March 2020

Grasping for the Bright Side and Perspective in Dealing with the Coronavirus

Dear Colleagues and Friends,

Now that each of us has a second to breathe and truly be with our families, we would like to share some bigger picture thoughts with you.  Coronavirus appears to be one of the most serious issues of our lifetimes and is impacting daily life and emotions in a pervasive way few things have.  The list of negatives associated with this situation is extremely long and, unfortunately, fairly clear to every one of us.  With the goal of always wanting to view the glass as half full, here is a list (perhaps not so obvious) of  positives that may come out of this painful experience.  The list is in no way meant to minimize the fear, risk or possible sad outcomes associated with mass illness.   These are our list of potential positives, but we suspect people will find many others when time is spent away from the week’s craziness and one can sit, reflect and talk with friends and family about life today:

  1. The fact that the youthful appear to be spared the worst of this disease, while the elderly and infirm are most vulnerable, is a clear reminder and a wake-up call reminding us how important parents, grandparents, aunts, uncles, older siblings, mentors and elderly friends are in our lives.  In the fast-paced world we live in today, it is easy to pay less attention to this group and take them for granted, because we assume they will always be around and we’ll have plenty of time in the future to show and tell them how we feel about them.  While the mortality rate of Coronavirus appears to be very low for younger and healthier people, everyone in the low risk categories needs to take extra care of themselves to minimize the chances of inadvertently spreading this virus to those we cherish in the older group.  Once this eventually calms down, a positive result should be the elderly and infirm enjoying even more deserved quality time, attention, respect and love from their families.
  2. In times of crisis, people tend to come together in the best way for the sake of our one true common cause: humanity.  This virus doesn’t know the difference between rich and poor, white and black, gay and straight, male and female, and conservative and liberal (or the wide middle).  This virus may very well have the unintended consequence of helping to bring us all together.  Political parties and all arms of governments will have to work together cohesively to attack this enemy none of us had even heard of just a very short time ago.  The fact that in the U.S. an initial $8.3 billion was quickly committed to combat this virus shows we are capable of working together.  Stimulus packages and virus relief bills are being worked on in real time in a bi-partisan manner.  This enemy will be very difficult to defeat, but the combination of a united global political leadership, a coordinated and aligned private sector, and a strong and fully committed global public is exactly what is needed for eventual victory. 
  3. Hopefully, this virus will change people’s behaviors globally.  Many of us unfortunately were lulled into a false sense of security and ignored the importance of doing simple things like washing our hands properly, but now we must accept the fact that practicing good hygiene is one of the best defenses we have for minimizing our chances of contracting and spreading all illnesses, big and small.  It is doubtful that we will ever forget how important these habits are and as a result, personal health may forever be improved by our new awareness.
  4. Clearly we will have to deal with this situation with social distancing, working from home and the avoidance of social gatherings.  While nobody wants to be sequestered or limited in their actions, if that is what is asked of us, we should immediately do so and be grateful that of all places we can be asked to stay, nothing is better than being at home with our loved ones.  We will also learn how to truly work from home and be effective.  This too has positive ramifications for the way we live our lives going forward.
  5. Firemen and firewomen run drills all day long, but nothing compares to the actual experience of dealing with an unpredictable real fire.  This virus is effectively an inferno that the entire world will have to put out.  Now that we all know this type of fire can actually happen in today’s world, there is no denying it can and will happen again.  Once the immediacy of this problem is under control, the good news is that the United States and the rest of the world  will no doubt create, enact, and enforce true contingency plans and procedures that will hopefully better prepare all of us when this happens again.  Knowing that a pandemic is a when, and not an if, is actually a good thing, because we will all be incented and motivated to be truly prepared for the future in terms of procedures, supplies, mindset and other resources.
  6. Interest rates globally are incredibly low.  The scope and magnitude of this crisis is broader than any of us can imagine.  All of our industries are interconnected and, just because some are more obvious to be hit in the first line of attack, it doesn’t mean the rest of the economy isn’t next.  This means that at some point, massive fiscal action will be required to allow this unfortunate moment  to pass without a chain reaction of carnage.   Low interest rates, coupled with an economy that was excellent only weeks ago, mean governments should be able to access a bazooka full of fresh cheap capital to come to the aid of the many innocent companies and people who are directly affected by Coronavirus.  We are not sure if and when this will happen, but fortunately the dynamics are such that this is more a probability than a possibility and super low rates will make it easier to do this in massive scale than it would be otherwise.
  7. This virus may be the straw that breaks the camel’s back in terms of the changes we need to protect and support the healthcare industry and the healthcare providers in our country.  Most U.S. hospitals operate at 95-105% of capacity during regular times and have margins that are razer thin.  They are for the most part dependent upon the government for subsidization and become instantly more fragile at the whiff of a regulatory change.  The professionals and support people within the hospitals work endless hours and under trying conditions, even when the world is calm.   Healthcare systems everywhere are going to be pushed even further to the point of excess stress because of the Coronavirus and perhaps once we get through this challenge, which won’t be easy, it will be time to remind ourselves how vital this entire system is to our way of life.  That realization hopefully will create the impetus for true positive long term change, particularly in the U.S.  No one person knows what changes to our healthcare system will be best, but the point is that this is the clearest reminder imaginable about the importance of quality care for the citizens of the world.
  8. The U.S., home country for the two of us and a large part of Jefferies, is a nation of strong-willed and independent people who rightfully relish our personal freedom and how we choose to live our daily lives.  This is fundamental to what makes the U.S. so distinct.  There is little doubt that to successfully deal with this virus, we are all going to make personal sacrifices, change some of our daily habits and learn to put the good of the many ahead of the good of the individual.  This is a lesson that should well serve our country and the world, and remind us all what it means to be fellow citizens and how important it is for us to care for one another, unite with one another, and make the tough decisions and sacrifices for the good of all.

Sharing perspective and learning alongside each of you,

Rich and Brian

 

RICH HANDLER
CEO, Jefferies Financial Group
1.212.284.2555

rhandler@jefferies.com
@handlerrich Twitter | Instagram
BRIAN FRIEDMAN
President, Jefferies Financial Group
1.212.284.1701

bfriedman@jefferies.com