Stimulus Plans, Drug Trials, and the New Normal
Keith Robinson and James Dwiggins review COVID-19 trends, testing gaps, and flawed early antibody studies from Santa Clara and LA. They warn against hydroxychloroquine after an NIH trial showed higher mortality, note 70 vaccine candidates in development, and discuss $480B in new stimulus funding as unemployment hits 26.5 million claims.
Chapters
All right. Good morning, everyone. This is Keith Robinson here with our weekly update. I've got my good friend and coworker, James Dwiggins. James, say hi to the adoring masses.
Hello, everybody. Hello, eif.
Yes, thank goodness. We think it's Friday. So we've been doing this now for a month. This is our fifth one of these, I think, where we just sort of share what we're seeing and trying to let y' all know, updates as things come down the pipe. So here's what this is kind of turning into. A lot of the information has made it out, which is great. That's awesome. Now we get to give you updates on things and sort of share things as we're seeing them. We've got some interesting content for you today, but this one might be a little less. This one might be a little more amusing and James and I thinking out loud and a little less on specifics because, you know, the stimulus plan hasn't passed yet, at least as of the last time I checked. So some of these things are still in progress.
Hasn't been signed by the President, huh? Hasn't been signed by the president.
Yeah. Okay. So, James, why don't we just dive right in? Let's start with some of the updates. We always start with the worldwide numbers and the US Numbers. Seems like it's peaking back up a little bit, but still staying within a flattened range. For you graphologists.
Yeah, I think it's the. The big thing about flattening the curve has occurred.
Yeah.
As far as reducing the numbers, I'm not necessarily seeing that, but that makes sense because of two reasons. We talked about this before. Testing is still ramping up. So there's still a massive lack of testing needed in the United States. We're three times under where we should be in order for us to really have a good grasp on where things are. And we'll talk about that in a minute. But obviously also, this is in other parts of the world where the medical system isn't quite as, you know, is not as developed. Here in the United States, you're seeing a lot of growth in a lot of those countries. So the worldwide numbers are going to continue to increase. And that's something that's just. That's just the reality of what we're dealing with on the US Side. I guess the best way to put it is you could say we flattened. Once it goes down, goes up, goes down, goes up again, related to the fact that testing is occurring more now than it was in the past, and it's continuing to be ramped up. So I think you will find that the numbers will increase. But the positive trend here, I'm going to go into this quite a bit, is because 90% of the country has been in some sort of lockdown or quarantine. You're seeing the infection rates going down, but testing's ramping. So you're seeing this flat number. And this is probably people that are sick because a family member got sick, they got sick, but it's not being spread on a significant basis. So testing's going up, numbers will incline, but overall the infection rate is generally going down because we're not all out doing things together like a concert or something. So I think that you'll see this continue to be flat for a bit drop. But to be clear, I, you know, this is my musings and I think, you know, if you just pay any attention to what doctors are saying, you know, we're moving towards a place of opening the country up because we have to. When you go into that in great detail, this is going to do this and I think it's then going to do this. And that's because as the, as we limit the amount of social distancing and things and start going back out more and starting to go to work, it's going to end up infecting more, more people. So which is why we're at, you know, in the US we're the biggest right now. Even these numbers are conservative. 887,000 cases in the U.S. but I've been saying this for five weeks. That's millions of people who have been, are infected that just don't know they're asymptomatic. We have unfortunately had 50,000 people that have died from COVID That number is going up not just because more deaths are occurring, but now because they're going back. And now they're starting to look at the people who have passed away before as early as February. Now they're seeing that they've had COVID 19, which goes to show that this has been in this country long before than we thought it was long before we stopped flights coming over from China. All of these things are showing that this has been here. Everyone's heard of this, everybody's been watching the same articles, but there's a lot of evidence that goes to this was actually here in the US long before we knew. So positive note, and then jump in your key if you want is 90,000 people have recovered from it from the diagnosed cases. We'll talk a lot about in just a minute. The people who went undiagnosed, but.
Right.
You know, we are the epicenter of it in the world right now.
Yeah, yeah. I think in a little bit we're going to unpack this even more. Just talking about the amount of people who got it that were never diagnosed but recovered and how that number is unmeasurable. You know, I do think we are. The data shows that it's flattening. You see some bumps and spikes maybe because of testing or increase in testing and other things. But let's talk about this piece because you and I were chatting about this actually before we started. But the lack of testing. Right. And how that there are some pluses and minuses to that. If you look at the countries who have successfully flattened the curve aggressively, they have tested a lot. That's why we talk about the testing. But one of the upside things is that means there's a lot of people who got sick and recovered but were never tested. And so they're not counted in that recovered data. Right.
Correct. All the data is rough. Basically. All the data is off is what it comes down to. You know, we've said from the beginning, and I said on the high side, I thought mortality rate might be 1% because of lost data. It turns out it's probably even less than that, which is great. It's still significantly more infectious than the flu and it has significantly higher mortality rate than the flu. So when people were comparing 19,000 people a year die from the common flu, I'm like, Great, we're at 50,000 now and it's just started, so it's not a good comparison. But there were two studies I want to bring out because I think this is. I always love watching the stuff that gets posted without any sort of research on it. There's a Stanford study done up here in Northern California where they had done a sampling for antibody tests, meaning people go in and they get blood work done to determine whether their bodies develop the antibodies against the body virus. Like they've already had it and now they're in theory immune to it. I want to make a comment on that. There's absolutely zero proof at this particular point in time that just because you have the antibodies for it doesn't mean you won't get reinfected. In fact, there are studies coming out that are showing the opposite. So this is still anecdotal at this point, but in theory, the idea is you've developed an immunity to it for a period of time. That study, that study basically said that they believe around April 1, around 48,000 to 81,000 people in Santa Clara County, a county here in Northern California, had likely had the virus and developed the antibodies, meaning 2.49 or 4.16% of the population had already had it, were not accounted for in those numbers and therefore shows that the mortality rate is significantly lower. There was a similar study done in LA county that just came out and between 2.8% and 5.6% they believe of the population is already carrying the antibodies as well. There's two problems with this. You know me, I'm analytical, so I dive into it. The first is the Stanford study was done without any peer review, meaning no other scientists had confirmed the work. And after they started to look at the data on it, there were significant flaws in the way the study was done. The first of which is the actual group of people they tested were hired off of Facebook. Meaning we're looking for a sampling of people who are willing to take a test to see whether you've had COVID 19. Who do you think is going to respond to that? It's going to be all people who thought that they had COVID 19. A true sampling, what they call AB testing, would be a random sample of people, not a selected sample of people who probably were sick. And like, I want to know if I have COVID 19 or not. So there's a significant error in the reporting of that. The second thing is, when you don't do peer reviews, like where you get other scientists to look at it, you don't get the mistakes you missed. That's not a hit against the scientists. But what they found was they didn't do a great job of including the false positive error rate among tests. Every single test you take, doesn't matter what it is, has a percentage of false positives that occur. This could be pregnancy tests, anything. And so that error rate wasn't calculated correctly in it. All that aside, what I'm trying to explain to you is that there's a lot of studies going on. It is very well known that there is a massive group of people likely who have already had this virus, who have developed the antibodies. And there's a significant portion of the population, what they're calling herd immunity, that's there. I want to counter this with one point because I've seen some really just some comments that just don't make sense to me. They're like, we need to let this thing go. Because, see, look at all the people that have developed antibodies. If you take that number of the high side of 5%, that means 95% of the population still hasn't. Which means that 95% of the people out there still have not gotten sick. And we don't know what percentage of those people are immune compromised that would end up being in a hospital or will die. That's. That's an ignorant approach. And it's. And we have to remember that this is not just about us. It's about how we affect other people. And so I'm trying to make sure people have some. Some empathy and compassion for loved ones and coworkers and family that may not know that they're immune compromised, that we need to keep this thing under control as much as possible. So.
Yeah, and the. The test that they're trying to figure out is can they extract the antibodies Right. From the people who have caught it and recovered from it? Plasma treatment. Yeah, yeah, right. Can they extract the antibodies and then use that to help people fight it off when they get it? It's an interesting concept. And granted, it's early and sounds like the studies weren't done as effectively or efficiently as they could have been, but from a macro standpoint, that seems like a very good idea.
It is. And it's being tested in China right now and a couple other countries where they're doing these treatments. And there is some preliminarily good reports. But one of the things on why you don't rush drugs to the market is you have to do proper testing. You have to see how it interacts with other medications. There's so many things that go wrong. And that's the comment I always make to people. I'm not a doctor. I just read a lot. Like, a lot. And so it's one of the reasons why it's like, okay, here's a drug. Take it. Well, what if you have three other medications you're taking for heart disease or something else? What if that drug interacts with that wrong and then actually kills you? But that's why you have to have trials and you have to go through massive medical review to determine what this is and how it can be used. We're just not there yet. We don't have enough time.
And there are a lot of things that they are. Look, there are a lot of things that are in these trials, and sometimes they pan out. We haven't had one pan all the way out yet. We're in that process. And there's multiple things that are going through this trial process right now.
To the point I just was saying some scientists are really pissed because the Stanford report came out without peer review. They're poking massive holes in it. And unfortunately what happens is these things come out and then they get thrown on social media and then everybody runs with it. And then here we are, everyone's determining that, oh my gosh, this isn't as severe as what it is when the data that's being provided is not accurate or just hasn't been tested enough.
Well, look, yeah, this one is, look, I like Facebook. This is now streaming live on Facebook with a couple watch parties going. Facebook has its place. But y' all like, don't get your news from Facebook. Don't even get your news from the news. Like, go do a little bit of research, read a little bit. You don't have to obsess about it. But when you hear it, just with a quick Google search and reading of two or three articles, you can very quickly form your own opinion. But don't, like, get your news from Facebook. And I personally recommend you don't even get your news from the news.
Yeah, and I would just add a comment to it. Look, I tend to be very centered on most things in my life. Keith knows that I look at stuff from a very analytical perspective. If you're watching NBC, msnbc, it slants left. If you watch Fox News, it's slanted. They both have agendas. Like, everybody knows that. So if you believe your news source is 100% giving you that truth, good luck. The reality is you have to dig deeper into medical reviews. You got to look at people who are coming at it from a science based position and then determine that it's the comment. I told Keith before when I was talking about this. You break your arm, you don't go to your attorney to have them fix it. You go to a doctor. If you want legal advice, you don't go to your landscaper. If you want anything truthful, you don't go to a politician, any of them, none of them, you know. So anyways, let's keep going.
All right, well, and the other thing they can do if they want is hang out with us on Friday. Right? And we'll do our best to unpack it in an.
You go into really deep detail on this stuff. And we're looking at a lot of different studies. This one was something that I've been paying attention to and I like these kinds of studies because it was commissioned. This study basically was done by the US center for Disease Control and Prevention. And basically what they've determined is 72% of hospitalized COVID 19 patients 65 or older who have hypertension. They've basically identified that this group of people who are taking blood pressure medications have a significantly higher death rate. And that is something they're now watching is. Okay. What they're basically saying is these basically call them ACE inhibitors, they may be an accelerant for the virus. These medications are causing a pathway for the virus to go affect your heart and your lungs. This is the kind of stuff I love to watch because they're leaving all the bullshit out of it and going down to let's study who these patients are. Why are we seeing people with this specific thing going on causing a higher death rate? This is what you're looking for. This is why they. Do you want to study the medical. What the doctors are looking at is how drugs are interacting with each other. So that doesn't mean if you're taking these, by the way, to freak out. I'm simply just telling you this is something that's now popped up is they've noticed a significant trend that if you are taking blood pressure medication, statistically 72%, you have a much, much higher rate currently today, based upon the first study that's occurred of unfortunately having a higher mortality rate.
When the thing to remember is we're like, we're four weeks into this.
Yeah.
Like we. All this data is. We got to start to compile it all and it's starting to come out with more and more depth and more and more frequency and more and more thought behind it. It's a journey. It's not a destination, it's a process. And it's really hard to be patient when you're sheltering in place. It's really hard to be patient when you see unemployment numbers like what we're seeing right now. It's tough to be patient, but we're going fast comparatively to how drug trials are normally done in a static or normal environment or even six weeks. Everything is happening quickly and with speed. And that's a good thing. We need to get more information. That is the key. Here's one of those that would look good for a weekend and then in the end maybe not so much.
Yeah, I mean, so this is, this is why I go back to this comment and this. I will. I will make sure everybody hears what I'm saying. All politicians, stop listening to them. Trust the medical community. Listen to what they're saying. This study just came out. It was commissioned by the National Institute of Health and University of Virginia, and it was a study done of 368 patients who took the hydrochloroquine. And it showed that 97 patients who took hydrochloroquine had a 27.8% death rate. And the 158 patients who did not take it had an 11.4% death rate. To be clear, this is hydrochloroquine without other drugs mixed into it. But what I want to make a comment on is the first study that's been done shows if you take it by itself, you have a higher death rate than not. My point here is that it's important to listen to the disease experts and the medical community before doing anything. I have seen stories of people who had this malaria drug. They had it on their shelves in their bathroom. They took this drug not based upon the recommendation of their doctor, and unfortunately, they died. And so it's really important that you guys continue to just sort through the crap and focus on what the truth is. People who study medicine their whole lives are the ones you want to listen to. I give the best analogy I can give you. Everybody on here probably has something to do with real estate. You guys get irritated when buyers and sellers go buy a house without talking to a real estate agent because you know more about the process than they do. So stop pretending. Politicians know more than doctors.
Yeah, yeah. Or when their neighbor, you know, when they listen to their neighbor who's a dentist. Right? Yeah.
Right?
Yeah. It's really important that you start to use your own mind and not just be spoon fed information. Just do a little bit of research. Just do a little bit of research.
And that doesn't mean Dr. Phil, right? You know he's a therapist, right? I mean, I heard him talk about how 360,000 people a year die from drowning in their pool. By the way, completely not true. And why are we listening to a therapist about medical treatments?
Because he's on tv.
I don't get it. Right.
Yeah. All right. But the economy is going to open some debate on this. But let's talk about that a little bit.
Yeah. I wanna add one comment I forgot to mention. I wanna add a positive here. There are 70 different vaccines currently. Now I wanna give a little bit update on this. There are 70 vaccine candidates in development across the world. Many of them are already in human trials. So when we talked originally about that 12 to 18 month timeframe, my hope is we're on the shorter side. My hope is that we're on the 12 month side of that timeframe. The other thing is there's over 20 different drug therapies that are being researched now too. So while what I just gave was a negative, that doesn't mean that there aren't other positives. I'm not really showing any of them because these are pre. There isn't any proof on anything yet. So just know that there's a whole other element of positivity coming. Let's go to the economy. Look, here's where we're at. The US economy has to turn back on the president's shooting for May 1. I think that, you know, and he's wanting the states to take lead in that. I think that's the right approach because different states certainly have different levels of cases. I just want to make a comment. There's no such thing as really state borders. Just because someone, just because one state says we're turning back on doesn't mean somebody from the other state can't come in your state and infect everybody. Just add context to it.
So yeah, it's a little like having the. I'm old enough to know there used to be a smoking and a non smoking section in an airplane. Yeah, good luck with that. Yeah, good luck with that.
The economy has to open because we've got to get the American worker moving again. I think most people would agree that they're at a point now where, and this includes us too, like, look, let me just cut to the chase. We all need to get to work. We gotta take care of our families. The government can't just keep writing checks if there's not enough money there. Eventually we'll just. We're gonna cause such a massive problem we can't get out of. We're getting close to some degree anyway. And the truth is what I believe will happen is we're going to open certain states up. It's going to go in waves. I think you'll see a resurgence of cases in certain states heavier than others. Maybe some states lock down again for 30 days to some different type of degree. Maybe not quite as extreme or candidly. We just go towards this here herd immunity thing and try to make sure that the hospitals are able to do the best they can to treat people and pray that we have a treatment before the vaccine. I don't know if this is just me personally speaking here. I don't see any other way to make this work because as lots of language has gone around, you know, we, we have to get the economy moving. It just, it's got to get pumping.
So the one piece that I've read a few things and I'm still Trying to get more information. But it sounds like we are getting close to having a lot closer to having the testing mechanism, getting there of tests that we need. We're not all the way there, but we're getting there. And that is a huge step in. We have to reopen the economy, but we have to do it in a very thoughtful and humanistic approach. Right. But that will translate to maybe not whole states, but for sure some cities will have spikes. And you need to test in order to isolate the people that are infected so that it doesn't spread the way that it is spread. Right.
We don't have the resources to technically do the trace and isolate portion of this, technically speaking, like, it just doesn't exist on the degree of what we would need. But that said, the testing and the antibody tests and those pieces will allow us to have a better clarity on. Look, if we know that 50% of our workforce. I'm making this up. But if 50% of our workforce in six months we know had the virus and they never showed symptoms, and you can fairly much assume that there are a lot that's a group of people you can put back into the economy. And then we need to treat people with compromised immune systems differently. I'm gonna get into this actually talking about the way the business should open, in my opinion, and how we treat our workforce differently. The ones that need to be careful versus not. I don't think George is the best example. I mean, even the president came out and was like, probably not the best approach on how to do it, which is kind of like, I don't know how massage parlors got involved in that discussion, which I thought was funny, but apparently that's an essential business to go with.
I'm going to fight the urge to make an investment.
Just leave that comment alone, Keith. So Oklahoma is coming next, and then Florida with its beaches. I'm still confused why Florida's opening beaches. To me, that's like mass groups of people together. I'm trying to find a lot. I get the economy part of it. I get that's how they make money and stuff. But that's also the fastest way to, like, spread everything. The point is states are going to start to move to opening the economy, and they need to. All of them need to find a way to start getting the workforce back into the economy as safely as possible to avoid loss of human life. And I think you'll see that happen over the next 30 days.
James, this isn't in what we're going to talk about, but it's a question from the audience. This is that comment and I've seen conflicting stories on both sides of this, personally, but the whole summer, warmer weather, drier or more humid. Any impact in what you've read? I've read things that say both ways. What about you?
I've read the recent thing I read today was you need to study countries near the equator like Ecuador, places where it's hot and humid. And unfortunately, the logic on that counters the popular opinion. They're having mass spread down there where it always is 100 degrees and hot and, you know. So is it the same? There's still work being done on that. Certainly the studies that I've read show that of course, if the virus is outside in the sun, it certainly reduces the incubation time on that. But that's not the issue. The issue has always been Keith and I are next to each other and the mass way it's spread is he coughs or says something to me. I have no mask on. No mask on. And now I get infected because the water droplets go through my mouth, my eyes or my nose. That's the fastest way it transmits. As far as the answer to the question the other way, yes, it probably does affect the spread when it's on surfaces. That's proven. Yes, if a higher heat environment like we'll talk about UV lights in a minute will certainly do that. But that's not how a majority of the viruses spread. A majority of the virus is spread through human contact. So I don't think that's. I don't think we can rely on that because that's just not statistically shown how the virus has spread thus far.
Yeah, if we all hang out and it's hot out, people, it's still going to spread. If we don't hang out and it's cold out, that'll have more impact. So it influences it. It's not highly correlative, but it is lightly correlative. All right, I'll cover this one on unemployment because the headlines that you're seeing in front of you right, weekly unemployment claims are coming down. Yay. We're only at 26 and a half million. Yeah, I know. So it had to come down. I'm glad it's coming down. It needed to come down and I think it will continue to come down. This is. I know I say this pretty much every week. We've never seen anything like this. It is abrupt, it is shocking. It will be a shock to the system. You are seeing the impact in volatility on the stock market, I do think we've seen the worst of it. I think that you will see I am still trying to dig into the data to find what percentage of these are furloughs versus layoffs and what percentage are independent contractors and gig economy workers. Fortunately, that seems to be a very hard two very hard data points to suss out from this. But I continue to work on it. If any of you. I'll crowdsource it. If any of you listening know a place to get that, let us know. So, yes, this I in no way want to say, like, hey, unemployment's coming down. This is great. The rate of increase of unemployment is slowing down.
Yeah, Correct.
That is a good thing. But there are still, unlike we've ever seen before, people without jobs.
Yeah. And the thing to keep in mind is I want to add to Keith's comment. It's coming down. It's a very serious problem. But I also think as the paycheck protection program, which I'm going to get into, there are two parts. First part of it, people are just getting their money last week and this week. That means jobs have to be hired back. So that you're going to first start to see the impact of that over the next few weeks. Then the second stimulus, which we're going to jump into is going to cause another wave of money to be dispersed to businesses. That should then bring the unemployment rate down even further. The goal here is to get that down to a more realistic number and then obviously bringing the total unemployment down as well. And I believe you will see those impacts to some degree in the coming weeks.
Yeah, I agree with you. Yeah, let's. Actually, that's perfect segue. We can get off that ugly slide.
480 billion in relief was just passed by the house. It's at the President's desk for signing. I have personally been on this webinar for 30 minutes. I don't know if he signed it yet. My assumption is he will. And the numbers that I've read today, which I thought were fascinating, we basically put around 600, 675 billion back towards business. The numbers on what a lot of analysts are saying was it needed to be closer to about 900 billion to get actual workforce there. So the downside is we're still missing a third of what people that needed to be helped. That's a problem. The plus side of it is two thirds of the businesses will have received money. And I'll go into some of those statistics for you, but go to the next slide. Keith really majority of this was towards the Paycheck protection program. So of that money that I was talking about, the 480 billion, 310 billion went towards the Paycheck Protection Program. 60 billion of that allocation will be for community banks, credit unions and community development financial institutions. The point being is it goes to small business. They realize the first go around, we've all read it, Harvard, and all these companies got stupid amounts of money they shouldn't have. They're trying to get it towards local community banks through SBA in order to help the little guy, what we call the little guy of the American workforce. 60 billion goes to the EIDL program, the Economic Injury Disaster Loan program. That's the program where you can get like, you know, $10,000 for the emergency grant that's submitted, 25 billion for coronavirus testing at the state level and then 75 billion for hospitals. And I think that's really to shore up the hospitals who have had a lot of expenditures. And candidly, hospitals are going to have a lot of expenditures as the second wave comes back around during the summer. Two things I've done a lot of reading on this the past few days. The first part is not good, is that Most of that 310 billion is probably likely spoken for. What that means is if you already applied for the PPP program or have been working with your bank, you are already in queue. Even if they never submitted your loan to the sba, the bank has a queuing process for who applied and who they're going to submit next because they all knew there was going to be more money granted towards it. So unfortunately, I think not all of it, but I think a large portion of that is already spoken for. So that's that. The second thing is just for some stats I found this morning, 1.7 million loans were approved in the first round of 350 billion. So there was a lot of screw ups in there. And look, this is me backing the government. When you move something from Congress to implementation within a few weeks, you're going to have a lot of problems. There's no way around it. And I'll give you two examples that you guys will cringe at. The first is when you apply for the PPP program, they don't actually verify the company's financial statements. Like they don't actually know whether you have $10 million sitting in a bank account. I'm making up a number here, but like they don't verify that. So it was designed to inject money in the economy quickly in order to shore up wages for people to not become unemployed, which puts a burden on both the feds and the states. So it was going to have problems right away. The second round will be cleaned up a little bit with just making sure smaller businesses get access to it, including independent contractors. But essentially 1.7 million businesses did get the PPP program in the first shot.
And James, you know, I'm the least political person in the history. I kind of don't trust any of them and think they're all, to a certain degree, crooked. If anyone listening is a mayor or whatever, I don't mean you, but in general, I don't have a tremendous faith in politicians or politics. But I know personally entrepreneurs and business owners that this worked for. They were considering layoffs or furloughs. They were on the brink of doing it. They received this money and they changed because they got it. They didn't have to lay people off, they didn't have to furlough people. I've had, I know three or four people that I've talked to in the last week who there are always the stories about the screw ups and about the people taking advantage of it. And I hate those stories. A lot telephone conversations that I have had where I know my buddy made a different business decision because of this shows me that to a certain degree that it worked. Also, quick update from the audience. President Donald Trump signed a nearly $500, $500, $500 billion interim coronavirus bill on Friday.
Sounds like it was time.
Thanks for that update, Jeff.
I appreciate it. Yeah. And Keith, to your point, there is, I know a lot of businesses that have been helped by it. That said, I wanted to give you guys a resource so that you walked away with something super tangible. So for those of you who have not applied, there is a company that has been set up to help apply and they've had great success with it. From what I've read, this website called covidreserve.com covidreserve.com will allow you to apply. They're very much centered around independent contractors as well. So if you don't have a relationship with a local bank and SBA lender, I would encourage you to try here and I would encourage you to do it fast because the fact the President signed it means that the treasury is going to allocate that money and that's going to immediately start that pipeline of PPP program right away. So for those of you who have not done it and you want to try, try this resource of covidreserve.com Take a look at it, see if it works for you. Again, I haven't done it personally. I'm just read some stuff about it online, maybe an opportunity and I would encourage you guys to do it today, like not drop whatever you're doing and focus on applying today if you want to get access to any of that money.
And 80% of our webinar participants are leaving. I'm just kidding.
Yeah.
What was that website? One more time just because I know.
Someone can ask covidreserve.com I want to put it in there. C O V I D R E S e r v e.com covidreserve.com okay, perfect. Let's go next on a couple other cool things or not cool things depending upon how you look at it. I've been reading a lot of studies on who's most affected by this and this is not necessarily a positive, but it was more of a comment that I think we need to take into consideration. Keith and I covered last week about how we think the recovery will look like. We're going to actually add two other slides to this today on where we actually still believe real estate is going to be a bright spot. In fact, I'm hearing locally from, in our company's case, 426 locations across the U.S. real estate is moving in a lot of areas. It's not shut down in many areas across the country and even areas that were they're starting to rebound. Because as Keith and I have stated for a thousand times now, there is a shortage of housing in this country where I'm finding that the group of people that are going to be most impacted is second home market where people were using retirement money in order to buy a second home. That's an area where we're concerned about the buyer pool shrinking and then of course, young buyers. So this is a study that just came out and it was 57% of millennials and gen zers who plan to become homeowners by 2025. Essentially 55% of them have put their home search on pause. This is as of today. Now, as things change, they get re employed because you have to remember this demographic, these two demographics were hit hard by unemployment. A lot of the tech sector, you know, depending on where they were in the tech sector, startups, et cetera, you know, furloughed or just completely, you know, removed their people. So there's a, there's a disproportionate number of people in this age group that's being affected by the mass unemployment numbers.
And if you especially that. Putting their search on hold. I had a. I did a webinar yesterday with a senior executive with Zillow and everybody across age ranges put their search on hold to some degree. And now it has started to come back. So I think depending on that report and the timing of it, you know, everyone, regardless of age and demographic, about a month ago put a dramatic stop on their home search process. And now we're seeing those numbers shift and tilt back up and come out the other side.
Yeah. And they said that basically or 35% were just simply going to lower their budgets some. So it's not necessarily bad. It's not great. But it's also that they're still interested in doing it. They just may adjust where they want to be in the buy. In the buying range. So just come in and watch there. We'll go to the next slide. I thought this was a good one. You know, Fannie Mae is forecasting mortgage rates to be under 3% for 2021. That's basically called free money.
Yeah.
And that stimulates economies, especially for housing. So as long as there's liquidity to do it, which you know, Keith's covered a thousand times as well.
Yep.
I think that that's a good sign that housing will also continue to be a bright spot.
Well, the biggest. I'll just. There is a light at the end of the tunnel for the liquidity stuff. It's complicated, but the forbearance piece is the biggest reason for one of the big reasons for the liquidity issues. And that has a window at which a lot of the opportunity for forbearance stops. And so that should, in addition to some of the things they're doing, unlock some of this liquidity. So. Yeah, yeah. Rates at under 3% that, that, that will stimulate more buyers into the system. We saw the inventory shortage, but that will stimulate more buyers into the system. And again with the sort of a little graphic maybe, but with these hard slaps to the face. That's very different than 2008, which was sort of this slow rotting process. Right. You recover quickly. If you get hit hard and you can come back quickly. It doesn't change the psych. It's not enough of a duration to radically change psychology.
Yeah, yeah.
Corey asks. Good question. Do you think this will make buyers wait until next year? I'll go quick on this. And Corey, if you shoot me an email. We actually did a whole webinar on this, which I could send you the link or you could check out humans overhouses.com humansoverhouses.com that's our website where we're depositing almost all of these webinars and information that we're doing. If you go to last Friday's webinar, we talked quite a bit about the buyer. But the short answer is some buyers. Yes. Right. We can't talk about buyers like there's only one of them. Some percentage of the buyers are unemployed and wanted to buy a month ago and can't today. And so that percentage is obviously gone. There's some percentage as well that has decided. I'm just going to tap the brakes on this and I'll figure it out later. But what we're actually seeing in real time in our company is there are very motivated buyers that are seeing this as their chance to get their foot in because they've kind of been getting their nose punched in by the real estate market. And we're seeing that if buyers are willing to consume a little extra discomfort, their perception is this is an opportunity for them, not a thing that is going to make people wait. People don't buy a house because of an interest rate. They buy a house because of timing in their life. When the interest rate goes down, it just means more people can afford to. So that brings you more buyers. But people don't buy an interest rate. They buy.
They also buy the home that they find that they want to live in. Like, it's an emotional thing at the end of the day. So, like, I think if somebody was like, oh, I'm going to wait until next year, my gut tells me they didn't turn the home search off, just not as active. But then when that home pops up, it's like, oh, my gosh, this may be our house. They move based upon an emotional buying decision into keys point of time in their life. So I also would say even if interest rates were 4% today, which is like super low. Yeah, buy the house, refinance later. Like, you know, so.
Yeah. All right, let's talk about Mike. He's a smart guy.
I like this slide.
His research.
I would encourage you guys to look him up. If you want, you can get a newsletter from him. He's a very highly regarded consultant in real estate. Michael Pri. He basically did some studies from brokerages showing MLS data. It was essentially like a classification of inventory. How many listings were pulled off the market, buyer activity, a bunch of stuff. Did it in Washington, up in Seattle, because that was where things really first got started with COVID He did it here in the Bay area of Northern California and a couple other markets. The overall trend chart looked like this. He calls it the check recovery. Keith and I have been saying u shape, he's extending the line a little bit. But essentially what happened was the real estate market, it went right off a cliff. As soon as lockdown occur, I'm going to call it lockdown. As soon as lockdown occurred, you got a one week drop where it just comes to a grinding halt. Studies showed that it was around a three to four week bottom. Basically kind of no man's land of no one's really doing much of anything until they get comfortable with this. Many of you, by the way, on this are in your third or fourth week. This is where you're starting to see that. And to clarify, we've been on, we're going on our six week. We in the Bay area are now on this slide up. And what we're noticing is one week drop, three to four week bottom. And Mike's actual numbers match up with a lot of ours. And then a slow recovery. That recovery projections based upon how the movement is. Again, lots of things could change that. This is just a projection, but it looks to be an 8 to 16 week recovery with what Keith and I have been saying is about a year to be back to full, full bore of where we were.
Yeah. And really what this speaks to is that real estate will recover faster than a lot of other markets.
I believe 100% with that. Yeah.
Because of what we just talked about. The buyer demand, limited inventory, all those things we've talked about.
Yeah. Yep.
So what does the future look like after Covid?
You know, I had fun with this one. This is my. I'm going to give this and then I'm going to tell you what you need to do as we start a opening up the economy as your takeaway from this PowerPoint. So one thing's for sure is I think we're gonna do massive reassessment on how we are prepared for a pandemic. I think that we need to realize that there are no such things as borders, that we're in a global world. And yes, shutting off travel to one country, it did help. I'm not arguing that. But ironically, that doesn't stop everybody from Italy and France. And the point is like we're in a global world anymore. You have to literally just shut the borders down. And even then that won't stop anything because once it's here, it spreads. So we have to relook at the way we handle this because the World is so interconnected with flights and travel. And then we've learned incubation time is up to two weeks. You could have this thing and never even know you have it. You can never show symptoms and you're spreading it. So I think America is going to look at this differently. At least that's my hope, is we learn something from it. Because one could wish. I think there's going to be a massive look at commercial space. I'd hate to be in the commercial real estate sector right now. I think that's going to be. Not a bright spot for real estate is the commercial space. Ironically, I think either wework will be a great success now or a massive failure because it's all about shared workspace.
Yeah.
You know, one of the things I do think will happen, at least I can tell you we're doing this. I think the US should work on a much more stringent sanitation process for office spaces. And what I mean by that is I don't want the government telling us everything to do. But there's nothing that's wrong with setting it up where janitorial disinfects desks and keyboards and handles on doors and things every day instead of just the carpets in the bathroom. Like, we need to be thinking a lot larger about how we stop spreading even things like the flu. And my hope is that we will relook at that. I think masks will become more common. And one of the things that I think you'll see really move, by the way, be paying very close attention to companies that are developing UV light systems. I posted one on Facebook of a company that does a UV light system. To be clear, UV light kills 99.9% of germs and bacteria and viruses. So there's a company that's doing one now that's like a. You know, everybody knows of those Roomba vacuum cleaners that are robotic and they run around your house. I have one that on a UV light system, it runs around a facility and it shines the light on everything, basically kills all, disinfects everything. I think that's the future tech I'd be paying really close attention to.
I'll take a look at that. You already order one.
I did. There's a UV light system that you can buy right now that's $79 that you can go take it around your house like on the common services. I think you'll see that happen in businesses, hotels, hospitals, all these different things. Because if you just imagine if you had it as a. It's at Night, no one's in the office. It starts at 8. It runs around the whole facility. By 6am the whole place is disinfected. Imagine the lack of how much spreading would stop by doing.
How can we prepare our businesses? Right? So small business owners, or even real estate owners or agents with their clients, how can we prepare your business?
So I would say the following. We all can agree that this thing's going to be around for a while. So the first thing is I would keep a stricter sanitation process. I'll give you what we're going to do just for perspective. Our team will be required to disinfect desks morning and evening. We will be doing meetings that are separated so that we're not putting large groups of people into a conference room. We are buying. We bought a system that does that, checks the, you know, the temperature. It's not intrusive. You just put your head up to it. It scans looking for temperature. And if somebody has a fever, then they can't come in the office. We are approaching it from. You need to be trying to think about everybody else. It's always the person that might be immune compromised. So masks are going to be required to be worn until we have a treatment, which, by the way, I think most states are going to adopt that anyway. I think you're going to see that become pretty standard for you. If you're doing a listing, you should only have one person in there at a time. They should be required to wear gloves. You should have hand sanitizer. They shouldn't require to wear a mask. I think as far as another policy that we're looking at, again, potentially is half staff in the office, half staff working from home, and then rotate. So that way you're not putting too many people into a facility at the same time.
Dibs on home. I call dibs on working from home.
I figured you'd say that. So the idea, though is to keep the social distancing measures in place and think about safety, but getting people back to work. And so just be smart. Just clean things. Just wipe door handles down. If somebody's sneezing or looks sick, send them home. Like, be respectful of how other people are. I think the work policies for how you're sick should be thought about so that they're not as strict. If somebody doesn't feel well and they're worried about getting their paycheck, change your policy, like get them to stay home so they don't infect all your other workers. And then you lose the whole idea about what this is trying to accomplish listings one kind of comment. I think that two things to pay attention to. I would be looking for a sanitation company that is willing to go in and clean the property to a level of sanitation that would solve most COVID 19 cases. Just add it to your process so that you can simply add it to the fact this home has been sanitized, it's been cleaned up. It makes it so that it helps the buyer feel comfortable. The seller will see it as a great service. And I would continue to use hold harmless waivers for all showings for the foreseeable future both on the seller and buy side.
I think the important thing is think about your business and and you need a plan. Right? We are going to be coming back online as an economy, as a country before we have a treatment and certainly before we have a vaccine. And so it shouldn't be business as usual. It should be business as new normal. And your new normal should be different. So be thinking about ways to protect yourself, protect your employees, protect your families and the people that and the one.
Thing to add and we'll end on a positive one of the reasons why the death rate in America is only 50,000 is because 90% of the country was locked down. Like just remember that. So we open up the country you're going to see infection that's going to occur and that's going to cause bigger issues. So just be mindful about yourself and other people when you're thinking about it like that to me is the most important part. Take care of the humans. Take care of your colleagues, your family. Don't let your guard down. But also live your life. But you know, just be mindful of all the best ways to try and keep everybody safe in your organization and let's get things moving in a safe way.
Yeah. A couple questions. What was the name of that UV light brand again?
Please hold. I'll tell you right now.
I'll answer the other one while you're looking that up. Do we have a copy of a hold harmless waiver? The most associations state associations I believe all but all is a really dangerous word but your state association should have put out a hold harmless waiver. If you want to email me I can help you track it down but check with your state first. Ann says not Texas and I believe that was true before but I believe it's come out since then. I could be wrong.
There's disclosures available in states. Not all states have hold harmless waivers.
Everyone has a hold harm Correct.
But at the worst case scenario is Contact your attorney and just have, by the way, attorneys, they have all this stuff drafted. It's a template. Just call them and ask for one. Don't have them send you a big bill.
Yeah.
The company is called UV Lizer. U V. Lizer is the one that I'm looking at. But just do a Google search. There's lots of them. And I'd hurry because this is gonna become a pretty standard product.
All right. I wish I would have bought stock in that one. All right, so, James, first of all, thank you. I missed.
Sure hope it was helpful.
Yeah. Yeah, it was. And these are the kinds of conversations that, you know, we just need to be having on a regular basis. And we won't always have chunky new updates or deep dive reports. It's just have a conversation so that. So that we can start to suss this out together and. And shepherd our way through it. So. I appreciate you a lot, brother. It's good to see your face. I can't wait till I can see it in person.
And stay safe really long.
Yeah, not mine. I'm good. I had Covid cut before. COVID cut was cool. So look at me now. Everyone's finally coming around to my style. All right, brother. I love you. Be safe. Thank you. Bye, guys. We will talk to you next Friday. Bye, brother.
Are connected with flights and travel and, you know, and then we've learned incubation time is up to two weeks. You could have this thing and never even know you have it. You can never show symptoms and you're spreading it. So I think America is going to look at this differently. At least that's my hope, is we learn something from it. Because one could wish. I think there's going to be a massive look at commercial space. I'd hate to be in the commercial space real estate sector.
Right.
I think that's a. That's going to be a. Not a bright spot for real estate is the commercial space. Ironically. I think either wework will be a great success now or a massive failure because it's all about shared workspace.
Yeah.
You know, one of the things I do think will happen, at least I can tell you we're doing this. I think the US should. Should work on a much more stringent sanitation process for office spaces. And what I mean by that is I don't want the government telling us everything to do. But there's nothing that's wrong with setting it up where janitorial disinfects desks and keyboards and handles on doors and things every day. Instead of just the carpets in the bathroom. Like, we need to be thinking a lot larger about how we stop spreading, even things like the flu. And my hope is that we will re look at that. I think masks will become more common. And one of the things that I think you'll see really move. By the way, I'd be paying very close attention to companies that are developing UV light systems. I posted one on Facebook of a company that does a UV light system. To be clear, UV light kills 99.9% of germs in bacteria and viruses. So there's a company that's doing one now that's like a. You know, everybody knows of those Roomba vacuum cleaners that are robotic and they run around your house. I have one that on a UV light system, it runs around a facility and it shines the light on everything, basically kills all, disinfects everything. I think that's the future tech I'd be paying really close attention to.
Yeah, I'll take a look at that. You already order one.
I did. There's a UV light system that you can buy right now that's $79 that you can go take it around your house like on the common services. I think you'll see that happen in businesses, hotels, hospitals, all these different things. Because if you just imagine if you had it as a. It's at night, no one's in the office. It starts at 8. It runs around the whole facility. By 6am the whole place is disinfected.
Yeah.
Imagine the lack of how much spreading would stop by doing.
How can we prepare our businesses? Right. So small business owners, or even real estate owners or agents with their clients. How can we prepare your business?
So I would say the following. We all can agree that this thing's going to be around for a while. So the first thing is I would keep a stricter sanitation process. I'll give you what we're going to do just for perspective. Our team will be required to disinfect desks morning and evening. We will be doing meetings that are separated so that we're not putting large groups of people into a conference room. We are buying. We bought a system that does that checks the, you know, the temperature. It's not intrusive. You just put your head up to it. It scans looking for temperature. And if somebody has a fever, then they can't come in the office. This we are approaching it from. You need to be trying to think about everybody.
