Thursday, March 19, 2020

Coronavirus – getting angry

I am going to give you a few stylised facts about severe acute respiratory syndrome coronavirus 2 and the data.
First – no matter what you say about the Chinese data – and the Chinese data was full of lies at first – China has controlled the outbreak. Shanghai, Beijing, Chongqing are all functional mega-cities with no obvious health catastrophes.
The virus has been managed to very low infection rates in Singapore and Taiwan. The numbers (completely real) in Korea show a dramatic slowdown in infection.
Korea has not shut restaurants and the like. The place is functioning. But it has had rigorous quarantine of the infected and very widespread testing. It has complete social buy-in.
China tests your temperature when you get on a bus or a train. It tests you when you go into a classroom, it tests you when you enter a building. There is rigorous and enforced quarantine.
But life goes on – and only a few are dying.
In Singapore nobody has died (yet) though I expect a handful to do so before this over. This is sad (especially for the affected families) but it is not a mega-catastrophe.
There is a story in the Financial Times about a town in the middle of the hot-zone in Italy where they have enforced quarantine and tested everyone in the town twice. They have no cases.
The second stylized fact – mortality differs by availability of hospital beds
A.    Coronavirus provided you do not run out of hospital beds probably has a mortality of about 1 percent. In a population that is very old (such as some areas in Italy) the mortality will be higher. In a population that is very young base mortality should be lower. Also co-morbidities such as smoking matter.
B.    If you run out of ICU beds (ventilators/forced oxygen) every incremental person who needs a ventilator dies. This probably takes your mortality to two percent.
C.     Beyond that a lot of people get a pneumonia that would benefit from supplemental oxygen. If you run out of hospital beds many of these people also die. Your mortality edges higher - but the only working case we have is Iran and you can't trust their data. That said a lot of young people require supplementary oxygen and will die. If you are 40 and you think this does not apply to you then you are wrong. Mass infection may kill you. Iran has said that 15 percent of their dead are below 40
I will put this in an American perspective with a 70 percent strike rate by the end.
Option A: 2 million dead
Option B: 4 million dead
Option C: maybe 6 million dead.
By contrast, Singapore: a handful of dead.
China has demonstrated this virus can be controlled. The town in Italy has demonstrated it can be controlled even where it is rife.
Life goes on in Singapore. Schools are open. Restaurants are open in Korea.
The right policy is not “herd immunity” or even “flattening the curve”. The right policy is to try to eliminate as many cases as possible and to strictly control and test to keep cases to a bare minimum for maybe 18 months while a vaccine is produced.
The alternative is literally millions of people dying completely unnecessarily.
What is required is a very sharp lockdown to get Ro well below one – and put the virus into exponential decay.
When the numbers are low enough – say six weeks – you let the quarantine off – but with Asian style monitoring. Everyone has their temperature measured regularly. Quarantine is rigid and enforced. You hand your phone over if you are infected and your travel routes and your contacts are bureaucratically reconstructed (as is done in Singapore). And we get through.
And in a while the scientists save us with a vaccine.
The economic costs will be much lower. Indeed life in three months will be approximately normal.
The social costs will be much lower.
Every crisis has its underlying source. And you want to throw as much resources (and then some) close to the source. Everything else is peripheral.
The last crisis was a monetary crisis and it had a monetary solution.
This is a virus crisis and it has a virology solution.
Asian Governments are not inherently superior to ours – but they have done a much better job of it than ours. The end death toll in China (probably much higher than stated) will wind up much smaller than the Western death tolls. I do not understand our idiocy.




John


PS. Longtime followers of this blog will know that I have rarely publicly agreed with Bill Ackman. I do here. This minimises economic and social cost of the virus. I am not sure the stock market bounces hard with a rational policy, only that it minimises the damage.

I regard the current course of English speaking democracies (other than New Zealand) as mass murder by the political elite. I think history will regard it that way too.


45 comments:

Adam Reynolds said...

Hi John,

I totally agree. I am sitting in a hospital bed in Malaysia with CV19, discovered because of SG’s vigorous processes. I am entirely symptom free and have been since discovered, but was tested due to contact. My wife and kids are all in quarantine in SG, having had 7 or 8 tests between them to make sure they are negative.

I have spent hours on the phone with both SG and MY MoH recalling my steps in Denmark, Australia, Singapore and Malaysia prior to contracting it, They are super thorough, totally professional and courteous and I couldn’t applaud them more,

Notwithstanding that, I think they economic impact is going to be immense as the market was priced to “perfection” prior to this virus, and was probably due a serious correction anyway. The withdrawal of liquidity is similar to 2008, but this time it is not just a financial crisis but a physical crisis as well.

Matthew Honnibal said...

Completely agree. I would add three more predictions.

1. During the quarantine, all other cold and flu infections also plummet. I think this will be key to the second phase of controlling the infection. Outbreaks of other influenza will get caught and controlled quickly, because there's little asymptomatic transmission. If P(covid | fever) is high, detecting new outbreaks becomes vastly easier.

2. Countries that clear themselves of the virus will be able to trade much more freely. Countries will want to clear themselves and get behind the hazmat curtain. Any country that does go for a "herd immunity" strategy could see their position worsen as their bloc erodes.

3. The no-lockdown strategy probably can't be executed coherently. Once the health system is overwhelmed, healthcare workers will demand action. Refusing them will not be viable: the work will be increasingly dangerous, and if they see nothing else being done, they'll conclude they're being treated as cannon-fodder and likely stop showing up.

Deaths lag infections by 20-25 days. If infections were doubling every 2.5 days prior to a lockdown, that's 8.8 doubling periods before the lockdown has any effect on deaths whatsoever. 41 people died yesterday in the US, suggesting that in 3 weeks time the U.S. might be seeing 10-20 thousand deaths in a single day --- regardless of any transmission mitigation measures they impose in the meantime. If by then they've reduced the doubling time to every five days with milder measures, they'll still face a 20-fold increase in deaths per day before a quarantine has any effect.

Robert Kane said...

Well said John.

Lyall Taylor said...

Hi John,

Thanks for the post, but I think both you and Ackman are wrong on this & being far too alarmist.

Three things:

*Firstly, the more evidence we get, the more it suggests death rates have been meaningfully overestimated due to major severity-bias in the data; i.e. the only people getting identified/tested are those presenting in hospital with severe symptoms. The most comprehensive testing to date has been in South Korea, and the death rate there was 0.6%, and it is likely that even that is upward biased by non-identified mild cases.

Additional datapoints: The Diamond Princess cruise ship that was quarantined had a death rate of only 1% despite it skewing elderly, which adjusting for the age structure corresponds to a level roughly in line with the seasonal flu's 0.1%. In addition, Bloomberg reported today that only 1% of the deaths in Italy across all age groups were people that did not have pre-existing conditions, and that is in spite of the healthcare infrastructure being overloaded.


Secondly, the virus cannot possibly be as contagious as Ackman & others have argued, and the R0 be only 2.3. Either the R0 is much much higher, or the level of contagion is being vastly exaggerated. There is a big difference between how an infection *can*, in theory, be transmitted, and how most actual transmissions in the real world happen. The vast majority of actual transmissions are droplets from coughs/sneezes that are inhaled while airborne (for a short time), or picked up off surfaces, and then rubbed on one's face.

It would have been utterly impossible to contain the virus in places like South Korea and Singapore if CV19 was as contagious even amongst asymptomatic patients as is argued. The measures taken in Singapore have actually been pretty modest/limited, and yet highly successful.


Thirdly, you and Ackman, and the world, are I believe vastly underestimating the dramatic reduction in R0 you can achieve through much more modest means that shutting the world down. Just doing what Singapore has done can make a huge difference:
*Temperature screen everyone going into public areas/restaurants etc. Test those with a temperature.
*Quarantine identified cases and their close contacts (family, recent friends & work colleagues).
*Have people wear masks and wash their hands regularly.
*Public awareness, which results in voluntary social distancing.
*Restrict large scale events only where large numbers of people will come into very close proximity with each other (e.g. concerts).


Simple measures have proven effective, and are being underestimated. Consider this John - how much do you think the probability of catching a cold would go down if you thought it was potentially fatal, but you continued to live your daily life largely unaffected, barring proactively removing yourself from obviously high-risk situations. You would conduct yourself in a much more circumspect and careful manner, and I think doing small things alone would probably reduce your risk by 80-90%.

If the R0 is actually 2-3, simply educating people, and scaring them into being careful; avoiding large gatherings, and having people take care & wash their hands etc, could easily see the R0 plummet below 1 all by itself without any drastic 'cancel the world' efforts needing to be taken.


People are overreacting not under-reacting in my view, and are in such a state of panic that they aren't thinking clearly and aren't focusing on very simple and effective strategies. Most of the containment measures at the moment are likely doing far more harm than good: crowding out medical resources & supplies for those who need them for other ailments, and creating massive financial & emotional stress for people, & stress is a major killer.

Alan Dimon said...

I agree with your analysis except for one point.

If you were a betting man (which I suppose you are as an investor), how much would you bet that our country can implement the sort of rigorous checking and contact tracing that Korea and Singapore currently have in place effectively enough to keep businesses operating normally while suppressing the virus?

I am not at all confident this can happen. Both korea and singapore have universal healthcare and well funded health systems. our profit driven health system? Well lets just say dividends are preferred over emergency response capacity and contingency planning. The gap isn't filled very well with our CDC which is pretty powerless and mostly broke.

Quarrel said...

ScoMo seems to think that people losing jobs in the short term (because of school closures) is terrible. He literally said that he didn't want to see tens of thousands of people lose their jobs because of it.

I can't understand how he doesn't see the deaths on the other side of that choice, and much longer economic carnage as a result.

Anonymous said...

Agree mostly. Flattening the curve is needed in the early innings (while testing capacity is ramping up). After this, you need mass testing and tracing. You also need to do random sampling testing, so you can identify hot spots as soon as they pop up. Vaccine should come eventually.

fadewid said...

Mr. Hempton,

While I cannot dispute any of your arguments of facts, I fail to see how such measures can realistically work in a Western Democracy. Confiscating phones and forced temperature readings? The authorities cannot even enforce vagrancy laws and prevent wholesale slaughter in some neighborhoods in the United States. Now they are talking about releasing prisoners. And we're going to start arresting normally law abiding citizens for not turning over their phones?

Cheers,

Dan Widdis

C.Thwaites said...

I fear this crisis will expose the incompetence and inadequacy of the US health care system. We all know the appalling number of un/under insured people in the US. They can not afford a test and will not have themselves checked out voluntarily. A trip to ER in the US costs $2,000. That’s $2,000 an hour.
Add in a low bed/doctor to population ratio, a stifling bureaucracy and no (so far) Federal direction. The US can not respond in the same way as the Asian countries. It can’t even respond like Italy or Spain.

David said...

I agree completely Mr. Hempton. It is pretty obvious that western governments have been slow on the uptake, some disastrously so. Next they need to stop the solipsism that only the west have the solutions. I am writing this from Denmark which has been quicker and more forceful than most, but by the time the curve is flattened we need another strategy for when we loosen the lockdown. We clearly need to look to the best in class, and that is without a doubt Northeast Asia. If nothing else we need to expand testing manyfold and have hundreds if not thousands do active tracking down of SARS-CoV-2 bearers. It makes social as well as economic sense.

Fatman said...

“Life goes on in Singapore. Schools are open.” Local schools on holiday, international schools sent kids home this week - out for at least another 3.

Gareth said...

Totally agree on the lock down John. And perhaps a short period afterward of enforced mask wearing when outside the home - how quickly can we get 25 million masks into Australia now? Even the crappy paper ones, it's about stopping outbound spread rather than protecting the wearer. Stop it dead while still allowing life to go on. Then we'll only have to worry about the issue of borders.

tim_g said...

i had thought that australia and nz's policies were currently quite similar?

Unknown said...

Mass testing is absolutely the way to go. I just don't think we (Australia, or most countries in general) have the test kit resources required to do so. Other countries have done a better job stockpiling what is needed, just in case.

Anonymous said...

It is not about superiority or Asian are smarter or anything like that. It is the mindset of doing the right things. I am sure your country or whoever the "ours" you are referring to know what are the things to do. They are not dumb but what is holding them back? Probably the politics? Probably due to the so called democracy that the western world holds on to?

Shezza said...

Brilliant piece - well done. Put Michael Osterholm from CIDRAP in charge of the world flanked by Obama. We then move forward to getting through this.

Anonymous said...

Thanks for the post, John.

I've a lot of respect for your views, from your long history of intelligent, thoughtful posting, and it's great to have a chance to chew over what's happening with CV19 and try to figure out and test thoughts about it.

First stage I think is to consider the facts you've presented, as there are a few points I'm not sure about.

So, first fact - China and some other countries have controlled the outbreak - okay. I can accept that.

Second fact, mortality rates.

I may be completely wrong, but I suspect the infection rate is much higher than is reported, and this makes the mortality rate correspondingly lower. It does look like it's the weak old (70+) who are vulnerable, and they do die from it. This puts me in mind of the annual flu, which in the US (pop 330m) I Google to find (fairly wide range) between 22,000 and 55,000 flu deaths per year. I suspect these deaths are predominately the old. Wikipedia says 16.03% of the population in the USA are 65+, so although it's a bit off (65 to 70 seems to make a big difference to CV19) let's roll with it - assume (22k+55k)/2 = 38.5k deaths per year from 330m * 0.1603 = 53m people, which is 0.000000727802037845706 (or 0.00007%).

This is with I assume pretty much full provision of medical care - the annual vaccine (which probably has a larger take up in the elderly) and hospital support for those who do fall ill.

So this is what we might think of as a scenario where CV19 is managed - there is a vaccine, and that in turn keeps the numbers of infected down to a level where hospital support is available for everyone who needs it.

What happens when there is no vaccine? how much of the population do we think becomes infected (in the absence of any measures taken to prevent infection, so we don't need to consider them here)?

I think when you write "strike rate 70%" you mean 70% of the population are infected?

I've been Googling a bit to try to get an idea of infection rates for infectious diseases, but no luck. My feeling is 70% is reasonable.

However, I think this only matters for the 16% who are over 70 years of age.

You argue that "a lot of people get a pneumonia that would benefit from supplemental oxygen", also that "Iran has said that 15 percent of their dead are below 40.". Almost immediately before though you say the data from Iran can't be trusted. I may be wrong now to say this but I think the pneumonia is simply the situation when the person with CV19 is developing serious symptoms - so this is really part and parcel of those who are vulnerable getting really sick and maybe dying.

Basically, I'm still thinking this is a killer only for people who are weak and old.

This does then leave us with the question of the death rate for the weak and old, and if it will be high enough to overwhelm hospital support. My impression is the answer is definitely yes, and here we're talking in the USA alone of 50m people.

The question then would seem to be what can be done to protect these people? you could say to them "self-isolate" but if everyone else pretty much is infected it seems hard to avoid becoming infected.

This then seems to bring me back to the notion to generalized control - reminding me of the kind of steps taken for Ebola, and indeed which I think must be the same pretty much in essence for any infectious disease when there's no vaccine - you have to get hold of the infected. Isolate the infected, retrace their steps, isolate those they've been in contact with. To make that practicable you probably do have to take far-ranging steps to stop people travelling around, otherwise the number of people you have to track down becomes impossibly large.





Anonymous said...

Ackman just wants the market lower to buy, go fuck yourself John.

Filippo Riccio said...

Here in Italy we actually produce (millions of) test kits, but are not able to use them due to lack of personnel and laboratories. It seems not a priority for our policymakers.

Anonymous said...

Please would people stop saying that Singapore school are "open". It is currently the school holidays here and when kids return, they will be doing distance learning at home. Also, Singapore today introduced stringent measures -- people are to stay 1m apart from each other. They also launched an app for contact tracing purposes. Life is far from "normal" in Singapore and cases are rising exponentially (though mostly imported cases).

Business Detective said...

Fantastic post. I agree.

The virus is at war with our bodies. Kill the virus before it kills us.

Western democracies are used to the freedom but in some circumstances those freedoms must be suspended for survival. All focus should be a on a strategy to reduce the R0
to well below 1 to kill it.

Anonymous said...

Please blog more! Especially through this crisis. Your blogging through throught the GFC was wonderful.

Unknown said...

Does anyone know if any efforts have been made (or are being considered) to calculate the time and resources required to develop a system of regular testing for ALL Australians?

philbrick said...

I agree with your analysis. Western countries have the expertise and resources to combat COVID-19 effectively. The problem is that Western governments are not very good at learning from history. Until a month ago, there were no votes to be gained from preparing for a pandemic.
"Mass murder by political elites" is quite a common crime - think of the Irish famine of the 1840s or the Bengal famine of 1943 or the Ethiopian disasters of the 1980s. Elites only fix problems which affect them - e.g. the Chinese leadership has been active in reducing air pollution (because they have to breathe the air), but much slower in addressing soil and water pollution.

James Barlow said...

Let us hope Lyall Taylor is correct and that R0 can be brought down with a public awareness campaign, quarantine and limitations on large gatherings. I fear this is not the case but in reality we do not know, so at this stage the path that minimises risk of unnecessary loss of life from CV19 is certainly the very sharp lockdown that John recommends.

A challenge with the very sharp lockdown at too early a stage is that although it reduces risk, it also licenses extraordinary government action based on very limited data. At this stage the combination of lack of testing, rushed-to-market test kits, severity bias and the sheer speed with which this is occurring means there really is a huge amount of uncertainty. Licensing governments to always rush to take what appears to be the lowest risk approach based on limited information is going to set a dangerous precedent. If we can immediately give up our freedom of association and freedom of movement based on this level of data, what level of control would we not accept from our governments for other issues?

Democracies have historically risked and given up lives to defend freedoms. The very sharp lockdown involves the reverse - giving up freedom to protect lives. It is not a decision that can be taken lightly and while being slower to take the necessary steps has already resulted in "unnecessary" loss of life, the instinct to be initially reluctant to take this step is one I personally hope our governments never lose.

Jon said...

Hi John

Practically speaking, apparently even in Wuhan those who knew they were sick got bored of being in self-isolation and started wandering outside and mingling with others. According to the WHO's Bruce Aylard, they had to be forcibly isolated. This in a country where the people fear the government.
The chances of most Australians, who thankfully live in a freer country and are more dismissive of being told what to do (unlike, it seems, the majority of your commenters), contentedly staying at home for six weeks and self-isolating is, in round figures, zero.
So what will the lockdown actually achieve?
It may slow the outbreak but it won't get rid of it unless you enact martial law, something that most Aussies will rebel against, thereby also ensuring the virus won't be sent packing (to quote Boris).
(Just wait for Americans, particularly those outside the lefty enclaves of the north-east and west coast, to rebel against any national lockdown that is being proposed there. It will not be pretty).
So practically speaking, calls for a lockdown are illogical and in fact counterproductive, as these calls are merely prolonging and expanding the panic that is currently occurring both in financial markets and the rest of society.
And that doesn't even consider the second order and third order effects of a lockdown, including a destroyed private economy, thousands of bankrupt businesses, millions of job losses, a probable housing crash here in Oz, peoples' futures destroyed. Essentially what you are proposing is turning a virus crisis into an even bigger financial crisis and forcing another Great Depression on us which, as I have noted above, will all likely be for naught.
The idea that the government can just step in and support businesses and the unemployed for a few months and then we will be back to normal in 3 or 6 months I think is...optimistic (I am trying not to be rude!). The reason being is that it still won't prevent massive business closures and job losses, as it won't deal with the massive demand shock that has already occurred and will be made a lot worse and more prolonged by a lockdown.
How this means the economic costs of a lockdown are lower than trying to mitigate the virus is beyond me.
And what about the social costs?
Ask anyone who lived through the Great Depression what it was like and what life was like for years afterwards. We're talking about tens of millions (in the USA, hundreds of millions) of people having to go through another Great Depression and its aftermath.
People will realise their lives are being destroyed by the lockdown, which will not only encourage them to ignore it (see above) but also probably lead to massive social unrest and upheaval.
How this means the social costs of a lockdown are lower than mitigation is also beyond me.
So instead I suggest we start being practical:
Protect the vulnerable (the elderly and those with pre-existing conditions) and for everyone else, advise them to wash their hands, wear masks, socially isolate etc, but encourage the latter to also get on with life and thereby stop the panic. Especially as the real case fatality rate is likely to be around 0.5% as noted by Lyall above.
Finally, I am amazed that the calls for lockdowns all seem to be coming from those (dare I use the term "elites"?) who can afford to stay at home for six weeks and do nothing (and perhaps even pick up great bargains when the stock market collapses further), rather than from those who form the majority of Australia's population and who would struggle to even be out of work for one week, let alone six, and whose lives will be destroyed by what you propose.

Amicus said...

Hi John,

Your comments and views are almost exactly the same as Tomas Pueyo in his article "The hammer and the dance", but his is longer and provides far more analysis. This is no criticism of you at all as anyone who contributes to finding the best solution is providing a service. I encourage other readers to look at the Pueyo article.

Looking at the wood and not the trees, everyone I think agrees that getting "R" the reproductive rate below 1.0 is necessary. Currently cases outside China are going up by a factor of 10 every 2 weeks. The rate is unchanged from early March, as South Korea gets things under control, Europe ramps up and next will be Africa (if they bother testing). The world is on course to have 100 million cases by the end of April. It's simple maths, 10 million cases mid April, 1 million by the end of March, 100K mid- March (and we are already passed that, but were at 100K around 16 March) and we were at 10K start of March, 1K mid-February.

For Australia (and the US or anywhere), how you get "R" below 1 is far less important than getting "R" below 1 as not getting "R" below 1 leads to disaster very quickly. If you think there is "panic" now in Australia with 1,000 cases so statistically only 1 in 25,000 people you might meet have COVID (and this assumes the 1,000 are all out and about which of course they are not, they are in isolation), think what it will be like when 1 million people have it and your chances of bumping into someone with it is 1 in 25. It's a "Lord of the Flies" situation

The economic damage done to control "R" below 1 will be orders of magnitude less than not controlling it regardless of how hard you go. From what I see of ScoMo he gets this and he understands people so everyday he is turning the screw harder with new restrictions and he is doing this because it is easier to warm people up and get them to comply if you do it progressively, social distancing, everyone needs 4m2, close Bondi Beach - much easier than just closing Bondi Beach off the bat.

The world is going to evolve into countries that have controlled it and continue to control it (its easier to control when you have beaten it down to low numbers and you can lift the restrictions somewhat) and those where it is rampant. The US response appears to be an increase in gun sales which might be useful on an individual basis, but unlikely on a collective one

Anonymous said...

Bigger picture looks a bit different. Australia had 160,909 deaths in 2017, that's 440 a day, (although maybe 17 % were preventable). That helps put Covid 19 deaths in perspective.

Men born 1960-62 can, if they make it to 65, expect to live until age 76;
women from the same cohort can expect to live to 81, (again that's if they make it to 65). Don't have the life tables but it's a fair proxy for the cohort born 1955, now aged 65.

Source here: /www.aihw.gov.au/reports/life-expectancy-death/deaths-in-australia/contents/life-expectancy

So that's 11 years for men, 16 for women, all aged 65.
Here's the assumptions in my rough calculation-
-equal numbers men and women, same mortality rate from virus
-the group aged >65 all share same life expectancy, 11 for men, 16 for women (not true but will do for upper bound illustration)
-population size 25.464 million and ages > 65 comprise 15 % of total (2016 census)
-90 % infection rate for population
-assume anyone < 65 unaffected by virus (sure, not strictly true but closer than
(mostly older) policy makers care to admit)

Following your lead, 3 scenarios.

- 30 % mortality in the >65 group, men and women have same rate

Lost Years due to Covid 19, men and women = (male deaths x expected future years men) + (female deaths x expected future years women)
Lost years = 14 million

-50 % mortality
Lost years = 24 million
-75% mortality
Lost years = 35 million

That's a lot of Lost Years if we do nothing.

But... what's the cost in Life Years if we shut down the economy for 3 months? Because there will be an effect on life expectancy. Some people are going to lose everything they have, jobs, too. Think heart attacks, stress related illness. Some will lose their way due to addictions as they look for ways to cope. There will be health issues associated with poverty. There will be suicides. In short, life expectancy would start to look a little different. How different? We might look at the tables for Indigenous Australians for an indication.

For males born 2005-07, there is an 11 year difference in life expectancy!
(I know, there are a lot reasons for the discrepancy)

Assume (conservatively, I think) that life expectancy drops by just 1 year for both men and women in the under 65 group; then

Lost Years due to Covid 19 Response= Pop<65 *(drop in life expectancy)
=21.644 million

If the realized mortality rate is under about 46%, then
Lost Years due to Response > Lost Years due to Covid 19

You could substitute numbers from the US, or Canada, whence I write, and get similar results. Shutting down an economy has more than financial costs. And they're not trivial.

Anonymous said...

The irony is i haven't seen anyone mention taking Vitamin C to slow and/or prevent the virus. Isn't this common knowledge? Apparently not. The key is the blood levels have to be high enough - much like intravenous treatment which is available to the doctors. We already have this yet the medical community is falling all over themselves for a vaccine or drug approach? i forget, drugs are profitable, yet less effective. Go figure.

yoyodyne said...

We were told that the mortality rate for h1n1 was 1-1.5%. 4 years later it ended up being 0.02%, over 60m Americans were infected but 12k people died. I see no reason [as yet] why this virus will be significantly different. Nobody knows the infection rate yet, only the sick rate and the death rate based on the sick rate. I think the R rate has been overstated to panic the public into changing behavior, the Chinese got it under 0.30 in a matter of weeks.

Agree 110% that we need better testing to ensure sick people aren't going out so we can reduce the R number. And more ventilators.


I was on a conf call with Dr. Michel Mina of Harvard U. epidemiology this week and even he brought up the salient point that you can't quarantine Americans for 1-3 months, and then do it again a 2nd and 3rd time because the virus will still be 'bouncing around' out in the world, that's why flattening the curve is so important. Otherwise, it will destroy the US economy completely.

I think you and Bill are clearly being led by the panic-driven media.

fencepost said...

A tested make-your-own mask design exists (search scmp.com for "make your own mask"). They are not perfect, but if the sick person and the healthy person wear one then the population benefits would be substantial since the virus would have to get past two masks to infect. There is a fitting saying common in England: "God helps those who help themselves".

Anonymous said...

John / Bronte:

Why not put all of your recommendations into a 12-15 page white paper and send it to your extensive distribution list of journalists, politicians, fund managers, etc? Given your prescience and expertise regarding the virus (you can include in the white paper all of the diligence you did and how you predicted the current crisis), I think people will definitely pay attention to your recommendations on how to handle things.

Bronte & you may thus go down in history as "The Hedge Fund / HF Manager that Saved the World Economy" - it will make Dirty Money seem like nothing (imagine just the fundraising opportunities, let alone lives saved). And not only that, but your long book should show massive gains if your recommendations help get the large economies in the West back on their feet quickly. A "win-win" if I've ever seen one.

Tiempo said...

Rest assured that every western country (and the developing world, through WHO) has had planning in place for a pandemic at least since SARS in the early 00's. We must understand that our cultures and the way we organize society is completely different.
China already has a police state in place to control their population, with camera surveillance, facial recognition on streets and in homes, a population used to this unlike in democraties, and an ever present communist party in every community ready to enforce central command. What they don't have is freedom of speech, which would otherwise made this contagion recognized far earlier. Asian cultures also have a deep founded respect towards their elderly, whom they are willing to protect at a great cost.
Italy then. Does not have a functioning democracy or healthcare system. Was also not helped by warnings from China of the 100k textile workers from Wuhan region now working in the Lombardy textile factories bought by Chinese companies. They don't have paid sick leave and probably live as cramped up as possible, perhaps even sleeping in their factories by help of local corruption. This is an even better breeding ground than in China and the corona virus has probably been within the Italian borders since new year without authorities knowing. Italy also has a deep found distrust towards government, the most number of smokers in Europe and a very social culture built upon interactions with both friends and strangers on the street. Many also live close with their elderly in extended families. Their only mode of action now given the circumstances is a widespread lock-down so as not to overburden the healthcare system nation wide. The cases we see in ICU today means 4x cases hospitalized in two weeks given exponential doubling of infected every three days and about 1 week until they end up in ICU.
Rest of Europe then. The price tag to a human life year has been 50kUSD/QALY for other healthcare interventions, so European countries expect a cost stemming from Covid-19 of about 12 to 25% of GDP without overburdening of healthcare. Europe does not have the advantages of a single communist state laid out above. It is far too late to eradicate the disease right now. Hence flattening the curve with measures that keeps the healthcare system in check without destroying the economy far greater than the cost of the 12-25% GDP of the virus itself. But also not lower than that because of the social contract implied by public healthcare to defend health of all citizens up to the cost of 50kUSD/QALY.
The US then. Rich country without public healthcare and many uninsured is a unique scenario. No paid sick leave, minimum wage jobs in the services industry creates no incentive for many young people to quarantine themselves with minor illnesses. No testing in place to verify infection, so no way of knowing if they are infected, and no serology test in place to know who have been infected. And the worst head of state the most powerful nation has ever seen in place to decide the course of action. Since it is probably far too late to contain the disease within certain states, the plan of attack must be different. If the US does not decide to flatten the curve within the whole nation, if it is going to be successful in eradicating disease within one state it would have to shut down state borders and quarantine everyone within with help of the military. The economic toll would likely be high as it would hurt consumption in other states as well. The US does not have a collective culture, has polarized media, no testing in place to relieve people from quarantine, many uninsured, minimum wage people without incentive to quarantine as they are now also most likely without a job. The most likely scenario is for Trump to see this one out and try to gain political points in his media so as to secure his re-election.

Brian said...

You may want to consider taking this one step further. Let's reinstate conscription, bring the millions of Americans who just got laid off into national service to defeat this virus. Give them a paycheck, a purpose, and a little hero propaganda (maybe wipe out their student loans while you're at it with a reverse GI-bill equivalent).

Instead of tanks and grenades, they will get thermometer guns and test swabs. We can use the empty schools, conference halls, and convention centers as temporary hospitals and self-quarantine safety zones (so you dont infect your roommates or loved ones). Kills three birds with one stone: pandemic outbreak, unemployment, healthcare overrun.

uncertainly said...

There are enough experts advising Government who have a broader and deeper knowledge of all the issues you argue about. Do you presume to know more than they do, or is it wisdom that you have which they don't?
I see your article as presuming yes, and the responses on here mostly presume yes as well.

Harry said...

God! Lot of differing opinions here.

I'll come back in 12 months and see who was right...unless its the same person writing all the comments of course!

Anonymous said...

You are such a douche it is laughable.

Anonymous said...

Please listen to epidemiologists and other medical staff with sound knowledge in this area - do not listen to hedge fund managers and other non-experts. With all due respect John, your opinions are not worth much on this particular issue.

TheDrugsDon'tWork said...

The Chinese produce this nice handbook on fighting COVID19.

https://twitter.com/davidasinclair/status/1240749385920765954

On page 24 deep in the minutia it describes there recommendation for some of the more precarious patients

"The artificial liver support system (ALSS) and blood purification can effectively diminish inflammatory mediators and cytokine cascade and prevent the incidence of shock, hypoxemia and respiratory distress syndrome"

I think the two words "BLOOD PURIFICATION" opens an opportunity up for an otherwise uninteresting company called Cytosorbents Corp . They have a blood purification solution approved in Europe for Septic Shock. I think this is a game changer for a spluttering small company. What are your thoughts? There is also a Chinese company in this space, I believe, but not approved in Europe.

Thedrugsdontwork said...

Sorry, just spotted my mistake. They are just talking about using ALSS not ALSS plus blood purification. Ignore my question please

theweeknd said...

as a mainland Chinese who always identity myself as pro-Western, pro-democracy,
I'm totally SHOCKED & CONFUSED by incompetence of Western politicians in this virus crisis.
US has plenty of time to react, yet Trump call it ‘no more danger than flu’, and u guys just totally WASTE that time
and now, deaths double in just 48h to surpass 2k. Yet Cuomo still refused NYC lockdown. totally disaster!what a tragedy

Unknown said...

Lock-downs are great in theory, I don't see them working in reality. You're not going to have a complete lock-down, agree that we need the people who work at the hospitals to continue coming to work. Then remember that they don't all get there by mass transportation, so you need gas stations and possibly auto repair shops. To fill the gas (and grocery stores) you need trucks. Truck drivers need truck stops. fuel needs refineries. Groceries need warehouses and shipping and trains and docks. I'm guessing all those things need electricity so the power plants need to keep running.

When it's all said and done, what percentage of the population can be in a significant six week lock-down? If you can only isolate say 30% (at best)of your population, does it work? I don't think so, it will slow the spread some, but it isn't going to drive it anywhere close to zero.

Also, enforcement, are you going to jail non-compliance? Do you keep the court system running for that, or do you just let the cops enforce it without trials? Are you willing to be part of a jury pool around possibly infected people?

There are a lot of details that need to be considered (define which stores/factories are essential), that would need to be figured out correctly or it would have some significant repercussions, do you know which factories are making all the inputs to the parts that get assembled into medical equipment, or drugs (what exactly is the inert filler material in those pills and where does it come from? Please don't forget that the paper plant is essential unless you were one of the people who bought a years worth of toilet paper earlier this month.

Dmitry said...

Totally agreed.
This cretinism was truly painful to watch. A lobotomized monkey would have done better.
Especially last weeks, after Italy already entered the "real problems" stage, and everybody could see "herd immunity" and "small-scale, isolated quarantines without a blow to the economy which is a lockdown" on live TV and Youtube from a country where, unlike China, it isn't expected that everything is censored and doctored.

i could brag that I was smarter than the entire UK government and the entire US government, and made some money off it, but it's quite hollow: not because Im such a genius, but because they all played head-in-the-sand for multiple weeks the way 5-year-old kids learn not to.

MasterPiece said...

Not only in travel industry but CoronaVirus is now effecting almost every business such as travel, hotel, aviation, share market, oil, education, game, IT etc. Precaution is better than cure. So, keep precautions.

samir sardana said...

Y is the USA and UK not bothered,about the COVID deaths ?

Could it be that they want it ? Who are the dead ? The dead are the pensioners,and the persons,who are fatally sick.dindooohindoo

Posit No.1

Assuming that these persons,had a residual life of 15 years,and we can assume that,by August,2020,there will be around 600000 dead in the West.

The pension to a pensioner would not be less than 12,000 USD per annum, on an average,at the minimum.In addition, the medical and other social costs,on an aged pensioner,would be not less than another 8,000 USD per annum.

If they die,then on 6,00,000 people,if the West saves 20,000 USD per annum,you net USD 12 Billion,PER ANNUM - which will be around 200-300 billion for 15 yeears

One could argue that the US Fed just printed,the USD 12 Billion - but now it need not.The Youth in the west,had to work at high rates of tax and deductions - to finance the aged pension and health care benefits - which ultimately,led to outsourcing.

The scam would be shocking,if the dead,had no insurance ! That would be telling ! If 6,00,000 are dead,with insurance and an average insurance claim,of USD 1,00,000 - then you have a bomb - to wipe out the insurers.

If 10 million die - we are looking at net savings of USD 200 billion per annum and USD 3 Trillion over 15 years.This will also solve the health insurance problems in the US/EU,as the high claim insurers,will cease to exist - and thus lower the insurance costs,for the young,and the cost of labour in manufacturing.

Posit No.2

Large number of services and industries,in the west,will die out.That will release labour and reprice resources and rents - to drastically lower costs - and that will make,"Make in USA",viable

How will the state finance the loss of tax revenue and GDP.Ultimately,the state will have to demonetise the deposits, in banks, of the westerners.Simple ! The USA will not be able to demonetise the PRC holdings of US T-bills - not even if the PRC sinks a US aircraft carrier in the South China Sea.

Posit No.3

All the nations who borrowed loans from PRC - will now force the PRC to do debt write offs.That will be a huge loss to the PRC,after the manufacturing shift from PRC to West.If 200 million people are unemployed in PRC - then you have Tiananmen - Part 2.

Of Course,the PRC could also force the IMF and the WB,to waive loans - but the harm to the PRC,will be done 1st.

Posit No.4

Trump postpones the US Polls,as people cannot stand in queues and no electioneering is possible - and he has the cure - and by September,the pensioners are dead - death rate and infections rates drops ..... who is the gainer ? If Trump is winning - Putin will stay calm - else,he might attack Eastern EU.If Trump is winning - then it will be the last chance for PRC to annex Taiwan and Vietnam - and make Trump lose face. But the odds of PRC action is medium.

Posit No.5

With massive unemployment in the West - the migrants will exit.Asians were made to clean toilets - that is their worth.They will exit.That will solve the migrants problem,rents and property rates will fall,labour will reprice,and the Westerners,will have to,start to work

The West has to take a BIG PICTURE view.South East Asia and Indian and Nepal ,are over populated,and there is no humanity there.There is no sentience,in the "so called humans".They are robots - and 80% of them,have to die.Their time is over - they are obsolete, a dead weight,and a burden on earth.This will de-price the resources sector,lower demand,and solve the environment problem,forever.

Africans have been exploited,for at least ,2000 years - and they deserve,many more chances.

There are 3 simple steps

Are the "so-called humans" - having a sentience - depending on their "individual and collective actions"
If not,then they are "robots"
It is time to "terminate the robots"

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. You should assume Mr. Hempton and his affiliates have positions in the securities discussed in this blog, and such beneficial ownership can create a conflict of interest regarding the objectivity of this blog. Statements in the blog are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. Certain information in this blog concerning economic trends and performance is based on or derived from information provided by third-party sources. Mr. Hempton does not guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. Such information may change after it is posted and Mr. Hempton is not obligated to, and may not, update it. The commentary in this blog in no way constitutes a solicitation of business, an offer of a security or a solicitation to purchase a security, or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.