I’ve heard from many of my mentors over the last 48-hours. Thanks people, nice to hear from you!
Let’s pause and consider what wise thinkers might tell us about the issue of Corona.
- Feynman – don’t fool yourself, seek to tear your ideas down
- Taleb – cut the tail, insurance is cheaper than catastrophe
- Munger – invert, invert, invert
- We see California, France, Italy, Spain… shut down to various degrees.
- We expect the shutdown to spread across Europe and North America.
- There will be massive, unknowable impacts from this shutdown.
Taleb => An early, severe over-reaction, would have been a tiny insurance premium to pay.
Hard to disagree.
We are staring into the abyss. What does it look like down there?
Consider the numbers being tossed around:
- US – 317 million people with 51 million 65+
- Cali – 38.7 million people with 5.6 million 65+
- Colorado – 5.6 million people with 800K 65+
- US Accidental deaths per year – about 150,000
- CDC estimates that so far this season there have been at least 38 million flu illnesses, 390,000 hospitalizations and 23,000 deaths from flu
Infect 150 million Americans and think through what might happen (see link above the bullets). Deaths of 1.5 to 6.0 million depending on the actual fatality rate.
- Those deaths are reported to skew towards the 65+ demographic.
- Use the 80% figure from the CDC article (link in prior bullet, slide down to Discussion) and one might expect 1.2 million to 4.8 million deaths for people over 65 years old (2-9% rate within the cohort).
- What does that mean for people under 65 years old? They will get the rest of the deaths, namely 300,000 to 1,200,000 deaths across 266 million people (0.1-0.5% rate).
- My medical mentor reminded me => deaths will skew towards patients with the shortest life expectancy.
There has been talk about this crisis being similar to World War 2 (link to Merkel). This doesn’t feel right to me as it ignores the nature of the deaths (far more, far older).
Corona is its own event, its own crisis.
Think past the deaths.
- We’ve lost 10% of our seniors
- Our capital assets and industrial productivity are unchanged
- Our collective debt has increased via a progressive distribution to all Americans
- Asset values have jumped downwards
- Highly-leveraged people/entities have been cleared from the system.
- There is a global consensus for a better response to outbreaks
We could, and would, handle it.
Earlier in the week I shared Soros’ observation that regulation lags a crisis. Another of his observations, we change reality by interacting with it.
..and there is a lot of interaction…
- A rolling lockdown moving outwards from hotspots
- Rapid up-scaling of American medical capacity
- State and Local education about how to minimize virus spread
- Massive injections of liquidity into the financial system
- Closing of international borders
These changes will interact with each other.
There has been some good news locally. From March 14th, our daily cases in Boulder County have gone 0/3/7/11/15/19. No escalation in the number of new daily positives.
This gives us hope that an early lockdown can mean an early return to normal living.
I have a call scheduled next week with my medical mentor. We’re going to talk medicine and markets. I’ll write up my thoughts.
- Tomorrow will focus on what we’ve learned from Corona School. Home school is not easy => no home school is worse.
- I’m taking a cyber-Sabbath on Sunday. Freshen up a bit!
- Monday will discuss the benefits to my family from the lockdown. My 2020 goals have been jumpstarted by this crisis.
I’m grateful to have married a swimmer. Monica excels within the repetitive nature of our lives under lockdown. Elite sport teaches resilience – or weeds out the non-resilient!
My kids are absolutely loving lockdown life.
As for me, I’ve given up on family dinners. By the time 6pm rolls around my earplugs are in and I’m ready to park the kids in front of a show.
Two recommendations for you: we liked Princess Protection Program and 100 Things to do before High School (both movie and the series).
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