Personally Trivial Things
For over two years, my wife an I did karaoke 2-3 times a week. Suddenly, that was gone and may never return.
In light of the fact we lost no lives or income, Covid-19 has so far been trivial on a personal level.
However, and in aggregate, restaurants, bars, movie theaters and even gym traffic will not bounce back to where things were before because of personally trivial things.
Reader Inspired Post
This post was inspired by reader “Wootendw” who commented on restaurant gift cards he has that may now be worthless.
He added “I Don’t know how much your gift cards cost but I renewed my YMCA membership for $240 on March 3.”
YMCA
Young Man
There’s no need to feel down
I said young man
Pick yourself off the ground
That is one of the songs I do at karaoke
Karaoke is economically trivial but I miss it.
Restaurants, bars, air travel, car rentals, fingernail painting, etc., will have a very delayed recovery.
Magnify all sorts of seemingly trivial things at the personal level and the total economic impact is not trivial.
Deflationary Outcome Baked In
The summation of many small things collectively explain why the Covid-19 Recession Will Be Deeper Than the Great Financial Crisis.
Moreover, these collective responses are deflationary at a price level and very deflationary at the credit expansion level where it matters most.
For further discussion, please see Hyperinflationists Come Out of the Woodwork.
The hyperinflationists are totally wrong once again.
Mish
Don’t count out the hyperinflationists just yet. As food supply chains break down…
Mish can’t you post some Karaoke that you preformed? Cmon give us something to smile about
Closures and stay at home restrictions have been effective in a number of countries, but only where they have gone hard early, shut down travel and gone big with testing and tracing. Most countries have not done all these things until the virus was already racking up the numbers and basically ”in the wild”.
In the US testing has been very slow to take off and still showing about 20% positive. Probably needs to be < 2% to start taking control and points to actual case numbers being maybe 10x higher. That is still on 2-3% of the population though. So if the US opens up there are a lot more people going to get sick.
At this point the US, Europe are stuck with years of managing the disease, so may as well move onto how they are going to re-open the economy and deal with the medical case load. The health workers can’t go flat out for month after month.
Once countries like the US and the UK re-open they may as well resume travel between them as they will both have rampant COVID. But countries which have suppressed the virus have to consider when they will need to have quarantine on incoming visitors for years.
p.s. assuming no cheap wonder vaccine or treatment
On April 1, the median age of Michigan COVID-19 deaths was 72. By Thursday, that number had risen to 75. In the past week, fully 42 percent of Michigan deaths involved people 80 or older. https://www.bridgemi.com/michigan-health-watch/michigan-identify-nursing-homes-infected-coronavirus
Jumping to conclusions, like with the serology testing done so far, is not a balanced view:
“On Friday, an official at Hillsdale Hospital in rural southern Michigan reported that a county nursing home had 42 cases of COVID-19 among staff and residents, accounting for seven nursing home deaths among 10 total coronavirus deaths in the county.”
We know fatalities are skewed towards the older age groups, we also know that those fatalities occur before younger age groups. We don’t know what background infection exists, in what age group. We don’t even know by number by age group tested as having virus. It may be more transmissible amongst older people for example, or the outbreak there started via staff in nursing homes, etc.
Valid information is much more useful than anecdotal, there is a ton of anecdotal information from all sides. Unfortunately many are guided by it, and when it is wrong it leads to confrontation because some pin it as reference.
I think there could be a delay in businesses rebounding not just because of people being cautious about disease when we reopen up, but also because people might start to awaken financially and want to cut down on frivolous things to build an emergency fund and balance their budgets.
We all come from the same place and end up in the same place.
The part in the middle is what matters.
Happiness should not be measured in dollar bills but in thrills per dollar bill. Stripper I once knew.
There may be even more problems than people think with getting things running again. There is a significant amount of fear out there among a large portion of the population and they are making themselves known to those of us who run small businesses.
Some of you may remember that I posted previously about the business started by my ex-wife and myself. We train elite athletes who compete on a national level and we lease a very large (30K+ sq feet) facility that we use for training.
Our state/local governments have recently announced their preparations to relax restrictions and allow fitness centers to start reopening – which covers us and would allow is to open as soon as Saturday.
The restrictions that will apply do not really help our overall business but it will allow is to begin offering small group and private lessons again. And to appear “open” – which I feel is a large psychological hurdle.
However, we are already receiving emails from a large number of our clients telling us that in their opinions, we would not be “socially responsible” were we to re-open our doors – even IF the restrictions are lifted. Some of them view this as a “make or break” issue that governs whether or not they will ever return.
Bear in mind that this is only private lesson traffic. Less than 10 people inside our huge facility at any time, hand washing, disinfecting daily…etc. This isn’t the “club” or “academy” portion of the business where we require monthly fees – those remain suspended. There are still no mandatory team practices or workouts and no dues or fees are being collected. This means that anyone who does attend the lessons is choosing to do so – and choosing to assume the risk.
This is creating a stir among the partners and leadership team. What is the risk if we re-open? And I don’t mean the risk from the virus, I mean the risk that we lose a significant portion of our customer base if we do. Do the ones emailing represent a larger silent majority or are they just the squeaky wheels?
I can’t believe that we are the only business getting these emails. How will these things affect the decisions of other businesses to reopen?
Maybe write a public explainer that goes into detail on your position. I mean otherwise they are just telling you to shut down till herd immunity or a vaccine, if either of those are ever reached ?
Personally I would not hold it against anywhere reopening, but I might well just avoid any public space or establishment where its use I thought was unnecessary or due to much contact with others being possible. People are funny though.
I think in the next month we will have some much clearer numbers on the true background infection rate, and the severity of the virus. That should help people in their decisions, if they are allowed to take any that is :/ .
I am personally on the side of doing just that – a letter to all clients explaining our position. However, I am not the only chef with a spoon in the pot…
We will see how it all shakes out.
Just wanted to point out that not only may people let their fear influence their own decisions, they may actually try to project it onto others.
Shocking for America I know….
The way I see it is that a portion see whatever level of total oversight as conducive to a solution , and they have set the goal of elimination of the virus by that means, and nothing short.
So, when they see anyone doing anything that might help the virus continue, they take it as lack of solidarity with their view, are willing to blame the other for continuing the difficulty of the measures, and they take it personally on top of that, as in a direct menace to their wellbeing.
These are extreme views and I think unrealistic, these people have not thought through the nature of the virus, that it will almost definitely be present and circulating for a very long time. They cannot expect to close down human activity as we know it permanently based on that moderate activity might mean higher transmission of the virus.
So they are highly fearful of the virus and current circumstance, they might even be right to be so, but they should not pin all of that on society as the cause. The cause is a virus, what amounts to eliminating society and its activity, in effect people, to combat the virus is unreasonable. Quite possibly it is that they themselves don’t want to be no longer exempted from work, or their children from schooling, and so be obliged into a circumstance of transmission.
Given that there will be much higher unemployment for quite a while, maybe it is possible to accommodate some of these people who wish to remain isolated, by offering some compensation for voluntary redundancy – as they would be allowing way for those who do wish to work. It’s a compromise and not one I am sure is deserved…on the other hand I see all that is being dished out now already. I guess they would have to come up with some new label like viral distress disorder or sanctuary payment to accomodate that.
Then again, I guess some people just like to force their opinions on others also, or when given the opportunity of dissing another. There are also probably a lot of uptight people at home tying themselves in knots and ready to lash out at anyone they can find to blame for that.
Who knows really.
The recent studies from Stanford and USC are making it clear that COVID-19 is far more widespread than we were led to believe with fatality rates significantly lower than we were led to believe and much closer to typical fatality rates for the flu. I agree with Casual_Observer’s comments above that this coronavirus is here to stay. The curve has been flattened; it’s now time to end this ridiculous total lockdown before the American economy is permanently flattened. We all deserve to get back to those “trivial” things we were enjoying. I would rather take my chances doing that then take any more chances that the government and medical bureaucrats have our best interests at heart.
Unfortunately both of those studies may not pass peer review. With Stanford the selection process for the sample had fatal flaws and the Chinese test used was nowhere near as accurate as they assumed producing junk output. The USC study may have also used innacurate tests, have not yet been able to scrutinize the study.
Makes tons of sense, but unfortunately, it does not fit the narrative/agenda. In the end, all the rest of the assets will end up in multinational corporate hands. Wave two of the asset scooper coming up.
I don’t think you understand what flatten the curve really means. Nor do you understand R0. If you come out of quarantine, the curve will “unflatten”. And C-19 is not just the flu for old people. Long term male infertility, severe reactions in 20% of people who catch it, mental illness, loss of smell and taste that’s long lasting, blood clotting, skin turning black and blue, yada yada.
Life is made up of mostly “trivial” things.
I would say an inflationary outcome is baked in too. After deflation of course. This is the nature of the system.
One thing few are mentioning is that Covid-19 is basically from the family of cold viruses which either come from coronaviruses or rhinoviruses. This means that the chances of any treatment or vaccine being effective are going to be low because these viruses will change from year to year just enough to keep getting stronger and not weaker. This isn’t like the flu virus at all which doesn’t mutate as quickly. If medicine and science could have there would already be a vaccine for the common cold but there isn’t. Maybe antibodies will help some people for a year but not after that. Now that Covid-19 has made the jump from animals to humans it will mutate on its own schedule and cause problems around the world for years to come. This explains why some people who overcome Covid-19 are getting it a second time and showing positive tests after getting it again. Eventually everyone will get Covid-19 and many may get it repeatedly like the common cold. We call it a cold but it is always a coronavirus or rhinovirus.
Also – I recently saw a video from a doctor discussing the fact that because the virus enters and spreads via the upper respiratory tract, this will provide a roadblock to a vaccine as well.
The upper respiratory tract is part of the mucosal immune system which functions differently from the rest of the immune system.
I am not a doctor so idk.
Ask 10 doctors you’ll get 10 opinions because the narrative keeps changing. In the end, the narrative will dictate that everything you do must be to combat the corona regardless of anything else.
https://www.businessinsider.com/new-coronavirus-mutates-slowly-vaccine-could-be-long-lasting-2020-3 – the Covid-19 virus mutates more slowly than the common flu
What matters the most for a vaccine is the ability of the body’s immune system to get to the intruder – in this case, the Wuhan virus.
There is a difference between the upper and lower respiratory system in that the upper tract has its own immune system – which is why upper tract bacterial infections don’t respond well to anitbiotics and doctors no longer like prescribing them. Why bother if the body’s stimulated immune response can’t reach the infection?
Naturally, this also means that injected vaccines don’t extend immunity to the upper respiratory tract as they stimulate the body’s internal immune response.
This may create problems for the development of a vaccine for CV if its primary residence is the upper respiratory tract.
Only effective against one strain of coronavirus. There are 3 in circulation now. There are thousands of strains of coronavirus in the animal kingdom. This is the 3rd major coronavirus that has become a global pandemic in the last 17 years. The first two killed so quickly they couldn’t spread. Natural selection is going to produce the best survivors.
Not sure how you are defining deflation but credit expansion will continue with all the new government spending that has yet to come. As long as you’re big and influential they’ll write new bills, spend money and the FED will keep printing to pay for them. Lower prices on some things? Yes but we’ve had multiple deflationary events yet the FED balance sheet keeps going up. How can there ever be deflation anymore?
“Not sure how you are defining deflation but credit expansion will continue with all the new government spending that has yet to come.”
…
Disinflation (now deflation) will be the order of the day until – and not before – massive debt overhang addressed. Ever greater amount of $s needed to service existing debt will subtract from current / future demand … forcing prices (in general) down.
I suspect that may be the first inpulse, but the response to deflation will result in inflation afterwords, IMHO. This is the time tested proven method for debtor govts to absolve their debt. It rewards profligacy and screws prudent savers.
I had to upgrade my internet connection to 1Gbps. Chip companies for networking, cloud and communications are going to boom.
🙂 OK, you just won the “First World Problem” contest of the year! “had to upgrade … to 1 Gbps”. Yes, such a living hell.
O/T.
1/2% handle approaching on the 30-year T-bond.
Hope so.
50 bps has been my mark to sell.
I joined the Y because it is the only fitness center in Norman, Oklahoma with a swimming pool (probably won’t use this for a long time now.)
Previously, I had a national membership with LA Fitness.
I did renew my YMCA membership for $240 but I was responding to@Greggg who had the restaurant gift cards.
Didn’t some economist say “In the Grand Scheme of Things, we are all dead!” ?
John Maynard Keynes stated “In the long-run, we’re all dead.” I guess that’s the sage advice our boomer leaders are relying on at this time and have relied on for the last several decades. They appear to figure they will not be around long enough to clean up the financial mess they have created and will leave it to the younger generations to figure it out.
“I guess that’s the sage advice our boomer leaders are relying on at this time and have relied on for the last several decades.”
Boomers learned from ‘sages’ of the ‘greatest’ generation.
We are living in a tourist area now, and restaurants, bars, entertainment, etc. are a major part of the economy. This will ruin a lot of lives here. There is nothing trivial about what is happening. If this keeps up the depression that will come will eclipse the Great Depression. There is loss of life in economic upheavals, too, not to mention the wars that arise from economic strife. I’m watching Sweden closely. Their daily new cases might be on the decline.
Their path might not work for America. Voluntary distancing requires self awareness and regard for your fellow humans. A large portion of our population lacks those traits.
Or it might just work now that people have so much more awareness of the simple things they can do to minimize their risk as they resume their lives. These new habits may even benefit society during future flu seasons. Furthermore, the data is not changing in terms of those most at risk: the elderly and those with underlying medical conditions such as high blood pressure, diabetes, and obesity. If those most at risk are not comfortable with the potential risks to their health, they should continue to self-isolate until they are comfortable. Sweden so far looks like it made the wiser choice in this regard and did not wreck its economy in the process. Young people in the United States must be allowed to get on with their lives before the economy is completely decimated.
All it takes is a few thousand nitwits to keep the numbers up. We’ve seen that many out protesting with their assault rifles.
“Sweden so far looks like it made the wiser choice in this regard and did not wreck its economy in the process.”
It may turn out to be that the nitwits were the ones who shut the U.S. economy down.
I can’t sing so I won’t miss Karaoke but it does seem as if the oppressive hand of government has found our necks and won’t soon release its grip. I’m a 68 year old retired widower so I will get by, absent a hyperinflationary collapse but, with the Central Banks and governments making it up on the fly, I do fear for the young. I lived through a few recessions and even lost a job during one but they were short sharp events you came out of. I’m not so sure this is going to be the same.
It turns out, since I can sing, and I live part of the year in Asia (I’m a European Caucasian who has an Asian girl) that Karaoke does NOT require singing skills. At the most basic level that they set these silly machines at, what matters is keeping up with the cadence of the song. Even if you’re singing off-key, if you match the pace of the lyrics you will win high marks on those machines calibrated this way, as most are. BTW I bought a karaoke machine at the bequest of my girl, and my whole neighborhood plays karaoke at all hours of the day and night (southeast Asia does not enforce quiet hours). I hate karaoke… lol
Try this out: https://www.theverge.com/2019/4/13/18308680/twitch-sings-free-karaoke-video-game-announced-live-streaming