Good Morning,


Happy St. Patrick’s Day to all.

It seemed timely to also consider the St. Patrick’s Day Prayer for all:

May the Strength of God pilot us.

May the Power of God preserve us.

May the Wisdom of God instruct us.

May the Hand of God protect us.

May the Way of God direct us.

May the Shield of God defend us.

May the Host of God guard us

Against the snares of the evil ones,

Against temptations of the world.

May Christ be with us!

May Christ be before us!

May Christ be in us,

Christ be over all!

May Thy Salvation, Lord,

Always be ours,

This day, O Lord, and evermore. Amen.

A Succinct Review

To suggest that “data” is flooding into our lives at a record pace in recent days would be the understatementof the decade.

I have deliberately been listening to news every moment that I can for the last two weeks – as you know I usually do not. I did so only to get a sense of the mind-set in place as we surely need to realize that the emotional feedback-loop is now in full swing.

In these morning notes, since the day I wrote the first one, the effort has always been to do the best we can to keep readers and clients aware of the long-term structure we need to be aware of – and in the process, keep one on track even as everything around us may seem to be going haywire at times.

These comments are not designed to be medical comments or advisory comments or anything other than an effort to be a calming effect – no matter how seemingly menial.


Because every panic/catastrophe/crisis in the past has had one thing in common. That one thing (the very same thing) is only proven later in time, as the then present “crisis” subsided.

What was it? They all passed – they all completed. The great minds, the great people, the great, often unspoken, magic of the US people working together to overcome has always solved the problem – always.

I know these words will not be deemed as correct when so much emotion, fear, concern and reaction are roiling everything at this point. In time, in the rearview mirror, when we have gotten on the other side of this storm – they will become more clear.

The biggest items of all:

We have an incredible country of people – great minds, great creativity and great capacity to find the processes needed to create solutions together.

One way or another, we have made it through every single challenge ever confronting us. It is absolutely critical that we recognize this during the current massive set of emergencies and theultra-heightened emotional state.

It is what always helps us overcome – teamwork, focus, patience, flexibility and a supreme vision of the bright future ahead.

We will come out of this with extreme benefits in place and a vastly stronger economic footprint for the significant opportunities ahead.

I can state this: In time, this crisis will result in some of the most important and valuable opportunities we will witness in our lifetimes – ever.

Get Focused

The current perception is that the US economy – in 3.5 weeks – has gone from peak performance, wide-spread benefits, record income, record assets, record unemployment, record low jobless activity and green lights almost across the board to – “the world as we know it is over.”

The process of going from “crisis to crisis” emotionally will be later seen as our more dire set of consequences. But, alas, that is a discussion for a later day.

A Missing Point?

Five years ago, the chief engineers at Intel were asked how they could give someone a sense of what “Moore’s Law” means in our life. That law states:

“Moore’s Law refers to Moore’s perceptionthat the number of transistors on a microchip doubles every two years, though the cost of computers is halved. Moore’s Law states that we can expect the speed and capability of our computers to increase every couple of years, and we will pay less for them. Another tenet of Moore’s Law asserts that this growth is exponential.”

Anyway, the engineers were asked how to show that effect in life as we normal people see it. They arrived at using a 1971 VW Beetle car as a point of beginning. They suggested that if the VW had seen the same impact as computing has, today it would:

Travel at 300,000 MPH

Get 2,000,000 miles to the gallon

Cost 2 cents

Why is this something to consider?

This is the incredible, unseen power working for us all, in us all – behind the science and medical brainpower which is (globally) at work, at breakneck speed, finding solutions. We will succeed as a group of people.

A Vaccine?

As it has been explained, there are two ways medical solutions will come: either a new vaccine (takes awhile) and or a therapeutic solution which seems to be a re-routing of currently approved drugs. PLEASE, note I am merely stating what has been stated publicly. This is NOT intended as a medical issue.

√ I would suggest we all listen to Regeneron’s interview later tonight on CNBC. They have apparently isolated a currently approved drug which has had a very positive impact on mice in lab tests. It seems to quell some of the major health elements.

√ IF that is the case, they have already stated they can be very aggressive in re-routing their manufacturing process and have many treatments available sooner than is currently assumed from a brand new vaccine, etc.

√ What we do know is this: we have been through disease outbreaks like this before. Long-term investors will recognize later in time that we have the greatest minds on the planet here in the US working around-the-clock to solve this problem. They will succeed.

√ I know in advance that element is difficult to focus upon or make sense of in the fog of panic we are currently trapped within.

Additional data in the last 48-hours on the bio-world front:


Expect lots more “cases” but also expect much more “solution processing” as this unfolds. Some reactions – in time – we will find were ineffective – others will be fine.

Though it will not be viewed at all, nor even possibly believed, the economic data is not yet showing the avalanche of bad news reporting. Of course, some of that will change over time as more and more shutdowns come into play.

The latest data:

The data above on retail has some interest aspects to it – let’s try to read the data as well as we can:

The prior data was revised higher by 0.3% and we lost 0.5% this for FEB. It will clearly be worse in March. But the point here is that when compared to the previous two months of “expectation”, when combined, the next effect is a negative move of .4%.

Here is the latest on industrial production just in as well:

Under the same perspective as before – note these elements in production:

Industrial production was higher than expect – with two of those weeks feeling the initial effects of the virus panic.

What can we expect in the future here in this area?

√ Looking back say a year from now, I feel we can fully expect that we will be set to witness a massive inflow of manufacturing bases returning to the US…forging an even stronger foundation for the US and her citizens for events like this in the future.

√ Combine this with the most brilliant minds on the planet fully ensconced in our tech world here – and you get a massive wave of change and rehab to our world during this setback – again, setting the stage for a significant improvement in the manner in which we will all see recovery from this threat.

Panic Still Underway

All of this – of course, has not yet stopped the level of panic – some of which in and of itself is now becoming completely self-fulfilling.

The current direct example is the effect we are witnessing this panic for cash is having on Bond ETF’s and Bond Funds: Pricing has become erratic – locking up many issues with no trade. This is only leading to more news coverage which then leads to more demand for cash which then leads to more mis-pricing.

First – your latest VIX chart. From a closing perspective — we have now set all-time highs. This is not the same chart as the “VIX Futures”. This is the Index itself:

As one can see from the data – there has been no other element in our past which has caused the reactions we have seen in the last three weeks.

Records were set again this morning on the open as you can see in the yellow band in the image screenshot.

Latest Key Case Count Issues In The US

For any confirm you wish – track it live here:

We have 7,511 deaths from cases around the globe – and that number rises every hour. All but 529 (currently) of them have taken place in the top 5 “hot-spot” countries.

The US has indeed seen cases spike as much more testing rolls in. We can expect that to rise in a very significant way in the next 2 weeks as “millions get tested.”

√ To be specific – as of this hour, we have 4,773 active cases logged – and 12 of them are called “Serious or Critical.” This 12 is an increase from 10 last week at this time.

√ We have had 93 deaths – 39 of which sadly, come from the first outbreak area in the nursing home in Seattle.

While repetitive – I will keep this image below in for us to know some comparable damage. The normal flu season which unfolds in Americaeach and every yearis a far larger event as noted below in the reminder graphic.

Again, please do not take from my words that I am being insensitive to the nature and the massive impact of this illness (and more importantly our response to this illness). But I feel we do need to remain confident that this panic will turn out like all other panics.

It has a life-span and it will come to a close.

Time will fix this – time will repair and pullback the fears.

America will overcome and conquer this illness and its impact and we will have set the stage to be far better off for it when we are done.

The Fed

Remember in ’08-’09 that Fed and Government action did not immediately stop the panic.

This time is likely no different.

The Fed is also communicating to back-stop money market accounts again as they did during the 2008-2009 crisis. Recall, then as now, this is being driven by massive requests for cash money flooding the system.

√ We can expect the following additional injections – though it is a huge guess as to how they will be timed:

√ Rescue funds for back-stopping airlines, cruises and travel elements given it is government action causing the all-stop.

√ Tax cuts (payroll) and Tax filing delays.

√ More Fed support to keep capital moving throughout the system.

√ Hopefully – they finally put the uptick rule back in which will greatly quell the speed of change during market hours…but that is not yet a done deal for sure.

This will only make sense to readers after the adrenaline and cortisol levels fall as this panic subsides later.

Here is what history tells us -at least going back to 1950:

Buy low, sell high.

Even if you know nothing about investing, you’ve heard this phrase before. With the S&P 500 now 30% off its highs last month, investors are now presented with the extremely painful and difficult execution of the first half of that statement.

√ Panics set the stage for the futures levels of gains.

√ As stocks decline, they become more dangerous in the short-run but more attractive over the long-run.

In order to show this, here is a table below that shows the average returns over different time periods based on how far stocks are from their high. The data is from the S&P 500, price only, going back to 1950. Returns 1 year and over are annualized, so in order to show an apples-to-apples comparison, I left 3 month and 6 month returns white.