Daily Briefing – October 19, 2020

Published on
October 19th, 2020
35 minutes

Daily Briefing – October 19, 2020

Daily Briefing ·
Featuring Jack Farley, Ash Bennington, and Ed Harrison

Published on: October 19th, 2020 • Duration: 35 minutes

Senior editor, Ash Bennington, is joined by managing editor, Ed Harrison, to interpret how the rising COVID-19 infections in Europe and the U.S. will impact markets. Ed conducts a deep dive on best practices for containing the virus while mitigating the economic damage, reviewing protocols in Norway, Sweden, Belgium, and New Zealand, and Ash looks at how China’s remarkable GDP growth could be related to its own containment strategy. Ed gives a sneak peek of his upcoming interview with legendary value investor Joel Greenblatt while Ash tells viewers about Real Vision CEO Raoul Pal’s surprise update on Bitcoin and central bank digital currencies (CBDCs). Lastly, Ed and Ash discuss signs of stress emanating from the New York commercial real estate market. In the intro, editor Jack Farley gives a snapshot of today’s price action and looks at NASDAQ futures contracts and Royal Caribbean Cruises’ recent convertible bond deal.



  • JA
    JOSE A.
    23 October 2020 @ 00:15
    OMG!!! https://memegenerator.net/instance/76755333/cuserstfrandesktoplooking-good-billy-ray-feeling-good-louis-looking-good-billy-ray-feeling-good-loui
  • PW
    Paul W.
    20 October 2020 @ 12:07
    Nobody talks about the relative success of most African countries in containing the virus to date. Overall, I think it is too early to debate who successfully managed the virus. We are still in the midst of the pandemic and it will also tale awhile to judge secondary and tertiary effects of different strategies. Time will tell.
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 13:45
      The purpose of talking about successful pandemic management is to pinpoint economic outcomes. My premise is that successful strategies will have enough of an economic impact that we should care which countries succeed and which don't. On Africa, we have been less interested because of their relative (un)importance economically. For me personally, it matters because there is a significant gap between Africans and people of a majority African descent in the US and the northern hemisphere more broadly. If I want to be safe and keep my family safe, I'd like to know why. There are four (mutually inclusive) broad hypotheses: 1. Africa's population is younger 2. Africa's population is thinner and therefore has fewer comorbidities 3. Africa is hotter and that holds the virus at bay 4. Africans receive more sunlight and Vitamin D, which is helpful in thwarting the virus
    • AB
      Alastair B.
      20 October 2020 @ 15:01
      Perhaps diet? Less processed food may be a factor. This would also explain why Asia has fared better than the west
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 17:40
      Alastair, definitely diet. I am assuming that diet also increases comorbidity (like heart disease, obesity, hypertension, blood pressure, diabetes, chronic inflammation). So you would see that factor show up there.
    • SS
      Steven S.
      21 October 2020 @ 00:45
      Africans are younger and have lower risk factors like high BMI, but I think we just don't know how well many areas in Africa are doing. There's very little testing and no way to assess excess mortality in an accurate manner. The same argument was made about India a few months ago. You're also right, Ed, that African Americans certainly have lower Vit D levels and higher rates of metabolic dysfunction than Africans, but they also are tested at dramatically higher rates and probably spend more time in enclosed areas (like all Americans) compared to Africans. With regard to endogenous factors that impact severity, it looks like IFNAR-mediated signaling, bradykinin cascades and cross reactivity to prior CoVs are the most promising ideas right now. Well, you are unlikely to carry the Chr 3 variant that predisposes to severe COVID-19, Ed. So, that's good news. Keep cycling and keep yourself and your family safe, Ed.
    • BB
      Benjamin B.
      22 October 2020 @ 13:52
      #1 and 2 seem likely. Vitamin D is supplemented in the US in many food products so it seems questionable whether Africans have higher levels simply due to increased sun exposure. How about limited mobility reducing transmission rates? Bet that and the lack of testing are the two largest factors by far.
  • CT
    Chris T.
    20 October 2020 @ 09:03
    Sweden.. come on guys. Why would you compare Swedens covid deaths vs other countries rather than using a logical like for like of comparing vs previous years. You will find that they have "performed" in line with prior years and 2020 does not stand out in the past 20 years as a year of notable amount of deaths. Common sense data analysis seems to have gone completely out of the window with covid.
    • CT
      Chris T.
      21 October 2020 @ 06:45
  • MT
    Mark T.
    20 October 2020 @ 15:21
    Much fewer obese people in Asia vs America.
    • JC
      JESSICA C.
      21 October 2020 @ 00:22
  • HK
    H K.
    20 October 2020 @ 20:10
    I came across a great piece of analysis on the virus in John Hempton's September Bronte newsletter. Explains the Sweden vs China vs Australia vs US outcomes unlike anything else I read. Would be worth checking it out, Ed. P.S. also might be great to have him come for an interview and talk about his thoughts on everything from algae manufacturers to his covid response model
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 23:04
      Thanks for the tip. I know John and have been trying to get him on for a while now. Let me give him another shout
  • AR
    Andrew R.
    20 October 2020 @ 22:50
    The Monday Ash & Ed Show never disappoints.
  • SJ
    Sean J.
    20 October 2020 @ 19:29
    Rolling my eyes on Cases...DEATHS are all that matter. I know plenty of infected cases. Thankfully all recovered. Deaths are so tiny as to be comparable to the flu if under the age of 70. Mutations of Coronaviruses become LESS virulent over time. Their called “common colds”. Dig deeper boys.
  • RC
    Robert C.
    20 October 2020 @ 05:58
    Ash/Ed I highly encourage to interview someone on the ground in New Zealand about our COVID-19 response. I keep seeing the commentary point to New Zealand being an island and that made it easy to reduce the risk of COVID-19. While this has contributed to lowering the ongoing risk, the key thing to note is that we like many other countries had cases of community transmission. It was our response to go into lockdown early and providing appropriate messaging to the public that made sure that we eliminated the initial wave of COVID-19 as well as learning from this to reduce the impact of the second wave of COVID-19.
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 11:32
      I am aware of that as I write about it. It’s difficult to convey the totality off ones thinking in video format extemporaneously. Successful mitigation is dependent in testing, quarantine, contact tracing and social distancing as a bulwark against force by the state. But if the state is forced to lock down like Wales, they should do it early like New Westland and not late like Wales.
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 14:14
      Robert, sorry for the broken English reply earlier. Auto-correct goes haywire. I am on a laptop now though. I agree with you that New Zealand has been a model for community transmission minimization protocols. Overall, you have to test, quarantine and contact trace to be able to run an effective mitigation strategy. If you don't, eventually you will get lots of community transmission and be forced to decide how quickly to shut down. New Zealand shuts down early too, which minimizes the ability of the virus to spread and paradoxically has allowed you lot to have MORE freedom rather than less. We see that in pictures of normal social interactions coming back to us during your recent election. I wrote an outline of how I am thinking about it in April that I just moved in front of the paywall for you. Here's the link https://pro.creditwritedowns.com/p/how-do-we-achieve-minimal-economic I will probably update this in some capacity. But I do see a trade-off in western democracies between freedom, public health and economic growth. All three are considerations for policy in an environment where different populations have different and idiosyncratic triggers for pushback against government mandates. Cheers, Ed
    • RC
      Robert C.
      20 October 2020 @ 18:59
      Thanks for the balanced response Ed. I agree with your points about the juggling act between the various factors of freedoms, health and economic growth and the appetite for this differs from one country to another. My point of contention is that people looking from the outside have dismissed all the other factors that have come into it (which you have rightly acknowledged) and narrowed it to New Zealand being an island. What I was attempting to do is start a discourse that attempts to expand the knowledge base by providing an on the ground description of what is going on. I worked pretty closely in supporting the government response, so my aim is to educate on all the successful factors that work as opposed to a debate about who is right or wrong. Robert.
  • AR
    Albert R.
    20 October 2020 @ 00:20
    I do not completely trust what China reports for GDP. Is there some independent 3rd party that verifies the numbers? I don't believe so since the CCP controls everything that comes out of China. China has had an extremely difficult year - including massive floods and drought. I can't imagine how that wouldn't have an impact. In addition, since the rest of the world is still struggling with COVID, wouldn't that impact the ability to get the raw materials and inputs required to have such an impressive GDP?
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 00:39
      The exact numbers aren’t as important as the direction, the change in growth level
    • TR
      Theodore R.
      20 October 2020 @ 02:44
      Ed, agreed. However, wouldn’t the Chinese know exactly that?
    • AB
      Alastair B.
      20 October 2020 @ 03:39
      No, they may not. Their political and economic system is extremely opaque, even for insiders. Over-reporting of GDP statistics and other indicators is common within the different levels of the bureaucracy, and each level has its own code of silence / social responsibility that makes going outside the chain of command uncommon. This is why there is the move towards big data harvesting / social credit scores / digital Yuan - it is so the national government actually has national data, as the data they get from the regional level is not reliable.
    • SJ
      Sean J.
      20 October 2020 @ 17:31
      Agreed, Albert. Ed quoting the NYT and praising the Chinese for “taking COVID seriously” signals quite a bit. Massive grain of salt for the praise of Communists who released this pandemic on the world. The Swedes took a different tact (though with a wiser population) and seem to be recovering nicely, yes? Their data I find far more reliable, but I’m just a fiscal conservative Gen-X’er, so what do I know?
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 17:44
      Sean, I don't think it 'signals' anything. Remember, the Chinese are an authoritarian regime no one in the west wants to emulate. Freedom is a factor that can't be quantified in determining how we respond to public health emergencies. But I personally rate freedom very, very high, which is why I see benefits in the way the Swedes think about the virus.
  • SL
    Sean L.
    20 October 2020 @ 03:10
    Sweden is definitely the country the western world should be following. The pandemic is over there - virtually zero deaths since May. This emphasis on case numbers is the big problem. Only a very small % of the population will die from the disease. The sooner we wake up to this the better
    • PC
      Paul C.
      20 October 2020 @ 03:50
      Well said, Sean
    • SJ
      Sean J.
      20 October 2020 @ 17:35
      Bravo. All thinking people are saying this. Sadly, too many decisions are being made by leftist partisans, hell bent on embarrassing their counterparts, who have decided to cherry pick selected grains of science to support their narrative.
  • JD
    James D.
    20 October 2020 @ 08:12
    I'm glad you liked the t-shirt - there should be one for Ash too and it was originally ordered from Singapore....
    • SB
      Stewart B.
      20 October 2020 @ 09:41
      Love your work James.
    • EH
      Edward H. | Real Vision
      20 October 2020 @ 11:28
      Thank you, James, Thank you. I love the shirt.
    • AB
      Ash B. | Real Vision
      20 October 2020 @ 11:54
      Thank you, James! I'm very excited to get mine!
    • CM
      Cory M.
      20 October 2020 @ 15:08
      Great James. Clearly you are the reason for the Asian economic recovery.
  • SS
    Steven S.
    20 October 2020 @ 10:53
    Not only is the mutation rate substantial (although lower than many other RNA viruses), but it's important to keep in mind that CoVs recombine. If we get a recombinant with SARS2 and another CoV, we could be really screwed.
  • SB
    Stewart B.
    20 October 2020 @ 09:00
    Great work. When comparing the success or not of Covid policies, we should be careful to define the objective. IMHO it should not just be how quickly deaths are brought under control, or how well the sick are helped, but maintaining LIBERTY should also be considered. Consider for a moment smoking and alcohol usage. We know that both of these are unhealthy and can lead to premature death. BUT our politicians do not ban these. This is because they respect our liberty. Similarly, when you lock someone in their bedroom for months with a laptop, you destroy a person's liberty. On top of that you exacerbate other problems such as domestic abuse, child abuse, narcotics abuse, depression, anxiety, suicide, etc. And you also destroy the pleasure that person receives out of life. You are also often destroying livelihoods, especially for small business owners. Picture for a moment those people who are living in tiny studio flats, or large flat shares. Our politicians have made life pure hell for these people. My point is that even if a State was able to bring down Covid cases rapidly, if they have done at the barrel of a gun, then to me that is still a failure. IMHO people should be encouraged to be safe and sensible with Covid, wear masks where possible, stay well rested and use track and trace. But these should be common sense and by the choice of the individual. Some of the draconian responses by governments have been unforgivable. Just as it is my choice whether I smoke a cigarette or not, it is also my choice as to who I have into my own home, and for how long. I wouldn't want to live in Maoist China for all the Covid immunity in the world!
    • SB
      Stewart B.
      20 October 2020 @ 09:37
      I forgot to mention how much education people have missed and the disruption to medical facilities. Here in the UK, despite hospitals well below capacity, it is near impossible to get a GP's appointment, and nearly all non-urgent surgery has been suspended. How many extra deaths has this lead to? And, despite all of the pain that lockdowns have created, a large number of people are still getting Covid19! So, it's not just a question of trading getting Covid19, for the dozens of other negatives associated with lockdowns, but this tradeoff doesn't even guarantee that you won't get Covid19. Consider how you might feel after two years. In scenario one, you have had six lockdowns, each lasting a month or two, and nearly everything good in life has been screwed up, and despite this you still may have contracted Covid19. Then consider scenario two, where most good things in life were kept, you maintained liberty, people were encouraged to be sensible, and the only price you paid was perhaps a slightly higher chance of getting a virus (with a very low mortality rate). In hindsight, I suspect most people would have chosen scenario two.
    • SB
      Stewart B.
      20 October 2020 @ 10:09
      So, what all of that means is that even if Sweden has comparable Covid19 cases to the rest of Europe, and has done so without removing individual liberties, then that was very much the most successful policy!
  • GL
    Grant L.
    20 October 2020 @ 08:26
    Trading Places!
  • JC
    John C.
    20 October 2020 @ 07:02
    Not sure I believe Ed's China argument. China has had this virus since late November 2019 and it speread throughout the country. They locked people in their homes to die early on and suppressed any information about it getting out. They seem to have just let the disease run its course in order to get to a form of herd immunity, deaths be damned. If that is indeed true, then the argument should focus on that fact and how it differs fron how most Western countries are tackling the pandemic. Ireland shutting down again while Wuhan is almost fully open makes zero sense and the answer is clearly not 'China eradicated the virus'
  • RT
    Rupert T.
    19 October 2020 @ 22:34
    Nearly 25% of the New Zealand economy is International tourism - not to mention all the money those service providers spend - so NZ demolished it's economy. You're spouting the party line - it's nonsense.
    • RM
      Robert M.
      20 October 2020 @ 00:15
      In Nashville, tourism revenues expected to decline 40% this year. Believe this is true around the world, whether your economy is open or not.
    • JF
      John F.
      20 October 2020 @ 04:08
      The contribution from international tourism in NZ is being replaced by a bigger domestic boom in tourism. Associated sales of boats, RVs etc also booming.
    • RC
      Robert C.
      20 October 2020 @ 05:52
      Sorry that is factually incorrect. Tourism generates a direct annual contribution to GDP of $16.2 billion, or 5.8% as per https://www.stats.govt.nz/news/tourism-expenditure-tops-40-billion. Also the international tourism market is being replaced by more domestic tourism as per the domestic card spend data https://www.stats.govt.nz/news/post-lockdown-retail-card-spending-picks-up. While the domestic tourism does not replace that lost by international tourism, it is no where near what you are making it out to be.
  • BD
    Bruce D.
    20 October 2020 @ 05:31
    Vietnam borders China and is not an island.
  • BD
    Bruce D.
    20 October 2020 @ 05:17
    How come you and other talking heads don't mention Vietnam which has done the best job in the world with a population of almost 100 million.
  • BZ
    Bert Z.
    20 October 2020 @ 00:03
    You spoke about regions in the western world that have successfully controlled the spread of the virus... check out British Columbia under Dr. Bonnie Henry, BC's Public Health Officer. She has led the province by making us all understand that we are partners to combatting COVID-19. Businesses are open and we never really went into total lockdown.
    • rm
      ryan m.
      20 October 2020 @ 04:16
      Yes, we did
  • AB
    Alastair B.
    20 October 2020 @ 03:48
    A 1-2 hour wait for the popular restaurant in the mall at dinner time in China is normal pre-COVID. That this is happening is a good sign of a return to normality.
  • JA
    Jordan A.
    20 October 2020 @ 01:11
    My best friend teaches English in China. They don't wear masks, they don't practice physical or social distancing, and they share food from the same platter. I don't get it what do they know that we don't?
    • AB
      Alastair B.
      20 October 2020 @ 03:35
      How to stay inside for a month, apparently. I have lots of friends in China. They are worried and sure the virus will come back at some point - people aren’t immune there - but in the meantime there is no need for undue precautions. The border control measures are effective for now.
  • pk
    philip k.
    20 October 2020 @ 01:37
    COVID19 has made a mockery of American Exceptionalism.
    • PP
      Patrick P.
      20 October 2020 @ 03:09
      Phillip... nice try using Covid19 as your example.... obviously a small thinker.
  • RA
    Robert A.
    20 October 2020 @ 02:42
    Love a little back and forth.....Ash, I don’t mind you playing the “fob” every now and again, but with the cogent accurate explanatory you can pull up instantaneously your “aw chucks” patois is wearing thin. You sit with that honking Jim Dandy passive aggressive Stratocaster off your port bow...and then can’t/won’t engage with Lewis? ....your like Maverick in “Top Gun”.....come on Billy Ray engage. BTW, Lewis I thank you for the Sunderland “Till I Die” Show heads up. My wife and I have never been into European football, but after the second episode of Season One we are hooked!....Oh....and the DB today was excellent .
  • dh
    daniel h.
    20 October 2020 @ 02:36
    forget all the intellectual back and forth. solid work on the trading places line. you catch ash off guard every time. I got Steve Vai to say it last month and the internet lost it's mind.
  • MM
    Martin M.
    20 October 2020 @ 02:26
    Hey Guys, always appreciate your commentary. Just a bit surprised that you accept China's data without acknowledging what I believe we know about their propensity to misreport. Politically-speaking, if they were ever inspired to "misreport" this would be the time, don't you think? Much of what we know about present global general conditions I think justifies at least a modicum of skepticism...
  • NN
    Ninh N.
    19 October 2020 @ 22:24
    Frozen Orange Juice Concentrate, short it.
    • SP
      Saxon P.
      19 October 2020 @ 23:54
      Ask Clarence Beeks
    • RT
      Richard T.
      20 October 2020 @ 01:00
      Yes, but why
  • AG
    Anthony G.
    20 October 2020 @ 00:34
    Regurgitating Chinese economic statistics without qualification is unprofessional journalism. Please provide context.
  • DG
    David G.
    20 October 2020 @ 00:16
    Insolvency phase? Lets be clear, are you talking about government insolvency, and a massive deleveraging world over, or a phase where business go belly up? Can Rao put deeper context on his usage of the word insolvency for us Plus subscribers and non professionals please. Will it be limited to individuals and businesses, or will it extent to central banks, and governments?
  • TS
    Tom S.
    19 October 2020 @ 23:51
    Definitely not an expert, but here's what I've heard about virus mutation: A virus may mutate in unpredictable ways. However, the lower the fatality rate of a specific mutant (i.e. the longer the infected victim survives), the more time and opportunity for the strain to reproduce and mutate into similar strains, giving higher probabilities to improved aggregate survivability of victims over time. Anyone care to collaborate or counter?
    • RM
      Robert M.
      20 October 2020 @ 00:12
      Have seen this statement made by a number of medical experts. Descendants of the 1918 influenza virus still circulate today and are included in the flu shot. It evolved to a less deadly state. There are already a number of versions of Covid circulating in the US.
  • HR
    Humberto R.
    19 October 2020 @ 23:26
    Can someone please clarify how is it that China is growing, and even more than last year, when the world economy (trade, etc) has been slowing since 2017/2018 and most other countries that import their stuff are experiencing recessions? Something doesn't add up. Maybe they are cranking all their factories and building inventories in the hopes that the other major countries come out of their recessions? In that case can we really consider it real growth?
    • RM
      Robert M.
      19 October 2020 @ 23:52
      Possibly inventory rebuilding in all their export countries. Domestically, looks like they are open for business with no virus concerns. But with China, have never trusted their numbers.
  • sc
    sung c.
    19 October 2020 @ 23:08
    It's clear the "Insolvency Phase" is coming to fruition as Raoul Pal had spoken of. The IMF meeting today regarding "a Bretton Wood moment" and Powell speaking about digital currency at that meeting today, when only one year ago, all of those in the meeting refused to even acknowledge any crypto and/or digital currency of any type as a valid possibility, indicates how far the world central bankers have come to realizing/admitting that the world is indeed much further along in degradation and insolvency then they were willing to admit just one year ago.
  • DT
    David T.
    19 October 2020 @ 22:57
    What is going on the equity and bond markets? Something is brewing.
  • NL
    Nikola L.
    19 October 2020 @ 22:42
    super fast test kit will get the job done. Test Kit that can spit results on the spot inside 5min. Clubs, Restaurants, Cinemas, Airlines.. all can use it. Also, Governments world over need to strike a deal with Travel Insurance companies so travelers can be covered by meaningful insurance policy.
  • GV
    Gunnar V.
    19 October 2020 @ 22:32
    I think Ed's hair looks the best yet in this video