Read the Footnotes

Everything you are saying is based on this assumption, which has no proof! Obviously the lack of testing in the US means this could be true. But extremely unlikely based on what we are seeing in other countries. In Ontario, we have tested just under 3000 people and 36 were positive. That is just over 1% positive from people deemed high risk of the virus. This is not a virus that has been silently going around for months. You are just wrong on this. And repeating it 50 times does not add value. https://www.latimes.com/science/story/2020-03-10/us-coronavirus-cases-far-above-official-tally-scientists "An analysis of the novel coronavirus’ spread inside the United States suggests that thousands of Americans are already infected, dimming the prospects for stomping out the outbreak in its earliest stages." "Released into a country of about 330 million, each of these travelers was assumed to have passed the virus to 2 to 2.5 people, each of whom in turn infected another 2 to 2.5 people, and so on. Tote up the nodes on this rapidly branching network of contacts and the number of victims balloons quickly, the researchers wrote." "That only accounts for U.S. residents whose infections originated with people carrying the virus directly from Wuhan, the epicenter of the outbreak in China. In reality, many more people likely have brought the virus here from other hot spots, including Italy, South Korea and the rest of Asia. Each virus carrier who arrived from those places would set off his or her own cascade of infections" "But estimates of the coronavirus’ reproductive rate in circumstances where it is spreading undetected has ranged between 5 and 6, so the researchers may have greatly underestimated the number of infections in the United States, Burke said. “The overall conclusion is, it’s very likely there’s a significant burden of disease we have yet to uncover,” Chowell said. Some of that will likely show up as testing for the disease becomes more commonplace, he said. But much of the outbreak’s unseen underside may never be counted." https://www.washingtonpost.com/health/coronavirus-may-have-spread-undetected-for-weeks-in-washington-state/2020/03/01/0f292336-5bcc-11ea-9055-5fa12981bbbf_story.html Its been in the country for months. Maybe you believe it, if you read online instead? ??? Orthopa has an important point here. Please read this article: https://www.boston.com/news/health/2020/03/11/coronavirus-testing-delays The outbreak in Kings County, WA was only discovered because the flu project funded by Bill Gates broke the law and multiple times ignored the direction of the federal government. I think the story told in this article is a real window in to how we got to where we are and is important for understanding our future. Some of the "Influenza" pressure on the US healthcare system was undoubtedly COVID-19. Even Kings County LTC victims who died after the discovery of the outbreak were classified as victims of the flu and only diagnosed as COVID-19 through testing after death, and after a different finding of cause of death on the death certificate. Deaths from COVID-19 in China are similarly understated. In China, for decades the practice has been you can only have one cause of death and it must be the most immediate cause of death. So if you had COVID-19 which caused a heart attack, the cause of death would be recorded as "heart attack" not COVID-19. That plus the fog of war led to under reporting. Please keep your tin hats safely stowed away. They aren't even needed in this case.

A while back, I wrote up one very simple way to create point estimates of the capacity tipping points. No one listened or paid any attention then. :(

Do you have some sort of obligatory quota which demands that you issue at least one insult or an otherwise denigrating comment per post? SJ SJ, I think he was joking. DH, Next time try one of these ;) so people will know you were joking. For me all it took was a piece of paper, a calculator and less than three minutes to scare the crap out of me, but of course I know a bit about healthcare and I've done enough bootstrap modeling in the past that I didn't think building a statistical model was worth the time. I could see it in my head.

I believe everyone accepts that there are infected people who are asymptomatic. In Kings County, WA medical personal interviewed by local media reported that asymptomatic people in the LTC facilities progressed from asymptomatic to dead within one hour in multiple cases. The problem is that Ontario, and China's research in combination with the most commonly expected vectors of disease transmission indicate that asymptomatic transmission is luckily not a major factor and that NPI's are effective and still worthwhile. We WILL see in the future on a regional basis and with varying levels of leadership and effectiveness efforts efforts made at containment and eventually to mitigation once containment no longer makes sense for that geographic area. The dominoes will fall one at a time, not all at once. Then they will be put back up again and they will likely fall a few more times before this is over.

It's not clear what you mean by asymptomatic, but WHO and many others say they believe asymptomatic cases are extremely rare. China for example went back and retested old samples that were collected and tested only for influenza A and B, or for other tests. They found almost 0% in the general population. That would indicate that there are not people running around China who have it and don't know. On the other hand, it is believed that asymptomatic transmission can happen early before symptoms present. It is important to note that though everything MacIntyre said is accurate, it is believed that as in other viral infections newly infected patients who are asymptomatic are believed to shed the virus much less than patients whose disease has progressed. For example, viral loads could be expected to be higher later, and coughing and sneezing would increase the risk of droplet infection. Asymptomatic people would be less likely to be coughing and sneezing, and the viral load per droplet likely lower too. These are just a few of the reasons recently innoculated asymptomatic people are believed to be less infectious. So while what MacIntyre said is accurate, extrapolating that there are thousands of asymptomatic spreaders who will have no illness or mild illness does not reflect the current scientific conventional wisdom at this point as far as I know.

Thanks, Merket. Some good news is that our interventions can impact BOTH the CFR and the R0. That's good news, but I probably should have included that in my list of things that make this more difficult for some people to understand without spending a lot of time on it. South Korea's CFR may rise. There seems to be a long delay in case progression, so it will be a while before we will know that. Also, I should have emphasized that an advanced understanding of probability and statistics will make this easier for some people to understand. There's probably a little bit of Duning-Kreuger going on here in this discussion. A final complicating factor I should have included is that even within countries there will be a wide dispersion of experiences. Some local geographic areas will do much better than others for various reasons: 1) how connected they are to other parts of the world (from and epidemiological perspective, Manhattan may have more ties to Milan and Wuhan than it does Bridgeport, CT.) 2) There will also be a lot of variation based on population differences, cultural differences etc 3) public health preparedness and local leadership

Weren't we just arguing about this in my example of extended contact at airport ? Now because he says it, its true? LOL Orthopa, do you think you can slow down a bit and try to communicate a little more clearly? I think you are making some good points, but it seems your points may not be getting across clearly or that you may even be misunderstood. This post in particular makes me think that is the case. I also thought your earlier point about testing the role of testing in a diagnosis is likely a good point, but was probably too hasty to get your point across. Maybe some other medical professionals could weigh in on that, especially if you're to busy to respond.

Looks like they have it in WA https://www.npr.org/2020/03/08/813486500/coronavirus-drive-through-testing-centers

Though it is unfortunate, I think it is less odd considering the following factors related to how people process information: 1) A large number of contributors to the board are US based. Donald Trump was a bit distracted at the time this got started and at that time he felt it was in his interest to minimize and politicize what was then known as Wuhan Coronavirus. Once Trump tells a lie, he NEVER goes back on it. For example, all of his businesses have been great successes and none of them have ever failed, blah, blah, blah. He NEVER admits he was wrong. That's part of his schtick. He just keeps doubling down. It's more important to him to seem confident than to be right or truthful, so he's not going to change his tune. 2) Members of this board who started with the attitude of its just a cold and have been arguing that will have difficulty changing their opinion. Some already have but some may have a hard time ever changing their opinion no matter how this ultimately turns out. This is basic cognitive dissonance, anchoring and adjustment bias, etc. The ones who have argued the most strongly and confidently will have the most trouble updating their estimates. To paraphrase Munger they are "pounding in their own stupidity". 3) Some people spend a lot of time arguing in the politics section and that has probably changed the way their brains work with respect to issues like this. Do something enough and it rewires your brain. There are also issues related specifically to understanding this virus such as: 1) A lot of people are not well educated about how healthcare actually works. 2) The other big issue is that you really need to slow down and use the slow logical part of your brain and really look at how easily the medical system can be overwhelmed. 3) In many cases both sides are right. The true distribution of fatality rates around the world will probably end up being roughly bi-modal. Some countries like South Korea will likely end up clustered around 0.5% other countries are going to end up clustered around 4%. For each developed country there was a point at which they could chose which group they would join. Finally, I think there are issues around communication: 1) We are all making a living investing or doing something else. Time for posting is limited 2) Communicating complex thoughts and being well understood in writing is more time consuming for most than verbally in person. 3) This topic is new to many and that may make it harder to communicate effectively. 4) For members of this board this is a matter of personal health, public health and investing opportunities. In haste, it is probably being lost at times which element posters mean to emphasize when making their comments. Some people are also thinking about politics, but hopefully they will take that to the politics section. 5) This is the first time I can think of when there are investment decisions to be made and large geographically diverse portion of this board is facing a certain major change to their lives due to the disruptions and a high likelihood of local health emergencies. All of those things at once complicates things. Some people are emphasizing making a buck, others are emphasizing their own health. Merket, you've been a good friend in real life, as have many others on this board. I suspect the fact that many of us are friends in real life is causing some of us to be concerned for each others portfolios and health. As a result, some of us are probably pushing harder than we would otherwise.

Schwab's comments are very important to note. To point to China and say that the situation is improving and that improvement proves this was all overblown is very misleading. China has incurred a huge cost to get to this point and things are NOT back to normal. If you look at the Chinese Government videos that are intended to be reassuring propoganda, even in those videos it is far less than reassuring. EVERYONE is still wearing a blue face mask and practicing social distancing by standing or sitting at least two meters apart, and the streets are empty, all the businesses are closed no street traffic. See! Everything is back to normal! https://www.wsj.com/articles/chinese-president-xi-jinping-arrives-in-wuhan-chinese-state-broadcaster-11583811578 Clearly nothing to see there. ;) Three months later and everything is back to normal. EDIT: Improvement doesn't have much meaning within out putting it in the context of the costs incurred to achieve that improvement.

This is the hope, but it's only one of many reasons to flatten the curve. Also, it cannot easily be tested. Plus Coronaviruses typically change slowly, but there is no guarantee. The virus will spread more slowly if some degree of heard immunity is established. A vaccine if developed will be necessarily rationed and likely provided to more at risk populations first.

Thank you Mloub. All well said and important to be heard. I hope people will read this post and do what they can to move the goal posts on their local level. If readers of this post feel like reflecting on this more once you are in lockdown, or after this is over, I would recommend Michael Lewis's book The Fifth Risk. Michael Lewis really reached the next level with this book. Instead of writing about the bubble and the crash after it was over, he actually predicted it this time. In the case of Liars Poker, The New New Thing, Panic, The Big Short, and Boomerang you had to wait months to read the Michael Lewis interpretation after the fact. In this case, you can read The Fifth Risk as it actually happens to you. https://en.wikipedia.org/wiki/The_Fifth_Risk https://www.bloomberg.com/opinion/articles/2019-10-15/lifesaving-coast-guard-scientist-reflects-on-government-service

I think it would be good to remember that there are several people here that are professionals in the field and that many people choose not to include or divulge their resume and qualifications on this board. Plus there are a few who specialize in healthcare investments. I suspect there are also several healthcare analysts or healthcare fund managers. There are also people with advance statistical training. There are many faculty members here in medical fields or related fields. Finally, good ideas, well reasoned arguments, and the truth should never be required to be accompanied by a resume to be recognized for what they are. I'm glad Bill Gates isn't letting his lack of a formal medical or epidemiological training stand in his way. I'm also glad he knows the limits of his circle of competence and admits that he knows less than the experts that surround him and trusts their input.

Thank you for stopping by and sharing some ideas again. I would assume it's a busy and stressful time to be on the front lines even if you are significantly impacted at the moment. Even the anticipation of what might happen would unnerve me a bit based on first hand reports from Italy. I think Orthopa is making a valid point here. We need to realize that we in the first world are going to handle this very well compared to what must be happening or will happen in some less developed countries. Those countries with the least resources and worst leadership will become the disease reservoir in the future and transmission from the third world to the first world will be so easy compared to when the reservoir was zoonotic and had to get lucky to make the leap to humans. Even if we did not need to assume that less developed nations will become the long-term disease reservoir, all the developed nations are progressing on their own different containment timelines and even if they are successful in the short run they are interconnected and they all will be playing "whack a mole" for some time as they pass it back and forth among themselves. Containment and mitigation efforts will not end this year, though we will likely get much better at the game with time. Another couple of points that no one has mentioned that are relevant here. Even if most will survive, if too many people get sick at once, there is a greater risk of societal collapse, so that is another reason to flatten the curve. The military will take extreme measures to ensure readiness. US banking and tradings systems have been making preparations for some time now. The US military and the intelligence services have said publicly that they are closely monitoring the situation abroad in case of disruptions. Also, the risk of coups goes up around the world, which is what most dictators worry about more than invasion. So governments have many motivations to flatten the curve that go well beyond any benevolence to their populace, I have only mentioned a few.

This is all well said and the right way to think about things. With that said, Orthopa does have a point that it is standard medical practice not to test unless there is some indication. The point should not necessarily be to test everyone which would produce tons of false positives, as he asserts, plus false negatives that might provide false reassurance, and there would be an economic cost too. The problem is that tests have been late, too few, with too many restrictions. In addition the administration likes to talk about how many test kits have shipped. That does not at all answer the question that is being asked. What you want to know is how many people have been tested. The tests produce false negatives and tests have been administered many times on some individuals.

I wonder if the National Guard can deliver food to every town? Does anyone know if there are any neighborhood banks in New Rochelle trading at Tangible Book Value? It's not just a question of whether the National Guard has the capacity to deliver food to every town, but a question of whether we should even want them to. We have a very efficient food retailing system in North America based on grocery stores which provide a typical American with a choice of more than 40,000 stock keeping units per store, refreshed regularly and with due care for food safety through effective cold-chain management. As long as you can keep those stores open, it strikes me that you wouldn't want the military to be delivering food baskets that probably don't have the assortment of food that most people want and that probably focuses on non-perishables (due to the need for a cold chain). The reason why a grocery store might need to close would be if a large portion of its employees refused to go to work out of fear of getting infected by colleagues or customers. I am convinced that there will definitely be some of this. There are some employees who work in a grocery store as a retirement job, but if I were 65 years old and just working at Safeway for something do do, I would be looking at the Covid mortality numbers and questioning how badly I really need that $10/hour. Similarly, a husband and wife making a family income of $200k who have a 17 year-old daughter working part-time at a grocery store, might naturally question how badly the family needs the daughter to earn the $10/hour. But, by and large, I can't see labour shortages (work refusals) being so severe that the existing supply chain would need to be replaced by centrally controlled food distribution. SJ Rate the following public relations messages: Option 1) We are sending the National Guard to help deliver food and disinfect common areas. Option 2) We are deploying the National Guard to establish a perimeter in anticipation of locking down the town within the next 3-5 days. We would appreciate it if no one left in the meantime. Ha ha! You are even more paranoid than me! I hadn't even considered the possibility that they were using this explanation as a plausible excuse for deploying the NG to a staging area where they could then be later deployed for sealing off the town. Maybe I am too trusting of government... SJ It may be paranoid, and I did intend it as a joke, but it is also a known technique to deal with epidemics. If you telegraph a closure, it will be ineffective. Basic game theory too.

I'm not sure where I land on this issue as I'm definitely not a qualified expert, but perhaps I can ask you, who is someone more qualified - why are countries such as South Korea testing like crazy? I'm trying to put myself in your shoes, and please don't take offense, but I'm having a hard time reconciling what govts are doing vs. someone on the internet saying it doesn't matter. Different random guy on the internet here, but I believe the experience in China was that even though all they had to offer was palliative care, early diagnosis improved patient outcomes. In addition, not only can you quarantine the infected, but the belief is that sicker patients tend to shed the virus at much higher rates and therefore reduce the risk of spreading the virus including to attending medical personnel.

I wonder if the National Guard can deliver food to every town? Does anyone know if there are any neighborhood banks in New Rochelle trading at Tangible Book Value? It's not just a question of whether the National Guard has the capacity to deliver food to every town, but a question of whether we should even want them to. We have a very efficient food retailing system in North America based on grocery stores which provide a typical American with a choice of more than 40,000 stock keeping units per store, refreshed regularly and with due care for food safety through effective cold-chain management. As long as you can keep those stores open, it strikes me that you wouldn't want the military to be delivering food baskets that probably don't have the assortment of food that most people want and that probably focuses on non-perishables (due to the need for a cold chain). The reason why a grocery store might need to close would be if a large portion of its employees refused to go to work out of fear of getting infected by colleagues or customers. I am convinced that there will definitely be some of this. There are some employees who work in a grocery store as a retirement job, but if I were 65 years old and just working at Safeway for something do do, I would be looking at the Covid mortality numbers and questioning how badly I really need that $10/hour. Similarly, a husband and wife making a family income of $200k who have a 17 year-old daughter working part-time at a grocery store, might naturally question how badly the family needs the daughter to earn the $10/hour. But, by and large, I can't see labour shortages (work refusals) being so severe that the existing supply chain would need to be replaced by centrally controlled food distribution. SJ Rate the following public relations messages: Option 1) We are sending the National Guard to help deliver food and disinfect common areas. Option 2) We are deploying the National Guard to establish a perimeter in anticipation of locking down the town within the next 3-5 days. We would appreciate it if no one left in the meantime.

So far I have bought equities and sold none, but . . . The article you referenced in your post was from March 9. The final disembarkation from the Diamond Princess was March 1. I don't know the current medical condition of the passengers, or when the last risk of inoculation was, but many reports are that on average it takes five days to present symptoms with less than 1% expected to take more than 14 days, and I believe the majority of patients took three to five weeks to progress to death in China's experience. It is probably too early to get too excited by this data. Here's a different take on the issue: https://www.medicalnewstoday.com/articles/why-are-covid-19-death-rates-so-hard-to-calculate-experts-weigh-in#Why-calculating-the-death-rate-is-so-tricky

There are a couple of issues with extrapolating from this data. First, it has been very well managed in S. Korea. The efficiency of testing alone undoubtedly resulted in better outcomes. Also, at this point a better estimate of the ultimate CFR is probably provided by dividing the number of deaths by the number of deaths added to the number of recovered cases. The problem is that there has been a long lag between presentation of symptoms and death.

The article you have posted is from March 7. The CDC's recommendations have changed in the three days since then. The CDC website now recommends: https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/high-risk-complications.html Also, their definition of "older" seems to be above 60 years old. This is a great example of how the costs are higher than they needed to be due to panic. When the messaging is poor, slow, inconsistent or people believe they are being lied to, it will likely lead to panic and will increase the costs through various action.

Last time I looked, WHO and others were saying that they believe asymptomatic cases were extremely rare. That seemed to be the direction that the opinion of most professionals was headed. I admit some statistics do strain credulity for me a bit. So maybe there is some agreement there. Your comments would make a lot more sense to me if you can substantiate your assumptions with references. By the way, it wasn't clear if you were saying I had said something offensive. One thing I should clarify is that when I have said "most people" in recent posts I was referring to people who aren't paying attention and those people certainly aren't reading the Coronavirus thread on CoB&F.

I hope someday what happened to racism and sexism happens to ageism. People are people, with inherent worth and dignity, they are not worth less because their bodies are sick and frail and they have had many birthdays. Now I know you said "economically", but the tone still got to me. Maybe you didn't mean it to come across this callous with the lives of people who often already have tough lives. No, I had intended to use a clinical tone to deal with that age cohort. I have several family and friends who are in that cohort and I fully expect to lose more than a few from Covid. When that happens, it will be sad for me and those around me. But, when dealing with the aggregate question, you need to remain distant, clinical, and ideally, objective. SJ What is sad is that if there is quick decisive action the financial costs can remain low. That unfortunately did not happen in China and this virus may now be with us indefinitely. And it also did not happen in the USA, which may increase the ultimate costs. It's kind of like levering the heck out of a bunch of businesses and telling everybody everything is going to be great. The costs of the leverage will be minimal until they aren't.

Your comments make me realize I could have expressed myself better. I really wanted to make two points regarding the scenarios outlined above. 1) In the limited examples where someone with commodities or over the age of 65 has severe enough symptoms to fall in the 15-20% who would normally be hospitalized and provided treatment, but the system fails and they are denied treatment, the situation becomes horrific. We should all try to prevent this from happening to loved ones and anyone else. This giant mobilization is about maintaining that capacity to treat and achieve better outcomes for anyone with severe cases. 2) The data contain an artifact that may cause healthier and younger people to underestimate the severity of risk that they face. Hopefully this will all be better communicated to the American people soon as well as around the world. Best of luck to you and your family, young and old.

I'm not leaning towards selling it. This isn't the Spanish flu which primarily targeted people in their 20s,30s,40s and largely left the children and elderly alone. The level of panic will subside once the general public comes to understand this. I am fearful for my parents who are in their 70s and 80s (my father has had pneumonia in the past 6 months) and I have two close social contacts with stage 4 cancer undergoing chemotherapy. However, I don't fear for myself, my wife or my kids . (I remarried in January). Best to you and your family. It is also possible that the young are actually underestimating their risk. When hospitals have become overwhelmed, the triage has been to not even try to treat those with pre-existing conditions or over the age of 60-65. If they needed oxygen supplementation they won't get it and will decline more rapidly. If they can't get oxygen and they start to decline further, they certainly aren't getting ventilation. In these cases the mortality rates have likely increased to near 100%. So some over 65 hospitalized patients likely had good care and a low mortality rate and others had no care or were turned away or simply isolated and had no chance. The outcomes would not be dependent upon immune response, but the timing of when they presented to the hospital, which would be much less likely to be a factor in the under 60 crowd. A well functioning modern healthcare system with adequate testing and early identification of symptoms should be able to keep the CFR well under 2%, but I think you can see from the points above how the risk to older people could be overstated and the risk to younger people could be understated. To some extent the outcomes are dependent upon the patient's ability to stage an immune response, but to some extent the data contain the artifact of denial of care to those over the age of 65.