The Second Wave that Isn’t-Part one
This is part one of two parts. I am just starting to learn a lot about the “spike” in Covid 19 cases.
But first, some market comments. Again and Again, people shrug their shoulders when asked why the market has come back so strong. Two observations. 1) The PE ratio for the entire S&P 500 is around 21. The average over last 50 years is 16.00. This is just all the prices added up of all 500 stocks divided by the total forecast earnings. You want a lower number, because that means there are more earnings to go to each share. 21 is not that high. It has been much higher. It was 124 in early 2009. You know how that ended☹. 2)With interest rates so incredibly low, 21 is not high. When holding 10-year government bonds pays you less than 1%, going to dividend stocks that may pay 3% or higher dividends makes some sense. Even though the indexes are high, there are many areas where stocks are priced very low. Real Estate and banks stand out as two values.
Covid 19 Wave
I heard yesterday they were tearing down an 80 year old statue of President Theodore Roosevelt. He is my favorite historical figure. He remains the youngest person to become President of the United States at 42. He was hunting Moose in Maine when a train got there, hunted him down and told him President McKinley was dead (assassination). Roosevelt, a Republican, was a leader of the progressive movement, and he championed his “Square Deal” domestic policies, stopping child labor practices, promising the average citizen fairness, breaking of monopolies, regulation of railroads, and pure food and drugs. He was the cause of the National Park system.
His Biography, especially the first of the Edmund Morris trilogy, The Rise of Theodore Roosevelt is my favorite book, fiction or non-fiction. You have to keep reminding yourself the book is not fiction. Roosevelt wrote 47 books (on the side?) He was elected governor of New York at age 27. After that he was Police Commissioner. He jumped off a horse, tackled a cougar and killed it. He was sickly as a child with asthma and a weak heart. He trained continually and became a noted boxer. He climbed the Matterhorn at age 23 on his honeymoon. He was the first President to leave the country, ever up to that time. And… he took a bullet to the chest and continued his campaign speech while mocking the would-be assassin. For all of his good he now gets this type of hatred. The headline below showed up Monday in the Smithsonian:
The Racist Statue of Theodore Roosevelt Will No Longer Loom Over the American Museum of Natural History As plans emerge to remove the controversial figure, the 26th President’s legacy remains sullied by his colonialist ideology https://www.smithsonianmag.com/smart-news/statue-theodore-roosevelt-removed-reexamination-racist-acts-180975154/ The thought police aren’t only active today, but now think they can go back 100 years or more and punish our heroes for believing in “Colonialism?” And they can. No one is stopping them!
So, I say all of this to point out that our nation has lost its mind with political correctness. We have lost all courage. No one will be there to protest the removal. If you Google News about it, there are only articles about all the “bad” statues that have to be torn down by Anarchists. Why don’t people protect these things? Because they are afraid and intimidated by the narrative created by criminals. Seattle, my hometown is occupied via a violent takeover of a major part of town. The Governor and Mayor are alright with that! The violent takeover was likened to a “street festival” by CNN. The Mayor of Seattle joked that it may be “the Summer of love” for Seattle.
I know this is the long way home to talk about the “wave.” But the same forces (politics and media) keep just about anyone from speaking the truth. Here is the truth as I see it:
First, deaths per day by Covid 19 are plummeting as they have been for many weeks. Scroll down on this page to see chart. https://www.worldometers.info/coronavirus/country/us/
We are averaging about 13-14,000 more new cases per day. Why? Does it create more risks for us?
- Part of that, maybe 10-20% is from huge increases in testing. The CDC also changed guidelines for the counting of “antibody tests.” This test is just to see if a person has developed resistance to the virus. Many people are getting that test out of curiosity, especially since they don’t need to go to the Doctor anymore to approve testing. They can do drive thru testing. So, since late May, we have been lumping in people who have antibodies as “new cases.” These are people who have never been sick, won’t get sick, but they are “new cases?”
- We have an occupational hazard to explain the big part of this. There is an occupation that is incredibly dangerous for the spreading of Covid 19. In this occupation people are forced to live in cramped quarters and ride to and from work on overcrowded buses. The occupation is seasonal farm workers. The wave has corresponded with the peak produce and berry seasons coming in late May through July 15th.
- Four states with big spikes, Texas, Arizona, California and Florida can account for all of the increase. The increase is about 13,000 cases per day. During the last 10 days or so Texas is averaging 4,000 excess cases per day, Arizona 3,000 excess cases. Florida is averaging 4,000 extra cases per day. California has excess cases of 4,500. Total increase in those 4 states: 15,500. Georgia is 5th with 1100 extra.
Five states 16,600. Since these states account for more than the daily increase, we can safely say the rest of the country is trending down, not up. Is the average more at risk? No. Not at all. But you almost never hear this from the media. There are some articles starting to trickle out. The first one is from Insurance Journal. The only industry that can’t afford to make statistical errors is insurance. https://www.insurancejournal.com/news/national/2020/05/29/570435.htm Other articles https://www.columbian.com/news/2020/jun/19/u-s-latino-communities-hard-hit-by-covid-19/https://time.com/5852711/florida-migrant-towns-coronavirus/
Now for the kicker. Those 5 states all rank in the top 10 in produce production. California is number one. Washington is number 2 because of huge apple crop (they will see “wave” in late September as farm workers show up unless we make changes.) Arizona is the third biggest producer, Florida and Georgia are the next two. So do the math. Millions of worker in cramped quarters and buses descending on states that need their help. When President Trump mentioned this, he was compared to Hitler by an “immigration advocate” and that was your headline. USA today: Garcia said: “Trump is finding a scapegoat right before the election to rile up the base. Immigrants bringing disease over the border is a trope that goes back to Hitler.”
Of course, politicians and media are blaming this all on one thing: The re-opening of our economy. For them, restarting our country is not important. Creating false narratives that create division, racism and fear is their gig. This spike will end as soon as the crops are picked. Fruit producing states will create a mini wave in September-October.
This is not a racist issue!! We are talking about an occupation not a race! No one is accusing these workers of doing anything wrong or doing anything immoral. They are just stuck in a bad work environment. If you read John Steinbeck you know that most farm workers in the 30’s were white. If they all got sick, we probably would have called it what it is. This is not about race until the media picks it up and twists it.
Please forward this to people who you think may be interested.
See you soon,
Craig
These comments and opinions are solely those of the author.