Ax-man ran-the-gauntlet at our local hospital yesterday => treatment on a plantar wart.

No sick kids in pediatrics => the protocol is telemedicine with a referral, if necessary, to the ER.

Plenty of hospital capacity right now.

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Our school district published an outline of how they will play the fall.

Once we move to “protect your neighbors” then families who wish to continue with online education will need to shift to the district’s existing online platform (Boulder Universal).

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California State University system announced a move to fall online learning. The first major domino to fall.

Gap year!

If you’re a student who isn’t sure about college you can attend Lambda School for $15k all-in, and you’ll spend more time writing code than the kids with CS degrees.

After you’re done you can decide if you want to go back to school or take a high-paying job.

— Austen Allred (@Austen) May 12, 2020

As I wrote a couple weeks ago => defer, defer, defer.

=> get your life under your own control and learn a marketable skill.

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What can we infer from continued US positives and a supplemental $600 per week unemployment insurance payment?

There is an underground economy creating leakage within our soft-quarantine framework.

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I don’t expect the President to wear a mask => he has a long track record of risk-seeking behavior (link is to my blog on Family Risks).

Focus on something useful.

Such as, a bottom-up movement of mask wearing, social distancing and bubble management.

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Bring-your-bags is out of fashion at the supermarket due to the risk of cross-contamination.

We are taking our paper shopping bags and cutting them open for large-format craft paper.

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If the US elects to let the virus keep rolling, slowly, then I would expect countries to impose travel restrictions for Americans. Same deal for developing world and other hotspot countries.

This has negative implications for any country, business or family relying on American travel to maintain financial viability.

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Three Macro Thoughts

1./ If you are generating cash during the pandemic then where would you put it?

If I had “new money” then I could see myself allocating a portion to the stock market, notwithstanding (what appear to be) high valuations.

If you think interest rates are going to zero for 5-10 years, and fiat currencies are going to massively depreciate, then the stock market doesn’t look expensive to me.

This mental exercise doesn’t have an impact on what I’m actually doing. Yesterday saw a small rebalance away from US Equities for a client’s portfolio.

2./ Inflation/Deflation => strikes me as the outcome will be divergent. Divergent inflation has been a key part of the story for the last 20 years.

I expect some of the fastest, prior-inflating segments to deflate. The essential inflates, while the non-essential deflates.

Non-essential => things like brand-name education, luxury goods and travel & leisure => within that grouping, the businesses with large fixed costs will be subject to strong deflationary pressure.

Figuring this out isn’t a priority for me => making sure I’m OK regardless of outcome is how I like to organize my life.

3./ A collapse in the national restaurant industry seems possible. Some are thinking that this will, in turn, trigger deflation in commercial rents. Similar to the stock market, if we end up with a consensus view of 5-10 years of zero rates, then this need not translate to a collapse in capital values.

• Checking the 10-year treasury => 0.67%.
• The 30-year 1.37%.
• VTSAX 1.87% (take that with a grain a salt as payouts are going to be under pressure).

Lots of uncertainty out there. I see a downward spiral in capital values as a possible outcome.

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Our summer swim league was cancelled.

While expected, it was a disappointment for the kids.

I’m going to buy an inflatable pool as a hedge against an August (re)lockdown.

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I did a 20-minute FTP test => the results (221w) were 20% below what I used to hold for five hours, before I ran a sub-2:50 marathon. 🙂

The only constant is change