It is said an Eastern monarch once charged his wise men to invent him a sentence to be ever in view, and which should be true and appropriate in all times and situations. They presented him the words, “And this too, shall pass away.” How much it expresses! How chastening in the hour of pride! How consoling in the depths of affliction!
Abraham Lincoln

At a time such as this, with double or even triple doses of concerning news daily, a little perspective can go a long way.

As troubling as the rapid descent of stocks into a bear market has been, and as much as it can preoccupy investors, we all need to think first about our health and the health of our loved ones. Covid-19, the disease caused by the coronavirus that emerged in China late last year, has been declared a pandemic. The speed at which the disease is spreading has led authorities to take strong measures, including school closures and cancellations of sporting events, on national and community levels.

The disruption to daily lives could be substantial all around the globe. Many in Asia have lived with such disruption, and heightened virus concerns, for several weeks already. It hasn’t been and it won’t be easy, but it’s necessary.

A new, short-term reality

Financial markets clearly are reflecting our new reality, recognizing that the strong response and medicine required to thwart Covid-19’s spread is also likely to blunt short-term economic growth. The result may be a mild U.S. recession, although if it ensues we believe it could be short. We also believe that recession risk is heightened in other developed markets.

In China, where activity is slowly getting back to normal, we expect GDP growth of around 5% in 2020, compared with a reported 6.1% for 2019, with risks to the downside as the coronavirus outbreak plays out among China’s global trading partners.

Read More:  https://vanguardblog.com/2020/03/16/perspective-in-a-challenging-time/

Wesbury 101 – Economic Video Commentary

Updated: 3/19/2020 5:40 pm

A “rainy day” fund is a reserved amount of money to be used in times when regular sources of income (or cash flow) are disrupted in order for typical operations to continue.

• Giant employers of lower-wage workers like McDonald’s and Starbucks spent and borrowed money for stock buybacks and dividends.
• Now companies are trying to tap credit to manage cash, avoid layoffs.
• Labor unions and experts say all that shareholder money could have gone to worker raises and to shore up the balance sheet during the bull market to better prepare for a financial downturn.
• The tax cuts of 2017 are also now being scrutinized.

Kitchen-table finance begins with one simple rule:

Have several months’ worth of expenses on hand, in cash, in case something unexpectedly goes wrong.

Some of America’s biggest employers are beginning to discover the truth of this maxim as the coronavirus crisis catches them short of cash just as business crashes. Together, the restaurant, leisure and hospitality, and airline industries account for about 17 million U.S. jobs.

To read more: Coronavirus crash shows major corporations broke No. 1 rule of personal finance

The Dow Jones dropped nearly 3,000 points Monday. For the Dow, the drop is its steepest decline as a result of the fear and panic created by the new coronavirus pandemic.

The decline reflects the fear that the emergency measures taken by the Federal Reserve may not be enough to ward off a coronavirus-induced U.S. recession and it underscores the level of worry among investors since the coronavirus pandemic escalated and disrupted supply chains, sidelined workers and infected tens of thousands of people outside China.

On Monday, the Trump Administration has advised Americans to self-quarantine and avoid congregating in groups larger than ten people in order to flatten the spread of the virus. Furthermore, the CDC recommended organizers to cancel or postpone in-person events that consist of 10 people or more throughout the United States for the next eight weeks. Examples of large events and mass gatherings include conferences, festivals, parades, concerts, sporting events, weddings, and other types of assemblies. These events can be planned not only by organizations and communities but also by individuals.

On Monday, Federal workers are urged to work from home and VP Pence this past weekend urged White House staff to wash hands, practice social distancing, avoid physical contact, clean and disinfect, and “Stay home if you’re sick!”

Pandemic compared to Seasonal Influenza

The seasonal influenza impacted 35 million Americans last year, causing over 490,000 hospitalizations and over 34,000 deaths according to the CDC. Without medicine or a vaccine, coronavirus has the potential to be more widespread and deadly than the flu.

Most individuals who contract COVID-19 will have mild to severe symptoms that resemble a cold or flu and will recover. However, a significant number will also require hospitalization. If these hospitalizations occur rapidly, it will overwhelm U.S. hospitals. For instance, emergency room visits for automobile accidents may be disrupted if our system is overcapacity. Therefore, it is imperative that we must limit the spread.

CDC Recommendations

The CDC has an aggressive response to identify potential cases of the new coronavirus and has activated its emergency operations center. The virus, known as COVID-19, is marked by respiratory problems that are usually mild but can be severe, especially in older adults and in people with underlying health conditions.

CDC guidance includes:

• Get a flu shot.
• Take flu antivirals if prescribed.
• Take everyday preventive actions to stop the spread of germs.
• Wash your hands often with soap and water for at least 20 seconds. An easy way to mark the time is to hum the “Happy Birthday” song from beginning to end twice while scrubbing.
• Use an alcohol-based hand sanitizer that contains at least 60% alcohol.
• Avoid touching your eyes, nose and mouth with unwashed hands.
• Avoid close contact with people who are sick.
• Stay home when you are sick or becoming sick.
• Cover your cough or sneeze with a tissue (not your hands) and throw the tissue in the trash.
• Clean and disinfect frequently touched objects and surfaces.

Additional practical precautions

• Do not travel while sick.
• Seek medical care right away if you have both symptoms of fever, cough and shortness of breath and have either recently returned from China or have direct exposure to others diagnosed with Novel Coronavirus Disease.
• Before going to a doctor’s office or emergency room, call ahead and tell them about your recent travel and your symptoms.
• If someone in your house has testified positive, keep the entire household at home. Do not go to work or school.
• If you are elderly, stay home and away from other people.
• If you have a serious underlying health condition, stay home and away from others.
• Avoid eating or drinking in restaurants, bars and food courts. Use drive-through, pickup and delivery options.
• Do not visit nursing homes or retirement or long-term care facilities unless to provide critical assistance.

Sources:

1. https://www.usatoday.com/story/news/politics/2020/03/16/coronavirus-trump-says-social-distancing-may-needed-through-august/5061517002/
2. https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

On Dec. 1, 2019, a patient in Wuhan, China, started showing symptoms of what doctors determined was a new coronavirus. Since then, the virus has spread to infect more than 100,000 people. Here’s how the virus grew to a global pandemic.

Source: Wall Street Journal

• Sustained community spread of respiratory illness caused by COVID-19 has been reported in many countries.
• Older adults and travelers with underlying health issues should avoid situations that put them at increased risk for more severe disease. This entails avoiding crowded places, avoiding non-essential travel such as long plane trips, and especially avoiding embarking on cruise ships.

Like many other viruses and influenza outbreaks, COVID-19 appears to spread more easily between people in close quarters. Person-to-person spread of COVID-19 is occurring across the globe and many countries are reporting both travel-related cases and community spread of the disease.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has conveyed that COVID-19 is deadlier than the flu. It’s deadlier for young adults. It’s deadlier for older adults. In China, early data shows that it was 10 times deadlier. This chart from Business Insider compares US flu deaths to deaths in China from COVID-19.

The seasonal flu kills less than 1% of infected people who are over age 65. By comparison, Chinese authorities reported that COVID-19 has killed 8% of those infected who were 70-79 and almost 15% of those infected who were age 80 or older. That’s a statistically significant difference.

Google’s Response to COVID-19

Google is working on a website for coronavirus testing, according an announcement by President Donald Trump on Friday. During the press conference announcing a state of emergency Friday afternoon, President announced that Google has their engineers working on developing a screening website.

The screening website from Google Verily will allow people to fill out a questionnaire and learn how they can get a test for the coronavirus. Americans will be able to learn from the websites more about risk factors and symptoms of coronavirus. It is anticipated that the U.S. would have 1.4 million coronavirus test kits available within a week and around 5 million kits within the next month.

The triaging tool from Verily will help people find COVID-19 testing sites in the U.S. The company says this tool will target the San Francisco Bay Area, though they hope to expand coverage to more regions. The move is part of a public-private partnership to dispense COVID-19 testing to “millions of Americans” in the weeks ahead at places like Target, Walgreens, CVS, and Walmart parking lots, according to U.S. Vice President Mike Pence.

Public health officials and authorities from effected countries have used AI as part of solutions to detect and fight COVID-19 since the novel coronavirus emerged in December 2019. Testing to confirm COVID-19 infection has been a critical part of response plans in other countries around the world.

Preventing Spread

It has become clear that people with underlying conditions such as heart disease, chronic lung disease, diabetes, and other conditions that cause suppression of immune system particularly among the older adults, are at a high risk of serious disease if infected with the novel coronavirus.

To best protect these vulnerable individuals, we recommend that such individuals avoid situations that increase their risk of acquiring infections. This entails avoiding crowded places, avoiding non-essential travel such as long plane trips, and especially avoiding embarking on cruise ships.

Sources:

1. https://www.cnbc.com/2020/03/13/google-creating-coronavirus-site-to-help-find-testing.html
2. https://www.businessinsider.com/we-have-to-stop-comparing-the-coronavirus-to-the-flu-2020-3?utm_source=facebook.com&utm_campaign=sf-bi-science&utm_medium=social
3. https://venturebeat.com/2020/03/13/google-is-building-covid-19-screening-website-as-trump-declares-national-emergency/

Common-sense investing insights we forget during stock-market panics

Many people seem to invest rationally, until the going gets tough. Then we often throw our reasoning out the window while making a mad dash for the exits.

It shouldn’t be like that. Here are some common-sense reminders that are worth heeding during volatile stretches in the stock market like now, with coronavirus anxiety seemingly everywhere.

You’re not going to lose everything

During times of heightened market turbulence, how often have you heard someone voice the fear of “losing everything” or getting “wiped out?” Sure, that’s a possibility, albeit remote, with an individual stock if the company suddenly gets hit with massive lawsuits, spirals toward bankruptcy or faces other cataclysmic obstacles.

But it’s not going to happen with broadly diversified mutual funds or exchange-traded funds, which have increasingly become investment mainstays. To lose everything in an index fund pegged to the Standard & Poor’s 500 index, for example, each of those 500 companies would need to go belly up for you to lose everything. That just isn’t going to happen.

Read more: https://apple.news/ALqODekypQVOlpEk_S7kndQ

Still much we don’t know about this global coronavirus pandemic.

These are challenging times as the world prepares for, and responds to, the worldwide novel coronavirus (COVID-19) pandemic.

Pandemic of Fear

Pandemic means sustained and continuous transmission of the disease, concurrently in more than three different geographical regions. Pandemic does not refer to the lethality of a virus but to its transmissibility and geographical extension.

What we certainly have is a pandemic of fear and uncertainty. The prescribed cure for the pandemic of fear and panic is not to rush to your local Costco or neighborhood grocery store to purchase a year’s worth of toilet paper. Instead, it’s to step away away from your television and keep everything in prospective. Additionally, it’s important to comprehend that it’s going to get better.

The health risks posed by COVID-19 are real and the short-term business impact has been significant. The economic and financial market consequences, however, are unlikely to be long term. In the short-term, we’re seeing the markets plummet as investors process that uncertainty and participate in panic selling.

Prospective, Faith, Poise and Process

Our thoughts go out to the people who have been affected by this unprecedented event and we appreciate the healthcare workers, local communities, and governments around the world who are on the proverbial tip of the spear working to contain this coronavirus.

The COVID-19 virus has required all of us to be more mindful as we go through our regular activities. Daily, we must ensure that we follow guidance from the CDC and WHO on hygiene and social distancing. We must address a broad spectrum of viruses, including COVID-19, by handwashing hygiene and cleaning common surfaces in our environment.

“This too will end” is a certainty. What is unknown is when this will end. And, as a results, fear and panic has assumed a death grip on the financial markets as well as on our daily lives. Many financial and health experts recommend taking a break from the television and constants dire news report.

80% cases mild

According to Chinese officials regarding the outbreak, about 80% of novel coronavirus cases are mild. Many of those effected experience only a fever or dry cough, while some show no symptoms at all. People who showed no symptoms or only mild symptoms may mean that many cases of the new coronavirus go unreported.

Older adults and people who have severe chronic medical conditions, like heart, lung, kidney disease, or diabetes, may be at higher risk for severe illness from COVID-19. If you or a loved one are at increased risk of getting COVID-19, take action now:

• Take care of your own health
• Stay home as much as possible
• Make a plan now in case you get sick
• Pay attention to what’s happening locally

https://bit.ly/2wM2X1m

The U.S. Department of State recommends travelers, especially older adults and those with underlying health issues, defer all cruise ship travel worldwide. COVID-19, like many other viral respiratory illnesses, appears to spread more easily between people in close quarters. Recent reports of COVID-19 on cruise ships highlight the risk of infection to passengers and crew.

See the newest travel advice: https://bit.ly/2TWsw7H

References:

1. https://theweek.com/articles/900400/coronavirus-really-black-swan-event