2020-03-30 COVID-19 Update

Governer Bill Lee issued a “safer at home” order today. Like what we have in Knox County already, it isn’t a mandated “stay-at-home” order but closes “non-essential” businesses. Page 7 of the order and after defines Essential Services in the executive order, it appears to be the same list we linked to from CISA last week. Religious institutions are explicitly listed as essential.

Outside of closing some obvious businesses like salons, barbershops and entertainment venues statewide we’re not sure what impact this will have. The list of essential services is incredibly broad. For instance, the manufacturing section reads:

25 . Manufacturing, Distribution and Supply Chain for Critical Products and Industries. This includes, but is not limited to: manufacturing companies, distributors, and supply chain companies producing and supplying essential products and services in and for industries such as pharmaceutical, technology, biotechnology, health care, chemicals, sanitization, waste pickup and disposal, agriculture and agricultural products, food and beverage, household consumer products, transportation, energy, steel and steel products, petroleum and fuel, mining, construction, defense and national defense, and communications, as well as products used by or component parts of other Essential Services;

TN Executive Order 22

That sounds like every business that does business for other businesses, or close to it.

Yesterday Dr. Fauci was publicly talking about 100,000 to 200,000 deaths. Today, Dr. Birx reminded the country that the worst-case scenario is closer to 2,200,000 deaths and she seems to think that 200,000 is a lower bound.

Texas is mandating and enforcing a two week self-isolation quarantine for anyone coming in from out of state. Rhode Island put in a similar measure yesterday. Florida has been requiring this for New Yorkers for a couple of days. These mandatory self-quarantines based on travel have been a staple of other places such as China & Hong Kong. We believe that like the statewide shutdowns — which were new less to two weeks ago! — travel based quarantines are likely to spread much more broadly.

Also, don’t be surprised if they don’t discriminate based on where you’re from. Legally, it seems, states are in safer territory by making it all-encompassing. For residents on state borders that regularly cross over this could have a dramatic effect.

CNN ran an article today reporting that President Trump was moved by the hospital situation in New York City and that impacted his policy response. That is significant because we don’t think he is a unique leader in that way: we expect leaders at all levels to become more protective as we progress towards the peak.

For Businesses (and non-Profits)

Remember that these SBA programs apply to businesses AND non-profits!

It seems that most of the headlines we’ve seen about the help that’s on the way is still being figured out. First, we have the Paycheck Protection Program (PPP) which is part of the CARES Act. Download a FAQ on it here.

• It goes through an SBA lender
• “The loan is forgiven at the end of the 8-week period after you take out the loan”
• You may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan.

The bankers I spoke with today were clear that they didn’t know how this was all going to work out, even though they are the ones who will be orchestrating it. It seems like guidance from banks is days out and funds are likely weeks out (through the SBA programs).

The SBA EIDL has been updated to include a $10,000 one time grant. That grant doesn’t have to be paid back even if you are denied the EIDL. Also, the new EIDL application site is up at https://covid19relief.sba.gov/#/ The EIDL is direct through SBA instead of going through another lender.

If you already have an EIDL in progress, “For loans submitted prior to the new process, you will automatically be included in the up-to $10,000 Advance loan that is ‘supposed’ to be distributed within three days. As I understand, even if the loan is declined, the Advance will still be paid. The Advance will not need to be repaid.”

We absolutely cannot recommend the TSBDC highly enough in their help and knowledge about the current SBA loans. The TSBDC at PSCC – Knoxville Chamber of Commerce has been phenomanal answering all of our questions.

Intuit is matching GoFundMe’s setup for SMBs, you can find out about it at https://quickbooks.intuit.com/smallbusinesshelp/

Mortgages

We missed an announcement from Wells Fargo, Saturday, already rolling out mortgage grace periods nationwide:

Mortgage customers: If you’re unable to make your payment due to COVID-19 related hardships, we’re offering a 90-day payment suspension. To request this assistance, sign on to online banking and email us through our secure Message Center. We’ll respond to you within 3 to 5 days. You can also contact us by phone at 1-800-219-9739. We are experiencing high call volume, resulting in longer than normal hold times and ask for your patience and understanding as we work to serve all of our customers.

US Numbers

We’re really not as focused on the specific numbers as we were a couple of weeks ago. We believe that a strategic mindset is more focused on the next two to four weeks than than today. However, for comparison, we’ll continue to visit these. Be sure to note that cases are on the left axis, the one with the big numbers.

Overall, new cases are starting to level off. New deaths are not yet doing that. We can break this down into two charts for a better look:

New York continues to be the clear lead, however, in both of these.

International Numbers

Italy’s new cases are finally dropping.

Today’s new cases are currently set to come in under yesterday’s. It’s a great sign that the social distancing measures that Italy imposed (late, and progressively instead of suddenly) are paying off. There is a subtle warning in the data as well, the US also implemented social distancing measures late and progressively. Our daily new cases may also take time to level off. We don’t watch Italian deaths at JM Addington because of how the Italian attribute deaths to COVID-19.

Spain is also looking better than it was last week. France and Germany’s data are not as neat, we’re going to pass on them today.

Tennessee

Tennessee remains on an upward trajectory, if not nearly as steep as some other states. The top several counties continue to make up the vast majority of the cases. This, of course, could change.

Knox County cases are small, relatively, but clearly headed on an exponential trend still. The age distribution shows that most confirmed cases are aged 50 and below.

Other

What we are watching next: The things we are internally focusing on next are: (1) what is going to happen in hospitals: we expect that if hospitals are overrun, that will trigger new responses from policymakers. (2) How long is COVID-19 going to be around in a significant fashion. We believe we need to update forecasts just to run our own business but expect that we need 5-7 more days worth of data at minimum, and 10-15 would be preferable.