Migrant issue is slightly distorted - as far as I know most of migrant left not because they were hungry or lost jobs etc. Some of these might be true but hunger was taken care by the free foodgrain programme from the centre. The biggest impact was the lack of social distancing measures in slums and lack of health care facilities for poor. They started hiding their infections that led to absolute fear psychosis among those who were not infected. The whole thing has been deliberately distorted to hide the failure of civic authorities in providing basic facilities like sanitation and health. It is mind boggling that folks believe that migrants will go home to search for jobs. I know countless folks who ran away despite having jobs. Yes, some of them were facing salary cuts/deferments but it is better than remaining unemployed in their hometowns.
Just shared a 2010 Population Consensus showing that India has taken most of the slots in the Top 50 cities with highest population density.
NY is not on the list.
The number of infections we are seeing in USA right now is going to be a dwarfed. The Unlockdown has come at a very bad time.
Reiterating, when timely and adequate treatment is not giving the Mortality Rate drastically increases. That is why the Bubonic Plague was disastrous. To quote an article from Wikipedia (The LINK)
" Without treatment, plague results in the death of 30% to 90% of those infected. Death, if it occurs, is typically within ten days. With treatment the risk of death is around 10%"
Much like in case of Corona Virus.
I, therefore, disagree with RJ when he says that its just a flu, not a plague or cancer. He shouldāve made a more responsible and an informed statement.
Possible scenarios that may emerge:
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Due to unlock, numbers rise exponentially and authorities are forced to enforce another lockdown
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The numbers rise exponentially but peaks in a very short time (maybe 20 days). Post that numbers start going down but economy takes some time to recover due to lack of discretionary spends.
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Same as scenario 2 but in this case economy start to fire on all cylinders as soon as we reach peak.
Now lets see what happens globally.
- Most of the US and European countries have reached the peak of infection and opened up.
- In a months time demand will be back and there will be no need of further liquidity infusion by central banks
- what happens to stock markets if this liquidity dries up?
In short quick recovery from Covid and recovery of economy may actually be a bad news for Stock Markets.
A fair thing to say, that. There is plenty of uncertainty right now, inspite of which the market is rallying hard.
FED in their last meet, said they will give āunendingā support". Those are some strong words. They were probably anticipating a prolonged effect of Covid-19. Now, with the ongoing protests there are reports of higher infections.
Lockdown had been removed in Chennai, and I believe it is being reinstated. And that is going to be the case in most of the metros. Ours is a far denser demographic than any US or EU. Most of the B2C stocks I am tracking are focussed on Indian business. And some, like NESCO and Inox, are in the business of gathering people!
Digressing slightly - I had to make the point that the real tragedy in India is we are lacking a scientific and rational way of looking at things. The pandemic just makes the scenario worse. I might get a lot of brick bats for saying but in my own humble opinion the migrant trains are a very bad idea - both economically and more important from a medical view point. Imagine these people going to the furthest villages in the country where the health infrastructure is almost non-existent. Now, if there are outbreaks in these places the situation would be far worse. A decision was taken from a political and emotional standpoint. The other confidence factor seems to be that the mortality rate in India is low - however the true extent would should up in late June and July and that is when we would know if there is a difference to all the movement and opening up.
The markets seem to be over optimistic about how it all plays out and might hit speed bumps later in the year.
"A decision was taken from a political and emotional standpoint. " There are lot of other factors to it.Govt was in fix either way.This is the kind of pandemic, every country has found impossible to manage and more so where political opposition are out to take advantage of.
if economy is opening up, the velocity & multiplier going to increase significantly. So liquidity is going increase significantly in this case
Some interesting thoughts hereā¦ Iāll share my opinion with a disclaimer that Iām not an economist and there will be multiple interpretations of the same data:
From Dec 1913 till the onset of the 2008 crisis, the US Federal Reserve Bankās balance sheet was approx. US$ 0.9 trillion. By Mar 2009, it hit US$ 2.08 trillion as Quantitative Easing. The US Federal Bank printed 2x the US$ in 1 year as compared to total quantity of US dollars printed in the first 95 years of its existence! So first let us allow this to sink in to our minds.
One would have expected that this was a temporary and extreme measure. The increase in money supply would stop now. However, by 2012 the money supply went up to US$ 2.8 trillion. This continued till early 2018, when it hit a peak of US$ 4.4 trillion. This came down to US$ 3.7 trillion in Dec 2018 (approx. 15% reduction after a 4.5x jump in 10 years). US stock markets fell by nearly 20%, so the money printing press was restarted.
Currently, the money supply stands at approx. US$ 7.2 trillion. Nearly US$ 3 trillion were added in the Feb-Apr 2020 period (up 75% from the pre-COVID crisis level). If the US Fed increases the money supply in the same proportion as the 2008-09 crisis, then we could be seeing an addition of another US$ 5-6 trillion dollars in the next 12 months. Will such a thing happen? I donāt know.
One would have expected the extraordinary increase in money supply should have led to a massive surge in inflation and skyrocketing interest rates. Instead, we have been seeing deflationary trends and low interest rates scenario for more than a decade in US & Europe. Since US Dollar is the currency of global trade, there is no currency devaluation.
It appears that Jerome Powell could continue doing this for a time period much longer than our imagination. Will he? I donāt know. Neither would I believe anyone who claims to know the answer.
The US Fed isnāt the only champion of Quantitative Easing (QE) with ultra low interest rates + near deflation economy. The printing presses at European & Japanese Central Banks will show a similar trend. In fact the BoJ has been doing QE since over 2 decades and the ECB has increased the money supply far more than the US Fed has since the Great Financial Crisis of 2008-09.
Is all of this going to cause a Zimbabwe / Venezeula type of run on the USD, Euro and Yen? Extremely unlikely.
I believe that this type of asset inflation cannot go on forever. Keep track of the increase in money supply by major Central Banks. But donāt try to hazard a guess when this money supply will stop or what will limit the Central Banksā ability to inflate prices of financial assets for several month-years-decades.
Bottom line - Central Banksā ability to keep the financial asset prices high could be way longer than our ability to wait for a correction. Being mindful of the massive surge in money supply is important, yet it is dangerous trying to predict how the liquidity will ebb and flow & where it will go.
IMHO he is just saying this so to get the market excited.
COVID19 is not just the flu,
the statement āthe COVID crisis has been blown out of proportion and has created an unnecessary fear psychosisā does not make any sense if you see the increasing number of infected people and the condition of healthcare in our country.
most of the people think Fear of corona is more deadly than Corona itselfā¦ hereās another perspective - the chances of death by a bullet is near 100% if hit at vital parts, death due to COVID19 has less than 10% chance, but this makes no sense as chances of you getting shot when you step outside is almost nill but acquiring corona is a real threat.
Sorry but Endemic is related to a small geographical area. I didnāt get your point.
additionally, its not just the risk of one getting the virus and dieing from it, but the risk of transmitting to every other person who comes in contact with him is what compounds the threat multi-fold.
For a person like RJ who can sit within the confines of his home even for next 5 yrs, its easy to say all this, but for the normal people out there who needs to go out to work, and then have kids and old aged parents back home, the risk of acquiring virus and then transmitting to his family members is absolutely a real risk !
More than 100 vaccines are in pipeline
There is a high chance vaccine will come by this year end
Possibilities are
- 100% successful vaccine -eradication of covid
2)most likely scenario I think will be semi effective vaccine which will prevent death but not the infection
( it will reduce severity of infection )
- unsuccessful vaccine which is very very unlikely
So market is forward looking abs experts know that with the combination of semi effective vaccine plus dexamethasone and remdesivir doctors can beat covid within next 6 months
Market is aware of this
Many experts are not understanding this and they missed big opportunity
COVID19 is a āRetrovirusā, a class of virus having RNA instead of DNAā¦ it is extremely difficult to produce Vaccines against Retrovirus thatās the reason thereās no vaccine on AIDS yet.
Letās hope we will succeed this time.
Itās not a retro virus .Its a type of corona virus
Coronaviruses are classified as a family within the Nidovirales order, viruses that replicate using a nested set of mRNAs (ānido=nestā)
Vaccine is definitely possible and the current set of vaccines are already producing antibodies
Yes brother you are right on the classification part, but i was talking in general, RNA virus is retro, yes there are differences based on mode of action and mode of replications. But we are not planning to dive deep into science here. Generally, RNA have high chances of error when copying itself and this property makes it difficult to make a reliable vaccine because of chances of antigen getting changed after some generations. 
But yes. On the basis of taxonomic classification they are different.
All RNA viruses are not retrovirus. Retrovirus uses reverse transcriptase enzyme to produce DNA which inserts into host genome. HIV and HTLV (Human T Lymphocytic Virus) are retrovirus.
Coronavirus can be compared to Influenza virus. They change antigens on mutation rendering the previous vaccine ineffective. Influenza vaccine is produced every year according to the prevalent antigen at the time. Severe mutation in H and N antigen causes epidemic like avian H5N1 or swine flu H1N1.
Yes. Exactly brother. . I was just loosely using the term. Not to go into detailsā¦ Of classification and mode of replication etc.
Many in uk have tested positive for antibodies
It means past infection
And 75% of those tested positive didnāt recall any symptoms
And market has realised many positive aspects and hence on fire
Howās that people forgetting that it is not corona virus anymore. Corona virus is long gone. If there is second wave and we have to close down economy then it is disastrous. Because of lockdown most of the economies were shut hence GDPās of most of the countries would de grow in the coming quarters. Tax collections were the lowest while governments had to spend lot of money for covid relief and to stimulate economy. So brace for more taxes.
The current rally in market is only due to FED. Fed is injecting lot of money into economy and keeping interest rates zero so most of the money is flowing into markets. As you can see once the up trend started we didnāt even see minor corrections in the market. It may continue this way till US elections after that it would be up to economy. If it recovers by then all good else brace yourself for the fall.