The Market Ticker
Commentary on The Capital Markets
Logging in or registering will improve your experience here
Main Navigation
Full-Text Search & Archives

Legal Disclaimer

The content on this site is provided without any warranty, express or implied. All opinions expressed on this site are those of the author and may contain errors or omissions.


The author may have a position in any company or security mentioned herein. Actions you undertake as a consequence of any analysis, opinion or advertisement on this site are your sole responsibility.

Market charts, when present, used with permission of TD Ameritrade/ThinkOrSwim Inc. Neither TD Ameritrade or ThinkOrSwim have reviewed, approved or disapproved any content herein.

The Market Ticker content may be sent unmodified to lawmakers via print or electronic means or excerpted online for non-commercial purposes provided full attribution is given and the original article source is linked to. Please contact Karl Denninger for reprint permission in other media, to republish full articles, or for any commercial use (which includes any site where advertising is displayed.)

Submissions or tips on matters of economic or political interest may be sent "over the transom" to The Editor at any time. To be considered for publication your submission must include full and correct contact information and be related to an economic or political matter of the day. All submissions become the property of The Market Ticker.

Considering sending spam? Read this first.

2020-04-03 11:50 by Karl Denninger
in Editorial , 135 references
[Comments enabled]  

Listen up folks:

In a scathing analysis published March 29 on Medium, “A Call to Honesty in Pandemic Modeling,” Pegden and Chikina assert that many of the popular models being cited by national media and President Trump are misleading. Pegden is an associate professor of mathematics at Carnegie Mellon University and Chikina is an assistant professor of molecular biology at the University of Pittsburgh; they are a married couple.

“The idea that normal life can resume in two to three months without having a huge wave in infections — there is just no science behind that,” Pegden said in a Tribune-Review interview.

What have I said since this started, repeatedly?

There is no way to avoid the spike that comes as soon as you release the lockdowns and other mitigation measures.

It will not happen because (1) it would take a year or more to reach herd immunity levels with those measures in place and (2) even if you left the measures in place for that long as soon as you released them the spike would happen anyway.

There is no science that documents otherwise ever, with any virus that can be transmitted before you show symptoms.

We couldn't do it with polio.

We couldn't do it with smallpox.

And on and on and on.

Yes, a vaccine will stop it eventually, if there ever is one.

But on even the most optimistic time line that's 18 months away.  The economy will be a smoking hole by then, the stock market will be shut down as it's an effective zero and government at all levels will collapse due to lack of funding.  Further, there is zero history of successful coronavirus vaccines conferring permanent immunity.


THERE IS NO ALTERNATIVE to reopening the economy right now and telling those who are at high risk to self-isolate or accept that very bad things may personally happen, perhaps with letting them attempt prophylaxis with HCQ -- which may or may not work.

We have taken an intentional deep recession that will guarantee a Depression within just a couple more weeks along with long-term changes in consumer behavior that may last decades on the basis of intentionally fraudulent models, knowingly false promises and lies by our elected officials, civil "authorities" and so-called "experts" including Fauci, Birx, Pence and Donald J. Trump.

Let me outline their clear statement of mathematical fact, as I have pointed out since this pandemic began:

The duration of containment efforts does not matter, if transmission rates return to normal when they end, and mortality rates have not improved,” they write. “This is simply because as long as a large majority of the population remains uninfected, lifting containment measures will lead to an epidemic almost as large as would happen without having mitigations in place at all.”



View this entry with comments (opens new window)

2020-04-03 11:32 by Karl Denninger
in Podcasts , 61 references
[Comments enabled]  

View this entry with comments (opens new window)

2020-04-03 10:17 by Karl Denninger
in Editorial , 190 references
[Comments enabled]  

Well folks, we can put a fork in that.

Singapore, with its jackbooted (by our standards) monitoring, fixing the infection vector in the hospitals, and everything else just gave up.

There's no giving up folks, unless you want America to die.

Literally die.

I don't know what form the death will take; whether it will be a violent shooting revolution, people hanging each other from the nearest lamppost or collapse of critical supply chains which everyone thinks they can predict and prevent, but I assure you they're wrong.  As just one example what happens when the storage tanks for everything but diesel fuel are full at the refinery because you shut down everyone other than "essential" services and they used all those other products?  Gasoline is so cheap because nobody can go anywhere in their car, and those trucks don't run on gasoline, so it has zero value to a trucker.

If you sit "locked down" for more weeks or months and then try to "soft reopen" do you win?  Nope.  Singapore tried to buck that and failed; they're now going to just shut it all down again.  Even jackbooted contact tracing to the level of mandatory all the time monitoring of where every citizen is didn't work.

There is no answer other than do what we can to mitigate individual outcomes (e.g. attempt prophylaxis with HCQ, etc) and take our lumps.  We can work on the underlying issues (e.g. allowing China to be anything other than an island ala North Korea given that they are the source of these thing with their "wet market" bull****) but that is for another time; for now we have no choice but to accept that everyone in this country is going to get the bug, some people will die and for those at higher risk they need to take personal steps to mitigate that risk up to and including personally choosing to live in an effective bunker in their home.

For the rest of us we have to suck it up and deal with it.  A few of us will be felled.  Heh, I get it -- death is bad.  I've put damn near everyone in my family in the hole already, and I didn't like any of it.  But if we destroy our society and the social contract between all of us and our government, which is exactly what all of these "lockdowns" and fearmongering is doing right now there will be no America worth living in -- virus or no virus.

This must end right here, right now, today.

Not tomorrow -- today.

View this entry with comments (opens new window)

2020-04-03 09:19 by Karl Denninger
in Employment , 491 references
[Comments enabled]  

Oh boy....

Total nonfarm payroll employment fell by 701,000 in March, and the unemployment rate rose to 4.4 percent, the U.S. Bureau of Labor Statistics reported today. The changes in these measures reflect the effects of the coronavirus (COVID-19) and efforts to contain it. Employment in leisure and hospitality fell by 459,000, mainly in food services and drinking places. Notable declines also occurred in health care and social assistance, professional and business services, retail trade, and construction.

The really bad news is that the household survey closed 2 days after the establishment survey.  That survey showed 2.85 million job losses, not 701,000!

Folks, there's now way to sugarcoat this: 30% of small businesses are gone.  They will never reopen.  We are not only destroying their cash flow the incessant prattle of fear has turned people against the premise of ever setting foot in a place where you may be within 6' of another person -- ever again.

If we do not stop that right now you could reopen every single bar and restaurant and they would have no customers.  It doesn't matter whether the sign reads "open" or "closed" if nobody comes through the door to spend money.  Loans, forgiven or not, do exactly nothing if there are no customers.

This threatens to be a problem that will not go away for a generation.  When the Depression came through it altered behavior for nearly 50 years.  This isn't that bad yet but it will end up that way if we don't cut this crap out right now.

Not in a month, not in three weeks, not at some indeterminate point when some model says it's ok, now.

Further, the collapse in health care I warned we were at risk of seeing is going to occur if we don't cut this crap out.  There will be little or no warning when that comes; a demand spike into collapsing employment in the sector, and thus no people to take care of you means you will die if you have an ordinary heart attack.

Next month is going to print 10+ million jobs lost  The internals in this jobs report say it might print as high as 20 million.  It will break every record.  The only way to stop it is to reopen the economy right now and take whatever mitigating steps we can for those who are at high risk, which we know are identified -- they are the deadly co-factors in the NY death data.  Specifically, those who have Diabetes, Lung Disease, Cancer, Immunodeficiency, Heart Disease, Hypertension, Asthma, Kidney Disease or Liver Disease, either singly or in combination, should self-isolate and not live with anyone who isn't willing to do so with them.  That means your groceries and such are ordered for pickup, you drive to the WalMart or wherever and the bags get loaded in the trunk, then you go back home.

Those people may also choose to take their chances and use HCQ as a prophylaxis.  It may work and it may not.  Some people cannot do so because of other drugs that interact badly with it, but the dose required for prophylaxis is likely similar to that for malaria, which is a once-a-week pill.  Will that stop all high-risk people from getting it and potentially dying?  Nope.  In fact it might not help much at all.  Some people will be forced off it by side effects.  We don't know.  But it's the best we have and the best we're going to have in the next few weeks, so you fight the war with the army you've got.  We cannot sit locked down for even another three to four weeks, and you know that claims is a lie; there's no date being given, the Administration already lied once and tripled its original claimed time while some governors have even issued orders all the way out into June already.

We now have governors, mayors and others that are literally placing people under house arrest -- more than 3/4 of the nation's population is under such orders and some, including in Kentucky, are literally putting ankle bracelets on ordinary citizens to compel compliance.  Walton County in Florida just banned families from sitting in their yard on property they own.

This is not theoretical any more.  It is not a "inconvenience."  It has destroyed consumer confidence and if we don't cut it out now it will destroy a huge percentage of economic activity on a permanent basis.  You cannot fix this by handing people "money" that we do not have; more debt is the last thing this nation and its citizens need.

By June the economy will be a smoking hole in the ground from which we will not recover.  We will have so-ingrained people with fear that it will not matter what you do or when you do it.  That fear will last years, even decades and we absolutely must not have that happen.


We must keep people out of the hospitals that are high risk.  We cannot, as a society and economy, accept the path being put forward by people on the Gates' Foundations board and their models.  Their models, which are the predicate for every single one of the shutdowns thus far have already proved wrong in the case of NY; they claimed the city would need far more hospital beds and ICU beds than on this day are actually required.  In fact they're so far off they're laughable yet all the so-called "experts" are still setting policy with those models.  Remember, NY is the worst thus far in the US and yet the models predicted that by now it would be three times worse than it actually is There has only been an 0.4-0.5 change in transmission rates (from ~2.7-2.2) and that is consistent, within a tenth, between NY and nationally as a whole.

I understand the fear -- it's palpable -- this is a sniper attack; you can't see him but he can kill you without warning.

I get it.  It's why snipers scare the living hell out of people; a guy shooting at you who you can see is still scary, but much less-so than a gunshot that comes out of nowhere.

We must overcome the fear; we must stare it down and power through it.  We have no choice.

We must take mitigating actions when and where we can.  There are many.  I will put up another post here shortly on this, and a podcast.

We cannot withstand, economically or in our consumer psyche, another jobs report that comes, and I remind you the survey week is next week, if it  prints anything like this -- say much less one that prints a number ten times this bad, and if we do not act right now to reopen the economy that is exactly what we're going to get.

View this entry with comments (opens new window)

2020-04-02 16:05 by Karl Denninger
in POTD , 103 references


View this entry with comments (opens new window)