Thanks for the reply.
Regarding bad debts, as you said, they are small amounts and will be paid off knowing the stimulus is on the way in more than 1 form. It's not just the cash payments that will help, it's the stimulus and bail out of struggling industries and small business loans that will allow businesses to retain staff and even rehire them. That's the whole point of the stimulus. Most of the big banks have also agreed to 3 month mortgage holidays. The hardship plan with 2 free reschedules will also help.
UMS - I don't see this getting smacked hard at all. I own a marketing company and we're seeing a nice uplift in e-commerce sales with hundreds of clients. There is definitely less demand for ads as non e-commerce related businesses have pulled back ad spend, so the bidding is cheaper on a cost per impression and cost per click basis. I think well capitalised companies will take advantage of this and customer acquisition will be strong.
SMEs - Spot on! Lower overheads and more adaptable and streamlined marketing budgets will allow these businesses to pivot quickly and gain an advantage.
Timeframe - I disagree with you here. There is a large movement, especially from the right, pushing to get things reopened. I think they'll keep certain cities locked down and will open and close based on capacity in hospitals. They well and truly get that it's all about building up the herd immunity so this passes. Have you seen the studies around the virus and humidity? Coming into the summer months this will peter out quickly. They are also very close to a test that can tell you if you already had the virus so you can go back to work. I'll post part of an article regarding a very effective treatment below this post.
50 cents a share for a company growing at 300% year on year in 1 of the fastest growing industries in the world is a steal.The Game-Changer: A Near-Term Anti-Viral Solution?
In addition to a clear decline in infection and death rates, there areseveral other event risks that could impact market sentiment. Arguably one ofthe most interesting is the near-term availability of a tractable anti-viralsolution.
It would appear that there are two cheap, publicly available, andscalable drugs that have existing FDA approvals for other purposes: chloroquine(C), which is an anti-malarial drug; and its much safer derivative, hydroxychloroquine(HC), which is used to treat auto-immune disease and arthritis.
Based on the available data, it would seem that HC in particular has areasonable probability of being able to kill the virus in the first couple ofweeks infection (before it has permanently damaged lung capacity and triggeredan immune system response).
In recent days President Trump has actively promoted HCuse in combination with an anti-biotic known as azithromycin or Z-Pak in hispress conferences and online. The FDA has confirmed they are allowing US hospitals to employ HC and Z-Pak on a compassionate basis until formal FDA approval for COVID-19 use is secured, which is expected soon.
We do know that both C and HC kill the virus in vitro. A leading global infection disease expert working in French hospitals has published results of a non-randomised and relatively small clinical trial of his patients that has shown encouraging findings (see the paper here and a detailed video with the key author here). There is also this video interview with a US physician who is treating 100 patients with HC at an east coast hospital who claims they have had similar success with the drug and no fatalities.
It would appear that the Chinese figured some of this out inmid-February, and have since been prescribing C as a standard therapeutic for COVID-19 patients. A Wall Street Journal article published by two senior practicing doctors on 23 March provides a good summary:
A flash of potential good news from the front lines of the coronaviruspandemic: A treatment is showing promise. Doctors in France, South Korea andthe U.S. are using an antimalarial drug known as hydroxychloroquine withsuccess. We are physicians treating patients with Covid-19, and the therapyappears to be making a difference.
Hydroxychloroquine is a common generic drug used to treat lupus,arthritis and malaria. The medication, whose brand name is Plaquenil, isrelatively safe, with the main side effect being stomach irritation, though itcan cause echocardiogram and vision changes. In 2005, a Centers for DiseaseControl and Prevention study showed that chloroquine, ananalogue, could block a virus from penetrating a cell if administered beforeexposure. If tissue had already been infected, the drug inhibited the virus.
On March 9 a team of researchers in China published results showinghydroxychloroquine was effective against the 2019 coronavirus in a test tube.The authors suggested a five-day, 12-pill treatment for Covid-19: two200-milligram tablets twice a day on the first day followed by one tablet twicea day for four more days.
A more recent French study used the drug in combination withazithromycin. Most Americans know azithromycin as the brand name ZithromaxZ-Pak, prescribed for upper respiratory infections. The Z-Pak alone doesn’tappear to help fight Covid-19, and the findings of combination treatment arepreliminary.
But researchers in France treated a small number of patients with bothhydroxychloroquine and a Z-Pak, and 100% of them were cured by day six oftreatment. Compare that with 57.1% of patients treated with hydroxychloroquine alone,and 12.5% of patients who received neither.
What’s more, most patients cleared the virus in three to six days ratherthan the 20 days observed in China. That reduces the time a patient can spreadthe virus to others. One lesson that should inform the U.S. approach: Use thistreatment cocktail early, and don’t wait until a patient is on a ventilator inthe intensive-care unit.
A couple of careful studies of hydroxychloroquine are in progress, butthe results may take weeks or longer. Infectious-disease experts are alreadyusing hydroxychloroquine clinically with some success. With our colleague Dr.Joe Brewer in Kansas City, Mo., we are using hydroxychloroquine in two ways: totreat patients and as prophylaxis to protect health-care workers from infection.
We had been using the protocol outlined in the research from China, butwe’ve switched to the combination prescribed in the French study. Our patientsappear to be showing fewer symptoms.
Our experience suggests that hydroxychloroquine, with or without aZ-Pak, should be a first-line treatment. Unfortunately, there is already ashortage of hydroxychloroquine. The federal government should immediatelycontract with generic manufacturers to ramp up production. Any stockpilesshould be released.
There are probably several reasons why we have not heard more about HCuntil the last week or so. First, a national leader promoting HC as a curewould create a run on the drug, denying it to the sick suffering from lupus andother auto-immune diseases, and those with rheumatoid arthritis. This hasalready happened in Australia and the US following Trump’s advocacy. Second,even with scalable production capacity, it will take time to ramp-up.Encouragingly, this process has already started. One US journal reports:
Novartis has pledged a global donation of up to130 million hydroxychloroquine tablets, pending regulatory approvals forCOVID-19. Mylan is ramping up production at its WestVirginia Facility with enough supplies to make 50 million tablets. Tevais donating 16 million tablets tohospitals around the U.S.
Thisbrings us to a third insight, which is that you still need containment toflatten the infection curve and massively reduce reproduction rates, or ROs,ideally below 1.0, if you are to avoid mass infections within any givencommunity. If national leaders start promoting cures, there is a risk thatthere will be widespread resistance to containment, massively increasingtransmission rates, and the need for more drugs that may have capacityconstraints.
