The Black Swan | Ep. 963
04:55 "... sort of a black swan a black swan is an ..."

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LIMITED TIME OFFER: Get 20% off with code DW2020! https://utm.io/uqKb.coronavirus tanks the stock market Joe Biden seeks a big comeback victory and perhaps we check the mailbag i'm ben shapiro this is the ben shapiro show [Music] today's show is sponsored by expressvpn protect your data from prying eyes at expressive VPN comm / ben alrighty so the market is tanking again today as of this morning it was dropping almost a thousand points again below 25,000 which means that we've seen a significant market sell-off over the course of the last five days all the way down from about 29,000 all the way down to below 25,000 that is a market correction anything below 10 percent down is a market correction we have seen well below 10 percent down and this is leading to questions about how real this drop is is this going to last are we going to see a gradual rise again as the market improves based on the market pricing in all of the global supply chain and disruptions what you are seeing in the news today is people trying to make political hay out of this thing there's just no question this is happening and it's really a points of irritation to watch the media who are definitely spinning people into a panic over this thing try to pretend that they are not involved in spinning people into a panic over this thing or Democrats who continue to claim that the government response is completely lackluster then claim held tear president Trump responds to our claims that he's watching a pandemic response I mean the fact is that there are people out there who without evidence are suggesting that a pandemic is directly on the horizon that the United States is gonna be hit with a wave that it is unprepared for and not only that but that President Trump is solely responsible for this you've seen Democrats out there claiming that the stock market drop is somehow reflective of president Trump's inability to quell fears about the stock market Nancy Pelosi for example said just this yesterday said well President Trump was trying to quell the markets the markets dropped even as Trump was talking a president said something so strange that you really have to wonder you said the reason the market dropped is because of the debate the other night well the market that dropped eighteen hundred points before the debate the other night the market dropped while he was speaking yesterday in his press conference so you know let's not let's not be silly about what that is okay what that is is global supply chains being disrupted the fact is that the United States has very strong underlying economic fundamentals by every expert that I have talked to and most experts out there the u.s. is not the problem with the global economy right now the global economy is in trouble specifically because of China and because when China's supply chains disrupt global supply chains it slows down the ability of customers to buy it slows down the ability of distributors to distribute it slow down the ability of producers to produce and this means that you have holdups and that means that companies are not able to fulfill their orders it means that they are not able to make money and then they are not able to pay off those debts so China's mishandling of this entire thing from the very outset it just demonstrates the dangers of investing heavy amounts of money in fact the reason authoritarian dictatorships that are more willing to kill their own people for speaking openly about threats like coronavirus than they are to actually crack down on coronavirus after the cat is already out of the bag after the hen is already out of the coop so the fact is this has really nothing to do the United States this has to do with China botching this thing it has to do with the fact that the European economy was already on relatively shaky footing their growth rates were already incredibly low we've had on Mohamed el-erian who's now getting all sorts of credit he's the head of Allianz he's getting all sorts of credit correctly so for forecasting a couple of days ago don't buy into the stock market drop yet wait a little bit more because it's really a stock market correction he's been on my show pointing out that the fundamentals of the economy in the United States are fine it's the fundamentals of the economy in Europe they're a real problem because Europe has been blowing out the spending because Europe has not actually got its its debt in line with its spending because European growth rates have been low and because China's growth rates have been unduly inflated and so he was predicting for a long time that as central bank's continue to manipulate currencies in order to keep the market up eventually they would run out of bullets in their gun and you would have to see some actual underlying fundamental economic changes in place yup and China in order to sustain growth that's what you were seeing here you're not seeing correction based on failures of American policy you're seeing Corrections here based on failures of European and Chinese policy specifically and you are seeing what happens when vulnerable global supply lines actually become vulnerable the fact is globalization is fantastic in the sense that if you can widely distribute the factors of production across various country lines you can make that cheaper you can make it quicker you can make products more easily and better all of that is true it also means that just as if you were playing a game a telephone the chances are much better that the longer the line goes on somebody is going to miss the message somewhere in the middle well the longer the supply chain is the better chance is that there is some sort of disruption in one of those areas and that disruption is going to affect the entire supply chain so companies are constantly trying to evaluate what are the what are the sort of downside risks here this event is sort of a black swan a black swan is an event that is completely unforeseen it's somewhat unforeseeable it's it's an event that is so large and out of the box that nobody has really planned for it there was no real contingency plan for it now I think it's fair to say that people should have taken into account that China was a significant area of risk for a very long time mean the fact is again it's an authoritarian regime that means that they can shift policy at a moment's notice but more than that there have been a series of diseases coming out of China ranging from bird flu to SARS right and all of these diseases coming out of China maybe that should have been more predictable that something like this would happened but they were cropping up once every few years they really did not disrupt global supply lines the way that this has disrupted global supply lines so it was sort of an unforeseeable Black Swan to blame that on Trump or to suggest that that is reflective of underlying problems in the American economy is really not true particularly since President ROM has been very harsh on China right President Trump has suggested that investments in China are actually a mistake in the first place that we should be bringing a lot more of those investments home and I think companies in the future are gonna think twice about whether they want to invest in China based on the factor that you never know five years from now whether China is simply going to step in and declare that all business in the country is done rather they're just not going to operate anymore and we'll get into more of this in just one second and these sort of parochial nature of Americans view of the economy which is that everything in the American economy is reliant on the American economy alone that just is not true it's never been true it's why it's always very silly I mean said this while Trump was president I think it's very silly for any one president to be credited with the stock market drop or a stock market increase unless the president takes policies that are directly related to a stock market crash very often global economic factors have very little to do let's sort of the tinkering around the margins the presidents tend to do well get into more of this in just one second first let's talk about the problems with that you may have with employees in a time where economic contraction may be beginning you want to be very careful about the people you hire so let's say that there's a guy who works for you and let's let's call him Jared just just for example Jared great guy and let's say that one of the things that he does he makes sure that you have your ads on time and that you are fully kept abreast of what exactly advertisers are interested in hearing and let's say that your show starts at let's say I don't know like 8:00 a.m. Pacific time let's say Jared just decides one morning you know what today's an important warning for me to really you know get in there and get into that supply line of the of the advertising and so he just shows up that like 8:15 and so suddenly you got a staff of 30 people and they're all waiting on Jared well at that point you might be thinking to yourself hey how about zip recruiter zip recruit calm slash daily wired so the smartest way to hire you can get great employees whether they are new or replacements for Jared no wonder four out of five employers who post on super clear to get a quality candidate within the very first day zip recruiters powerful matching technology finds people with the right skills and experience for your job and invites them to apply when you post on zip recruiter that job listing get sent out to over a hundred top job sites the results that you get qualified candidates fast see for yourself don't trust me try zip recruiter for free right now go to zip recruiter comm slash daily wire that is zip recruiter comm slash at Dai ly WI re zip recruiter comm slash at daily wire zip recruiter is indeed the smartest way to hire so you don't get stuck with people like for example Jared zip recruiter comm slash daily wiring and zip recruiter comm slash Dai ly WI are you improve your business by making your employees better and by threatening your employees with the possibility of unemployment zip recruiter comm slash daily wire okay so the New York Times reporting on the real reasons why this thing is dropping and that the lead is always buried but the reality again is that the cause of the global stock market drop is not the United States it's pretty much everybody else the global stock market according to the New York Times slid for the sixth straight day on Thursday of course is sliding again today on Friday the sp500 slid 4.4% on Thursday as I say again as of early trading this morning the stock market the Dow Jones Industrial Average was down another thousand points the downturn continued on Friday as asian markets closed sharply lower and european stocks tumbled at the start of trading the widening scope of the health crisis threatens to overwhelm global supply chains especially in China the world's second largest economy after the United States in addition the outbreak could crush consumer demand as people limit travel or stay home even without a government or to do so this is where the uncertainty really comes in it's why China has really botched this thing because even if China had an outbreak but there were transparent about what exactly was going on the market could price in the information that's what markets do markets are fantastic at pricing in for information there's a theory of the stock market that is called the if the efficient markets theory there's sort of a strong version or a weak version the strong efficient markets theory says that no single trader can ever beat the stock market in general because it is a collectivized it has collectivized aggregation of all knowledge on a particular topic the more information is available the more the stock market is able to price it and when you see tremendous stock market drops like you've seen over the last week what that means is tremendous uncertainty it means that people are trying to figure out exactly how much uncertainty there is in the global market exactly how much information has been made available and the fact that China has been very stingy about the information that they've actually put out there is the rationale for this trap because investors are trying to figure out okay well I'm not sure whether this thing is gonna continue for a month or six months I'm not sure whether we're gonna see cancellations and public events already in Switzerland they've cancelled apparently all public events over a thousand people not sure why a thousand people is the limit but you could easily see something like that in the United States if this outbreak starts to worsen he could see public I mean sporting events could be shut down for example Scott Clemmens the chief investment strategist for private bankers at Brown Brothers Harriman said the outbreaks potential to alter American consumers habits was at the heart of the sell-off so the gree of the consumers changed their behaviors they stopped going out to eat they don't take the vacation they cancel the business trip that consumption that spending personal consumption is 68 percent of GDP over the past few days companies as varied as United Airlines MasterCard and Pfizer have said the outbreak poses a threat to their 2020 earnings analyst at Goldman Sachs predict that companies in the S&P 500 would generate no profit growth the entire year as a result of the crisis because of its severe decline in Chinese economic activity when on Wednesday president Trump tried to address the outbreak and said that the risk to the United States was low but people aren't really confident in that because frankly even the United States government doesn't know enough about coronavirus again this is the problem with China withholding all sorts of information nobody knows the death threat there are two real factors as I discussed yesterday in deciding what the risk factors are with regard to coronavirus one is the transmission rate and the other is the death rate and we don't have good information on either one of those because China has not been revealing the information in you are seeing widely variant reports across the globe on the impact of coronavirus right you are seeing that coronavirus in Iran is killing like a crapload of people but koruna virus in Italy isn't killing that many people which is not like a major shot considering that Public Health and Iran is garbage and the government of Iran is garbage a bunch of their top ministers have gotten coronavirus over in Iran according to farah naaz for CG and Rick Gladstone reporting for The New York Times a senior figure in Iran's government who sits just a few seats away from president Hassan rouhani a cabinet meetings has fallen ill with coronavirus making her Iran's seventh official to test positive including one prominent cleric who has died there have been almost 300 deaths in Iran that's just what's been reported vice president ma su ma empty car mr. rouhani's deputy for women's affairs in the highest-ranking woman in the government also one of the lead revolutionaries during the Iranian Revolution that in which they took hostages she was actually one of the hostage takers so she's a delightful human being she's a confirmed corona virus infection couldnt happen to a nicer gal is quarantined at home that his closure came a day after a cabinet meeting in which she was in close contact with other government leaders including rouhani a photo posted by a BBC Persian reporter on Twitter showed she was sitting within a few yards of rouhani she was known as Mary during the Tehran hostage crisis four decades ago Iran now appears to have the highest number of government officials infected by coronavirus who is officially first reported in the holy Iranian city of Qom on February 19th the disease is believed to have spread to the country from China which retains close economic relations with Iran they have already reported something like 26 I'm it was it was 245 people infected some 126 deaths already but health experts estimate the number of infections is far higher because the country's fatality rate of about 20 percent seems so high compared to a our countries meanwhile we've seen that in Italy coronavirus is shutting down public activity but we're not seeing tons of deaths so there is a wide difference in how countries death rates are varying and transmission rates are varying as well because we don't have enough information the stock market is trying to price in a tremendous amount of uncertainty right now so when you see that stock market dip well you should recognize is that if as information emerges it turns out that coronavirus is really not going to have as grave an impact on global health rates as it was originally suspected it might then you're gonna see the stock market quickly reprice and people buy back in the question is where the bottom is and nobody really knows the answer my guess is that we are approaching the bottom because uncertainty seems like it's at its height right now I'm not recommending that people go on buy stocks all I'm saying is that I would be looking in the very near future to buy stocks given the the stock market dip that has taken place over the last few days whenever the stock market drops this much that tends to be a fairly good time to buy stocks not a great time to sell stocks you'll want to sell into a dropping market buying into a dropping markets a good idea and by the way when people say my 401k is worth less that's true your 401k is worth less but if you're not cashing it out it doesn't really matter and Warren Buffett was once asked how much money he lost during the 2007 2008 stock market crash and he said I didn't lose a dime because I didn't sell a stock as long as you don't realize the loss the loss is not realized which is something good to keep in mind when you're panicking over the value of your 401k if you don't have to access your 401k right now then really matter you can wait another year the stock market goes back up which by the way is the best investment strategy buy-and-hold is a very very good investment strategy over time playing around with the stock market is generally not a great investment strategy the outbreak of coronavirus in and around Milan is light-years from the horrors of the plague for now only just over a dozen people have died they were elderly or with serious underlying health conditions and this seems to be the pattern even in the Chinese statistics that have been made available the death rates are much higher for older people and people with pre-existing conditions than they are for people who are young nonetheless people are staying home people are freaked out you can see the pictures from Milan it's a bustling city but now basically everybody is staying home on via Alessandro Manzoni hardly any cars or people went by and long lines of white taxis waited for fares that didn't come and led down to Piazza del Duomo where Milan's landmark Cathedral usually crammed with tourists and people rushing to the subway was mostly empty only a few tourists often wearing nests show up into pictures of themselves swarms in great clouds of the pigeons they fed out of their hands La Scala is still shuttered the shopkeepers and bars in stores stared absent-mindedly out the windows or check their phones again none of this is a grave shock everybody is being very cautious at this point meanwhile in the United States there has been a lot of focus on California because they're apparently 8400 people who are being monitored in the state of California our Ken doll of the governor Gavin Newsom who has presided over one of the worst health crises in modern California history in terms of a massive homeless crisis that has spread disease in areas like downtown Los Angeles Gavin Newsom came out yesterday and announced that we are monitoring 8400 people in that 33 confirmed cases of coronavirus have cropped up in California alone thousands and thousands of other people have come in on more traditional flights through the state of California some 8400 plus are currently being monitored with 49 local jurisdictions doing those protocols and monitoring as it relates to more traditional commercial flights that came in from points of concern and potential points of contact particularly in Asia okay so 8400 people is a lot of people to monitor the people they're monitoring are people who have had points of contact in China we have seen the first case in California this is the one that's that's kind of freaky the first case of what they call a community infection meaning we have no idea where the person got the corona virus infection according to the New York Times coronavirus diagnosis in California is highlighting testing flaws doctors suspected that one person was infected with corona virus for days but the patient didn't fit the federal criteria because they hadn't been in contact with anyone from China and they weren't tested for days which means they're running around the state of California without any testing protocol in place even before the announcement on Wednesday frustration had been mounting among health providers and medical experts that the agency was testing too few Americans which may slow preparations for an outbreak and may obscure the scope of infections lauren lawrence our director of operations at johns hopkins office of critical event preparedness and response says I think the diagnostic issues the single most important thing that keeps me up at night right now CDC officials said on Thursday they had not been made aware that doctors in California made an urgent appeal for diagnostic testing of the woman by the end of the day the agency had revised and broadened its testing criteria adding to the of Americans who qualify right now they're saying there is a shortage of testing kits so all the talk about testing everybody that apparently is is not a thing that that is possible right now CDC is worrying that maybe the health system gets overwhelmed but the fact is that we are going to be spending billions of dollars on this thing I mean billions of dollars can we're gonna get into more of what the government has been doing where the shortcomings are in just one second first let's talk about the problems with fixing your car so you know something breaks down your car your car is no more complex than ever you probably can't go to the local auto parts store get what you need and walk out with exactly the right part for your car because parts have become parts to become so specific instead what you need is to use the power of the Internet chain stores have different price tiers for professional mechanics and do-it-yourselfers alike and here's the thing rockauto.com doesn't Rock Auto calm always offers the lowest prices 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best possible price that you could ever wish for okay so updates from ABC News the FDA is now announcing that the issue of a drug shortage is is a possibility again these drugs will be ramped up fairly quickly you would imagine Japan has reported a couple additional time in princess cruise ship deaths the individuals were a British man and a Japanese woman they were the fifth and sixth passengers to die from corona virus after being aboard the quarantined cruise ship of course like 700 people were actually infected on that quarantine cruise ship so not a huge surprise that that many people died because that if there were 800 people infected aboard the cruise ship in six or seven people died that's obviously tragic and it's obviously terrible but that mean the death rate is not 10% or 20% or even 5% so the the right now China still leads the way in terms of number of infections apparently at least 2,800 people according to the WHI of South Korea has the second highest national total of coronavirus cases behind China with more than 81 thousand people tested in that country about 2300 had tested positive for a corona virus more than 30 thousand others were waiting test results at this point meanwhile a majority of America of the cases who are on board the diamond Princess cruise ships the the people in the United States were diagnosed with the disease they were on board that time in princess cruise ship that was placed under quarantine in Japanese waters no American has yet died from corona virus when the CDC is investigating the source of the various infections that have been seen around the country the FDA said on Thursday it was not aware of any reports at this time of human illnesses that suggests that corona virus can be transmitted by food or by food packaging meanwhile there's the other big story today from the US government is that a whistleblower within the US Department of Health and Human Services had filed a complaint alleging that more than a dozen workers were sent to receive the first Americans repatriated from Wuhan China without proper training or protective gear for coronavirus infection control this was reported by The Washington Post they suggest that the corona virus basically was treated without any sort of protective gear according to this whistleblower the underlying complaint apparently has not been substantiated at this point a spokesperson for the US Office of Special Counsel confirmed it received the whistleblower complaint and that the case has been assigned when asked for comment US Department of Health and Human Services spokesperson Katelyn Oakley told ABC News we take all whistleblower complaints very seriously and are providing the complainants all appropriate protections under The Whistleblower Protection Act we're evaluating the complaint have nothing further to add at this time ABC News has not revealed the complaint lawyers representing the whistleblower have refused to provide the complaint one of the whistleblowers attorneys told ABC News that the allegations laid forth are accurate he says we are hopeful Congress in the OSC will investigate this case in a timely and comprehensive manner there's no evidence by the way that anybody who actually met the folks coming back from Wuhan that any of those those folks were actually infected with corona virus nonetheless that is leading two questions about the the federal handling of this entire situation now with all of that set there's no question that the Democrats and the media are making hay out of all this brian Stelter was saying we may be looking at a crisis and meanwhile we're having a crisis in leadership okay we're not anywhere near a crisis point in the United States at this point guys we are just not we're not the fact is that we have double-digit numbers of actual infected in the United States has only 60 total infected in the United States in a country of 330 million people we have zero deaths so far so the notion that we are like on the verge of a widespread outbreak now this stuff is fluid it could move but there's no evidence at this point that a pandemic is in the offing in the United States particularly since the US has done a fairly good job it seems so far of quarantine people meanwhile over in Israel there are reports that Israeli scientists are on the cusp of developing the first vaccine against the novel coronavirus according to Science and Technology Minister Ophir akunis I look forward to Bernie Sanders receded to Lieb and Omaha Nome are suggesting boycott divestment and sanction from the corona virus vaccine because it's produced in Israel if all goes as planned the vaccine could be ready within a few weeks and available in 90 days according to a press release congratulations to the Galilee Research Institute on this exciting breakthrough said the Science and Technology Minister akunis I'm confident there will be further rapid progress enabling us to provide a needed response to the grave of global kovat 19 threat for the past four years scientists have been developing a vaccine against infectious bronchitis virus which causes a bronchial disease affecting poultry the effectiveness of that vaccine had been proven in preclinical trials so we'll see you know how well this this coronavirus vaccine works but at least there are some glimmers of hope on the horizon but this is not stopping anybody in the media from speculating at the end of the world is upon us we're gonna get to that in a second because that really is the big story in the United States right now the big story is not the actual corona virus outbreak because there is no corona virus outbreak in the United States the big story in the United States is twofold one the drop in the stock market which again is not attributable attributable to Trump it is attributable to the weakness in the global economy and the fact that trying to has screwed everything up and to it is the Democrats in the media trying to spin this thing into crisis and again the evidence just ain't there for crisis at this point we'll get there in just one second first let's talk about making your business more efficient now now would be the time to think about making your business more efficient right I mean we may be looking at the ability of an economic downturn Goldman Sachs suggesting the sp500 companies are not gonna have profits this year if your business is a business that requires profit one thing that you definitely need is control of your data right we hear the daily wire we have to have our eye on our data at all times because that is how we know where the holes in our business are you need that too and this is why you should be checking out NetSuite by Oracle whether you're doing a million 10 million or hundreds of millions in revenue NetSuite by Oracle gives you the tools you need to accelerate your growth with NetSuite you get a full picture of your business finance inventory HR customers and more it's everything 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LIMITED TIME OFFER: Get 20% off with code DW2020! https://utm.io/uqKb.coronavirus tanks the stock market Joe Biden seeks a big comeback victory and perhaps we check the mailbag i'm ben shapiro this is the ben shapiro show [Music] today's show is sponsored by expressvpn protect your data from prying eyes at expressive VPN comm / ben alrighty so the market is tanking again today as of this morning it was dropping almost a thousand points again below 25,000 which means that we've seen a significant market sell-off over the course of the last five days all the way down from about 29,000 all the way down to below 25,000 that is a market correction anything below 10 percent down is a market correction we have seen well below 10 percent down and this is leading to questions about how real this drop is is this going to last are we going to see a gradual rise again as the market improves based on the market pricing in all of the global supply chain and disruptions what you are seeing in the news today is people trying to make political hay out of this thing there's just no question this is happening and it's really a points of irritation to watch the media who are definitely spinning people into a panic over this thing try to pretend that they are not involved in spinning people into a panic over this thing or Democrats who continue to claim that the government response is completely lackluster then claim held tear president Trump responds to our claims that he's watching a pandemic response I mean the fact is that there are people out there who without evidence are suggesting that a pandemic is directly on the horizon that the United States is gonna be hit with a wave that it is unprepared for and not only that but that President Trump is solely responsible for this you've seen Democrats out there claiming that the stock market drop is somehow reflective of president Trump's inability to quell fears about the stock market Nancy Pelosi for example said just this yesterday said well President Trump was trying to quell the markets the markets dropped even as Trump was talking a president said something so strange that you really have to wonder you said the reason the market dropped is because of the debate the other night well the market that dropped eighteen hundred points before the debate the other night the market dropped while he was speaking yesterday in his press conference so you know let's not let's not be silly about what that is okay what that is is global supply chains being disrupted the fact is that the United States has very strong underlying economic fundamentals by every expert that I have talked to and most experts out there the u.s. is not the problem with the global economy right now the global economy is in trouble specifically because of China and because when China's supply chains disrupt global supply chains it slows down the ability of customers to buy it slows down the ability of distributors to distribute it slow down the ability of producers to produce and this means that you have holdups and that means that companies are not able to fulfill their orders it means that they are not able to make money and then they are not able to pay off those debts so China's mishandling of this entire thing from the very outset it just demonstrates the dangers of investing heavy amounts of money in fact the reason authoritarian dictatorships that are more willing to kill their own people for speaking openly about threats like coronavirus than they are to actually crack down on coronavirus after the cat is already out of the bag after the hen is already out of the coop so the fact is this has really nothing to do the United States this has to do with China botching this thing it has to do with the fact that the European economy was already on relatively shaky footing their growth rates were already incredibly low we've had on Mohamed el-erian who's now getting all sorts of credit he's the head of Allianz he's getting all sorts of credit correctly so for forecasting a couple of days ago don't buy into the stock market drop yet wait a little bit more because it's really a stock market correction he's been on my show pointing out that the fundamentals of the economy in the United States are fine it's the fundamentals of the economy in Europe they're a real problem because Europe has been blowing out the spending because Europe has not actually got its its debt in line with its spending because European growth rates have been low and because China's growth rates have been unduly inflated and so he was predicting for a long time that as central bank's continue to manipulate currencies in order to keep the market up eventually they would run out of bullets in their gun and you would have to see some actual underlying fundamental economic changes in place yup and China in order to sustain growth that's what you were seeing here you're not seeing correction based on failures of American policy you're seeing Corrections here based on failures of European and Chinese policy specifically and you are seeing what happens when vulnerable global supply lines actually become vulnerable the fact is globalization is fantastic in the sense that if you can widely distribute the factors of production across various country lines you can make that cheaper you can make it quicker you can make products more easily and better all of that is true it also means that just as if you were playing a game a telephone the chances are much better that the longer the line goes on somebody is going to miss the message somewhere in the middle well the longer the supply chain is the better chance is that there is some sort of disruption in one of those areas and that disruption is going to affect the entire supply chain so companies are constantly trying to evaluate what are the what are the sort of downside risks here this event is sort of a black swan a black swan is an event that is completely unforeseen it's somewhat unforeseeable it's it's an event that is so large and out of the box that nobody has really planned for it there was no real contingency plan for it now I think it's fair to say that people should have taken into account that China was a significant area of risk for a very long time mean the fact is again it's an authoritarian regime that means that they can shift policy at a moment's notice but more than that there have been a series of diseases coming out of China ranging from bird flu to SARS right and all of these diseases coming out of China maybe that should have been more predictable that something like this would happened but they were cropping up once every few years they really did not disrupt global supply lines the way that this has disrupted global supply lines so it was sort of an unforeseeable Black Swan to blame that on Trump or to suggest that that is reflective of underlying problems in the American economy is really not true particularly since President ROM has been very harsh on China right President Trump has suggested that investments in China are actually a mistake in the first place that we should be bringing a lot more of those investments home and I think companies in the future are gonna think twice about whether they want to invest in China based on the factor that you never know five years from now whether China is simply going to step in and declare that all business in the country is done rather they're just not going to operate anymore and we'll get into more of this in just one second and these sort of parochial nature of Americans view of the economy which is that everything in the American economy is reliant on the American economy alone that just is not true it's never been true it's why it's always very silly I mean said this while Trump was president I think it's very silly for any one president to be credited with the stock market drop or a stock market increase unless the president takes policies that are directly related to a stock market crash very often global economic factors have very little to do let's sort of the tinkering around the margins the presidents tend to do well get into more of this in just one second first let's talk about the problems with that you may have with employees in a time where economic contraction may be beginning you want to be very careful about the people you hire so let's say that there's a guy who works for you and let's let's call him Jared just just for example Jared great guy and let's say that one of the things that he does he makes sure that you have your ads on time and that you are fully kept abreast of what exactly advertisers are interested in hearing and let's say that your show starts at let's say I don't know like 8:00 a.m. Pacific time let's say Jared just decides one morning you know what today's an important warning for me to really you know get in there and get into that supply line of the of the advertising and so he just shows up that like 8:15 and so suddenly you got a staff of 30 people and they're all waiting on Jared well at that point you might be thinking to yourself hey how about zip recruiter zip recruit calm slash daily wired so the smartest way to hire you can get great employees whether they are new or replacements for Jared no wonder four out of five employers who post on super clear to get a quality candidate within the very first day zip recruiters powerful matching technology finds people with the right skills and experience for your job and invites them to apply when you post on zip recruiter that job listing get sent out to over a hundred top job sites the results that you get qualified candidates fast see for yourself don't trust me try zip recruiter for free right now go to zip recruiter comm slash daily wire that is zip recruiter comm slash at Dai ly WI re zip recruiter comm slash at daily wire zip recruiter is indeed the smartest way to hire so you don't get stuck with people like for example Jared zip recruiter comm slash daily wiring and zip recruiter comm slash Dai ly WI are you improve your business by making your employees better and by threatening your employees with the possibility of unemployment zip recruiter comm slash daily wire okay so the New York Times reporting on the real reasons why this thing is dropping and that the lead is always buried but the reality again is that the cause of the global stock market drop is not the United States it's pretty much everybody else the global stock market according to the New York Times slid for the sixth straight day on Thursday of course is sliding again today on Friday the sp500 slid 4.4% on Thursday as I say again as of early trading this morning the stock market the Dow Jones Industrial Average was down another thousand points the downturn continued on Friday as asian markets closed sharply lower and european stocks tumbled at the start of trading the widening scope of the health crisis threatens to overwhelm global supply chains especially in China the world's second largest economy after the United States in addition the outbreak could crush consumer demand as people limit travel or stay home even without a government or to do so this is where the uncertainty really comes in it's why China has really botched this thing because even if China had an outbreak but there were transparent about what exactly was going on the market could price in the information that's what markets do markets are fantastic at pricing in for information there's a theory of the stock market that is called the if the efficient markets theory there's sort of a strong version or a weak version the strong efficient markets theory says that no single trader can ever beat the stock market in general because it is a collectivized it has collectivized aggregation of all knowledge on a particular topic the more information is available the more the stock market is able to price it and when you see tremendous stock market drops like you've seen over the last week what that means is tremendous uncertainty it means that people are trying to figure out exactly how much uncertainty there is in the global market exactly how much information has been made available and the fact that China has been very stingy about the information that they've actually put out there is the rationale for this trap because investors are trying to figure out okay well I'm not sure whether this thing is gonna continue for a month or six months I'm not sure whether we're gonna see cancellations and public events already in Switzerland they've cancelled apparently all public events over a thousand people not sure why a thousand people is the limit but you could easily see something like that in the United States if this outbreak starts to worsen he could see public I mean sporting events could be shut down for example Scott Clemmens the chief investment strategist for private bankers at Brown Brothers Harriman said the outbreaks potential to alter American consumers habits was at the heart of the sell-off so the gree of the consumers changed their behaviors they stopped going out to eat they don't take the vacation they cancel the business trip that consumption that spending personal consumption is 68 percent of GDP over the past few days companies as varied as United Airlines MasterCard and Pfizer have said the outbreak poses a threat to their 2020 earnings analyst at Goldman Sachs predict that companies in the S&P 500 would generate no profit growth the entire year as a result of the crisis because of its severe decline in Chinese economic activity when on Wednesday president Trump tried to address the outbreak and said that the risk to the United States was low but people aren't really confident in that because frankly even the United States government doesn't know enough about coronavirus again this is the problem with China withholding all sorts of information nobody knows the death threat there are two real factors as I discussed yesterday in deciding what the risk factors are with regard to coronavirus one is the transmission rate and the other is the death rate and we don't have good information on either one of those because China has not been revealing the information in you are seeing widely variant reports across the globe on the impact of coronavirus right you are seeing that coronavirus in Iran is killing like a crapload of people but koruna virus in Italy isn't killing that many people which is not like a major shot considering that Public Health and Iran is garbage and the government of Iran is garbage a bunch of their top ministers have gotten coronavirus over in Iran according to farah naaz for CG and Rick Gladstone reporting for The New York Times a senior figure in Iran's government who sits just a few seats away from president Hassan rouhani a cabinet meetings has fallen ill with coronavirus making her Iran's seventh official to test positive including one prominent cleric who has died there have been almost 300 deaths in Iran that's just what's been reported vice president ma su ma empty car mr. rouhani's deputy for women's affairs in the highest-ranking woman in the government also one of the lead revolutionaries during the Iranian Revolution that in which they took hostages she was actually one of the hostage takers so she's a delightful human being she's a confirmed corona virus infection couldnt happen to a nicer gal is quarantined at home that his closure came a day after a cabinet meeting in which she was in close contact with other government leaders including rouhani a photo posted by a BBC Persian reporter on Twitter showed she was sitting within a few yards of rouhani she was known as Mary during the Tehran hostage crisis four decades ago Iran now appears to have the highest number of government officials infected by coronavirus who is officially first reported in the holy Iranian city of Qom on February 19th the disease is believed to have spread to the country from China which retains close economic relations with Iran they have already reported something like 26 I'm it was it was 245 people infected some 126 deaths already but health experts estimate the number of infections is far higher because the country's fatality rate of about 20 percent seems so high compared to a our countries meanwhile we've seen that in Italy coronavirus is shutting down public activity but we're not seeing tons of deaths so there is a wide difference in how countries death rates are varying and transmission rates are varying as well because we don't have enough information the stock market is trying to price in a tremendous amount of uncertainty right now so when you see that stock market dip well you should recognize is that if as information emerges it turns out that coronavirus is really not going to have as grave an impact on global health rates as it was originally suspected it might then you're gonna see the stock market quickly reprice and people buy back in the question is where the bottom is and nobody really knows the answer my guess is that we are approaching the bottom because uncertainty seems like it's at its height right now I'm not recommending that people go on buy stocks all I'm saying is that I would be looking in the very near future to buy stocks given the the stock market dip that has taken place over the last few days whenever the stock market drops this much that tends to be a fairly good time to buy stocks not a great time to sell stocks you'll want to sell into a dropping market buying into a dropping markets a good idea and by the way when people say my 401k is worth less that's true your 401k is worth less but if you're not cashing it out it doesn't really matter and Warren Buffett was once asked how much money he lost during the 2007 2008 stock market crash and he said I didn't lose a dime because I didn't sell a stock as long as you don't realize the loss the loss is not realized which is something good to keep in mind when you're panicking over the value of your 401k if you don't have to access your 401k right now then really matter you can wait another year the stock market goes back up which by the way is the best investment strategy buy-and-hold is a very very good investment strategy over time playing around with the stock market is generally not a great investment strategy the outbreak of coronavirus in and around Milan is light-years from the horrors of the plague for now only just over a dozen people have died they were elderly or with serious underlying health conditions and this seems to be the pattern even in the Chinese statistics that have been made available the death rates are much higher for older people and people with pre-existing conditions than they are for people who are young nonetheless people are staying home people are freaked out you can see the pictures from Milan it's a bustling city but now basically everybody is staying home on via Alessandro Manzoni hardly any cars or people went by and long lines of white taxis waited for fares that didn't come and led down to Piazza del Duomo where Milan's landmark Cathedral usually crammed with tourists and people rushing to the subway was mostly empty only a few tourists often wearing nests show up into pictures of themselves swarms in great clouds of the pigeons they fed out of their hands La Scala is still shuttered the shopkeepers and bars in stores stared absent-mindedly out the windows or check their phones again none of this is a grave shock everybody is being very cautious at this point meanwhile in the United States there has been a lot of focus on California because they're apparently 8400 people who are being monitored in the state of California our Ken doll of the governor Gavin Newsom who has presided over one of the worst health crises in modern California history in terms of a massive homeless crisis that has spread disease in areas like downtown Los Angeles Gavin Newsom came out yesterday and announced that we are monitoring 8400 people in that 33 confirmed cases of coronavirus have cropped up in California alone thousands and thousands of other people have come in on more traditional flights through the state of California some 8400 plus are currently being monitored with 49 local jurisdictions doing those protocols and monitoring as it relates to more traditional commercial flights that came in from points of concern and potential points of contact particularly in Asia okay so 8400 people is a lot of people to monitor the people they're monitoring are people who have had points of contact in China we have seen the first case in California this is the one that's that's kind of freaky the first case of what they call a community infection meaning we have no idea where the person got the corona virus infection according to the New York Times coronavirus diagnosis in California is highlighting testing flaws doctors suspected that one person was infected with corona virus for days but the patient didn't fit the federal criteria because they hadn't been in contact with anyone from China and they weren't tested for days which means they're running around the state of California without any testing protocol in place even before the announcement on Wednesday frustration had been mounting among health providers and medical experts that the agency was testing too few Americans which may slow preparations for an outbreak and may obscure the scope of infections lauren lawrence our director of operations at johns hopkins office of critical event preparedness and response says I think the diagnostic issues the single most important thing that keeps me up at night right now CDC officials said on Thursday they had not been made aware that doctors in California made an urgent appeal for diagnostic testing of the woman by the end of the day the agency had revised and broadened its testing criteria adding to the of Americans who qualify right now they're saying there is a shortage of testing kits so all the talk about testing everybody that apparently is is not a thing that that is possible right now CDC is worrying that maybe the health system gets overwhelmed but the fact is that we are going to be spending billions of dollars on this thing I mean billions of dollars can we're gonna get into more of what the government has been doing where the shortcomings are in just one second first let's talk about the problems with fixing your car so you know something breaks down your car your car is no more complex than ever you probably can't go to the local auto parts store get what you need and walk out with exactly the right part for your car because parts have become parts to become so specific instead what you need is to use the power of the Internet chain stores have different price tiers for professional mechanics and do-it-yourselfers alike and here's the thing rockauto.com doesn't Rock Auto calm always offers the lowest prices possible rather than changing prices based on what the market will bear like Airlines do I spend up to twice as much for the same part the rockauto.com catalog is unique remarkably easy to navigate you can quickly see all the parts available for your vehicle and choose the brand's specifications and prices you prefer rockauto.com has everything from engine control modules and brake parts to tail lamps motor oil even new carpet whether it's for your classic or daily driver and get everything you need in a few easy clicks delivered directly to your door Rock Auto comm is a family business serving Auto Parts customers online for 20 years go to rockauto.com right now see all the parts available for your car or truck right Shapiro's in there how did you hear about us box so they know that we sent you again the power of the internet making your life better every day Rock Auto dot-com rich appear on there how did you hear about us box they know that we say you and get all the parts at the best possible price that you could ever wish for okay so updates from ABC News the FDA is now announcing that the issue of a drug shortage is is a possibility again these drugs will be ramped up fairly quickly you would imagine Japan has reported a couple additional time in princess cruise ship deaths the individuals were a British man and a Japanese woman they were the fifth and sixth passengers to die from corona virus after being aboard the quarantined cruise ship of course like 700 people were actually infected on that quarantine cruise ship so not a huge surprise that that many people died because that if there were 800 people infected aboard the cruise ship in six or seven people died that's obviously tragic and it's obviously terrible but that mean the death rate is not 10% or 20% or even 5% so the the right now China still leads the way in terms of number of infections apparently at least 2,800 people according to the WHI of South Korea has the second highest national total of coronavirus cases behind China with more than 81 thousand people tested in that country about 2300 had tested positive for a corona virus more than 30 thousand others were waiting test results at this point meanwhile a majority of America of the cases who are on board the diamond Princess cruise ships the the people in the United States were diagnosed with the disease they were on board that time in princess cruise ship that was placed under quarantine in Japanese waters no American has yet died from corona virus when the CDC is investigating the source of the various infections that have been seen around the country the FDA said on Thursday it was not aware of any reports at this time of human illnesses that suggests that corona virus can be transmitted by food or by food packaging meanwhile there's the other big story today from the US government is that a whistleblower within the US Department of Health and Human Services had filed a complaint alleging that more than a dozen workers were sent to receive the first Americans repatriated from Wuhan China without proper training or protective gear for coronavirus infection control this was reported by The Washington Post they suggest that the corona virus basically was treated without any sort of protective gear according to this whistleblower the underlying complaint apparently has not been substantiated at this point a spokesperson for the US Office of Special Counsel confirmed it received the whistleblower complaint and that the case has been assigned when asked for comment US Department of Health and Human Services spokesperson Katelyn Oakley told ABC News we take all whistleblower complaints very seriously and are providing the complainants all appropriate protections under The Whistleblower Protection Act we're evaluating the complaint have nothing further to add at this time ABC News has not revealed the complaint lawyers representing the whistleblower have refused to provide the complaint one of the whistleblowers attorneys told ABC News that the allegations laid forth are accurate he says we are hopeful Congress in the OSC will investigate this case in a timely and comprehensive manner there's no evidence by the way that anybody who actually met the folks coming back from Wuhan that any of those those folks were actually infected with corona virus nonetheless that is leading two questions about the the federal handling of this entire situation now with all of that set there's no question that the Democrats and the media are making hay out of all this brian Stelter was saying we may be looking at a crisis and meanwhile we're having a crisis in leadership okay we're not anywhere near a crisis point in the United States at this point guys we are just not we're not the fact is that we have double-digit numbers of actual infected in the United States has only 60 total infected in the United States in a country of 330 million people we have zero deaths so far so the notion that we are like on the verge of a widespread outbreak now this stuff is fluid it could move but there's no evidence at this point that a pandemic is in the offing in the United States particularly since the US has done a fairly good job it seems so far of quarantine people meanwhile over in Israel there are reports that Israeli scientists are on the cusp of developing the first vaccine against the novel coronavirus according to Science and Technology Minister Ophir akunis I look forward to Bernie Sanders receded to Lieb and Omaha Nome are suggesting boycott divestment and sanction from the corona virus vaccine because it's produced in Israel if all goes as planned the vaccine could be ready within a few weeks and available in 90 days according to a press release congratulations to the Galilee Research Institute on this exciting breakthrough said the Science and Technology Minister akunis I'm confident there will be further rapid progress enabling us to provide a needed response to the grave of global kovat 19 threat for the past four years scientists have been developing a vaccine against infectious bronchitis virus which causes a bronchial disease affecting poultry the effectiveness of that vaccine had been proven in preclinical trials so we'll see you know how well this this coronavirus vaccine works but at least there are some glimmers of hope on the horizon but this is not stopping anybody in the media from speculating at the end of the world is upon us we're gonna get to that in a second because that really is the big story in the United States right now the big story is not the actual corona virus outbreak because there is no corona virus outbreak in the United States the big story in the United States is twofold one the drop in the stock market which again is not attributable attributable to Trump it is attributable to the weakness in the global economy and the fact that trying to has screwed everything up and to it is the Democrats in the media trying to spin this thing into crisis and again the evidence just ain't there for crisis at this point we'll get there in just one second first let's talk about making your business more efficient now now would be the time to think about making your business more efficient right I mean we may be looking at the ability of an economic downturn Goldman Sachs suggesting the sp500 companies are not gonna have profits this year if your business is a business that requires profit one thing that you definitely need is control of your data right we hear the daily wire we have to have our eye on our data at all times because that is how we know where the holes in our business are you need that too and this is why you should be checking out NetSuite by Oracle whether you're doing a million 10 million or hundreds of millions in revenue NetSuite by Oracle gives you the tools you need to accelerate your growth with NetSuite you get a full picture of your business finance inventory HR customers and more it's everything you need to grow all in one place directly from your phone or computer NetSuite will give you the visibility and control you need to make the right decisions and grow with confidence that's why NetSuite customers grow faster than the S&P 500 NetSuite is the world's number one cloud business system it's trusted by more than 19,000 companies it is the last system you will ever need NetSuite because business grows here schedule your free products tour right this moment receive your free guide seven key strategies to grow your profits at NetSuite comm slash pen that is NetSuite comm /ban ETSU ite comm slash man NetSuite dot-com slash Bend go check them out right now and make your b

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