Deep, but short: What Apple’s production recovery tells us about COVID-19 recession

Due to the COVID-19 pandemic black swan, we’re now dealing with a significant global recession. The duration is the most important factor. An interruption is hugely less damaging than a permanent shrinkage in the economy; a V-shaped crash and recovery would be the best outcome.

Tim Worstall writes for Seeking Alpha:

global recession. Image: U.S. moneyMoody’s Analytics, just as an example, is predicting an 18% drop on an annualized basis, for GDP in the second quarter. That’s horrible, we’ve not seen that in many a decade. However, what’s important to us as investors (a well as producers and consumers in the economy more generally) is how long this is going to last for. Moody’s, again, is predicting a couple of percentage points decline in GDP for the whole year. That, obviously enough, means they’re predicting a significant recovery in Q3 and 4. Not quite back to our starting point but close to it… Sure, we’ll not enjoy neither the trip nor the return to being poorer at the end of the year than we were at the beginning. But a couple of percentage points of GDP is merely uncomfortable, it’s not a disaster.

China is where this all started and they’re a couple of months ahead of everywhere else… Yes, yes, yes, full recovery will take longer but China has already turned that all important corner. It seems reasonable enough to think that much the same will happen to us.

We might well think – largely because there’s truth to the thought – that what the Chinese government tells us isn’t something we want to believe without checking… However, we’ve another entirely private sector measure we can use. Apple has near all of its manufacturing in China. The country is also a major market for its products. Finally, the company cannot be browbeaten by anyone in China into stating untruths. It’s too big for any of that sort of pressure to work. So, we can use what we can glean about Apple’s operations to see what has been and is happening.

MacDailyNews Take: Here’s to a quick strong recovery from this global recession in all aspects, starting with afflicted people’s health and extending to employment and the economy!

17 Comments

          1. In mid-March, President Trump directed the US FDA to fast-track the use of Remdesivir, chloroquine, hydroxychloroquine, in conjunction with Zithromax (azithromycin, Z-Pak) which a leading Infectious Disease Specialist, Dr. Stephen Smith, above calls a “game changer” that “marks the beginning of the end of the pandemic.”

            President Trump saved countless lives with just that one action.

            The only moron here is you.

            1. A lesser man would have said screw it years ago, now, under the onslaught of the most evil people on the planet, who would gladly see millions die just to get rid of him, he is fighting for us. God bless you President Trump!

            2. Please contain your enthusiasm and cease demeaning others here.

              The president claimed on March 16 that the FDA approved the use of chloroquine to treat COVID-19. That was false.

              Let’s level set everyone.

              Chloroquine was discovered in 1934 by Bayer but determined too toxic for human consumption. Eventually prescription compounds were developed for safe treatment of viral infections like Malaria and autoimmune diseases like Lupus.

              The Chinese (who you always say cannot ever be trusted) proposed exploratory research be conducted using it against COVID-19. All research conducted to date has been early stage exploratory. Statistically valid peer-reviewed results aren’t available at this date. It is far too premature to predict the effectiveness in treating COVID-19 in different groups. Anecdotally, some people think symptoms were improved, some would argue that previously healthy people recovered on their own. Effectiveness has not been established!

              Chloroquine and its compounds are toxins. They are anti inflammatory and immunosuppressive. To treat viruses, the leading thesis proposes that these drugs act to inhibit hemozoin biocrystallization, which allows cytotoxic hemes to accumulate, with the hope of killing parasites that transfer viruses. In layman’s terms, it’s a low level poison. It is not clear that viruses themselves are actually killed by Chloloquine. Let me repeat that: this drug may kill parasites that carry viruses but it doesn’t actually kill viruses effectively. Your body kills the viruses. Your body is also harmed by the toxic drugs.

              After decades of studies, the effects of chloroquine are now understood so of course doctors can prescribe it in low doses. But it’s definitely not safe for the average consumer to experiment. I cannot repeat this too much — Chloroquines are toxic and have many side effects. Consult a real doctor.

              The FDA did issue an exemption for doctors to prescribe chloroquine for emergency off-label on March 28. This was not a unanimous decision. It is not anywhere close to approving final trials that are needed to show statistical validity of results.

              Again, DO NOT take chloroquine without consulting a doctor. If you are diagnosed with COVID-19 but are not feeling extreme symptoms, do not ask to take chloroquine.

              The premature presidential announcements have already put strain on supplies and treatment of other diseases rely on these medications.

            3. “Please contain your enthusiasm and cease demeaning others here.”

              And then you go on to demean people enthusiastically.
              I mean how stupid do you think everyone is concerning medication?

              So then of course TxAbUser jumps on board because he saw an argument where Trump is demeaned for no rational reason other than the ‘can’t let RedManBad have any credit for anything, so we’ll insinuate followers are stupid to make us feel superior” mentality the Left lives for in their quest for self-valuation.

              It’s like a brain-rot virus has already attacked the Democrats…..

            4. LOL.. Oh how far we have fallen. so if trump shot someone on fifth avenue, you would proudly proclaim that he didn’t kill all the other people saving coubtless lives.
              SMH

  1. Bank of America’s guidance today wasn’t so optimistic MDN. They predict S&P500 at 2600 for the end of the year. If this comes to pass, it would make the Trump Recession deeper in market % loss than the Bush-Obama Recession. (I’m being generous so you know I’m not picking on your party). A smart investor would be advised to take cues from the greater marketplace rather than the tips of a Seeking Alpha shill attempting to push AAPL this week.

    You never temper your happy music with any downtempo reality checks, do you? Like your hero, you’re good at telling people what you think they want to hear. Now hurry up and rush out some more propaganda under the pen name of First 2014 Then 2016. Make your oligarch bosses proud!

  2. Many mixed signals coming from China. It’s hard to believe their death count was less than 4,000. People working at the crematoriums implied the count was much higher. However, some say things are getting back to normal. Beats me. If that’s the case, why can’t we get our asses in gear in stopping the spread of the virus as our death count steadily rises. America is supposed to be the greatest country on Earth or so we’re always boasting. The general public is still finding masks hard to get in NYC. Luckily, I had a couple of N95 masks before the outbreak. Same with Purell hand sanitizer and Lysol Spray cans. I’m doing my part in social distancing and only going out for food.

    Amazon has stopped selling PPE to the general public and I understand that. Make that equipment available for the people on the front line. This whole virus thing is disrupting the norm and may get worse. I don’t think most people are focusing on buying new smartphones. Apple will recover eventually and hopefully I’ll still be around when it does. I’m spending a lot of time on Youtube watching all I can to learn what’s happening with the virus. Mostly bad news mixed with some good news. I don’t know why NYC had to get screwed the worst in the U.S. It’s just so weird. I’m guessing it’s due to the high population count or city/government slowpokes.

    1. New York is a transportation hub with three international airports, several railway hubs, a crowded public transit system, and high population density. That it is a tinderbox for infectious disease, and has been since the nineteenth century, goes almost without saying. However, that just means that its “curve” was particularly unflat. The same is likely to happen elsewhere, first in cities and then in the countryside. Social distancing can substantially slow the spread, but not stop it.

  3. Dear Sux, please examine your remarks. It’s not the Trump recession, it’s the VIRUS recession. The economy was humming along just fine under Trump, until the Virus reared it’s ugly head.

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