Cigarbutt

^The important part is to have consistent methodology. Mr. Hulbert's data seems to include direct and indirect ownership. One can use data from the Federal Reserve Financial Accounts but you have to decide what to include. Some items are straightforward ie direct holdings of corporate and listed equities. You have to decide if indirect ownership through pension assets needs to be accounted for and it can tricky with 'balanced' funds which contain a variable percentage of equity exposure. Some of these findings come from well done consumer surveys but this would tend to be less precise (although possibly accurate). On top of that, you may want to adjust for other demographic factors. The US is getting older: median age in 1990:32.9, 2000:35.3 and 2019:38.4. Also, you may want to remember (or ignore) that stock ownership (especially since 1999) is becoming more concentrated in the top 10% and the top 10% of that 10%. Since the GFC, stock ownership (along age and income profile) has significantly decreased for all groups unless you're 65+ or make more than 100K a year. Interestingly(?), in 1999, the middle class held about 25% more wealth than the top 1% and now the top 1% holds 50% more wealth than the middle class (the numbers reported here also involve some reasonable methodological choices about definitions etc). i don't really care about this last part now but i wonder if this has future implications when we-the people eventually start to claim their share of the we-1%.

Who knows but there may be an element of rebalancing. From the lows in 2009 to now, investor allocation to equities went from about 30-35% to 50-55%. From an overall perspective (i spent only a short time on data and the full Morningstar report) the net outflows in Q2 represent around 1 to 1.3% of the increase in value of listed us equities. So investors, in the aggregate, retained about 99% of the rise in market value into the equity market. FWIW, some expect that baby boomers (who have had lately a historically high exposure to stocks) will eventually become net sellers and maybe they will have an opportunity to unload in a Robinhood market. Not to be used as a timing tool because this time may be different but the last times that investor allocation to equities was in this high range: around 1970, around 2007 and around 1999. (?) Fair points. Where are you seeing investor allocation to equities? The AAII data only goes back to 1987? Just in case there is some residual interest. This is not an effective timing tool (retail sentiment) but it's interesting to think about who's on the other side of transaction and there are potential conceptual links with the 1999 period. From Morningstar: https://www.morningstar.com/articles/1001907/the-fund-flows-indicator-is-behaving-strangely https://www.morningstar.com/articles/1001536/us-fund-flows-batter-equity-funds-in-august Here's another similar perspective: i guess the very bright and qualified authors could be questioned using a forest-from-the-trees argument. They are missing the big picture as their numbers showing what appears to be retail investors leaving in droves is simply reflecting the overall difficulty in keeping up with capital allocation given the incessant (with some volatility) rise in market value of marketable equity securities. There are many ways to use 'official' data to compute this and the author of the next graph has chosen one method which is absolutely different from many others but which, relatively, shows that we're back to 1999, in a way. One way to 'explain' (there are many) is that retail investors and households are, once again, being able to 'see' the value in stocks that hasn't been recognized by the real economy. It's a great time to be alive (overall) and the future looks bright (mostly) but part of me wished that, as an investor, i'd have come of age in the early 70's.

@Viking, Can you comment on the limitations of the model? :) An interesting exercise is to 'play' with the following in order to see how the output changed over time, especially for the longer term. The model has a reputation for too optimistic 'confidence' intervals. i'd say it's more-than-a-few-weeks predictive record is similar to calling election results or to say where the R2000 index will be by the end of the year. https://www.covid-projections.com/ Can i offer a tidbit of data that may suggest a more optimistic outlook (at least for the virus, not the host), especially in relation to the seasonality aspect that is still work in progress? The CDC just released an interesting report about the flu. Mitigation efforts were unusual (extent and duration) and adjustments may be required under a less stringent and flexible community spread regime going forward but, under the new normal, it looks like the flu, a typical seasonal virus, is not what it used to be: https://www.cdc.gov/mmwr/volumes/69/wr/mm6937a6.htm?s_cid=mm6937a6_w ----- Concerning the no (we can take it on the chin now-Castanza) to full (better safe than sorry-LC) lockdown spectrum, why not aim for a flexible and dynamic model? In my area (for disclosure, my area did very poorly, especially early on), people in charge of governance devised such a 4-color alert-level system based on transparent criteria that will compare regions and that will guide the level of interventions, with the level 1 labeled as 'vigilance' and basic measures which have minimal impact on personal autonomy and which have limited impact on economy and the other costs that are frequently mentioned (schools, inactivity, loneliness etc). People will be able to see where they stand and the trends in different regions. The vigilance appears especially interesting and cost-effective as there may be a component of outcome related to the Hawthorne effect.

Thanks for the effective search and select exercise that allowed to gain (over just a few minutes) a helpful perspective. i decided, instead of spending hours in order to perhaps form the beginning of a useful opinion, to do something else*. i will rely on the experts on this one. It's not appropriate to silence somebody, with credentials or not, but it does not mean that one can't ignore what she's saying. By rapidly taking the microphone and not going through the painful peer-review process, the value of her work pretty much went to zero. i continue to think there is some responsibility related to sharing info with others and the burden of proof should be high when submitting unusual, controversial or poorly substantiated claims. Also, if the question of 'fault' is raised as to the proximate cause, doesn't that mean that the same degree of ruthlessness should be applied about less than optimal mitigating measures applied after or is this only about diversion? The following is interesting also for perspective: https://theconversation.com/heres-how-scientists-know-the-coronavirus-came-from-bats-and-wasnt-made-in-a-lab-141850 *Instead, i did a 144.8 km ride which i really appreciate and which, as luck would have it sometimes, finished by linking up with a bunch of millennials, some of whom Peloton fans. i won't tell you about the finish but my legs hurt today. ----- The blame game perhaps is related to persisting and uncomfortable trends. Global trends seem to indicate that this will be with us for a while (although likely with a more benign course) and may even develop a seasonal pattern. This should be a slowly mutating virus so vaccines are likely to catch up and with rising herd immunity, our focus is likely to go elsewhere. American trends are also interesting and recent data suggests that the virus has permeated through the continent to an unusual degree. Here are two interesting links: https://www.brookings.edu/blog/the-avenue/2020/09/11/covid-19s-summer-surge-into-red-america-sets-the-stage-for-novembers-election/?utm_campaign=Brookings%20Brief&utm_medium=email&utm_content=95240983&utm_source=hs_email https://reason.com/2020/09/16/how-much-difference-do-covid-19-lockdowns-make/ The first link has a left predisposition but is submitted because of its factual content and the political 'message' can be put aside. The data shows how the foreign virus has been allowed to infiltrate the US fabric. The second link questions the value of lockdowns with a potential analytical weakness related to the underappreciation that a poorly coordinated and confused containment and spread-mitigation strategy may have significant marginal effects on mortality and morbidity. With this virus, the tension between individualism and the common good has played out and it seems that Sweden had a special predisposition to transfer some of the personal individualism into personal responsibility, at least in a relatively homogeneous way. For both Sweden and the US, the strategy (confused or not) has resulted in a significant front-loading of deaths and will become a superior strategy over time only if certain assumptions are met (vaccines don't work, social unrest etc).

[/img] This is not what you asked but it's an interesting graph. Do you remember the 1990s when credit agencies got agitated over federal debt? You may want to adjust for real GDP growth x 4.4 (1969 to end 2019). The following contains what you are looking for. For the first link, CDN's household debt to GDP reached about 106% at the time of this writing. For the second link, see page 12 for provinces and the federal net debt to GDP. i think you're from Quebec? i don't want to get into politics but there was a lot of noise about "austerity" for a few years and the new government does have some more breathing room as a result although IMO marginal debt addition even at super low rates may eventually become an issue. https://betterdwelling.com/canadian-household-debt-has-grown-over-49-faster-than-gdp-since-2005/ http://www.rbc.com/economics/economic-reports/pdf/canadian-fiscal/prov_fiscal.pdf http://3.bp.blogspot.com/-2NiwRPP4uS4/U_ye1sgb70I/AAAAAAAAFeg/kkS92RwVU-Y/s1600/download.jpg

Hmmm... :) So, more absurd diversion based on the fact that the 'scientist' used essentially unsubstantiated claims, went through a non-peer-reviewed process and published the study in a non-scientific journal funded by a party who is closely aligned with somebody voicing unusual opinions and who recently got arrested for fraud: https://www.dailymail.co.uk/news/article-8738733/Study-claiming-covid-Chinese-lab-published-groups-founded-Steve-Bannon.html i think the word absurd applies but not in relation to the diversion you describe. Are you (like your Scientist-in-Chief yesterday) also confusing herd immunity with herd mentality? ----- In related news, Google just announced a deal with Singapore (i have mixed feelings about the Singapore model and about this deal but it's interesting) whereby good behaviors including vaccinations will be rewarded using some kind of nudge strategy, extending a strategy that was used during the pandemic in order to contain spread: https://www.bloomberg.com/news/articles/2020-09-16/singapore-to-pay-citizens-for-keeping-healthy-with-apple-watch

Yes, this is quite exciting (for CV and all other infectious diseases) but we are still very early in the game. You may want to note that this is passive immunity versus active immunity from a vaccine. The antibodies or pieces of antibodies that are neutralizing and that are to-be-laboratory-produced, if and when proven, will be useful in only pockets of disease activity where protection is felt to be necessary based on specific criteria (risk of, or recent exposure, once sick etc). Passive immunity is very short term. Neutralizing antibodies arising as a result of a vaccine (if and when proven) will also tend to go away rapidly but some 'memory' (this is really fascinating stuff) is likely to remain within our dear B-cells. There are a lot of bright and motivated people working on this and the odds are that something good will come, somehow, as part of the efforts. For the financially inclined, passive vs active immunity is like liquidity vs solvency when dealing with distress. Both are important but solvency is more encompassing. Maybe the Fed will backstop the synthetic antibodies. This post of yours is absolutely interesting to me but not for the intent that was premeditated. The real reason for the response is found below, as a follow-up to Spekulatius' post. You appear to be bright and knowledgeable and you even showed what seemed to be authentic empathy at some point so your post is a head-scratcher for me, at least to some degree. Last century, i got some scientific training and learned to think of the data first and then to deal with credibility and that's what i'll do below as a response to your post but i also completed post-graduate law training (i think you're a lawyer) and learned to combine data and credibility assessment simultaneously with the proviso that the expert needs to be certified as such first, at least under formal circumstances. It's hard to certify you as an expert with the info, as submitted. You had brought up the idea before and some comments had been made including in relation to one of the Nobel laureates that you refer to. The serious data i've looked at for this continue to suggest that the virus was not modified in the lab but this is still work in progress Pentagon suggests otherwise: https://futurism.com/neoscope/us-military-unlikely-covid-19-created-lab-bioweapon It’s a big enough disaster to investigate closely and maybe even go down some rabbit holes, but the way the virus got started as well as Occam’s razor and existing genetic evidence suggests that this virus got its start in nature. It's hard to disprove theories which can be unfortunate for alleged conspiracies of various sorts. 1st step: evidence Most of the genomic work that came out suggests that the mutations were natural (although not 100% sure). A good example (quite 'scientific' but included as some may be interested; i know Gregmal for instance has an interest in advanced genomics): https://www.nature.com/articles/s41591-020-0820-9 2nd step: source The main source, Mr Luc Montagnier, after the work that led to the Nobel prize, has become REALLY bizarre. He has postulated about the use of antibiotics for autism, DNA "teleportation" and especially about the "memory" of water. (bad-taste joke removed here) The second Nobel laureate you refer to (Dr. Honjo) had to make the record straight: https://infotagion.com/factcheck-did-nobel-prize-winner-say-covid-19-came-from-a-lab/ As far as the third source, here's a tidbit from Wikipedia (not the best source but enough for me at this point): "Later in September Yan published a research paper named "Unusual Features of the SARS-CoV-2 Genome Suggesting Sophisticated Laboratory Modification Rather Than Natural Evolution and Delineation of Its Probable Synthetic Route." In the paper's abstract, it stated that "SARS-CoV-2 shows biological characteristics that are inconsistent with a naturally occurring, zoonotic virus" and that it could have been created in lab within 6 months.[26][27] One reason for scepticism is that the paper was published under the Rule of Law Society & Rule of Law Foundation in New York, which is owned by Guo Mengui, who is a friend of anti-Chinese US citizen and far-right evangelist, Steve Bannon." You just need to look here to come to the conclusion that the rollout of the vaccine will be difficult: https://www.cornerofberkshireandfairfax.ca/forum/general-discussion/vovid-19-vaccine-give-it-a-shot-or-mot/ I would think that they give first dibs to first responders (nurses have many mandatory vaccinations anyways), then essential workers and have mandatory vaccinations for school (unless they choose online). I would also think about talking to economist about a good incentive program. Maybe cash incentives? There is a risk that A homeless person gets three shots for cash, but I would rather have that than many of them being superspreaders. Time to think this through, imo. Cash incentives may be a step too far but who knows? In selected circumstances, there are sound strategies that can apply when the outcome is clearly one-sided in order to optimize behavior and decision-making without compromising personal autonomy (eg vaccines, organ donation etc). Nudging strategies (look for libertarian vs paternalistic nudges) that include default options with possible opting out can be interesting. Many people (a growing number...) hold strong beliefs against vaccines but many are simply lazy or indifferent and then issues such as availability, cost, simplicity can make a significant difference. Most people tend to show spontaneous sympathy (even empathy and even benevolence) under the right circumstances. Simple strategies can result in win-win scenarios. The worrisome part (that's the real reason behind this long post) is the post-truth populist era that we've entered and that's playing out under Covid. It's normal that some people reject options such as vaccines based on some kind of rational process. That's OK. The problem is when a critical mass of people (that includes some very intelligent folks) start to develop motivated resistance based on raw intuition when level 2 deliberate thinking is required. An unfortunate result may be that some people may become more entrenched in their beliefs when exposed to genuine high-quality evidence (have you seen this in social media? :) ). It's called the backfire effect and it results from distorted reasoning. This tribal way to think is reinforced by simple and repetitive (and wrong) easy answers. i've come to believe that this is becoming a huge problem. A potential solution may involve to patiently and respectfully deal with the issue by politely sharing knowledge and analysis, one by one. To delay or defuse the trigger, i hope that an appeal to reason may be helpful. i would call this a nudge to reason, to slowly but surely reverse the drift.

In the meantime, if present trends continue, it appears that, by the time the vaccines come, only a minority of people will want them. Only 51% of adults would get it today. Why? Many reasons including trust, politicization of issues, confused messages etc Based on what SJ mentioned last July (in relation to the younger cohorts): "You can appeal to people's sense of solidarity and goodwill to their fellow man all you want, but in the end, people will make a decision based on their own individual risk and benefit." So maybe many are using an inverse Pascal's wager to decide: what I have got to lose (rare side effect) versus no significant gain with the vaccine from an immunity standpoint. There is little to gain from a vaccination program where such a high percentage of the group is taking an individual perspective on this. i wonder if we should just decide on our own what is good for all of us. At noon today, i participated in a webinar from public health and the 'expert' said that this was one of the biggest challenges that they had to deal with during the community spread.

Maybe you're pulling my leg but just in case you're serious. First, a picture is worth a thousand words but i owe you an (scientific) explanation for the partisan picture: Taking into account the pathophysiology of the virus, its mode of transmission and multiplication as well as socio-sanitary data from the area where the rally occurred, it's likely that many will become sick, some will be hospitalized +/- requiring ventilatory support and a few may have signed their own death warrant. For the method to insert an image (please accompany with a scientific explanation, especially for the causation part), you can use (click on) the bottom-left item on your screen above the smiling emoji and obtain: [ img ] [ /img ], then insert your url link with a proper image format so that it becomes: [ img ] http://www.blablabla.png [ /img ]. i also learned earlier this year (from an exchange between posters of whom at least two are vit.D fans) how to change the size of the picture to improve the 'fit'. For example: http://tylervigen.com/correlation_project/correlation_images/per-capita-consumption-of-cheese-us_number-of-people-who-died-by-becoming-tangled-in-their-bedsheets.png http://tylervigen.com/correlation_project/correlation_images/per-capita-consumption-of-cheese-us_number-of-people-who-died-by-becoming-tangled-in-their-bedsheets.png So, by using: [ img ] [ /img ] and changing it to: [ img width=# ] [ /img ], # being something like 200 to 900, you can adjust size. BTW, the correlation coefficient for the above data is a solid 0.95 so i've petitioned my local jurisdiction to limit cheese consumption even if it may have an adverse effect on vit. D levels at the population level. In a show of good faith, i will accept a recommendation to take vit.D during the next winter if you submit a specific product (i need help). Please not the product that contains fermented and rancid cod oil. Hope this helps but i'm starting to wonder.

... https://www.medpagetoday.com/meetingcoverage/asbmr/88586 At the time of hospital admission, 25(OH)D levels were lower in the severely symptomatic group, at 18.2 ng/mL, than in the mildly symptomatic group, at 30.3 ng/mL, and in controls, at 25.4 ng/mL (P<0.0001 for both comparisons). So both from Causal relationship (more severe patients had lower Vitamin D) and now the Spanish showed one can give 25OH Vitamin D (Calcifediol) upon hospitalization with already pneumonia in radiological patterns and reduced the ICU admission by 95% compared to standard of care in a randomized clinical trial. Once we have randomized clinical trial with such result, supported by other causual relationships, I am not sure why many of you are questioning this? Should they repeat the clinical trial with more patients to confirm? Yes, absolutely. But it is also difficult to conduct such a study now. Who will volunteer not to take Vitamin D with such result already available? @Investor20 Apologies for the resistance. The 'problem' i have with the approach is not the basic data shared, it's the way authors of studies jump to conclusions and the way you seem to jump on the bandwagon. :) The data is worth looking at and perhaps to think about but the jumping-rational-steps approach possibly linked to certain beliefs is what leads vaccines to markets without appropriate evaluations and what leads to: ----- The Milan study done by Dr. Gennari includes a very questionable way to establish the three groups (one hospitalized, one working or living in care centers and one being tested for vit D levels in a completely different context). The fact that the real issue of correlated risks is mentioned but not integrated in the thought process before jumping to conclusions is simply mind-boggling. Even if there is some kind of correlation, let's say you formulate the results as an odds ratio versus exposure, if "exposure" to vitamin D deficiency results in a worse outcome, how can you rule out that factors such as race (as a separate independent risk factor) , lower socioeconomic status or other presently risk factors unaccounted for do not 'explain' the difference. Look at this as a piece of info that may help to integrate the value of vit. D levels into the larger picture: https://www.apmresearchlab.org/covid/deaths-by-race What i'm saying is not that vit" D levels are irrelevant, i'm saying that one should start with (or at least consider) the other elephants in the room. ----- On herd immunity, the following is interesting: https://marginalrevolution.com/marginalrevolution/2020/09/the-fragility-of-herd-immunity.html Many comments raise relevant points but i would say that the author gets the bipartisan gist of it.

Thanks for the reminder related to elementary school math. :) However, even if the saving, investing or withholding have to achieve mathematical balance, this balancing does not mean net saving or, equivalently, net investment will be high, zero or negative. The balance also does not mediate what is consumed and what is invested. The following graph shows the mathematical balance always at zero but does not help to understand what has happened to the saving or investing trend: (picture borrowed from O'Shaughnessy Asset Management and saved for an example here) If you want to apply this 'concept' to what has recently happened with Covid (just an acceleration of deeply entrenched secular trends IMO), look at the following: (picture borrowed from Goldman Sachs and saved for an example here) The government borrowed to compensate for the recipients in need of saving (the areas under the negative and positive curves do match quite nicely) and to support consumption and now we're back to where we were before (long term trend line) except that debt to GDP has risen to a significant degree. It's hard to swallow that the recent rise in debt is "not so much real". ???

^Debt like greed is good, with the proviso that it needs to be kept to a reasonable level and for productive purposes. The definition of those terms is up to you. The 1997-2001 period is interesting (this was the time i started to take investing seriously) indeed but it's not clear if it's worth it to discuss what is correlation or causation and the direction of such? What is amazing though is the idea that cycles no longer exist. When we entered the macro-prudential era, the initial terms of the contract implied to alternate between using a margin of safety and then building it (which IMO is the second-best approach) but this MMT thing just feels like a huge free lunch.

The insights in this thread are interesting, especially the fiscal room concept and the unrecognized intangible aspect. The following will be light on numbers but here’s the most recent long term CBO outlook: https://www.cbo.gov/system/files/2020-09/56517-Budget-Outlook.pdf Of note, the CBO people periodically report how reliable their “forecasts” are but base their self-administered conclusions on short term segments (year to year) in an auto-correlated way and longer term trends are missed, often wildly so. It’s hard to “see” the longer term outcome from here as the picture will be, as always, very dynamic but there are reasons to think that economic growth (tax revenues) will be muted and that government expenditures may surprise on the upside. The potential resilience is enormous so this exercise is more like trust but verify. The fiscal room and human ingenuity will be tested, i would say. Back to the future (unaudited), from previous CBO disclosures (all debt measures correspond to government debt held by public): -From 2000. The theme had to do with surpluses(!). Mid-range scenario expected for public debt to GDP, for 2020, was an actual net negative position (all debt reimbursed and more!). -From 2010. The theme was more like a new normal. Worse-case scenario expected for public debt to GDP, for 2020, was at 80 to 90%. -From 2020. Public debt to GDP will be at about 98%. The theme is (IMHO) unusually optimistic under the circumstances as it is assumed that, somehow, the very deep secular trend that has been deeply entrenched for decades will resolve with a free lunch and a debt to GDP at 109% is expected by 2030.. ----- Let’s try to kill the pessimistic thesis. The US is used as an example because of its size but similar concepts are playing out in most large developed economies and even China. Japan just reported that there was actually no limit whatsoever under any circumstances concerning the amount of government debt that they can issue… The US has the cleanest dirty shirt but it holds the international reserve currency. -- From an international perspective, in 2003, Mr. Buffett weighted in on the question. https://archive.fortune.com/magazines/fortune/fortune_archive/2003/11/10/352872/index.htm Since then, the trade deficit has relatively decreased to some degree but remains somewhat negative, meaning that there are net capital flows going into the US. Looking back, this happened also to a similar degree in the late 1800s when the international capital was invested in productive capacity: industrialization, not consumption. Where is the international capital going now and is it invested in productive capital? Mr. Buffett was worried that a persistently high negative current account balance would mean a declining ownership of real domestic assets. If one follows the numbers, this has not really happened. Dissecting the numbers, the net international capital flows going into the US, mostly, are not coming in as equity purchases or foreign direct investments, they are coming in to buy US government debt. This results in a situation where the international holders of the debt assets (who are also the prospective buyers of newly issued US government debt) would not benefit from rising rates or from a depreciation of the USD. Even in the absence of the final gold restraint repealed in 1971, the US continues, absolutely unabated, to hold an exorbitant privilege. Isn’t it bothersome that there does not exist a limit on how negative the trade balance can be for a country that has a growing net negative investment international position? So, the net capital flows go into debt, as a first but non-effective lien on US economic capacity and that part does not really answer the question as to the productivity of the negative balance so let’s look at the domestic aspect. -- From a domestic perspective, playing with basic math, domestic savings equal domestic investments adjusting for the current account balance. Since the negative current account balance (savings glut from others) is funneled to additional debt, one can focus on the domestic aspect of this question: is the net debt issued at large going to productive use or to consumption? It appears clear that the only way total debt could reach today’s levels is because of low and declining interest rates and it is quite obvious that rising interest rates with today’s and tomorrow’s debt levels are simply an impossible proposition. Given that interest rates have become now mostly managed (and to be yield-curve controlled), domestic policy makers have developed a domestic exorbitant privilege, thereby removing another natural restraint to debt. Isn’t it bothersome that there does not exist a limit on how high the government debt can be for a country that has growing unrecognized off-balance sheet liabilities? The key question therefore remains: Is the debt going to productive purposes? Can we grow out of it, eventually, assuming present secular trends? Net national savings (government, households and corporates) have been going down and are now net negative meaning a corresponding trend for net investments. This means that the capital assets after depreciation will have a tendency to go down. The general conditions of infrastructures may be a reflection of that. From that perspective, it is hard to argue that debt (government included) is going to productive purposes. This would suggest a negative self-feeding and eventually non-linear loop. What about the intangible investments that may not be recognized as lasting value because of modern accounting’s ‘failure’ to grasp the lasting value of these expenses? There may be some kind of delay and evolutionary changes may become revolutionary but, so far, these productive expenses have not showed up in productivity numbers and in overall GDP growth, in fact, quite to the contrary. So far, tangible effects of residual tangible and intangible investments are not supporting the argument that debt is going into productive use and are supporting the argument that debt is going mostly into consumption, various non-productive ‘services’ and status-quo maintenance. -- Periodically, it has been argued that the market has been better suited to recognize the intangible value created by intangible investments. A basic premise here on my part is that the net worth of a country should be correlated to its net earnings. The graph can be updated to September 2020. https://fred.stlouisfed.org/graph/?g=Egr#0 Clearly, something has been going on here, with an upward trend occasionally disturbed by incomplete(?) corrections. Right around the first peak (following link from 1999), it was argued that the market should be relied upon to judge the value of intangible investments. Recognizing realized gains and market value of traded securities would have better reflected the ‘true’ economic progress. The proposed reform would have also conveniently contributed to deeply needed upward adjustments in the national private savings rate. https://fraser.stlouisfed.org/files/docs/historical/frbphi/businessreview/frbphil_rev_199907.pdf Right around the second peak (housing bubble), it was argued that raising house prices were based on fundamental and often unrecognized intangible (including hedonistic) principles. Mr. Bernanke, in real time, failed to appreciate the disconnect and failed to assess the potential consequences as the downturn started. In retrospect, he (and his tribe) attributed the “bubble” to others (!) including international cash flows leading to global demand of mortgage-backed securities (!) and to the fact that financial institutions were affected by a growing component of intangible assets and “declining quality of capital” during the run-up (!) among others, giving little attention to the very unusual low interest post dost-com response leading itself to unusual leverage and, in large part, to the result we know of now and to the more-of-the-same monetary policy response that the Fed has engineered, so far, in response to the central thought process. And the trend is again up, reaching new heights, and the underlying justification is still based on the notion of unrecognized intangible value. It may be different this time? -- http://www.haver.com/comment/200911r.png It is being reported that the US annual deficit will reach about 26K per household for 2020. A country (especially if it can print money) is different from an individual or a household as it is, in theory, a perpetuity. However, individuals and households have to live with certain constraints that are conducive to survival which equates to a variable but definite deadline. There was no doubt that the country would survive the virus as the concern was always centered on the host. The virus will be eventually conquered and may even disappear but the crying wolf says that the host will live on. In David Copperfield, Dickens described how the difference between happiness and misery was really a function of the bottom line. I wonder about the risk of the transition between Great Expectations and Hard Times. Apologies for the shared negativity but it seems to me that the debt expansion is extremely foolish and nobody I know gives a hoot.

https://www.businessinsider.com.au/fauci-takes-recommends-vitamin-d-and-c-supplements-immunity-boost-2020-9 Dr. Fauci says he takes vitamin D and C supplements and that they can lessen 'your susceptibility to infection' “If you’re deficient in vitamin D, that does have an impact on your susceptibility to infection. I would not mind recommending, and I do it myself, taking vitamin D supplements,” he said. “The other vitamin that people take is vitamin C because it’s a good antioxidant, so if people want to take a gram or so of vitamin C, that would be fine.” On a personal level, i continue to be exposed to the real risk of destroying the therapeutic alliance when dealing with poorly substantiated beliefs. This unappreciated risk may be one of the reasons why many people turn to 'alternative' solutions (with outcomes ranging from mild to tragic consequences) and tend to develop disdain for 'experts'. i assume this "tension" can be pushed to another level on an anonymous thread that includes discussions about decision-making processes at the individual and collective levels. As far as this thread and sub-topic are concerned, the official 'recommendation' is reasonable but, in itself, does not change the weight of evidence. i've been following the science on this and you may be interested in the following: https://myorthoevidence.com/Blog/Show/76 Again, one has to be flexible and open-minded, especially if the option is available and low-cost but one also has to consider second-order effects. With the Covid outbreak, the amount of research with low, zero or even negative value has exploded and the threshold for publications has been dramatically reduced, even in recognized publications. The cost of this is very high. The evidence that you have brought here so far on this topic has been VERY poor. Also, most of the sources of information on this and related topics are very often one click away from statements that the 'substance' is good for everything under any circumstances and two-clicks away from a 'product' that can be purchased online. The cost of this is also very high. Having said all that, keep the info coming. Personal opinions are OK but weight will be allocated according to solid fundamental data, designs etc. ----) Back to regular programming

Insurance is a series of cycles influenced by capital markets, underwriting practices and even behavioral aspects. This hard market is for real and, in many corners and perhaps at large, pricing actions are taking a new direction. It looks like many components of the cycle have correlated to result in one of the most significant soft markets ever. With forward events collaborating, this could become the mother of all hardening. Some recent 'developments': -some lines have continued to show poor (to very poor) underwriting results -price adjustments are also happening in more profitable lines -many pockets of reserve redundancies have started to reverse The following is focused on the reinsurance side but is useful to get a sense of where this may go. The second link can lead to the full report using a simple procedure. https://www.insurancejournal.com/news/international/2020/09/11/582134.htm https://www.fitchratings.com/research/insurance/global-reinsurance-sector-outlook-remains-negative-for-2021-10-09-2020

From a humble perspective, it's hard to 'see' or 'smell' a short term connection between reaching some kind of herd immunity and market 'movements'. Maybe you can? This thread is more about trying to understand the world. Because of your superior perspective, we are in the unfortunate position that i may benefit from yours without you benefiting form mine. :) We all have to make decisions based on limited information. How to go about it is the question.

@Muscleman This continues to be an interesting perspective. A few things: The Swedish 'authorities', from the start, took some decisions. From official reports and from discussions with actual people on the ground, it was clear that reaching herd immunity was not the goal although it could be a side effect of their strategy subject to a path based on sustainability. They (people and the leaders) were shaken by the actual turn of events (severity). One can admire them for the way the social contract on this was 'negotiated' (based on fairness, transparency etc). Immunity in Sweden is highly heterogeneous with significant variations between different regions and the capital. Even in the capital, immunity levels are quite variable as many sub-groups and some ethnicities were more highly 'involved' than others. It's hard to use a binary concept of herd immunity when there is such variable levels of acquired immunity. The graph below is from an article published 2 days ago, whose angle is "they were right all along". i think you're good at "reading graphs" and i have a technical and a fundamental question. 1-When looking at countries but Spain, isn't it possible to expect a resurgence in most countries including Sweden but with Sweden's curve being delayed and lessened because of the the way they dealt with the problem? 2-If herd immunity is the variable to look at and if Sweden achieved it, considering that the area under the curve for these graphs is a reasonable indicator of the pain that needs to be endured for herd immunity to occur, how do you explain Spain (and soon France)? @Investor20 Thanks for the post as this is an area that interests me. It would be great to have new and more specific data. Do you know about snake oil? It's a long story (which i will abstain from telling but you can look it up easily) but basically it started with a good idea in China which was imported to the US and the idea was denatured to such a degree during the Spanish Flu that it acquired a new meaning. Apologies for the apparent 'attack' on what you bring to this topic but trust and respect for science needs to be rebuilt and sometimes things happen at the margin. The facts that some stuff is inexpensive and that, at least, there is some rationale behind it, in no way lessen the potential risk for conceptual credibility for the entire enterprise. @StubbleJumper If your idea is directionally correct, a side effect would be an ability to compute (with some adjustments) the number of deaths required to acquire herd immunity. It would be nice for We, The People to know about this. https://ourworldindata.org/grapher/daily-covid-deaths-per-million-7-day-average?year=latest&time=2020-02-28..latest&country=ITA~USA~GBR~KOR~CAN~DEU~SWE

Israel is an interesting case right now as they have to backpedal and go back to various lockdown measures. It's a delicate balance. Herd immunity is likely not a significant issue here and at this point as they were able to contain the virus earlier. The key aspect appears to be related to stringency measures applied compared to others. Early on they ranked higher on the stringency index and, for the last few weeks, have ranked quite a bit lower on the index, relatively. The spread now is more into the younger cohorts, the "vulnerables" are probably better protected and medical care has improved (more because of a better combination of timely treatments than new treatments) and the death curve is less ominous but it's a delicate balance. The dynamics around this virus have a lot in common with fires in the wild.

An interesting take and a look at some numbers for the puzzling Japanese basket acquisition with no significant comments about currency exposure risk: https://brooklyninvestor.blogspot.com/2020/09/sogo-shosha.html

^If one takes comparable populations, first the populations in Lombardy, New York and my area (Montreal) where initial containment was a key failed issue and second the populations of Florida, Georgia and Texas, the first group showed that, compared to the second group, it was possible to reach much higher levels of cases, hospitalizations and deaths per unit of population. What caused those numbers to compare better in the second group? Herd immunity? If yes, what evidence suggests that the second group's immunity is different? Also, how one defines "open" when leisure, retail, transit and work-related mobility are still way down in FL, GA and TX?

^Yes, that's another important one in investing. To link with a topic you seem to be following: By focusing on the what's happening now and attributing short terms reactions to actions, mechanisms such as debt limits can lose their effectiveness. Perspective (historical etc) can help. Here's an example, complementing the above graph. In order to lessen the impact of the recent contrast, this is a graph showing pre-covid projections. Similar dynamics are at play with political drifts which can sometimes reach further than typical standard deviations. Benjamin Franklin also said: "If you can keep it" in relation to the destiny aspect and the "work" involved. It's amazing to think that our brains, in the end, depend on binary 0 to 1 chemical reactions. Somehow, in certain cases, higher functions need to kick in higher gears.

Yeah, some people are focussed on politics. Strangely, nobody on this forum is talking about France. Yesterday, France had 6,500 new cases for a country of ~65 million people. Yesterday the United States had 29k new cases for a population of ~325m people. Over the past week, looks like France took over the lead for the most significant covid outbreak amongst developed countries, relative to its population? Things seem pretty manageable in Sweden these days... So, shall we engage in a series of venomous statements about President Macron, now that France is "winning?" Is this MFGA? SJ Oh man. Prepare to be viciously attacked like the dozens of others who came before you; that dared present anything contrary to the narrative of the guy who got snubbed for debate team captain in high skool. Now back to crying about Trump. I heard yet another person who dislikes him is writing a book or prepared to make a statement about how much he sucks! Libtards....go crazy! What is happening in Europe is interesting. Again multiple factors involved but yes politics plays a role. There is significant resurgence in the aggregate in the European Union but the average hides wide disparities. There appears to be some inverse correlation between the extent of the initial wave (eg Sweden and some others) and what is happening now but 'performance' with the first wave is also correlated. There is more testing now but the positivity rate is also going up. An argument could be made that it's better to spread the spread over time but there may be a fatigue component. Time will also reveal more about the seasonal impact.

^i guess my message is not to underestimate the power of the editor. 8) I showed the article to my daughter today and she thanked me. She mentioned the unusual power of combination and re-arrangements. In the end, optimal contributions are unique and editing op-eds can be a source of interesting enthusiasm. The above was an attempt at random and nonspecific generation of questionable AI-like quality comments. Thanks for the article. i showed it to my daughter today who has an unusual interest in the topic. She dampened my enthusiasm when she shared some of the limitations included in the notes at the end. When editing op-eds, at least you are dealing with a unique contribution, even if optimized. The above was generated through a voice-recognition device and google-translated after.

^The reality today is seeing many peaks. 1-Funds allocated to intangible assets are expensed from an accounting point of view but are captured in final GDP measures. American GDP per hour grew 1.79 per cent per year between 1870 and 1920, 2.82 per cent per year between 1920 and 1970 and 1.62 per cent per year between 1970 and 2014 (similar out to 2020). Where is the productivity miracle? 2-If there is no crowding out, why is the productivity of debt (amount of GDP per unit of debt incurred) falling in the US and globally? 3-Isn't the definition of a restructuring a new beginning and not an end in itself and is doing more of the same and hoping for something good to happen the best strategy? Recently, a "friend" sent me a link in order to improve "productivity". i wonder if reading this link means wasting precious intangible time. https://www.insidehook.com/article/advice/best-products-apps-productivity Of public credit is a good essay.

Excellent post Scorpion. Will check out. Munger mentioned that he thought the democracies will get in trouble with debt. There is this very stupid notion out there that deficits and debt don't matter for countries. I guess reality doesn't matter either - until it does. Humans seem to need a crisis to learn basic stuff at times (I have been guilty of this too at times). I think we will see some defaults of high inflation. Italy anyone? Sorta of related but I was reading part of Cody Lundin's book "When All Hell Breaks Loose" (I bought for a self insurance policy). Great book but he is a huge advocate for self reliance and I think it is really pathetic that we are all so reliant on the government for so many things - and the media perpetuates this weakness and blame mentality probably because of their political ideology and kissing their customers asses. For those entering this debt and savings "crisis" territory, non-linear changes can happen but timing may be elusive as acute phases have apparently been reached since at least the 80s. An interesting complementary article (perhaps more user-friendly) is the following: https://dash.harvard.edu/bitstream/handle/1/11129154/Reinhart_Rogoff_Growth_in_a_Time_of_Debt_2010.pdf?sequence=1&isAllowed=y i continue to be haunted by the threshold concept and by figure 4. At the anecdotal level, it always amazes me how people save little and how they've come to rely (consciously or not) on the generosity of strangers (healthcare, pensions, old-age support, generic hardship etc) who, lately in the last few years, have decided to extend and pretend. Even the Fed is into social policy now. An inter-temporal mismatch can last for a very long time but an understanding of potential energy could be useful. https://fred.stlouisfed.org/series/W207RC1Q156SBEA The net national saving includes households, corporations and public entities. For the longest time (see Feldstein and Horioka for example (1980), during an era when a tall banker was aiming to raise interest rates), it's been shown that, through some short term noise, savings and investments are joined at the hip. Conclusion: democracies will run into trouble with debt. When will it matter?