Federal Reserve slashes interest rates to zero

At this point, I'm actually starting to wonder. If we literally do nothing about the virus, or do the bare minimum, the worst case scenario based on the numbers I hear is 7.7b * 0.6 (total infections) * 0.02-0.03 (presumed mortality rate after the healthcare system collapses MINUS the rate if it doesn't), ~115m people are going to die worldwide. This appears to me to be the absolute worst case scenario given current knowledge; gradually slowing infection rates, the fact that the developing world skews younger and is less connected, etc., may make it better. That 115m will skew heavily towards the elderly, i.e. loss in days-of-life would be significantly less than you would expect.

Now, if you put value on days of human life (which you totally can do; first, as a matter of policy, you won't pay a million dollars to give a 90 year old another year of life, nor would you pay a billion to cure cancer in one teenager; second, you do it every day when you take quantifiable risks to make money or for convenience, everything from being a logger or a deep sea fisherman, to merely driving)... if you put value on human life, how much would this waste of life be worth? And how much waste of life is a worldwide recession or depression going to produce - in direct deaths, days lost by billions of people in s terrible economy, esp. if it gets to GD levels or worse, or in the developing world where it definitely will if the economy grinds to a halt; and on top of that in purely monetary terms, as people are not able to do things from buying houses to merely making ends meet, depending on the circumstances?

At this point everybody seems to admit it's beyond containment and the only thing we are trying to do is flatten the curve and prevent the deaths. Is entering a recession, or worse a depression and risking a total collapse really worth it? I am starting to doubt it.

PS. Frankly this reminds me of plane crash reporting. Everybody is, comparatively speaking, overreacting because the event is visible and distinct, even though many more people die in cars every day.

> Was there for a couple weeks in dec '18… kyoto, fujisan, hiroshima, tokyo… I didn't think this at all unless the "ahead" was meant in jest

Tokyo is a hell of a lot more advanced than the bay area (where I grew up).

> So people can look forward to a 30 year bear flag? lol Facetiously, I don't know what you're talking about because you look like someone from /r/wsb, but I'll entertain your comment: the markets are highly manipulated and the fed is going to turn on the money machine to pump them up again.

It's all a bubble. Until you run out things to turn into bubbles.

3000 cases tested positive but from what I know, we're barely testing.

Here in California as of today -- if you have a cough, and a fever, you will not be tested unless you have had international travel or known contact with a victim. This I know because I've spoken to two doctors and a nurse through Aetna.

In financial markets, there's a formula that banks use to determine interest rates:

Interest Rate = Real Risk Free Rate + Expected Inflation + Default Risk Premium + Liquidity Premium + Maturity Premium

Fed bond rates are what determine the 'risk-free' rate. A bank can have the fed hold on to their cash and it is really safe there. Safe enough, that financial markets consider it 'risk free'. This is why all of your loans are dependent on this number.

Banks add on a premium for inflation -- they want the dollars they get paid back in to be worth the same in real value, not nominal.

They also add a premium for default risk. This is the obvious one -- the riskier the loan, the more the bank will have to charge to break even over a large number of loans, where some of them won't be paid back.

The liquidity premium is kind of like a charge for FOMO. If it is hard for the bank to sell (or liquidate) your loan, they might be stuck with a your loan contract in a filing cabinet when they really need some cash. If they can sell your loan on the open market, then they'll give you a better rate here.

And finally, the maturity premium is a charge for uncertainty. A bank can be pretty certain that they know what the financial markets will look like in the short term. But for a 30 year loan? The financial market could be a much different beast in 30 years. This is a lot of risk on a bank that has their cash tied up for that long of a period.

There's a billion people in India and so far the mortality and spread rates there aren't similar to other countries. There is a theory that humid and warm places will not have these mortality rates (as validated by our common sense that summer time flu is less common). I don't think we have enough information about the virus to generalize to the whole world yet.