternative simply be fewer travelers (with maybe better service) at a higher ticket price? Perhaps we are headed back to the 1950's when restaurants and travel are pleasures for the well-to-do rather than more democratic pastimes as is now the case.
  • JD
    John D.
    22 May 2020 @ 11:58
    Anecdotal, but my entire family, ~ 30 people, have all agreed to support local jobs, by consuming products/services from local vendors. Secondly, if an option is not locally available..we consume from countries that mirror our social values. Free speech, democracy etc.
  • AT
    Andrew T.
    22 May 2020 @ 09:32
    Thanks guys for the discussion on Sterling. Interesting insights and funny how sentiment has flipped so quickly.
  • KB
    Kevin B.
    22 May 2020 @ 08:56
    Always interesting listening to Roger. One of the main reasons I subscribed.
  • IP
    IDA P.
    22 May 2020 @ 08:07
    exactly, you can save the firms and jobs and wipe out the investors, seems like everyone forgot this
  • SG
    Sebastian G.
    22 May 2020 @ 03:44
    Where do I get Roger's shirt? Serious question. Good briefing as always.
    • DS
      David S.
      22 May 2020 @ 06:18
      It is a good-looking shirt. It is a well-made update of the old Madras shirts from India of the 60s. Madras material was guaranteed to fade and bleed each time it was washed. What a great marketing promotion. This shirt has a different fabric inside and around the neck like a Burberry. In the old days when you soiled the inside of the collar, they would sew another fabric to cover up the soiled area to save the shirt. Burberry has used this as an upscale marketing promotion to identify their shirts – so it may be a Burberry. Normally Burberry uses a plaid, but this shirt is plaid so solid fits. Fun to think of something else other than the recession and COVID-19. Thanks. DLS
    • TS
      Thalia S.
      22 May 2020 @ 07:30
      Quite a hypnotic shirt. Trippy.
  • AP
    Amar P.
    22 May 2020 @ 07:06
    Sir Roger Hirst, the Charles Colville of finance.
  • AA
    Alberto A.
    22 May 2020 @ 02:06
    Great discussion guys! I really like game of playing different outcomes to expand our thinking on future possibilities
    • SS
      Shanthi S.
      22 May 2020 @ 07:00
      Agreed! And love the long term view.
  • DS
    David S.
    22 May 2020 @ 06:47
    Mark T. - Hypertension, obesity, and diabetes were the most common comorbidities among COVID-19 patients in the New York City area, according to a recent paper published in JAMA. This looks like a cross section of many Americans to me. This virus spreads from an infected person that has no symptoms. There is no clear and present danger. We are opening. We will have a second wave and probably a third wave like the Spanish Flu. We could have been prepared. We should have done a better job of shutting down. There is no way now to do a better job of opening. You quote statistics that it is reasonable to open and leave the old folds at home. It is rational. When one of your friends or family die that statistic no longer explains your situation. DLS
  • AP
    Ash P.
    22 May 2020 @ 05:12
    Finally. Somebody Arsenal gets a mention on RealVision. Now we're getting down to brass tacks - the things that matter #GOYG.
    • AP
      Ash P.
      22 May 2020 @ 05:23
      ...#COYG
    • TS
      Thalia S.
      22 May 2020 @ 06:26
      #COYS
  • BP
    Brian P.
    22 May 2020 @ 02:46
    Great discussion as always! Just wanted to add a few comments on what's going on in Korea which is where I live, as some of the facts you shared seem a bit dated. Yes, new clusters from the clubs is an issue here, but not as significant as it is portrayed by the media - We certainly don't think this will cause a second wave. Daily new cases in Korea had stayed within single digit for some time, and the new cluster spiked that number back up to 30's but it is now down to teens. People worried much severer impact from this new clusters, but people now generally think it is mostly contained. People initially worried that this would cause huge privacy and discrimination issues against LGBT community as you said, but again, the government has continuously promised that their privacies will be protected if they cooperate. The government has identified and contacted most of the club visitors and the number of people still not identified is only 240, not 3000. Even though the daily new cases has been kept very low since mid-March, the government and general public have continuously been extremely cautious. The government has kept it very slow in loosening social distancing measures. We rarely see people not wearing masks in public and people still avoid large crowds. Many companies are continuing the WFH policies. Places like movie theaters, hotels and restaurants are still nowhere near pre-COVID level. There has been a lot of debates about re-opening schools for a long time now. Some schools immediately shutting down right after re-opening wasn't a big surprise and was generally anticipated.
    • DS
      David S.
      22 May 2020 @ 06:20
      Great update. Thanks, DLS
  • DS
    David S.
    22 May 2020 @ 05:37
    It would make it clearer for me if everyone would use ECB for European Central Bank and EU for the European Economic Union. There seems to be a lot of double usage. Thanks. DLS
  • MT
    Mark T.
    21 May 2020 @ 22:24
    Ed, you nailed it on the head. With the data we have, we know that 98% of those who died from this virus are age 60 or older or have one, and most commonly two comorbidity factors. This means the virus isn't as dangerous to the overwhelming majority of the population. But why (in the US) do we have such a reaction to it? Because both the government and corporations are afraid of getting sued. If we want to re-open we have to indemnify.
    • DR
      Derrick R.
      22 May 2020 @ 00:15
      You can’t repay dead people.
    • JM
      John M.
      22 May 2020 @ 00:22
      In Canada (according to data as at May 21st) 69% of Covid-19 fatalities were > 80 & 95% were > 60 yrs of age. https://www.canada.ca/content/dam/phac-aspc/documents/services/diseases/2019-novel-coronavirus-infection/surv-covid19-epi-update-eng.pdf
    • DR
      Derrick R.
      22 May 2020 @ 00:33
      Ok, and what is the point? The obsession with “but the death rate is low” is practically “it’s just the flu”, when it comes to the extreme lack of nuance and consequences following such a blunt conclusion.
    • MT
      Mark T.
      22 May 2020 @ 01:15
      Derrick R.: "You can't repay dead people" . Such hyperbole. It's statements like that which prevent people from thinking rationally about this and keep them in a state of fear. The data points to this being much less severe than the flu for the overwhelming majority of people. This doesn't lesson the impact on those who die or their families. It's just a statement based on data. And how many people over the age of 60 are still in the workforce? Isn't it cheaper to pay them to stay home and quarantine than to shut down everything and everyone? Don't submit to fear.
    • MS
      Michael S.
      22 May 2020 @ 03:12
      Maybe not in your world, but people over 60 are in contact with people of other ages in most families and social circles. Maybe we should just put people over 60 in jail to save them?
    • DR
      Derrick R.
      22 May 2020 @ 05:07
      @Mark T., looking at one statistic in the data (and as most of us know the data itself is fraught with issues) I think is not enough to capture the most likely outcome, in this case. Here's why: Forget about the death rate altogether. Pretend it kills nobody, and leave everything else about it unchanged. We'll also assume for simplicity that everyone lives alone (no mixed age households) and keep it focused on workers. We'll also assume no mutations of the virus occur that make it even worse, or more contagious than it is now. Finally we assume that a recovered patient is just as healthy as one who hasn't had the virus (this is largely not true, mostly as yet unknown, but very interesting should you look into that further) According to BLS data the median working age in the US is 42. What percentage of cases across the working age population require hospitalization? ICU? Have you looked at THOSE numbers? Do you realize how many people in the US in working age range are on medications for various conditions and are overweight and/or diabetic? Do you realize how ill-equipped the US medical system is to handle this? What percentage will miss work.... at the same time as this spreads through their social networks? What hospital capacity do we have? What risk is this load presenting to the health of the medical staff? Who is going to replace them when they get sick and can't continue working..... as more cases flood in? Beds, supplies, ventilators? Who pays the physical and monetary costs for the care? What does this strain on the system do to other patients? "Reopen because it doesn't kill everyone without one foot already in the grave" is a myth as well as a dangerously simplistic view. Productivity at scale is not recovering just because we decide we will reopen anyway. The above reasoning is why I remain skeptical of a near term full recovery. I see this simply lingering and doing damage for a longer term, in so many scenarios. A solution will eventually be teased out, but it will take time and will come in pieces and parts, not all at once. That's my view.
  • RA
    Robert A.
    22 May 2020 @ 04:00
    One of the very best to date guys. Great intro by Nick and the concept of more AI in DM to the labor detriment of EM was a first for me. China got the Labor Arbitrage because they were in the right place at the right time. I’m getting a real antidotal sense that we are turning on a dime to domestic consumption preference. My hat is off to you Ed and Roger—one of the best DB to date!
  • BB
    Bob B.
    22 May 2020 @ 01:43
    On the way to bankruptcy as partial restarts begin, prices will be pushed as higher. Supply side will be reduced which will find customers who will pay higher prices. Would this not start the change in price inflation psychology?
    • JW
      Jesse W.
      22 May 2020 @ 02:51
      I see what your saying but capacity utilization is so low that supply holes could be filled quickly. The likeliest form of inflation will be from dollar devaluing not supply/demand IMO.
  • NJ
    Nimitt J.
    22 May 2020 @ 02:19
    Even tech cos like IBM are cutting jobs today... Things are going the Raoul predicted.... https://www.wsj.com/articles/ibm-announces-first-job-cuts-under-new-chief-executive-11590113061?mod=djemalertNEWS
  • DP
    David P.
    22 May 2020 @ 02:13
    Very interesting take on the EU and the UK. I'm questioning though to which extent having a lower currency means having your industry and exports back. You end up having more and more players like the internet infrastructure stocks and luxury having insane pricing power that define the economy more and more. They become so powerful to a point that they are an hybrid economical/political entity that will one day encounter a political response. How likely is it then for the EU to try to get their own IT infrastructure companies and stop bleeding all the value accruded from the network effect on the other side of the pond.
  • CX
    Cindy X.
    22 May 2020 @ 01:10
    Unfortunately you guys talk about manufacturing returning to the US as if it already happened but gave no supports. Which company made the announcements? What I heard from companies was that they went to other Asian countries as well as Europe and only ended up going back to China because those countries are just poorly developed, people are not ready either, yes including Europe, very old infrastructure.
  • DB
    Donna B.
    22 May 2020 @ 00:32
    Roger has mentioned in several briefings that Amazon is a macro play. That it's the last stock investors will sell. This is worth mentioning often and is good signal to watch for market capitulation. Great job as always.
  • TS
    Thomas S.
    22 May 2020 @ 00:26
    Another great job Ed and Roger!
  • DR
    Derrick R.
    22 May 2020 @ 00:14
    What a great discussion, led by a very nice approach by Ed, to hone in on one aspect. It reminds me of one of my favorite quotes, “From one thing, know ten thousand things.“ Ed is walking through the chaos, slicing into it with a samurai sword. Bravo!
  • SL
    Steven L.
    22 May 2020 @ 00:03
    With major countries in the world seemingly in a bind and having to weaken their currencies en mass; does the USD remain stronger for longer and continue to drag the world economies and especially EM down. At some point doesn't the US market crack despite the feds jawboning and unlimited backstops. What motivates Powell at this point, e.g., politics, institutional imperative, last gasps of the reserve currency, fear of the unknown old world order collapse. We seem to be living in the land of the absurd. Political and financial leaders are lost (even without Cov19). Emperor's with no clothes abound. But do enjoy the Daily briefings. Thanks!
  • HR
    Humberto R.
    21 May 2020 @ 23:37
    Great job keeping the focus on one particular broad outcome and playing out the various follow on effects.
  • RA
    Ron A.
    21 May 2020 @ 23:14
    Terrific discussion, thanks. The complexities about what we’re facing are breathtaking. Nick, Ed and Roger are fearless investigators into this new world. I don’t think most of us human beings have a scintilla of understanding of how mind-warping and traumatic our future is going to be; that’s why I love the Daily Briefing. Keep it rocking! P.S.: I love the mental realignment to on-shoring and automation but the fruits of our labors will take many years and, meanwhile, what about the dispossessed new millions living in cardboard boxes?
  • Jv
    Jasper v.
    21 May 2020 @ 22:49
    Agree with almost everything but if the inequality grows then most people need cheap products to consume (can not afford the expensive meat from the butcher around the block). How do you think people are going to consume if inequality grows? Do we need products from emerging markets just because they are cheap?
  • mn
    marcus n.
    21 May 2020 @ 22:27
    Curious what happens with the S&P after the re-balancing June 19th