The 'D' word why governors want economies opened up: Desperation

My parents had the Coronavirus.  

It plunged their weight, left them absolutely exhausted, and left me praying to the Lord Jesus that they would be OK.

Thankfully, He answered in the affirmative. Sadly, hundreds of thousands of others didn't come through it (I don't know why. We just got lucky, I suppose).

In Texas and all over the USA, there are repeated calls from factions who want everyone to get out there and 'restart the economy again'. 

And you can understand why. These factions - often pushed along by their areas - have seen their areas (and voters, if we're honest about it), hammered by this immediate recession, and they are dying to get people back to work.

I would love to restart the economy again. I would love for Disneyland and Disneyworld to open up again, be able to go the cinema two or three times a week, and get to use some of the Houston Astros baseball tickets that I bought in March (now I realise why the guy receiving the money was so grateful!). 

The bottom line? A better economy means that people are generally happier. People have more money in their pockets, and are willing to spend it on areas that have really been destroyed by the Coronavirus, like restaurants and my friends who are physical therapists and personal trainers. Hey, I think about the poor ladies from Lil' Woodrow's bar in Houston in The Heights, who are doing the jobs....most of them doing the work as mothers with children of under-10.

Sadly, according to a research group, 66% of polled US citizens/ residents aren't as excited about ignoring social distancing and going out there.

In the Republican-heavy Southern States, governors all over the shop have taken it upon themselves to try and kickstart their state's economies. They need people to feel 'the new normal', and get back to work and - quite frankly - feel that it's OK to support their local businesses. In Georgia, the governor (who only lately admitted that he'd only just realised that COVID-19 could be transferred from person to person) has decided to open up the state. This hasn't gone down well with President Trump , and I actually agree with The Man In The White House. 

But what should be noted is that Governor Kemp hasn't seen two of the biggest employers in Atlanta, namely Coca-Cola and Home Depot, siding with him on this aspect. 

Note also that Florida's also opening up like mad, but two massive visiting points- the aforementioned Disneyworld and Universal Studios in Orlando – are remaining closed until further notice (but they are looking into ways of reopening). We can only hope that they open further than the predicted 2021 move – it would be fantastic to see as many people as possible employed (and good for Disney's share price, which in turn is good for yours truly, a shareholder of said company).

The reason why President Trump's annoyed with Kemp - and he's probably annoyed with a lot of governors who want to open their states post haste - is that so far there have only been around 4.4 million tests nationally, and that's simply not enough (In Texas - where my wife Jane and I live - is still one of the lowest states on the totem pole per capita getting tested). 

But move by the likes of Georgia and Florida isn't a middle finger up at the Democratic states: It's desperation. The local economies - a lot of which rely on tourism this time of year - have been absolutely hammered. They want people to get a bit of confidence in them before the schools finally finish at the end of May. I get it. I totally do. But it worries me.

But while the desperation is well thought-of (I am thinking the best of people, rather than it's simply a bunch of special-interest groups screaming at the Governor and threatening him with a withdrawal of support come their next elections), the fact is this: People can't go from fearing for their lives on March 1 to thinking it's all going to be fine on April 31st. As my sister Coco said: "You can’t go from ‘stay in or you’re at risk from dying of Coronavirus to ‘let’s all go back to the pub! Yay! In a month!” And while the hairdressers, the sit-down restaurants and the pubs are hopeful of a speedy recovery, the fear factor is going to be a far, far bigger block (Again: I want them to be packed. It’s good for the local economy. It's good for the oil prices if this makes people fly again. And it'll be good for my own pocket as a fund manager).

The thoughts from a fascinating note from senior COVID-19 research bods at the Institute for Health Metrics and Evaluation, agrees with Trump, saying that most states should not be opening fast. In its model, it recommends that although 16 states could relax their social distancing efforts by mid-May and be OK, there are 16 of them that should be on the other end of the spectrum…including Texas, Florida and Georgia. It also predicts in a model that although things are improving, COVID-19 will end the lives of 67,000 people by early August. Again, I hope the model is way, way wrong.

Speaking of havoc, it was quite the March on Wall Street. There was more blood on the street than a horror movie. Then the positive people came in again, and April rebounded. My father and I’s fund – which was battered to the tune of 12% in one month – has seen improvement across the board. But the big money (and that’s certainly not us (I wish!) – is lining up to put bets against the Fed-money flooded market…to the tune of $68.1 billion. That’s the highest figure since January 2016….and we know what happened there. Simply, the big money the economy recovery is a fallacy. In other words, it's going to be an horrific recession (note, we’re 30% or more in cash, bracing for such an eventuality - and I pray we're wrong).

It's going to take quite the effort to get back to the new normal. 

And a new vaccine. 

Stay safe and Facetime or hug a loved one, people. 

Yours sincerely,

Alex Ferguson. 

P.S. A friend of mine questioned the mortality rate of COVID-19. It seems that a majority of people that have fallen to this awful disease have been in 70s and 80s. A lot of them have had underlying health issues. I talked to another friend while fretting about this, and he had this analogy: “If you are clinically obese. You get COVID-19. You decide to go out for a walk when it all seems a bit better. Your cross the road. Your system is so beaten-up that you don’t walk as quickly as you would like. A car flies around a corner and kills you. Is that the COVID that caused you to die, or is that an ‘underlying health condition called obesity?’. Worth thinking about. And probably losing some weight.