Wealth vs Health Battle
We appear to be seeing this battle ramp up today.
The S&P market technically hit its macro rebound point yesterday and failed, closing lower. This morning we are back higher trying a retest.
We have an administration that unabashedly weighs wealth first.
On the positive side, IHME, The Institute for Health Metrics, a University of Washington group has kind of moved to the top in providing Corona Virus information. They made some big changes to their model last weekend and based on that new model their projection of deaths by August 4, has come down from 93,000 on the old model to 60,000 on the new model today. That is a reason for hope here, but it is recognized that the drop has been primarily due to isolation in place. No one knows what will happen if isolation opens up. For myself, at age 77, I know that my wife and I will wait three weeks after Washington opens thing up again, in order to see what happens.
Here is a little research we came across yesterday. As more information builds for the Corona Virus crisis a few broad statements.
- As information on race and location develop it becomes apparent that this goes beyond the virus itself, and is really an indictment of the broad inequality in both wealth and healthcare that persists in the US. The poor who tend strongly to have less access to good health environments make up the majority of the COVID 19 cases and deaths.
- Secondly, it appears that an anti-body test will start to create a database of people who have had COVID 19 and thus would be immune to it. These immune people would be the safest bet to work in essential health and food service environments.
- Researchers are saying that anti-bodies from one person can be used to innoculate around 4 other people to make them immune. The problem, based on limited anti-body testing is that less than 5 percent, maybe as low as 2 percent of the general population tested, show that they have had COVID 19. Extrapolating from that info, at the moment only maybe 8 to 10 % of the total population could be immunized at this moment.
- How this plays out will be really a function of the equation that pits the goals of the few, the maybe 30 percent that are tied to the wealthy in the Whitehouse and Wall Street, versus the many, in the bottom 70 percent of the population. Will Health beat out Wealth, or vice versa?
- Issues that jump to the front are: a) social distancing is working; b) but going back to an open environment and only having 2 percent of the population immune, will open the general population to an even bigger crisis down the road; c) so does the country have the patience to wait to collect enough antibodies by multiple collections ?
Back to the Markets.
How the market acts going forward may be more attuned to expected earnings. Most guesses at the moment are looking at 20 to 30 percent down. If that is the case, the market is quite rich at the moment.
The second question is how this virus event has affected the population life view. Is this a potential demand reset for the consumer economy that has dominated for the past 50 years?
- So this will get wild for the next two or three days