With the Dow set to open on the downside this morning, and with a possible test of S&P 1,900 out there, we have to scan the headlines – as we do every morning – and try to anticipate what’s the BEST news that could happen to the markets and what’s the WORST?
It’s only in the testing stage at the moment, but Mt. Sinai in NYC is looking at a case where a patient came in last night who had recently traveled to West Africa.
Not like the US is alone: Saudi Arabia is testing for a possible case.
In an absolute worst-caser, this person would have had a Ro of 3 to 10. 1.6 is what’s needed to cross the pandemic threshold.
So in addition to all our economic numbers, we need to add this little critter “Ro” to our thinking.
Probably one of the best/most simple ways to look at Ro is borrow this definition from the Medical Center for Public Health Preparedness where it’s explained that Ro means the basic reproductive rate of a disease (which is generally secondary infection rates):
Ro is calculated using the formula Ro = C * P * D
- C = the number of contacts the infectious person makes per unit time (day, week, month, etc.)
- P = the probability of transmission per contact with the infectious person
- D = the duration that the infected person is infectious to others
And in tomorrow’s Peoplenomics.com report, we will be working out from Ro I which would be the Reproductive rate over various incubation periods (the sub i part).
All of which leads to some interesting financial possibilities, since growth is the Holy Grail of markets. And, since markets generally try to discount prices as much as 18 months in the future (though some research says shorter periods like 9 months) we’re looking at a situation where we may see some market “information asymmetry” develop and that’s the kind of stuff that causes markets to act “out of channel.”
This would especially be the case when the markets are at nearly bubble-like levels. What could be better for Wall Str. that for some plague, or other, to wander along just to be blamed as the latest “exogenous event” that will replace greed and avarice of the top 1% with a fine bastion of plausible deniability behind which to secret their profits?
Ah…but more tomorrow as we pass out the spreadsheets and ponder some of the other major problems ahead for the economy. But economic impacts of a pandemic shutdown – gets to be an interesting modeling problem, does it not?
When the World Bank says it’s putting up a $200 million Ebola fund, I think you you can bet your bippy that the potential economic loss is at least ten – and maybe a thousand times – that amount if this thing gets out of hand.
If it hasn’t already…but we won’t know that for three weeks.
Meantime, the U.S.-African business conference is expected to hear how US corporate investment in Africa will be $14-billion….but plans can drift, as I’m sure we’ll find over time.
Truce or Consequences
72 hours of no shooting is supposed to be getting underway in Israel/Gaza this morning. Israel has begun to withdraw troops, but we have to shy away from bets that this will last longer than another 10-seconds.
Peace is never good for the market, and true to form, the futures are down. Down 55 on the Dow futures.
More after this…
Let’s Beat Up Putin
Yes, looks like yet another round of the media beating down Vlad Putin is ramping up.
Reason for the observation?
Officials? Oh, that would be the US officials, of course. And all anyone has to do in order to get face time as an expert is to come up with new and clever ways to diss Putin.
After all, we can’t call him a dirty commie anymore, and dirty competing capitalist wouldn’t do, nor would it make sense to slam him for wanting Ukraine to pay for natural gas shipments, since we’re in a country where the water’s getting turned off for Detroiters for less.
So with a lack of substance, let’s roll with the demon magazine covers and without waiting for details, criticize his policies in Ukraine. I mean, doesn’t he understand that the EU needs another financial victim in order to become genuinely “too big to fail?”
While it could be pictured that refuge ranks are swollen by Russian policy, we have to remember that Ukraine didn’t have refugees until the EU told Russia the had designs all the way to Vladivostok and the US passed out cookies to the angry right in the west of the country.
But now? Refugees are on the rise…yet it takes two to tangle. Or, three if we include the baker of those cookies.
But Are Things Are Looking Up?
Look…up into space where, our retired wargamer known as warhammer notices that China is starting to sound like an up and coming property owner…
Good morning, George
Is China suddenly interested in ‘owning space?’
When I read stuff like this, it reminds me of the 1980s and the last days of the Cold War, with Russia and the U.S. flushing huge amounts of resources on anti-satellite capabilities.
We know the Chinese have already tested ASAT in orbit, and the ISS is regularly encountering the shrapnel from this ill-planned exercise. The purpose of these demonstrations seems more in the “we can do this” column that the “we’re going to do this” one – a demonstration of capability intended to serve as a deterrent to competing nation/states and multi-national industries.
As that sums up the full spectrum of problems facing this great nation: We have problems from the telescope to the microscope and everything in-between.