Thursday, April 23, 2020

The intolerable shut-down must end

Chart #1

Chart #1 shows what I estimate the total loss of private sector jobs has been since most of the country went into lockdown. It's just about the worst economic catastrophe imaginable: over 26 million people have been sent home and forced to apply for unemployment insurance. To date I am unaware of how many public sector employees have been affected, but I'd bet it's very few. Eric Garcetti (Mayor of Los Angeles) announced last Sunday that thousands of city workers will be "furloughed" beginning this July, but that only translates into a 10% drop in their incomes, not their jobs. 

The disparity between the massive suffering imposed on private sector workers and the extremely limited impact on public sector workers can only exacerbate the feelings of frustration that are building across the country. I think people are beginning to realize that we consented to the shut-down strategy in the belief that doing otherwise would result in millions of deaths. A shut-down was necessary to "flatten the curve," and that has been achieved throughout most of the US. It is pointless to continue the shut-down, since the virus can only be contained by immunity, which in turn is achieved by infection or by vaccination, and the latter is still far in the future.

So why not begin the reopening? Hospitals throughout the country are so empty (having forbidden elective surgeries and having received far fewer covid-19 patients than originally projected) that many are teetering on the verge of bankruptcy. The 14-day moving average of daily new cases (an official criterion for reopening) is now falling significantly in at least 20 states (most impressively in New York), and it has flattened in at least 14 other states. New studies reveal that many millions have already been infected, yet only a few have been sick enough to seek treatment or a test. It's becoming crystal clear that the vast majority of deaths occur only among people who were already suffering from a co-morbidity; for healthy people under the age of 65, the risk of dying from covid-19 is negligible, according to Stanford Professor Ioaniddis.

Yet we are still under the thumb of bureaucrats and politicians who were quick to impose draconian shutdown measures but are now very slow to embrace any reopening. Tens of millions are going stir-crazy, millions fear the loss of their business and/or their livelihoods, millions are standing in breadlines and virtually all students are studying at home while staring at computer screens (yet these are the ones with almost no chance of suffering serious consequences from a Covid-19 infection). But the ones calling the shots are still getting paid (and many handsomely) and still fully-employed. There is a precedent for this, and it portends more social unrest in the days and weeks to come. A good friend of mine, H. Cademartori, penned this cartoon with these thoughts in mind:

If there's a silver lining to this massive unemployment cloud, it's that Congress decided—in a paroxysm of generosity—to add $600/week to each unemployment check through the end of July. Unfortunately, the Law of Unintended Consequences promptly kicked in, as many workers suddenly discovered they would be earning far more while unemployed than they were previously making while working. This will make it much more difficult for employers to restart their businesses, especially in the restaurant industry. "Call me August 1st" will be the answer that many employers receive when asking their workforce to come back.

Recovery from this shutdown will likely be painfully slow for awhile, but it will happen, and at some point—probably on or about August 1st—it should begin in earnest. I'm still planning to take the family to Maui in August.

UPDATE (April 24): I highly recommend this article by Scott Atlas. It is a succinct and compelling summary of what we know so far about the coronavirus and why it is time to end the shutdown: "Strictly protect the known vulnerable, self-isolate the mildly sick and open most workplaces and small businesses with some prudent large-group precautions."

UPDATE (April 25): I also highly recommend this article by George Gilder. “... since the virus has already spread widely in the general population, efforts to stop further spread are both futile and destructive. So let’s stop pretending that our policies have been rational and need to be phased out, as if they once had a purpose. They should be reversed summarily and acknowledged to be a mistake, perpetrated by statisticians with erroneous computer models.” HT W. Smith


Benjamin Cole said...


Let us hope for a rapid economic recovery. The recovery from the 2008 Great Recession was anemic and it was a full 10 years or more before labor participation rates approached pre-recession levels.

Academics, public workers, and TV Talking Heads are in sinecures. For 20 million freshly unemployed Americans, and millions of businesses, the lockdowns are real.

Roy said...

That cartoon is fascinating, I'm trying really hard to figure if that person is POTUS, the manager in charge, or is it his enabler, Mitch McConnell? Both are men though, so it must be someone else from the ruling party, the GOP. Can someone figure it out? Thanks.

Chris said...

I agree with everything in the post but the cartoon at the end blaming Pelosi seems very strange.... How is this Nancy Pelosi's fault? Does she run the executive branch of the federal government?

Johnny Bee Dawg said...

Gosh...have we flattened the curve yet?
Notice how the goal posts keep moving?? ANYBODY WAKING UP YET??

Suddenly...its no longer about keeping the hospitals from overflowing...that never came close to happening.

Its about a Marxist Cloward-Piven destruction of the United States. Overwhelm the system with debt.
That midget Doctor needs to be in prison. Completely FOS and incompetent. Lifetime pension.
Has not been right on a SINGLE THING in his entire miserable career. And just look at his "friends".
Legit epidemiologists think he is a whack job. And here we are.
Nothing about this BS was legit. Nothing. Everything was a lie.

All the data are proving this virus is less contagious than the flu, and less deadly.
Each antibody study further plummets the death rate, and exposes the con.

This country is being destroyed from within.
No wonder "Let em Eat Ice Cream" Pelosi is holed up in her bunker.

What's the plan from these freaks, next? A vaccine certificate to be allowed to buy or sell?
This whole con is Satanic.

Rick Jones said...

Johnny Bee Dawg wrote:

>That midget Doctor needs to be in prison. Completely FOS and incompetent.

Yo Dawg, how is that possible? Trump promised us he'd surround himself with only the best people?

>All the data are proving this virus is less contagious than the flu, and less deadly.

Only in your dreams, Dawg, only in your dreams.

Rick Jones said...

Scott Grannis wrote:

>Yet we are still under the thumb of bureaucrats and politicians...

LOL! Georgia Governor Brian Kemp declared he was going to open Georgia, and Donald Trump quickly told him he wasn't happy about that. This, after previously tweeting that workers should liberate themselves from the lockdowns.

When the guy at the top of the food chain is a complete idiot who can't stay on his own message -- let alone lead the development and implementation of a national strategy -- what would you expect but confusion and chaos?

Rick Jones said...

From Bloomberg:

>Meanwhile, the American food system is breaking: not because there’s a lack of food, but because workers at the plants that process it are getting sick and dying.

Yup, let's end this intolerable shut down and get workers across ALL critical industries sick and dying. That'll show those bureaucrats and politicians.

steve said...

A very quick peek at the charts provided above will negate the idea that the curves are flattening. They're certainly flattening in some places but concurrently getting worse in others. Unfortunately, the places they're starting to flatten out at are THE most dangerous places in the country and Covid doesn't care about state borders. My second home state of NH has been largely spared but what will happen this summer when all the "Massholes" (I did NOT come up with that!) come up visiting-especially if bars and restaurants open? Mass infection (pun intended).

Scott, you're panicking and panic always results in poor decision making. A few posts ago you talked about a gradual approach using younger healthy workers. Now it sounds like you want to throw caution to the wind. But more to the point, people are not ready to risk everything and go back to business as usual. No way. We need to accept that this is going to be painful until we get a mass produced vaccine. I see no other viable option.

Johnny Bee Dawg said...

Glad to see Rick Jones agrees that Fauci has been a poor public health bureaucrat. Trump didn’t pick him. He inherited him, like he inherited the rest of this bloated deep state bureaucracy. Fauci’s job is to provide US public health policy, and it has been the biggest disaster in Man’s history. He’s been running that agency for 36 years. Time to part ways with his “advice”. He’s been a complete failure.

The American food system isn’t “breaking”. The disruptions occurred before any workers were sick. More simpleton analysis.
The supply chains don’t cross over between grocery, restaurant, and institutional. Different processes, machinery, packaging, distribution, customers.
There is not a massive push to adjust because it’s expensive and time consuming, and won’t be worth it by the time America re-opens.

Comments section is amazing.

Rick Jones said...

Johnny Bee Dawg said:

>Trump didn’t pick him. He inherited him...

So why doesn't he just push him aside? He's had no problems pushing aside other "deep state" bureaucrats he inherited. He promised us he would surround himself with only the best people. Why aren't some of those best epidemiologists standing next to him when his gives his coronavirus briefings?

>The American food system isn’t “breaking”. The disruptions occurred before any workers were sick

You obviously didn't read the article. Meat processing plants are shutting down because workers are getting sick (and dying). Cattle ranchers can take this, because they have sufficient extra space to keep the cattle. Pork farmers generally don't have sufficient extra space, and they are slaughtering their hogs because there's nowhere to put them.

But hey, Dawg...don't let facts get in the way of your thinking.

Benjamin Cole said...

Rick Scott:

The meatpacking plants are being shut down by government ukase. The plant managers do not want to shut them down.

I doubt there have been many, if any worker deaths, as extremely few people under age 55 die from COVID-19 and meatpacking work is a tough trade. I would not be surprised if COVID-19 is not so much spreading in the plants as in the housing, that is overcrowded immigrant housing, same story as in Singapore.

For me, it is the same story: Lockdowns are catastrophic with ramifications (now what to do with cattle and pigs) and yet the intended decrease in infections may be fantasy.

Johnny Bee Dawg has a valid point: The lockdowns were supposed to suppress peak infections, not beat the virus, which they cannot do.

Like anyone, i wish for a better option, but in the real world is what it is.

To paraphrase Joe Louis regarding COVID-19, "You can run, but you can't hide."

Ironically, being out of doors, in sunlight and outdoor air, is safer than being cooped up. I am not advising you to go fly a kite, but if local authorities allow you to set foot outside, you might consider it.

Yevgeny said...

Massachusetts provides detailed data on

Based on hospitalization rates and bed capacity, MA could allow everyone under 50 to go back to work now (as long as everyone in the household is also under 50).

Once this group acquires herd immunity then, based on likely hospitalization needs, the under 65s could be released.

I assume most States could do the same thing.

Rick Jones said...

Benjamin Cole said:

>The meatpacking plants are being shut down by government ukase. The plant managers do not want to shut them down.

First of all, you are creating a false dilemma: government or plant managers. There are also workers as well as owners, and if you do some searching, you'll find that workers and owners play a role.

At the JBS meat packing plant in Colorado, at least four workers have died and it was the union that insisted the plant be closed for cleaning.

In the case of the Smithfield plant in Sioux City, SD I believe the mayor of Sioux Falls asked the Smithfield processing plant to shut down for two weeks to get it under control. It was the company's decision to shut down indefinitely.

I can't speak for all meat processing plants, but if you just do some cursory Googling you'll find that, yes indeed, lot of workers have tested positive, and as of 23 April at least 13 workers had died.

>few people under age 55 die from COVID-19

55 is an arbitrary number, but about 8% of the estimated deaths in the U.S. are below age 55.

But why use 55? About 12% are between 55 and 65. This cohort is still working, and is generally where management and leadership resides.

So at approximatelt 20% of the estimated deaths are in age groups that are out there in the work force. And of course, a whole bunch of people are working past 65...

Rick Jones said...

You can't make this stuff up...

Yesterday, Donald Trump -- in all of his moronic glory -- mused at his daily coronavirus briefing that ingesting disinfectants might be a way to treat the virus. (It's worth watching a version of the video where Dr. Birx reacts to this.)

Today, physicians (as well as the maker of Lysol) are having to warn people not to ingest Lysol or other disinfectants. But you just know there are going to be dunderheads out there who drink disinfectants because The Donald suggested it.

Yo Dawg...'Murica!

Andy said...

Scott - quick question on a related topic. The general opinion is that all this FED cash pushed into the economy is very inflationary. I would argue - perhaps naively - that it's all a function of economic growth. From '08 to '14, gov't debt went from 9.5T to 17.6T and from 60% of GDP to 105%. But from then to 2019, the debt grew to 23.2T but only to 105% of GDP since economic growth also rose. So given this current pop, isn't it a function of growth in the next few years? (I guess the argument for inflation is that we don't get it)...

Andy said...

oops - 60 to 100. Then 100 to 105

K T Cat said...

We bought all the time we could buy. We now have enough information to overcome the misunderstandings we had because the Chinese lied and lied and lied. There are a couple of decent treatments available. That's as good as it's going to get. We are going to have to reopen the economy because we're out of money. Government officials adding zeroes in spreadsheet cells isn't real.

Rick Jones said...

K T Cat said:

>We are going to have to reopen the economy because we're out of money.

No, we're not out of money, and we never will be out of money. You missed the memo on modern monetary theory (MMT).

If you prefer, here's Stephanie Kelton -- probably MMT's most well-known proponent -- explaining it in a 10-minute video.

Rick Jones said...

Benjamin Cole said:

>...extremely few people under age 55 die from COVID-19...

Benjamin, I owe you an apology. I did not see the subtle genius behind your idea.

It seems that elderly voters dying off could cost Trump the election this fall. It's brilliant...absolutely brilliant!

Hat's off to you, my man.

K T Cat said...

Rick, I love the MMT stuff. Who knew it was that easy to make us all rich?

Rick Jones said...

K T Cat said:

>Rick, I love the MMT stuff. Who knew it was that easy to make us all rich?

Ha ha...believe me, we won't all be rich. Most of it will -- in one way or another -- get siphoned to those who already are rich.

My only point was that as a sovereign that prints its own fiat currency, the U.S. will never run out of money.

Anonymous said...

Where do you get the chart on public vs private employment?

Bryon said...

I read this blog to learn what is likely to happen based on data, not what someone wants to happen.

Johnny Bee Dawg said...

The VIX gave another major sell signal today.
S&P closed above its 50 day MA.

Still less than 25% of stocks are trading above their 50 day averages, so far.
Up from 1.3% at the bottom.

Lots of potential for growth.
We will just have to see. I heard there is a virus killing millions of Americans.

Johnny Bee Dawg said...

Rick Jones:
Twelve US meat plants have shut down.
The American food system isn’t “Breaking”

No, I didn’t read your article.

Adam said...

For me this is crystal clear that this is 100% politically driven event. swamp will do their best to mislead the public. Soon we will see, "second wave" hysteria in the media. They must put the president in as difficult situation as possibble to win.

Scott Grannis said...

Re "Where do you get the chart on public vs private employment?"
I always indicate the source of my charts' data in the lower left-hand corner of the chart. In this case the data comes from the Bureau of Labor Statistics. I have estimated the data for April (the actual data will be released in two weeks) based on the number of first time claims for unemployment since late March. I'm reasonably confident my estimates will be within a million or so of the actual data.

JDonley said...

Scott, thanks for taking time to post your thoughts. i look forward to Calafia beach Pundit.

Midwest Guy said...

Must be easy to talk your book when you're in retirement and don't have to go out into harms way. I'm under 55 and I have no interest in putting myself and my family at risk to support your portfolio.

Midwest Guy said...

Agree, this blog was fantastic for a long time. Now someone seems more concerned with their retirement portfolio then the safety of fellow Americans.

Benjamin Cole said... is about balances.

If one person nationwide would die of COVID-19, would we shut down the economy? What about that one person? Have they no rights?

If 30 million would die, including children, then the obvious answer is yes, and we have to go all out to save lives, and pick up the pieces later. Maybe we would wreck the economy and it would be the right thing to do.

But presently, initial estimates were for 9 million dead, then 1.9 million dead, then 260,000, then 60,000. The balance has shifted, and thank goodness, children are all but immune, as are young and middle-aged adults.

Some workers get sick on the job, but more get sick at home, and for immigrants in meatpacking plants and farm fields, US leadership has tolerated re-creating Third World housing conditions in America. The same thing happened in Singapore, with immigrant worker housing becoming the locus of COVID-19. There is an ugly underside to globalism.

In any event, lockdowns do not make sense when death rates are double or triple that of seasonal flu. Even Lockdown King Governor Cuomo said COVID-19 has a 0.5% death rate, vs. 0.1% to 0.3% for seasonal flu. Yes, COVID-19 hit quickly, flooding emergency rooms, fleetingly at that. We panicked.

Panic is not policy. Let's get back to work.

Ataraxia said...

Scott is 100% correct. However the bear came at a great time for me, although if we had the bottom I only invested about 60% of my cash so far, unfortunately. Also looking for better real estate prices. This was one of those opportunities like 08-09. But at great social cost for many just as Scott has been explaining.

Rick Jones said...

Another potential milestone...

According to the World-o-Meter, coronavirus deaths in the U.S. are now approximately 52,200.

According to the Centers for Disease Control, of the last nine flu seasons, only one -- 2017-2018 -- had higher estimated deaths. That was an anomalously high season, with deaths estimated at 61,000 (compared to the average of 37,462).

Of note: The last two flu seasons are still in the "preliminary estimate" phase. The estimate of 61,000 could change as the data get further analyzed. But at this rate, the coronavirus will undoubtedly surpass that before too long.

With all that in mind, to borrow from George C. Scott in Dr. Strangelove, although I hate to judge before all the facts are in, it's beginning to look like the coronavirus is going to be worse -- a lot worse -- than a normal flu season, as so many have contended.

amritsari said...

50000 dead in two months. Perhaps we are half way through the crisis. Will be at 100000+ by the time it gets done. And old farts with retirement portfolios are asking the rest of us to go risk our lives. This pandemic has confirmed something that I had only read about - the conservative character does not feel empathy until the bad stuff happens to them (or a loved one). Then its "I had no idea it could be that bad". Kinda like Trump.

steve said...

The older I get the less "conservative" I get. NO WAY I'll vote for Trump in Nov. Daffy Duck would have my vote over him. I sadly have to agree with the above comment. Those asking for a reopening now sure sound callous. And without question the final tally will be closer to 100,000 than 60,000. New cases hit a new daily high YESTERDAY. So much for flattening the curve. Does not portend well.

WHEN will the stock market see this? Bonds more cautious than stock as is typical but the disparity is stark.

Time will tell.

Johnny Bee Dawg said...


Who asked you to risk your life? Nobody. Stay home. Forever.
Just dont demand that I or my children pay you for hiding under your bed from seasonal flu.
We've had 50,000 dead in six months. We had 80,000 die of the flu just 2 years ago.
Scientists say this new virus has been infecting people since November.

And not all these 50,000 deaths were really from the virus.
Even Dr. Birx admits those numbers are padded.
Almost all that number had something else already killing them..."co-morbidity".
Almost everybody who gets it has mild to no symptoms. The death rate is a fraction of flu.
The audit in Italy showed only 12% of their reported deaths were actually from this Chinese virus.

Its nice to hear that you dont need a retirement portfolio, but its sad to see that you dont have empathy for those less fortunate than you. Like the 30 million who were thrown out of work.
Many of us dont get to live off of inheritance or pensions. Many of us have to earn our own way.

The authoritarian socialist character does not feel empathy until the bad stuff happens to them (or a loved one.)
Then its, "I had no idea that my idiotic socialist policies could be this bad". Kinda like Obama.

Rick Jones said...

Johnny Bee Dawg said:

>We've had 50,000 dead in six months.

Yo Dawg, according to the New England Journal of Medicine, the first known coronavirus case in the U.S. was around 19 January, 2020. And the first death is reported to have been in February. Hardly six months by anyone's reckoning.

>We had 80,000 die of the flu just 2 years ago.

Yo Dawg, the Centers for Disease Control's preliminary death estimates for the flu season you're talking about (the 2017-2018 season) was, in fact, 61,000. That's the highest over the past nine flu seasons. The average is around 37,000.

What was it you said a few posts ago about respecting science? LOL!

Johnny Bee Dawg said...

Rick Jones
Antibody studies are indicating its been here since November.
November to April is six months.
Undercounted a small number of deaths early. Overcounting them bigly, now.

2018 flu deaths were 79,000, according to CDC. I rounded up to 80,000.


Rick Jones said...

Johnny Bee Dawg said:

>Antibody studies are indicating its been here since November.

Yo Dawg, I provided links to my sources. Please provide yours. I am more than happy to change my mind in the face of credible new data.

>2018 flu deaths were 79,000, according to CDC. I rounded up to 80,000.

Yo Dawg, here is the CDC site (which I've provided several times now). As you can see on the next-to-the-last column on the right, preliminary estimates for deaths in the 2017-2018 season are 61,000.

CDC Disease Burden for Influenza

Again, if you have credible other sources, I'll be happy to change my mind.

K T Cat said...

To my small mind, the argument isn't about opening the economy, it's about the consequences of freedom. If others are allowed to make decisions regarding their lives, it might impact me. It might injure or even kill me. Do we allow people to direct their own lives or not?

In this particular case, we now have a good enough idea how the virus works and what the odds are. You can stay as safe as you like for as long as you like without having to direct everyone else's lives.

I was a mathematician and programmed a model or two in a previous life. You'd have a nearly impossible time convincing me that your particular odds of dying in a re-opened economy would increase significantly. If you shop for groceries, you are already coming in viral contact with everyone in the store and everyone they've met recently.

Jim said...

You know we are screwed here in California. Repeal of Prop 13 here we come.

Welschman said...

Given the early data on the antibodies (more infected) tests, and early results on heat, light, humidity (environmental headwind for the virus)test I'll double down on the seasonal flu profile. Slightly more contagious, slightly deadlier but basic seasonal flu all the same.

Rick Jones said...

Welschman said:

>Given the...early results on heat, light, humidity...

Don't forget ingesting disinfectants

steve said...

K T, I respect your educational background. My son is director of computational biology at a biotech firm in Cambridge, MA. As you know this field analyses biological data via mathematical models. His opinion in the diametric opposite of yours. Namely, increased exposure leads to increased infection. He is incredulous of those who can't seem to grasp this simple concept. He and my daughter-in-law (also a PhD in bio engineering from MIT) both are working from home with their 4 mo old daughter who my wife and I haven't seen since February. We are all frustrated with this lifestyle but I am sure as HELL not going to put at risk any of my five children because I'm concerned about "freedom".

Freedom can wait a few months. In the meantime, it's not like we're in freakin jail.

cbt141 said...

Wash your hands
Cover coughs and sneezes
Maintain a comfortable distance from others
Take your own temperature
Wear a mask if comfortable distance in not possible

If you’re older or in poor health, then self-quarantine.

Everyone else should go back to work feeding and providing for the rest of us while the medical profession cares for us and we all work on a solution.

We cannot stop the world every time a crisis arises.

Welschman said...

Rick, hydroxychloroquine chaser? Yeah, I get it but the data indicates (unlike the models?) greater contagion, lower CFR. More inline with the flu than the deadly disease the media is panicking over. So, if Georgia opens with out a sharp uptick in death rates whats the explanation? The mitigation killed the virus? LOL

Welschman said...

Steve, exposure does increase infection, obviously but in order to develop herd immunity exposure/infection is required. Self isolation will not reduce the death total, it will not hasten herd immunity, it will extend the duration of the virus until herd immunity is reached or a vaccine is developed. The later is not likely anytime soon

Johnny Bee Dawg said...

Still waiting for our vaccines for SARS and MERS.
Somehow we made it.

Was just looking at a live shot of an outdoor market in Holland this morning, packed with people.
Nobody wearing masks.
People getting on with life after the flu.

Rick Jones said...

Johnny Bee Dawg said:

>blah blah blah...

Yo Dawg...where are your credible resources that the 2017-2018 flu season death toll was 80,000, or that the virus has been here since November?

Inquiring minds want to know...

Johnny Bee Dawg said...

Socialized Medicine in NY:

The State of New York sent nursing homes a directive stating that they had to take in infected elderly and told them that they couldn't ask if they had the virus which led to the spread in nursing homes killing almost 4,000 in nursing homes alone.
Let that sink in.

This is Big Government at work...killing people.
Big Government has no empathy, and the weak & elderly have no recourse.
The entire government health bureaucracy has been a disaster in this flu spread, but none worse than New York.
One minute they say, "No worries! Come to Wuhan Parade!" The next minute they shut down society and demand health equipment, resources, and money from the rest of us. NOW!!!

Will the government health bureaucrats be fired? Imprisoned? Or will they coast along, and get lavish lifetime pensions?
How about the Governors who shut everything down?
None of them will ever face consequences, or ever miss a meal. Or ever wonder where their next meal is coming from like the 30 million unemployed.

Rick Jones said...

Johnny Bee Dawg said:

>Socialized Medicine in NY: blah blah blah...

Yo Dawg...where are your credible resources that the 2017-2018 flu season death toll was 80,000, or that the virus has been here since November?

Once you've done that, give us some credible resources re: Socialized Medicine in New York.

Inquiring minds want to know...

wkevinw said...

Steve- your response is typical of the elitist class, sorry to name it.

Of course your experience is that you would want to stay in the lockdown. I'm sure your family has plenty of wealth and can work from home.

Note - I have a PhD in physical chemistry (yes, quantum mechanics), have been programming since 1973 and have written more than a few computational models in my life. I am fine working from home, but I also understand the plight of the average joe.

The working class is going broke, completely.

It's a vicious cycle- no private business, no taxes. No taxes, no government services, no government services, no private businesses (e.g. think of trash piling up or no law enforcement in cities or even unincorporated areas). The crime rates in some places are rising (some are falling).

This can't last long.

Johnny Bee Dawg said...

New York sending sick COVIDs back into LOCKED DOWN nursing homes rather than into specialized quarantine was probably the single most deadly policy of this entire outbreak.
It was probably the single most deadly policy in the history of State governments.
20% of New York deaths came just from this absurd far.

More indication this is less deadly than flu.
The state government MANDATED that the most vulnerable population be directly exposed to this virus, knowing that is exactly who it kills for certain.

Let that sink in.

K T Cat said...

Steve, thanks for the kind words, but I agree with wkevinw. I would also push back on the idea that opening up will dramatically increase your chances of infection. We've learned recently that the infection rates are 20-80 times higher than we thought. If you go to the store and the virus lasts 3 hours on plastic or metal surfaces and in those three hours 20 people have touched them, then if the infection rate is 1%, your odds of encountering the virus is 1 - 0.99**20 or about 20%. That's a 20% chance of contacting the virus every visit to the store.

But wait, there's more! If you're locked inside with someone who went to the store, your chances are still 20% per their visit because of all the shared surfaces.

Every time you go to the store, you're playing Russian Roulette. Have you been to the store lately? How about Home Depot? That place is packed because people are simply throwing in the towel.

From a viral contact point of view, the economy is effectively already open. The only people who don't realize this are the super-dee-dooper smart people. Like the ones from Harvard and Yale and McKinsey and maybe even a few from Brown and Columbia.

Rick Jones said...

The Russian troll Johnny Bee Dawg said:

>New York sending sick COVIDs back into LOCKED DOWN nursing homes...blah blah blah

Yo Dawg, the jig's up. Among other things, analysis of grammatical errors and irresolution of IP addresses gave it away.

See: "The Foundations of Geopolitics" by Aleksandr Dugin. This is the playbook JBD is working from: sow discord and disharmony in America.

steve said...

KT, if you're right then I guess we have nothing to worry about as people naturally get lackadaisical about quarantine. I have not been in a store in 6 weeks (well, once to pick up wine!). I suspect that things will relax this summer and it will be interesting to see if infections/deaths increase. I most certainly hope I'm wrong. I will not be among the relaxed. I have a gym in my garage and lift weights 3X/week for 2 hours and ride my bike 45-60 minutes 3X week. Other than that, I'm hunkered. Trade from my laptop and read 4-6 hours a day. Food delivered or curbside pickup. My WIFE is way more antsy than me and it will be a challenge to keep her from getting her hair/nails done when that becomes available. Good grief.

K T Cat said...

Steve, I totally respect your decision. It makes sense. I'm in a semi-risk category, but I'm willing to roll the dice and accept what comes. In that, I disagree with Gov. Cuomo - death is not the worst thing. Living in fear and losing my freedom is the worst. I'm going to die no matter what I do. When I go scuba diving, I acknowledge the risk, too.

Something that opened my eyes were the hospital bankruptcies and layoffs. Duh. Why didn't I see that coming? If we shut them down, they can't see patients. If they can't see patients, they don't get paid. Their capital costs must be crazy high what with all that gear. Dittos for their labor costs.

So we go one way and some hospitals get swamped. We go another way and some hospitals go out of business. Oh well. Life can be full of bad choices sometimes.

Take care, amigo. I hope you and yours stay safe.

Rick Jones said...

Just for the record...

There are indications that the coronavirus is a little bit more complex than most people think, and that it hits younger people in strange ways.

Young and middle-aged people, barely sick with covid-19, are dying from strokes

I am not suggesting this is cause for freaking out, but before we go rushing into the notion that we know everything about this, we ought to at least pause to let these findings be either verified or discounted.

WashingtonCT4music said...

So far you are just all talk. Take your lovely wife and your kids (if u have any) and show us a video with your whole family traveling in a subway car, train, or even better an airplane.
To top that visit several movie theatres LOL

Rick Jones said...

K T Cat said:

>When I go scuba diving, I acknowledge the risk, too....

There is a difference between risk and uncertainty.

In general, risk is something that can be measured; uncertainty can't.

When you go SCUBA diving -- and I can pretty much guarantee you that my own diving background far outstrips yours -- you've been trained and certified, and there are years of data to fill diving tables, decompression schedules, recompression chamber operations, etc. If you're any kind of reasonable diver, you make a dive plan based on standard protocols. There is a small element of uncertainty, but relatively speaking, not much.

With standard influenza, the environment is also one characterized more by risk than uncertainty. There are years of data, there are medical staffs who understand it, there are vaccines, there are yearly marketing campaigns to induce you to get vaccinated, there are standard treatments, etc.

Not so much with the coronavirus. We're learning more about it everyday, but I would say it's still a phenomenon characterized more by uncertainty than risk. I pay assiduous attention to this, and barely a day goes by that there's not some article about new things that are coming to light. With no protocols for mandatory prophylactic measures, you have no idea if some jerk in the grocery line has it and has infected you. And if he has, there are no known effective treatments (let alone vaccines). It's not at all like SCUBA diving.

>I'm willing to roll the dice...

The problem is it's not a dice roll. This is what Nassim Nicholas Taleb calls "the Ludic Fallacy", meaning that we think of this as a casino game with known odds, when it's not. And to the extent there's a distribution, it's a very fat tailed distribution at this point.

Now, if you want to wander out into that sort of uncertainty for no good reason, I say have at it. But as I told you earlier, there is really no reason the Federal Reserve and the Treasury can't keep the country afloat for the foreseeable future. Modern Monetary Theory is not something we need to implement...we've been doing it for decades. We just need to acknowledge it and manage it rationally.

K T Cat said...

"if you want to wander out into that sort of uncertainty for no good reason" - You don't get a say in what my reasons are. Therein lies the freedom vs risk question.

I would argue that my freedom isn't significantly impacting your risk as we've already shown that every time you go to the store, you're taking on all kinds of uncertainties and risks.

I don't need you to make my decisions for me.

Rick Jones said...

K T Cat said:

>I don't need you to make my decisions for me...

Oh I do beg your pardon. I did not mean to imply I was making your decisions for you. But earlier you said that "We are going to have to reopen the economy because we're out of money", and I was just reiterating that that's not a good reason for doing anything. We are not out of money, and we never will be. So the "you" was more a collective "you" that seems to think we're in some sort of desperate economic straights. The Fed and the Treasury -- with the blessings of the Congress and the President -- can easily carry the load here.

>...we've already shown that every time you go to the store, you're taking on all kinds of uncertainties and risks...

Um...I don't recall that we've already shown that. Sorry.

steve said...

"and I can pretty much guarantee you that my own diving background far outstrips yours".

Ouch. K T, I saw that coming from a mile away. You have been chastened.

Anyways, largely a moot point; it's happening, slowly, but surely.

Rick Jones said...

OK ladies, it's almost 11:00 pm here in Paris, and I'm going to bed.

The death count right now in the U.S. appears to be almost 54,000...getting close to the point where people will start comparing it to the Vietnam War.

I look forward to hearing you all continue on about how it's no worse than the seasonal flu.

steve said...

Hey WashingtonCT4music, your comment was offensive and uncalled for. We all have different opinions and having read Scott's blog for ten years I can guarantee anyone reading it his intentions are honorable and absolutely what he believes in the best interest of our country.

Ease up.

minnesota nice said...

Steve, I have to agree with you. There are policy decisions, and there are personal decisions. We can argue about policy, but each of us will have to make individual decisions within that policy framework. I appreciate the opinions on this board.

Rick (the European troll?) said
I look forward to hearing you all continue on about how it's no worse than the seasonal flu.

Good Morning, I hope you had a nice sleep. What collective "you" are you referring to. JBD? Scott Granis? All the readers of CBP? All Americans? You seem to have all the answers and assume that we are naïve ideologues.

Scott Grannis said...

I’m retired and my portfolio will provide for me and my family. I do this blog not to talk up my portfolio but to share my observations of the economy and markets in the hope that I can assist others. I make no money from this. My concerns are with the people who are actually suffering from this shutdown, and those people number in the tens if not hundreds of millions. I worry about our loss of personal freedoms, and the growing control bureaucrats have over our lives. I worry that a prolonged shutdown will do serious and possibly irreversible harm to the economy, which would in turn negatively impact all of our lives for many years to come. It really worries me to realize how we were all scared to death by mathematical projections of millions of deaths that ended up being completely wrong. And how, having scared the masses to death, our leaders were able to take control of our lives and abridge our freedoms. Rational thought and common sense have been the great casualties of this “pandemic.”

My wife and I are both 70 and healthy. We go out for 5-mile walks nearly every day (we did so even before shutdown), and we wear a mask only if required to when visiting Costco. We’ve been getting together with friends and family almost every night for the past week or so, and will see some of our grandkids tonight for dinner at their house. I have decided the risk of this virus is not much greater than the risks I bear in the course of a normal day, so I am not going to hunker down for the rest of my life in fear of a 0.01% chance of running into an infectious person and then dying. This virus is a nasty flu, as I said about a month ago; it is not a super-bug that is going to destroy the human race.

Welschman said...


randy said...

I guess a lot of us read this blog because Scott takes the emotion out of so many threats we might see for our financial futures. I do. Worth more than I can say. A thank you is pretty darn cheap, but what else do I have. KT Cat and Rick, glad for the new contributions, good stuff. The usual contributors too. For my part, the best I know to do is to protect the at risk, start unwinding and closely monitor and adjust. Get over the dream of some perfect solution.

Benjamin Cole said...

Amen to everything Scott Grannis said.

We cannot find a virus by destroying workers and investors.

Roy said...


I agree with you that the virus is probably just a few multiples of the flu, but you still need to take care of yourself considering you are at the high-risk group...

Just to add to the technical discussion, we should always remember viral loads. You have a far better chance to beat the virus when exposed to a "small quantity". Hence why masks, any masks, are so useful.

I also greatly appreciate my freedoms and so am extremely thankful to live in a country that is based on the rule of law with strong institutions. (compare to Russia or Venezuela). Let us hope that the indiscriminate dismantling of the rule of law and the institutions diminishes.

Let us hope that if anything is learned from this, is that we need a smaller government, but not just any small government, we need a smaller but capable, science-based, government, so we may retain our freedoms and have a better system in place to face the next virus, which might indeed cause millions in deaths.

Let us hope that we have learned our lessons not to blindly push for a free market, in a global market that is manipulated and oppressed. A global market where our openness means that our consumers and demand can be taken advantage of and where our middle class pays for the wealth of the elite in other countries.

Rick Jones said...

Minnesota Nice said:

>Rick...Good Morning, I hope you had a nice sleep.

I did, thank you. (By the way, I used to live in Duluth, and Minnesota is actually on the short list of places my wife and I would live if we ever have to return to the U.S. I would go back to Duluth in a heartbeat, although my wife is more insistent on Minneapolis.)

What collective "you" are you referring to...

I'm referring to the collective "you" -- whoever you may be -- that don't seem to realize that the economic hardships we're facing from the coronavirus shutdown are actually mild by historic standards – you know, the way the same collective "you" insists the coronavirus is comparable to a regular flu season.

Economies have suffered from famine, plague, and war since time immemorial. This is not, by a long shot, the worst economic crisis the world has seen. Not too very long ago much of western Europe was absolutely devastated physically by WWII. You know, cities reduced to rubble, that sort of thing. And yet within a few years it was up and running again. We came up with something called The Marshall Plan, and we can do something similar again.

We know a few more things now than we did in prior economic crises, even considering the GFC of 2008. The Fed now better understands its power in the monetary world, and has stepped up. The Treasury has stepped up, too, with fiscal stimulus in ways it didn’t following 2008. There is absolutely no reason why we can’t have the equivalent of a Marshall Plan – starting right now – to substantially ease the economic burden and buy more time while we try to better understand and better manage the virus.

>You seem to have all the answers and assume that we are naïve ideologues.

Well, there do seem to be a number of ideologues on here (I don’t know about naïve, but a few appear to be complete morons). But there are also some solid pragmatists on here, too, like Steve and a few others who pop in from time to time.

But I, myself, don’t pretend to have many -- if any -- answers. Epidemiology is far, far outside my circle of competence, and it bothers me that from what I can tell -- and I spend a fair amount of time searching out credible sources -- that there doesn’t seem to be a consensus among epidemiologists. To me that’s a red flag. To me that means we should hope for the best, assume the worst, and proceed with caution.

I’ll tell you what is in my circle of competence, though: decision making under conditions of uncertainty. Much of my life since 1980 has been involved with decision making under conditions of uncertainty. I don’t claim to be God’s gift to decision makers, but I do know more than most people, both viscerally (life in combat zones) and more cerebrally (managing a knowledge management department, teaching probability and decision science at a university).

And what I find lacking in a lot of the hollering to reopen are two things: first, any acknowledgement that we are operating in conditions that can be better characterized by “uncertainty” than “risk”; and second, anyone citing even the most rudimentary decision analysis tools and processes.

(Oh yeah, and I see a fair number of logical fallacies, too, as well as a few flat out lies. Both of those things bother me.)

So there you go. I have no answers regarding what we should do. But I do have a lot of experience and some opinions regarding how we should go about deciding what we should do.

And you...did you sleep well?

Adam said...
data showing mortality across EU

Rick Jones said...

Scott Grannis wrote:

>This virus is a nasty flu, as I said about a month ago; it is not a super-bug that is going to destroy the human race.

You know, Scott, this is an example of where I think you lose credibility.

Like me, you double-majored in philosophy as an undergraduate. So I know you have been exposed to identifying fallacious reasoning, and that you were undoubtedly taught to root it out.

But your statement here is something you’d get a poor mark on in any decent philosophy course. It’s a false dichotomy at best, but one could argue that it sets up a straw man. You, someone trained in philosophy, should know better. Shame, shame, shame.

First, I cannot think of anyone who ever likened the coronavirus to “a super-bug that is going to destroy the human race.” Not a soul. That should not be put forth as one of our options.

But second, the data at this point indicate that it’s more than just a nasty flu, both quantitatively and qualitatively.

Quantitatively, the death count in the U.S. has surpassed all but the one very worst flu season (2017-2018) in the past nine flu seasons. And that is with all these prophylactic measures – closures, social distancing, etc. -- in place. Furthermore, although it seems to be slowing down in some places, it appears to still have a ways to go.

And just to be clear, according to the CDC’s “Disease Burden of Influenza” page, the average estimated number of deaths per flu season since 2010 is 34,462 (not 45,000, as you said on 15 April). As I write this, the estimated death toll for the coronavirus in the U.S. is 54,265. I’ll stick my neck out and say that the final death count will be significantly higher than our worst flu season in the past 10 years (which preliminary estimates put at 61,000). And again, that’s with all the prophylactic measures in place.

Qualitatively, it is beginning to appear that the coronavirus attacks the body in a much more vicious manner than the flu. Indications are that it seems to begin in the respiratory system, like the flu, but moves on to attack many other organs and systems in the body. For example, see:

WebMD - The Great Invader: How COVID-19 Attacks Every Organ

And there are reports of young people in their 30s and 40s suffering strokes related to the virus.

Axios – Some Young Coronavirus Patients Are Having Severe Strokes

These may just be anecdotal at this point, and there may turn out to be no relevant connections. But the real point is that there is still a cloud of uncertainty surrounding this virus. We are still in the “fog of war” phase.

So no, the destruction of the human race is not a realistic characterization, and neither is “just a nasty flu.” It’s probably closer to being just a nasty flu than it is to being the destruction of the human race, but that’s a somewhat meaningless distinction given the ridiculous alternative. From a logical point of view alone, there are many gradients in between, but we are uncertain of where, exactly, the coronavirus stands. And among other things, this is a test for how we deal with uncertainty.

Again, as a fellow philosophy major, I find this very disappointing. Philosophy is supposed to be about finding truth, not propagating ideology.

That’s all. I found your site about 18 months ago when I was participating in a forecasting tournament regarding yield curve inversions. I was impressed by your knowledge, and I kept reading your posts after that tournament ended. I still think you post excellent pieces from time to time when you stay in your swim lane, like the one about oil a few days ago. That was great.

But I do find it incredibly disappointing when you -- someone trained in philosophy -- appear to engage in sophistry to make an ideological point instead of pursuing the truth about the current situation, even if the truth is not something you particularly want to hear.

steve said...

Scott, it's a free country and we will all go through this as we see fit but I got to say it seems your lifestyle is steeped in insouciance and at 70 you're in the risk group. I suppose it's a waste of time to urge more vigilance. Not to mention, those around you are also at higher risk.

I never studied philosophy. I was a biochemistry major who after a few career moves found my niche in self employment and money management. I've been successful trader for over 25 years now so I think I understand risk but certainly not in high stress environments like Rick. I will brag a little and say my son the bioengineer is almost off the charts smart (he was coding web pages when he was in the 7th grade. THAT kind of smart) AND has a healthy dose of common sense.

So you'll excuse me if I listen and trust his word over anyone on this forum or anything that I read for that matter and I read a LOT. A couple of points;

-categorically, this is NOT a kicked up flu. This virus is far more pernicious than the flu for people who are older or with co-morbidities. Bluntly, it's ignorant to call this virus anything but a pandemic.

-not surprisingly, restrictions are relaxing but NOT because the virus is less deadly but rather due to human nature of not wanting to be cooped up, isolated and people wanting to return to some semblance of normality. We'll see how this goes. My son thinks we'll see a spike in cases/deaths where these restrictions are loosened. Perhaps this is a good test.

-things will NOT return to normal until we get a mass produced vaccine. Unfortunately, that is likely to be 9-12 mos-at least. That's a long time to quarantine. This is going to get very interesting before it's over.

-to bring it back to the markets, something I feel I have some level of expertise in, the stock market's expectations are too sanguine and I trust the bond market more here. That said, I'm still 100% long "risk" and carrying one of the biggest unrealized short term gains I ever have-but my finger is on the "sell" trigger and could flinch at any time. It will NOT take much.

For the life of me I do not understand why anyone would want to put their family and themselves at risk now just to prove a point. I'm sorry if I sound supercilious Scott but would urge you to reconsider and be safe.

cbt141 said...

I’ll write this without any “ad hominem” remarks.

Both the pandemic models and the media have presented a wide range of assessments as to the danger of COVID 19.
• Initially we were told go about our daily business but to wash our hands and avoid touching our faces while not wearing masks.
• Next schools and parks were closed jobs were labeled essential and non essential, restaurants were carry out only, masks were to be worn.

The range of official response has certainly been from “no big deal” to “very big deal.”

I would like to see the country go back to work. Nobody is going to run out of money as long as the printing presses run, but we are running out of the goods and services we can buy with it.

Even AMZN will sputter and fail when the fulfillment centers are empty and the boxes can’t be filled.

Neither commerce nor society will be the same, but we need to open up and begin to learn as we go.

Welschman said...

randy said...

As I went on a long bike ride through Austin today, it was interesting to ride by all of the homeless encampments. Our homeless problems are nothing compared to LA, Seattle, San Fran, etc. Still, I've got to wonder if the virus has such lethal potential for those with health issues, how is it possible that 1/2 the people in these encampments haven't died. Travis county has had only 36 deaths - with 1.3 million population. Makes you wonder.

Side note - there are more people outside walking, biking, running etc than I've ever seen. I understand and believe sunshine and fresh air is keeping me mentally and physically healthy.

minnesota nice said...

Rick, thanks for your comments. I lived in Minneapolis, but it was too big... so I moved to Duluth. Tell you wife Duluth is safer in times of pandemics.
Steve, I don't think Scott is "trying to prove a point" or acting "supercilious". If he wants to see his grandkids... have at it. You (and I) may question his wisdom, but he, and his family, can make their own decisions.
I am not letting my children (or myself) visit my parents for the time being. But it is a real question: will I keep this restriction until a vaccine is found? If they decide that they would like to be with my kids, I think I would say OK.
Also, Steve, you say 9-12 months to a vaccine. Sounds good. What if it's 2 years? What if it's never?

steve said...

If it's longer than 9-12 mos I will be forever pissed off at our technologists and I was most certainly not trying to sound sententious with Scott. Totally agree we all need to make our own decisions. We WILL have a vaccine and given that our best and brightest are working on this and it's fast tracked, I expect sooner than expected. But yeah, IF we don't? New plan I guess! Bill gates wrote in the piece in The Economist that until we get a vaccine, normality will not return. But look, as I pointed out a couple of posts ago some states (including my home state FL) are slowly reopening so we'll know in a few weeks if it's too soon and I'm big enough to stand up and say I was wrong.


Be that as it may I want to touch on what Randy wrote. One of my daughters is doing an internship at SpaceX in TX this summer and I checked McClellan county where they're located. Out of a population of 255K+ there are a total of 74 cases. Absolutely no more than we would expect to see from the common flu. No data on deaths. What the HELL is going on down there? Is the virus SCARED of TX?

Rick Jones said...

Minnesota Nice said:

>Tell your wife Duluth is safer in times of pandemics.

Yeah, there's that, too. But I was originally thinking about it more in terms of climate change. Duluth has a lot of features that make it attractive: unlimited fresh water from Lake Superior, very good housing stock at ultra-affordable prices, a university, and several other things I think I would value in a time of tight tennis shoes.

We went back to visit a few years ago, and our old neighborhood on Vermilion Road appeared to have gone seriously to hell. To me it was a small thing, but it made a big impression on my wife and really put her off. never know. We'll see.

Rick Jones said...

Two other good blogs to follow...

I came across "Calafia Beach Pundit" back in 2018 when I was in a forecasting challenge regarding the inversion of the yield curve. At the same time, I came across Tim Duy's
Fed Watch blog. As with "Calafia Beach Pundit," I found it good enough to continue following it once that particular forecasting challenge ended. Here's the link if you're interested...

Tim Duy's Fed Watch

In 2019 I was in a forecasting challenge related to the GDP going negative or not. In researching that, I came across Bill McBride's "Calculated Risk" blog. This, too, turned out to be a real gem that I continue to follow (and recently he's taken to including a daily COVID testing post that I've found informative). Here's the link...

Calculated Risk

Rick Jones said...

steve wrote:

>Is the virus SCARED of TX?

According to World-o-Meter, in absolute numbers Texas has the 11th highest case incidence at 24,981. In cases per one million people, it's the 11th smallest at 896.

I look at these and other numbers a lot and try to make sense of them, and it's hard.

Sometime shortly after WWII Dwight Eisenhower said something along the lines of, "The real test of whether the occupation was successful or not will be if Germany is a thriving economic democracy in 50 years." Something like that.

Similarly, I think it's going to be quite a while -- possibly several years -- before we can really get a good picture on this virus...why it acted like it did here, but differently there...what measures worked and what didn't...etc.

steve said...

Rick, the number of deaths/1M of population in TX is the lowest among the 10 most populous states and FL isn't far behind. I suspect because of less density of population? In any event, yesterday was the least amount of deaths since April 2. Quarantine is working and hopefully we're over the hump AS restrictions are loosening. Next several weeks will be very telling.

randy said...

The relatively low death count in Austin is most definitely not because better social distancing efforts. My observation is that the university students just cannot abide. Our niece (along with mother!) spent the week on crowded Rosemary beach in FL, then returned to Houston. Clever instagram photos making fun of social distancing. They can't avoid commingling dynamically. I suppose the fact that the kids are somewhat staying on campus is keeping the infection on campus, and the infected young just don't get as sick. For the larger community in Texas, yeah it must be less density and warmer, more humid weather. A little non-scientific evidence that, in healthy communities, perhaps the young and healthy may be able to go about their business, with better awareness about how to protect the at risk they may come into contact with.

AUSTIN, Texas — Two weeks ago (3/15/20), amid the coronavirus pandemic, about 70 students from the University of Texas at Austin partied in Mexico on spring break. The students, all in their 20s, flew on a chartered plane to Cabo San Lucas, and some returned on separate commercial flights to Texas.
Now, 44 of them have tested positive for the virus and are self-isolating.

Johnny Bee Dawg said...

Would like to hear more from Roma, and have her weigh in on how me must keep the economy closed, despite the lack of "curve".
I bet her models are a lot better than Fauci's.

We have so many amateur internet epidemiologists in the comments section these days.
I bet Roma makes about as much sense.

steve said...

Certainly as much sense as you do, Dawg. 😁

C'mon, you ran right into that one.

Grechster said...

Tim Draper is the latest credible guy to suggest that we've made a HUGE policy mistake in the wake of Covid. The "experts" have been so spectacularly wrong - again - that it makes you wonder if a bigger agenda isn't at play. It's amazing how conspiracy theories are consistently pilloried at the same time the government keeps making the ground fertile for conspiracy theories. Odd dynamic, that.

randy said...

This is interesting:

A dozen of America’s top scientists and a collection of billionaires and industry titans say they have the answer to the coronavirus pandemic, and they found a backdoor to deliver their plan to the White House.

Noblesse oblige? Arrogance? The Carlyle Group or Opus Dei controlling the world?

I'll take it as a positive effort that could help weed out the bureaucrats and politicians - of which none are known for particular intelligence.

Rick Jones said...

Grechster said:

> The "experts" have been so spectacularly wrong ...

A few things here...

First, the "experts" have been spectacularly wrong about tons of stuff. Just off the top of my head: the "experts" were spectacularly wrong about Vietnam...the "experts" were spectacularly wrong about the collapse of the Soviet Union and the Warsaw Pact...the "experts" were spectacularly wrong about WMD in Iraq...the "experts" were spectacularly wrong in the run up to the 2008-2009 GFC...the "experts" were spectacularly wrong about the Trump and Clinton election in 2016. Need I go on?

The problem is probably not that the "experts" are wrong; the problem is probably that we have no real idea what we mean by "experts" and what's reasonable to expect from them.

Second, what do you mean by "spectacularly wrong?"

In most of modern decision theory, when you discuss decisions under conditions of uncertainty, the outcome of a decision is not how you judge the quality of the decision. It's the process. For a somewhat easy introduction to that, see Annie Duke's book, "Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts." Do you or Tim Draper have some special privileged information about the process? I doubt it.

Finally, it is way, way too early to be making any sort of judgements about the decisions that were made. In a column dated 13 April, Charlie Warzel listed 48 basic things about the coronavirus we still didn't know. What are the right decisions under conditions of such extreme uncertainty?

It will be at least a year -- probably more -- before we can have any clear ideas of what worked and what didn't. But that's going to also demand an answer to, "What do we think we wanted?"

Think about Norway, Sweden, and Finland. Sweden followed the so-called "Swedish Model" of not closing down. Norway and Finland did not.

Right now Sweden has 225 deaths per million of population; Norway and Finland have 38 and 35, respectively. Was that the right decision? How can we know right now? We'll have to wait a year or so and see how each of those countries is doing.

But keep this in mind: Sweden basically said to each working adult, "We are going to put your parents or grandparents or other elderly relatives in a life or death game of poker so that you can keep working." And that is truly what the deal was. Is that a deal you'd agree to?

No, Tim Draper can expound all he wants about the "experts" being spectacularly wrong. But it's so, so easy to be a Monday morning quarterback or an armchair General.

Grechster said...

Rick: Based upon whatever models the experts used, they put in place a policy that resulted in over 26 million lost jobs in just a few weeks. I mean, that's quite a call! Their own estimates for anticipated deaths now look wildly off.

Their dramatic response, one would think, would be based on a high level of conviction. We now know that that level of conviction simply didn't exist.

We also know that the death toll from their actions will likely be greater than the final death toll from covid.

Their call was pathetic and our willingness to listen to this tripe is pretty lame too. Luckily the market mostly saw through this although I believe there will be some lasting marks. We certainly are going to be dealing with a lot more debt and (hopefully) a lower level of trust of these clowns in govt. (I didn't have any pre-covid.)

Johnny Bee Dawg said...

The VIX is back down to February levels.
The market knows the virus panic was overblown, and knows we are opening back up.
There are pictures online of people packing into restaurants in Texas.

Would be interesting to know how many people actually died from COVID-19, but we will never, ever know.
I bet its not even 10,000 in the USA. Records are so screwed up, there can never be a true audit.
ER Doctors on video complaining that they are being pressured to mark COVID for cause of death, when it wasnt.

Most of those real deaths could have been avoided, except certain Governors ordered infected hospital patients into nursing homes, AFTER THE FEDERALLY MANDATED NURSING HOME LOCKDOWN, killing thousands of our most vulnerable citizens in New York.

Imagine being a nursing home resident, and having your own Governor force diseased people into your facility.
No appeal. No escape.
And then you die a horrible painful death, gasping for air.
Michigan and New York Governors have blood on their hands.

Scott Hammond said...

This is the most sever non-wartime government overreach ever