Listen to the podcast below to hear about this week’s update, the pandemic, our thoughts about the economy, and some positive news.
July 21, 2020
Listen to the podcast below to hear about this week’s update, the pandemic, our thoughts about the economy, and some positive news.
Hi Everyone,
History fascinates me and frequently it repeats itself, we just never know when. And as Yogi Berra once said, “it is deja vous all over again.”
San Francisco was ahead of the other cities. The first flu case was identified in October and with contact tracing, the man was quarantined but it was too late. One case jumped to 169 which jumped to 2,000. Close the entertainment parks, public events, businesses, social gatherings, places of worship and schools. Social distance, wear a mask. Those who serve the public must wear a mask. Anyone who didn’t was a “slacker” said the ad from the American Red Cross. Masks are available for 10 cents. If you don’t wear a mask, you are fined $10.
After a few weeks, the new cases declined substantially. no longer taxing the health care system. A month later – freedom for the citizens. Masks are off and social gathering occurs. But wait. The cases are going up again, said Dr. William Hassler, the public health officer. Time to reinstate masks and social distancing. We opened too soon.
No more said the Anti-Mask League. A small but vocal group. More citizens said no to reinstatement of masks and distancing. It is too much trouble. We already wore masks and social distanced. The economy is declining and Christmas is coming. The editorial headline in the S.F. Chronicle said “The Epidemic has Passed.”
By not maintaining the wearing of masks and social distancing, the cases reached 45,000 and over 3,000 people died. San Francisco compared to other cities of the similar size was one of the hardest hit.
You guessed it, this was October 1918.
Re-opening to quickly caused a resurgence of the flu, said Alex Navarro. He is the current assistant director of the Center for the History of Medicine at the University of Michigan.
As I said, “deja vous all over again.”
By the way, the flu was actually traced to Fort Riley in Haskell County, Kansas. It then went overseas as soldiers moved to Europe for World War I.. It is estimated that the flu killed 3-5% of the world population. Oh, and the current price for a citation in Los Angeles for not wearing a mask is $300. How’s that for inflation?
So here we are today. Dr. Fauci said, “if it looks like you’re overreacting, you’re probably doing the right thing.”
I’m sorry to sound judgmental but I don’t understand why people are not taking this seriously. Do they think it isn’t going to happen to them? Their bad behavior is a danger to all of us. It seems that we are repeating the mistakes of 100 years ago and Americans haven’t changed. I heard this morning one member of the California legislature calling for a hard close again.
Moving along to the economy and markets, at the time of this recording, the stock market continues to rise. However, according to a July 14th article in the Wall Street Journal, the largest U.S. banks are waiting for the second shoe to drop. They feel the worst is yet to come.
They have suspended credit card and other loan payments but expect that they may never get paid. Billions of dollars are being placed in reserve anticipating the need to write off the loans.
The interest rates have been low for so long, consumers and companies alike added debt because the money was cheap. It works well the economy is healthy, but not in a declining one. The money isn’t there to service the loan.
We are waiting to see what the next stimulus bill will look like but Congress has yet to pass one.
Even after the Spanish flu, our economy came back and flourished – think the roaring 20s.
Our country has always emerged better and stronger from a crises, though it has not always been immediately apparent or guaranteed. As usual, the human toll is painful. It is our hope that the disenfranchised will be more heard, our medical infrastructure will be more prepared, our economy will be more stable, our students and teachers more accustomed to new ways of education, and the world and politics will become more compassionate.
You may recall in a previous podcast, I discussed reskilling formerly known as retraining. Microsoft recently announced free-online classes for 25 million people to help them develop skills in jobs in automation and artificial intelligence.
In other positive news, 83 millionaires sent a letter to governments demanding, yes demanding, an increased tax rate on their fortunes in order to raise money to benefit society in view of the damage to people from the COVID-19 crisis. The project is called Millionaires for Humanity. Some of the U.S. members are two Disney heirs and a Ben and Jerry’s co-founder.
Next, a study by Nature found that adding basalt (baSALT), a mineral by- product of mining to fallow farmland not only created crop production that is more nutrient, but also accelerated the absorption of CO2.
So, that’s it on news today. We have discussed asset allocation with many of you anticipating market downturns in the future. Please feel free to contact us if we haven’t spoken. Stay well
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