I hate to say this but, I told you so. On the morning of February 27th I published an article with the title “Recession is Imminent: We Need A Travel Ban NOW!”. I wanted to make sure you understand the severity of the situation; hence the bold title.
This was the first time I made a recession call since March 2008. I also told you short the market and buy Treasury bonds in the same article. If you had shorted the market and bought Treasury bonds instead of investing in index funds, your portfolio would have been 25% bigger now.
I have a PhD in financial economics. I am not a journalist who is working for a measly salary. Journalists won’t give you timely, accurate analysis of the financial markets. News sites in general don’t make enough money from the advertisements in articles. At Insider Monkey, we have a subscription service that really pays for all of our expenses. So, please subscribe to our monthly newsletter if you care about staying one step ahead of the markets.
I completed my coronavirus analysis on February 25th and sent an email alert to our premium subscribers on February 26th. I published a summary of that email alert on February 27th. This was 3 weeks ago, but it feels like months ago.
At the time of my analysis America didn’t have a single coronavirus death. We also weren’t aware of any community transmissions of the new coronavirus. On February 26th at a press briefing Trump was asked the following question:
“Q: Just to follow up on Zeke’s question, can you clarify: Are you considering restricting travel to and from South Korea, Italy, and other countries that have been affected by this?
THE PRESIDENT: At a right time, we may do that. Right now, it’s not the right time.”
That was a missed opportunity to take decisive action to slow down the spread of the coronavirus. Every day the United States receives 200,000 international travelers. Donald Trump allowed dozens of infected people travel from Europe into the United States and plant the seeds of coronavirus in every major metropolitan area in America. That’s why I blame Trump for the severity of the incoming coronavirus recession. Three weeks ago, we didn’t have any local coronavirus cases. Today, we identified 4661 cases. Three days ago, we identified fewer than 2200 cases.
Let’s start with our predictions:
Prediction 1: On March 20th, we will report more than 10,000 coronavirus cases.
Prediction 2: On March 24th, we will report more than 20,000 coronavirus cases.
Prediction 3: On March 26th, we will report more than 30,000 coronavirus cases.
Prediction 4: On March 29th, we will report more than 50,000 coronavirus cases.
Prediction 5: On April 5th, we will report more than 100,000 coronavirus cases.
Prediction 6: Before April 1st we will implement Italy style total lockdowns of the New York City metro area, Seattle, San Francisco, Los Angeles, and many other major metropolitan areas.
Prediction 7: Right now the S&P 500 Index is trading at the 2500 level. Within 2 weeks it will see below the 2250 level. So, if you short the S&P 500 ETFs today and place a buy order 10% below the price you shorted them, you will earn a 10% return in potentially fewer than 2 weeks.
Prediction 8: Our hospitals won’t have enough beds for all serious cases of COVID-19 and doctors will give available beds to younger people and older people will be left to die. Be prepared to read several articles detailing the experiences of older Americans’ stories before the elections.
Prediction 9: The economic contraction will be relatively milder in Q1, but deeper than the 2008 recession in Q2.
Prediction 10: Donald Trump will lose the election to Joe Biden, assuming that they both survive the coronavirus pandemic. There is a 4.3% chance that Trump will die (see the details here) if he contracts the new coronavirus.
