What are real reasons for Coronavirus hysterics and when it's over?

Subscribe

Hi, guys!

I think not only myself think that Coronavirus is not a real reason, but an instrument to achieve political/economical goals. Just look at how synchronized all mass media blown the topic.
So as my "5 cents" I have two hypotheses.
First, this is a new strike against China forcing it to follow US agenda, new "Opium war" with story-telling instead of gunboats.
Second, this was orchestrated by China itself to disguise a slowing economy problem. Looks like it's a matter of time when China will trigger a new big crisis and they decided that a decease crisis is better for them since they can refer to "Corona" as a force major for a year or even longer.

I understand that people who have real information on the subject will very unlikely speak it out. But I'm also pretty sure a lot of people are asking similar questions. If we have an understanding of the reasons, we can make reasonable assumptions when it's over and make our bets.
Who thinks what?

Region

Comments (13)

 
Most Helpful
Mar 13, 2020 - 2:26pm

Dude, you literally have no idea what are you're talking about, so let me fill you in. let me tell you why the stock market just plunged 20% over the course of 3 weeks because of the virus:
economic activity just fell off a cliff. No one is going to the theaters, amusment parks, casinos. and traveling as much anymore. This means less money for airlines, amusement parks, which are super levered. The airlines/hotels/casinos start defaulting on their interest payment, and as a result, start laying off people. These laid off people just lost their incomes, and will won't be spending anymore. This affect Boeing too, airlines don't want planes anymore. That means less parts from Boeing's suppliers are needed. Boeing suppliers start cutting production, and they lay off people. Rinse and repeat. We're already in a recession, or close to a recession. As long as people are social distancing themselves now and the virus remains out of control, economic activity will be demolished.

\Now imagine a scenario out retardo president can't keep it under control and denies the reality of the situation. People will be more worred about living, then actually going to work. This could end as a severe depression in the worst case

 
  • Intern in IB - Gen
Mar 13, 2020 - 2:30pm

lol I hope there are more people like you who are panicking over nothing, Im already minting money in my brokerage account from fools who were over extended and over leveraged and got caught with this oversold market.

KEEP IT COMING, im eating vol for breakfast, lunch and dinner

 
Mar 13, 2020 - 2:46pm

Cause of Hysteria: Social Media

Social Media Stats at time of H1N1 vs COVID-19

  • 3 to 4x as many social media users
  • 6x social media activity

Players on the Phillies were playing in the World Series with swine flu vs. the NBA potentially cancelling it’s season

World leaders, CEOs, commissioners, no one is immune to the constant feed of irrational behavior that we cemented into our culture over the past 10 years

Array
 
Mar 13, 2020 - 5:20pm

The modern US economy is 73% consumer spending

people pay other people to do things they could do for themselves...for 10x the cost (restaurants, bars, etc...)

Why...the well-off pay the poor to make their lives more convenient...and the govt taxes that transaction.

Why? It's all about getting people to spend more and work more so we can buy more aircraft carriers at the end of the day.

Companies are highly leveraged...large loans..paying high rent to the owners of capital and land...to sell these services to the public. When that economic activity slows down (or god forbid - stops) then borrowers of money don't have enough income to pay their interest expense and other fixed costs. If a company is on the edge (shale oil drillers, restaurants, etc..) they will default on a loan or lease somewhere leading to bankruptcy. The federal govt can't bailout everybody.

Why bail out cruise lines..they aren't even US companies
Royal Caribbean is a Liberian corporation and Carnival is Panamanian.
Majority of cruise line employees are from the Philippines.

so, all in all...velocity of spending money has been, and will continue to be reduced...less income for companies... = stock prices lower.

Start Discussion

Total Avg Compensation

September 2020 Hedge Fund

  • Vice President (18) $520
  • Director/MD (10) $359
  • Portfolio Manager (7) $297
  • 3rd+ Year Associate (18) $269
  • 2nd Year Associate (25) $242
  • Engineer/Quant (45) $238
  • 1st Year Associate (58) $189
  • Analysts (175) $167
  • Intern/Summer Associate (12) $134
  • Junior Trader (5) $102
  • Intern/Summer Analyst (183) $80

Leaderboard See all

1
Jamoldo's picture
Jamoldo
98.3
2
LonLonMilk's picture
LonLonMilk
98.3
3
Secyh62's picture
Secyh62
98.2
4
CompBanker's picture
CompBanker
97.8
5
Addinator's picture
Addinator
97.6
6
Edifice's picture
Edifice
97.6
7
redever's picture
redever
97.6
8
frgna's picture
frgna
97.5
9
NuckFuts's picture
NuckFuts
97.5
10
bolo up's picture
bolo up
97.4