Goldman Sachs: “Half Of America Will Get Sick”

Around the time the Fed stunned markets with its 5pm Sunday emergency bazooka intervention, Goldman was holding an emergency conference call in which some 1,500 clients and companies dialed-in, making the comparisons to “Lehman Sunday” especially apropos.

For those wondering what Goldman said, here is the bottom line via TME:

  • 50% of Americans will contract the virus (150m people) as it’s very communicable. This is on a par with the common cold (Rhinovirus) of which there are about 200 strains and which the majority of Americans will get 2-4 per year.
  • 70% of Germany will contract it (58M people). This is the next most relevant industrial economy to be effected.
  • Peak-virus is expected over the next eight weeks, declining thereafter.
  • The virus appears to be concentrated in a band between 30-50 degrees north latitude, meaning that like the common cold and flu, it prefers cold weather. The coming summer in the northern hemisphere should help. This is to say that the virus is likely seasonal.
  • Of those impacted 80% will be early-stage, 15% mid-stage and 5% critical-stage. Early-stage symptoms are like the common cold and mid-stage symptoms are like the flu; these are stay at home for two weeks and rest. 5% will be critical and highly weighted towards the elderly.
  • Mortality rate on average of up to 2%, heavily weight towards the elderly and immunocompromised; meaning up to 3m people (150m*.02). In the US about 3m/yr die mostly due to old age and disease, those two being highly correlated (as a percent very few from accidents). There will be significant overlap, so this does not mean 3m new deaths from the virus, it means elderly people dying sooner due to respiratory issues. This may however stress the healthcare system.
  • There is a debate as to how to address the virus pre-vaccine. The US is tending towards quarantine. The UK is tending towards allowing it to spread so that the population can develop a natural immunity. Quarantine is likely to be ineffective and result in significant economic damage but will slow the rate of transmission giving the healthcare system more time to deal with the case load.
  • China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
  • Global GDP growth rate will be the lowest in 30 years at around 2%.
  • S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
  • There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
  • In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
  • Technically the market generally has been looking for a reason to reset after the longest bull market in history.
  • There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like ?9/11 than it does like 2008.

via zerohedge

13 comments

  1. Using the statistics of this forecast – are you saying that 50% of China has been infected with 700 million x0.02 = 14 MILLION dead as a result of this virus??
    If not, then why would the statistics in the USA be so radically different than those in China or South Korea?

  2. Goldman Sachs, you sir are full of crap. You are feeding into the public panicking and are sitting back and enjoying it. You should not even be opening your mouth with something you don’t know crap about.

    1. You are so right. Here is what Goldman Sachs said: 50% of Americans will contract the virus (150m people) as it’s very communicable. So far it’s 69 that has died, and have heard nothing about whether they were already sick before contracting the virus. May have died anyway. Got a ways to go yet.

  3. I agree with Doctor Kalir. We ran the same statistical analysis in our office yesterday using Ohio’s numbers. China would have 14 million or more confirmed infections using Ohio rational. We will keep our numbers low just by using common sense. Don’t be scared by the nonsense.
    Rick

  4. Good thing Goldman Sacs is not in charge and cannot be taken seriously. This is totally BS and is Fear Mongering at its absolute WORSE. These guys need to be locked up for trying to spread this total Bull Shit. I totally expect this to be pretty much over within the next 4 weeks time, but people like GS will try to extend it into much later this year.

  5. Just where do u get ur facts or rather what facts .more socialists spreading panic! Don’t u people have anything else to do ? Thank GOD FOR A TRUE STATESMAN PRESIDENT DONALD J TRUMP !!!!!!!

  6. Dear Goldman Sachs

    First of all you are very foolish.
    Only God can do healing and protect His children. Here is the word of God. 2 Chronicles 7:14 “if My people who are called by My name will humble themselves, and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land” Thank you God for healing people sickness, thank you God. I give the honor and praise. Hallelujah

  7. People like Goldman Sachs who spread such manure trying to create total panic across should be sent to prison for the rest of their miserable corrupt lives. What a deplorable liar!

  8. I’ll take my lead from Dr. Fauci, my governor, President Trump and V.P. Pence, Thank You, although, I do anticipate a quick recovery for most of the market come summer. The energy (petroleum industry) is more complicated. — So much for the Russia, Russia, Russia hoax.

  9. Goldman-Sachs, hey? Why not Scooby-Doo or my mother-in-law? Who has Halzeihmer?
    These banking institutions have been proven wrong, dishonest, and irresponsible over and over and over again. I always question their soundnesszand motives.
    But what are yours at RealConservatives when you take over yourself to publish that rubbish?

  10. This is more fearmongering and panic being whooped up by Goldman Sachs. Just shut them down until this pandemic is past.

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