Cigarbutt

In my area, elementary schools (ages 5 to 12) have been re-opened outside of the metropolitan areas (with some social distancing-type rules) for about one month (natural experiment going on) and there have been small and localized outbreaks affecting mostly children and some adults. So far, this appears manageable.

If ~10% exposure is enough to cause herd immunity, the how do you explain the extremely high positive test rate (>30%) for antibody in Chelsea (the hardest hit community in MA)? If 10% exposure were enough, the 30% exposure should have never occurred. https://www.bostonglobe.com/2020/04/17/business/nearly-third-200-blood-samples-taken-chelsea-show-exposure-coronavirus/ I haven’t seen much updates lately on antibody test results. Some other communities have been evaluated in our neck of woods, but the Chelsea study was never repeated. This study was from mid April, so the positive test rate should be even higher now and close to the herd immunity threshold. On many other points you made, especially deferring medical care, I very much agree with you. I while ago for example, I went through a CC transcript from TMDX, a company that works in the field, of improving organ transplants. They pretty much stated that all organ transplants came to a screeching halt in March 2020, which means that many organs went to waste (got buried) because there was literally chaos and nobody knew how to deal with hospital capacity (mostly reserved for covid) as well as how to ensure that organs weren’t from infected donors (since there wasn’t sufficient testing ). While this is addressed by now (hopefully) it means that many organ transplants didn’t get done and since there is a shortage of donor organs, some will not get transplants don’t just get deferred, they simply will not get done for people that might have otherwise gotten them. It's been reported that organ transplant activity in the US declined by 85% for some time and is slowly picking up (similar story in Canada, see link if interested). Transplant patients don't tend to make noise in the public sphere but organ transplant activity is resource intensive and rely on a delicate balance as far as supply is concerned. Of note is that some people die while waiting and the typical transplant patient will get a large number of useful and good quality life-years after the procedure (typically "life-changing"). If you think like an actuary reporting to a decision maker, you may want to calculate the equivalent to the typical patient succumbing in nursing homes. Tough question, i know... https://profedu.blood.ca/en/organs-and-tissues/covid-19-update/national-covid-19-impact-data You're correct in pointing out the flaw when using a 'modified' herd immunity concept. The R0 and herd immunity numbers assume an unhindered transmission across a homogeneous population. With CV, under these assumptions, the effective herd immunity may be equivalent or similar to the theoretical herd immunity. But many factors need to be considered including the impact of social measures (from simple distancing, washing hands etc to strict and extensive lock-downs) and the possibility that seroconversion numbers may not give an appropriate approximation of exposure. The point i was trying to make (in terms of sustainability, resurgence activity with opening, other waves etc) is that a + or - 10% prevalence of antibodies may be another criteria to allow or maintain some kind of partial or limited lock-down. i think Sweden did not necessarily "aim" for full herd immunity but it had to be a considered feature of their plans. It looks like they were surprised by the price to pay (mortality in nursing homes, morbidity and mortality in some immigrant subgroups and hospital resources allocation) per unit of herd immunity acquired. Their plan (outcome of some parameters) looks wrong now in retrospect but their process was based on a lower price-to-pay premise. Some say that it's easier to fail conventionally. It's great to succeed unconventionally but the risk is to look bad. However, they may have helped define a way to go forward if we are early in the game. In May 2003, Toronto (relatively hard hit area, US had 0 mortality from this high case fatality outbreak) declared victory (and many leading officials left the country to lecture others) only to find out later that the spread process was, in fact, not over. Personal anecdote: Today, i went for a bike ride and, on the cycling path, there were two ladies (who had met by chance presumably) who decided to talk together. They decided to keep a safe distance (one on each side of the path) and had to somewhat shout to each other, aerosolizing their droplets on the numerous riders and walkers passing by. Sometimes the challenge is between the design and the application. So, i wonder now if i should take zinc as post-exposure prophylaxis but, for some reason, there is cognitive resistance. :)

The spread of CV is multi-factorial and still only partly figured out but one of the most unsettling aspects has been that the virus seems to have a life of its own (natural forces can be overriding). Take the following from Norway (this is not to support Sweden or anybody specific, it is to try to get closer to the best solution, given the evolving circumstances): https://www.fhi.no/contentassets/c9e459cd7cc24991810a0d28d7803bd0/notat-om-risiko-og-respons-2020-05-05.pdf https://www.spectator.co.uk/article/norway-health-chief-lockdown-was-not-needed-to-tame-covid If you want to prevent wrist tendinitis from excessive google translate use, the second link is a reasonable summary. A fascinating aspect may be that the concept of herd immunity has been mishandled when discussed. It appears that a large part of the population, even if significantly exposed, will not develop the disease or will not be sick if they seroconvert. For that reason, the "true" level of herd immunity may be much lower than the typical 60-70% mentioned at large, if you consider the susceptible subpopulation as the relevant group. There are areas with partial lockdowns where the community spread has been controlled with antibody levels in less than 10% of the population. In terms of likelihood, a second (or more) wave is likely but the genetic drift of the virus is unlikely to be detrimental (but the risk is not zero). This will make it difficult to obtain an effective vaccine and preparation of the host (medical and economic) for the future makes sense. From the healthcare standpoint, the virus and associated measures have resulted in a huge (and still mostly unrecognized) cost: delayed and or forgone care (stroke, heart disease, cancer screening and treatments, vaccination etc). Alcohol and cigarette tax increased in proportion to the federal response and history shows that some trends are hard to reverse. The cynic in me says that the 30-50% of US care that is waste or detrimental will not be missed but, in reality, the net loss to health has been very significant. From an economic standpoint, many poor and uncoordinated decisions have been taken and a lower level of measures (gross amount) has been linked to higher mortality numbers but, in terms of sunk costs and their significance, a second wave or any source of economic malaise would occur in a period very heavily mortgaged with future liabilities. Maybe the answer lies in partial lock-downs and better management of spread control.

Additional data is always welcome. The Lancet has made some corrections and it seems like the WHO decided to put lower weight on the specific new piece of 'evidence' so that more studies are on the way. FWIW, from my perspective, it's unlikely that hydroxychloroquine will come to anything even with supplements of various sorts. It's still possible and that's why venture capital-type ventures exist in normal times. But are we in normal times? Resources are limited. A healthy way to invest may include an attempt to kill the thesis from various angles. In science, it may also be healthy to come up with an idea and to devise an experiment whose goal is to try to disprove the idea. A large problem with a lot of publications (it's become more obvious with CV but this has been a growing problem especially in some sect-like branches of research) is that individuals start with an idea in which they have a strong belief and then try (from conscious to unconscious) to find corroborating evidence. It doesn't tend to be constructive.

Part#1 In 2001/2002, it was pretty easy to see that the deflation of the stock bubble was just shifting in to a real estate bubble fueled by the monetary stimulus. After 9-11 there was an additional impulse to "nest" at home which added to the momentum already in place. Part#2 Although I think the current market conditions are likely to be short lived, people predicting a crash are likely not giving enough credit to the current monetary stimulus, plus the potential for additional stimulus. Plus it seems reasonable that people will place a premium on personal space in the future. That combined with the fact that home and landscaping improvements have been two areas that persisted in many places during the stay at home period may lead to a change in consumer preferences that may persist for several years at least. i hesitated before putting this post up (it contains a certain amount of non-constructive criticism) but (because of one of wabuffo's recent comments about a specific subprime lender that failed with an unusual capital structure in 2009; reviewing the case has awakened nostalgia and the notion of value behind delayed gratification inversely related to the degree of feeling stupid during the preceding phase) i've been focusing on real estate opportunities (both personal and investment-related) in my area and defined entry points which are much lower than today's market values. Because of part#1, i'm filled with envy. Filled with envy because that period required a LOT of work (real estate bubble) and the internal conclusions became increasingly uncomfortable as time went on, reaching a climax around 2006 (origination and global distribution of real estate-backed securities, repackaging etc). It's impressive that someone can say that this was easy to see in 2001-2. In the early 2000s, walking in my neighborhood (no dog) and talking to neighbors, i got relatively snubbed when i was trying to explain why we were sending our kids to public schools because of a growing discomfort with the growing disconnect. My neighborhood has changed a lot but as Mr. Benjamin Graham used to say: "Plus ça change, plus c’est pareil". But with all due respect, to my noob ears, part#2 sounds like Alan Greenspan during the growing disconnect period.

i have a question (not so medical) for you: Given the next hypothetical case, out of the possibilities, which would you put on the first line of the death certificate? Listed randomly: -fentanyl intoxication and recent methamphetamine use -partially blocked coronary arteries -COVID+ -partial obliteration of trachea due to an extrinsic knee cap Personally, i would put decaying culture as the main cause of death and perhaps that would trigger a call from a health authority but it would also go a long way in explaining the current state of affairs.

That's very interesting but i don't plan to spend more time on this (now). Looking for statutory documents can be a frustrating experience. Sometimes it's useful to look at specific states (Missouri in this case?). You may want to take a look at the following which is a solvency report from the "international" sub domiciled in Ireland. The report has a risk section (insurance risk, market risk and the new CV risk) with sensitivity scenarios that may be transposed to the whole company? https://rgare.com/docs/default-source/regulatory-documents/sfcr-report-template-2019.pdf They also seem to have significant and growing exposure to longevity risk which is related to the management of volatility of pension plans and that has the potential also to be very interesting. The risk that risks become more correlated may be underappreciated. Please eventually provide longer term follow-up.

^Fairfax was cleared by the SEC in 2009 (investigations launched in late 2004 at large). I would say that industry concern was legitimate. The poster child example was the AIG-GenRe (BRK sub) transaction and the key issues were 1-disclosure, 2-degree and clarity of risk transfer and 3-presence of side letters or agreements modifying the substance of the reinsurance transaction which could effectively be a financing deal. In the 1990s and after, the growing popularity of finite reinsurance was partly related to the 'management' of volatility. https://www.reuters.com/article/us-aig-genre-trial-idUSBRE85L17320120622 FFH saw huge adverse development after the late 90s acquisitions, had bought a large Swiss Re stop loss cover and eventually had to restate results which included changes to the accounting treatment of various reinsurance transactions. FFH appropriately used finite reinsurance and this created an opportunity because of managed volatility induced by various parties with vested interests. It seems that the risk transfer in transactions has become clearer in general and finite reinsurance is now called structured reinsurance. Perhaps the most interesting part of the 'story' has to do with the then NY AG, Eliot Spitzer (the Eliot Ness going after Wall Street). Hint: He hooked up with the wrong crowd and developed an expensive hobby.

You seem to have high conviction about hydroxychloroquine. Just released, is a multi-center trial that appears to be very solid evidence in relation to the role as prevention post-exposure. Conclusion: it seems hydroxychloroquine, in that context, is neutral: no significant side effects and no benefit. https://www.nejm.org/doi/pdf/10.1056/NEJMoa2016638?articleTools=true The main investigator is based in Minneapolis. Not everything that comes out of that place is questionable.

As likely inferred already, i’ve taken that Pledge and often failed miserably. One of the revelations was how much people understand when you do your best and how, especially when suffering, ordinary people spontaneously recognize the difference between human and humane. The Oath itself (and its interpretations) is not so clear. You may be interested in the fact that the origin of the “first do no harm” principle is relatively disputed. Hippocrates did write about ethics of the practice and most of the substance related to the principle can be found in Of The Epidemics (!). Specifically: "The physician must be able to tell the antecedents, know the present, and foretell the future — must mediate these things, and have two special objects in view with regard to disease, namely, to do good or to do no harm." The risk? obviously is to do nothing and somehow the process is very similar to investing. Didn't Mr. Buffett suggest that the first rule was not to lose? Think about that when somebody offers potentially lethal chemotherapy or mutilating surgery. It’s not so easy to reconcile in real life. I like the way you are engaging this discussion and i’m in no way defending Sweden’s strategy but people involved in devising and applying policy in my area often use the analogy that it’s like building a plane while it’s flying. I’d say that’s beyond what even the Musks of this world could achieve gracefully. In addition to the beneficience and non-maleficience potential conflicts inherent to individual patient encounters, public health policy needs to integrate concepts such as efficiency, population health maximization (‘social’ beneficience), justice and proportionality. So it depends on values which are subjective. Think of the general who may need to lose a few battles (sacrifice) in order to win the war. For example, concerning the issue of proportionality (balance or tension between individual rights and collective good, an obvious point of contention in the numerous above posts), i understand that Denmark (just used as an illustration) has the legislative balance tilted most towards the collective side of the argument which brings the topic of the last item: respect of autonomy at the individual and collective level. The first duty is to inform and, ideally, individuals should usually be able to take decisions that minimize failures and collective interventions have to be initiated with care (first, do no harm?). A way to mitigate this at the society’s level is to provide a unified and educated message to gather essential elements of society and reach a critical mass in order to move in the right (civilized) direction. Do i need to say more? That was pretty much useless verbal inflation so to compensate, here’s a link that provides interesting data and analysis as well as some economic correlation. The whole thing has been very humbling. https://lipperalpha.refinitiv.com/2020/05/fathom-recovery-watch-29-05-2020/?utm_source=Eloqua&utm_medium=email&utm_campaign=00008DL_NewsletterLipperAlphaInsightWeekly&utm_content=Newsletter_InvestmentWeekly_02June2020&elqTrackId=c6126a5396e1467887c07718c78c1120&elq=398d29cf74ab456f97e170b788f4a4c5&elqaid=67000&elqat=1&elqCampaignId=165

That was interesting (the article and your comment). FWIW, i have distant connections to people working in public health who, these days, tend to have difficulty sleeping and who sometimes watch evolving morbid statistics in the middle of the night. From some limited interactions with the Swedish posture, a recurring comment is that their relatively contrarian approach has created "tensions" with their neighbors. Sometimes the best way to get together is to converge. If i'd be the leading figure in Sweden (i'm just a noob though), i'd hope the head of the independent policy office to tender his resignation but would still refuse it by writing "Keep at it" on it.

Right but this argument is something I’m not as convinced about at the moment. For one thing I’m not certain what distortions he is talking about. It’s true that a lot of money has gone into various startups with questionable prospects with regard to future profitability for example but was that really a net loss for society? I’m not so sure, given that consumers have almost certainly benefited, their workers presumably learned useful skills on the job, at least some of technologies that they developed are sure to remain valuable, etc. Your perspective makes sense but there is no magical line that determines when productive capital becomes unproductive. It just seems that 'we' (developed nations) appear to require more and more debt to obtain less and less marginal increase in GDP and low and ultra-low interest rates have become a sine qua non. If interested, Mr. Druckenmiller talked about the productivity of capital in an interview made last year: https://www.gurufocus.com/news/889851/stanley-druckenmiller-people-have-been-doing-stupid-things

^Once the Crew Dragon enters an orbit, it becomes a different ball game. The flying Dragon is made to be as simple as possible and incremental adjustments in speed need to be made along raising the orbit. While it may appear that the Dragon (and the ISS) does not go fast, the speeds are tremendous. Watch (and listen) the following relevant video when Mr. Chris Hadfield answers a question while in space. Take a look at the microphone he's periodically holding to adjust the position. The microphone looks likes it's immobile but in fact, in a relativity way, it is moving at an amazingly high speed. The process appears simple but it's anything but. From Einstein: "Everything should be made as simple as possible, but not simpler". :) You may remember that i had tried to share with you a rocket launch science theory of interest rates but it seems that you had lost interest.

Relevant follow-up about potential costs (workers comp in California) which is important for Zenith. The ongoing development (not in the sense of recognized reserve development but in the sense of the social inflation threat) is definitely positive. Absent future adverse legislation, costs appear more and more manageable. Even if there is unusual flexibility to submit claims, Zenith will have to opportunity to rebut the claims and influence case law. It appears that Zenith will be able to report reasonable estimates in the coming quarters. https://www.wcirb.com/sites/default/files/documents/rb-covid19-cost_impact_of_governor_executive_order_0.pdf ... The document was a nice walk through on how the costs can rapidly accumulate. So in California, they are estimating a mid-point of 7 loss points and a bound of 10 or 11 points, and that's before any government programming or reinsurance. If that applied across the US, that would be no problem at all for Zenith. Beyond that, on a personal level, I am surprised at how small the indemnity is for a health care worker fatality. Only $400k each and that includes medical costs as well as 5 or 10 years of economic support to surviving spouses and children? The bulk of the workers dying must be personal support workers who don't earn so much? I think I trotted out an assumption of about 5X as large, but admittedly, I just pulled that out of my ass because I know so little about WC. SJ Perhaps the saturation point has been reached for this topic but the California workers comp Bureau just came out with an interesting report: https://www.wcirb.com/sites/default/files/documents/rb-impact_of_economic_downturn-audienceready_0.pdf TL;DR version: with the economy slowing, on a net basis (more 'cumulative' injuries more than compensated by lower 'traumatic' injuries), there will be less claims per hours worked, if history is any guide. The challenge may mean much lower written premiums but Zenith has been there before and they could always send excess capital upstream until they can grow their book of business again.

More of the same elsewhere: https://www.reinsurancene.ws/fhcf-will-not-renew-its-private-market-reinsurance-in-2020/ "Kuczwanski notes that since 2015, there’s been ample private market capital and significant risk transfer capacity, which has enabled the FHCF to participate in the private market without lowering the amount of capacity available to direct writers in Florida. However, capital is now less abundant that in prior years..." The world has changed. The question is unfolding as to whether it's cyclical or secular.

Sweden is interesting on many levels. Yes, the social measures have been applied, in practice, to similar degrees (despite the first level impression) but there are differences. For instance, daycares and schools (age 16 and under) have remained open. Potential bias: the house is full now and i may overestimate the downside to school closures...They have reported higher numbers in relation to a slightly different application of measures but it is interesting to note that this appears to be a (collective) decision made consciously and with a fair degree of consensus. Also, it appears that keeping schools open may have been a good decision because there is good evidence showing that 1-young individuals don't tend to become COVID+ even with exposure which may be related to a relative absence of receptors (specific to entry of CV) on the surface of cells of their respiratory tracts, 2-even when COVID+, young people tend not to become sick and 3-asymptomatic COVID+ kids don't seem to spread very well (for example, there's this reported case of a young (European) person who turned out to be both influenza+ and CV+, who happened to travel places and the person was quite efficient at spreading the flu but not CV). Sweden shows the potential inter-geography outcomes from different application of measures but there's also the inter-temporal differential outcomes. The 1957 flu in the US occurred in waves (two or three in 1957-8, also came back (maybe a new virus) significantly in 1968). In 1957-8, the US population was about half of what it is now and the estimated excess mortality (numbers vary) came to about 100K for the 1957-8 period and the mortality included younger age groups. At that time, the President and the people were different: From 1957 (before the fall wave and the vaccine came around the first peak): "In addition to the steps mentioned above [vaccine distribution related], President Eisenhower has asked for a $500,000 special appropriation from Congress (raised by Congress to $800,000), as well as for authority to transfer about $2,000,000 of public health funds for use in the event of a widespread outbreak. Specifically, the additional $800,000 would be used to develop diagnostic sera to detect the disease, prepare educational material to encourage the use of the vaccine, and to make 10 specialists in epidemic control available for work with state authorities." Then, the US demographic profile was different and so were the relative absence of comorbidities as well as some cultural differences perhaps. i guess it's reasonable to affirm that we have improved in some areas but this very statement paints an incomplete picture. In 1958 (year 2 of the partnerships era), Mr. Buffett was investing in the Sanborn Map Company but he felt that the market was expensive.

The December 2019 post did not exactly trigger unbridled enthusiasm but there's been some action. With the superimposed virus wave, residual intrinsic value has been impaired and a fourth scenario needed to be defined: CCAA. They've just announced closure of the maternity segment and will liquidate related inventory (i assume this will be close to reported inventory value). http://www.reitmanscanadalimited.com/news.aspx?AspxAutoDetectCookieSupport=1 The next step is financing and the natural move would involve a sale-leaseback transaction for the head office and distribution center (fair value well above reported book value). The "safest" way to realize value would be to liquidate all inventory and go through BIA (effective way to deal with leases under the circumstances) but there is uncertainty about the duration related to the opening of stores enclosed in shopping malls and the management may have an emotional tie to the brand and its history. The share trading has been suspended, for now. Interesting fact: As part of the buyback in summer 2019, Fairfax sold its A shares (7.4M of them) at 3$ per share and then the share price declined by 97.5% when the trading was suspended 2 weeks ago.

^The trajectory of this thread and the course of human effects signal dwindling interest which is too bad in a way because we shouldn't let the sun go down on the virus as interesting data continues to come in and this is the time when beginnings of answers can be formulated for many important questions. There has been a lot of noise. Take the chloroquine issue. At first, the medication was heavily recommended with limited data and limited conceptual support and, at some point along the way and during good quality trials, the Lancet publishes a "warning" article (relatively poor method and limited validity) and the medication is declared dangerous, ending several trials prematurely. Disclosure: chloroquine is unlikely to be beneficial but this remains a position based on present knowledge and this interim conclusion could be changed. When a company is affected by (or reports) an unexpected event, the actual price action often has little correlation with the real intrinsic effect on value. It typically takes a while for a more correlated pattern between price and value. When CV started to spread, there was a lot of uncertainty (not necessarily an excuse for poor policy). From January to March 2020, 1,741 COVID-19 focused articles were published across 59 countries and in 447 journals with unusual short times to publication and often a truncated peer review. Somebody came up with a flattened curve infodemic concept with two waves of data. A point has been reached where the proportion of solid data will be higher. If interested: Looking at the picture for 5 to 10 seconds is probably sufficient. This noise vs signal issue is also found on this Board (IMO). i've been spending time in various threads (historical) {Thank you Sanjeev} and the threads tend to show a pattern where posts with the most "impact" are found in a pattern of spaced (in time) exchanges. There seems to be a lot of noise when discussions are densely packed? Anyways, there's a reference that proposes an acronym that helps to define (validate) an 'expert': Transparency about conflicts of interest Resume that supports expertise Use of high-quality data to support opinions Strength and reputation of affiliations Testimonials from other respected experts in relevant field

This is what makes monetary policy so confusing... Now imagine... If a central bank really wants high inflation they need to... ...target nominal GDP growth instead. i just want to say that it's difficult to aim for something nominal when a component is inflation. High inflation (and high nominal GDP numbers) in the 70s and early 80s did wonders for the % of public debt held by the public per GDP but equities had significant yield competition. Also during that specific inflation period, net national savings went from 10 to 8% of GDP but it stood recently at 2% (and going way down as we speak). Does that matter for future real growth? In the late 60s and 70s, from an equity perspective, one did not need to wait for a cheery consensus but a dose of eeriness was reasonable against the inflation swindler?

^I think you effectively dodged Munger_Disciple's question. 8) The 'investment' a country or region makes is based on the total of government, private (household and corporate) and 'foreign' sector. There are methodological issues but it is basically a simple equation. In the end, net savings =net investment. Over time, net investment as a percentage of GDP has been coming down. The QE subterfuge lies in the scenario whereby it is assumed that money can be created and added to this savings equation without a proportionate decrease in the value of the currency. This assumption so far has been 'true' only because the Fed cannot force private entities to hold currency or excess reserves in the circulating economy. So far, the money created somehow circulated through the system (raising asset prices (wealth effect), with the help of supressed interest rates) and came back in depository institutions as excess reserves. The money velocity concept applies here: the money supply increased but the velocity decline offsets the M2 increase. This is why inflation has not picked up and this is why the extra currency has not contributed to the savings equation. Adding currency to the savings equation needs to account for the fact, over time and if money stays in the system, that more money means less value per unit of money. Unfortunately, the QE 'temporary' and now found to be difficult to reverse dynamic contributed to an environment where it became easier to issue debt in an already over-indebted global system. It appears that QE had minimal effect on the output gap over time and by trying to start quantitative tightening (going back to 'normal'), the Fed found out that this would have resulted in higher interest rates, asset price deflation etc etc. It's boring and perhaps considered obsolete but savings and investments are connected at the hip. In a way, it's too bad that we end up painted in a corner, left with the best scenario being to go through a period that includes at least some level of asset deflation. Also related to the savings issue is the fact that the savings glut situation not only applies to the 'foreign' sector but also to the rich sector. The savings rate has increased for the household sector but up until recently this reflected a much higher savings rate by the top 1 and 10% more than compensating lower savings rate by the rest. This can be interpreted many ways but the numbers tend to indicate that the group saving more has not really invested in productive capacity and the savings as an asset effectively became, over time, a liability for the rest. This may help to explain the dynamics playing now in several downtown areas although the focus is applied elsewhere at this point. An interesting feature is that the populace may become more conscious about the value of savings and they are the group who has historically manifested the greatest propensity to consume. As usual, Spekulatius got it right using a few toddler words. In my very anecdotal experience, parents who have tended to use the delayed inverse gratification rules to raise children are the ones also pushing for relaxation of diagnostic criteria for the autism spectrum 'disorder'.

^Interesting stuff wabuffo. Of course, you're allowed in-house definitions of terms 8) but, for discussion sake, it may be helpful to make sure we use the same language. You seem to equate government savings as an equal opposite to private savings which is an accounting truism (asset versus liabilities) but it may be more valuable to look at this aspect from a flow perspective. Government issuing debt results in a liability but the asset may end up on the household, corporate or even foreign ledger. From a flow perspective, the net investment for a nation will be a function (basic equation) of government, private and foreign savings. Private players, including individuals in households take decisions about savings that, in the aggregate, will be influenced by savings decisions by other agents, but will not necessarily exactly offset although the whole thing has to balance in toto. Take a look at the following if you have an interest: https://www150.statcan.gc.ca/n1/pub/11f0027m/11f0027m2014093-eng.htm BTW, Hodrick Prescott statistical adjustments will not help in making investments in shuttle tankers and they use a gross savings methodology which does not really change the conclusions or inferences. Gross savings only include depreciation which has remained relatively stable over time. You can see from Chart 1 that, in the US, during WWII, private savings more than compensated public deficits. You can also see the global savings glut (chicken or egg question) playing out in the early 2000s with 'foreigners' compensating for other agents. It's a dynamic picture and outside of unusual interest in numbers, this may have interesting ramifications and you should update your numbers to 2020 'cause the times they are changin'. In Canada (who cares?), households have been saving less because (among other reasons) of the 'equity' in housing. We saw how this turned out for you American friends just a short while ago. Liabilities are stickier. In both Canada and the US, household savings rate are on the rise (very recent in Canada) but national savings rate are still way down and, as mentioned above, net national savings will go negative (VERY unusual). In the US, this dynamic is playing out when there is a building consensus to kill the trade deficit... There is also the sense that individuals don't need to save because the government is there as a backstop. The example above about Social Security shows that individuals may end up with more dollars (perhaps a lot more) but the unit of dollars may be worth much less. Central banks will mop it up somehow but the potential interim effects on consumption are mind-boggling. Why does this matter? From the statcan article: "An economy’s access to saving influences its investment prospects, and hence, its ability to increase productivity, capital stocks, and living standards."

Not that I think you need any reassurance but this is a potentially great critique of recent Fed/ECB/BOJ actions — and one that hasn’t been repeated a million times. If you follow comments made by Mr. Druckenmiller over the years, he referred to the hot potato effect whereby people in general would then have a lower propensity to hold cash or low yield risk-free debt and reach for yield raising the risk of capital misallocation and resulting in the possibility of asset inflation and subsequent asset deflation once easing was gone or when easing could not mitigate economic deterioration. The effect on savers is difficult to ascertain because the aggregated data hide significant asymmetry. In the US, in general, the three-legged stool of retirement reveals a widely insufficient level of personal savings and many rely on Social Security (defined benefit plans are on their way out). The future status of Social Security is interesting, only considering reasonable scenarios. https://bipartisanpolicy.org/blog/covid-19-may-deplete-social-security-trust-funds-this-decade/ An interesting and related (to easing and low interest rates) aspect is that excess amounts from the payroll tax have been funnelled to trust funds. The government (through the Treasury) borrows the excess funds for "general corporate purposes" and pays interest on the special and non traded debt security. In a fascinating way, the interest paid by the government on the inter-department debt has somewhat closely followed the net national savings rate of the US (private, corporate and government). https://www.ssa.gov/OACT/ProgData/newIssueRates.html The interest (and net savings rate) was around 6% 20 years ago. The interest was at 2.00% in January 2020 and went down to 0.75% in May 2020. The net national savings rate has been coming down over several decades after reaching a high during WWII (despite large government deficits). It briefly went slightly negative in 2009 and then 'recovered' to its secular trend but is about the see an amount of negativity not encountered since the Great Reset that came after the 1920-1 deflationary recession. Of course, it's possible that the Fed has conquered the cycle. For example, in the last few cycles, the Fed has been able to mitigate the decline of commercial and industrial loans through bridge-financing mechanisms but this time around there was a record increase in commercial and industrial loans during the actual formation of recessionary conditions. The numbers i look at suggest that bank debt taken up by the corporate sector since early 2020 is equivalent to the total bank debt taken in the last 6 years before that (the capital market is cooperating too). It is said that in China, because of unlimited and unbound powers, the authorities consider putting into law provisions forcing companies to report profits at all times. Under those conditions, who wants to be a saver? Attempt to make this relevant for stock picking: Recently KJP put up Williams Sonoma as a case study and wondered at the price evolution. It seems the business just surfed the right waves and it appears to me that, absent the recent positive performance (which could be noise), the price performance of the last few years is very similar to the S&P 500. It's easier to be a genius when the wind is in your back (and when the Fed prevents deflation at all costs).

Canada's market cap is less than 3% of global market cap and Quebec is largely irrelevant but since you ask. Looking at standardized reported numbers, mortality rates in Canada without the two central (and most populous) provinces (Ontario and Quebec) are comparable to Germany. Ontario has been reporting number showing slightly lower mortality versus average US. In my province (Quebec) mortality numbers compare to Spain, Italy etc. Reasons for relatively higher numbers are many and include slight differences in policy choices and application. However, the main reason for higher mortality in my province is a slightly older age demographic profile and, especially, at much higher rate of chronic care institutionalization for elderlies (about 3x the rate versus the rest of Canada). 80% of deaths occur in people living in large chronic care institutions (Petri dish scenario). With more data coming in, it looks like the overall mortality rate (global) will be relatively low (tip of the iceberg versus the whole iceberg). The following is an interesting study dealing with some kind of natural experiment. However, i can tell you that, for population at risk, including older, sicker and clustered, this CV thing can be decimating and is nothing like the flu (at least this first wave). https://thorax.bmj.com/content/early/2020/05/27/thoraxjnl-2020-215091.full Maybe i'm taking too much space here but here's an embarrassing situation. Last Thursday, i participated in an international symposium (virtual) and one of the speakers was Dr. Heidi Stensmyren (relevant clinician and policy advocate in Stockholm) and while she explained their rationale, it appeared clear that they were playing this for the long run, keeping an eye for overall costs and showing better numbers than my province when it was pretty much in full lockdown..Canada's "stimulus" program (both federal and provincial) is running at about 20% of GDP and still counting..

So (after a relatively acute phase because of genetic novelty), it seems that the new CV is about to enter a lingering phase, perhaps similar to other CVs and influenza (seasonal etc). The COVID-19 episode has renewed impetus for the anti-vaxxer movement. http://www.apnorc.org/projects/Pages/Expectations-for-a-COVID-19-Vaccine.aspx A vaccine for new CV is clearly not a slam dunk but may become a useful long-term and evolving tool. It appears (and this is detrimental to the premises underlying the efficacy of vaccines) that a significant portion of the population will actively or passively not have it (them). The determinants behind the anti-vaxxer movement are fascinating. The movement attracts different flavors: environmental, anti-BigPharma, celebrity cult followers. More recently the wide availability of poor and false information spread on the internet or social media has been a great enhancer of individuals who think they know better and who have deep antipathy to 'experts'. It seems that the common sense crowd (at least a significant portion of them) who felt that the first phase would be like the flu and that opening up should be done indiscriminately also believe the anti-vaxxer message. In 1776, when Thomas Paine disseminated Common Sense, he underlined the importance of keeping a healthy dose of skepticism against government and authority but encouraged people to use science and reason over beliefs. The development of Internet has been great but it is only a tool.

It is ironic that the 2017 link that you submitted above came with a top "breaking news" announcement: "EU unveils plan to borrow 750 billion euros to aid economic recovery" What is presented as a Marshall-like (it clearly is not) Plan or as an Angela Merkel's "Hamilton moment" (destiny will get more correlated) triggered the following comment from a timid opposing voice: "There will be no end". From Mr. Druckenmiller (2017): "The longer this goes on, the worse it's going to be". The Rubicon has been crossed.