The corona effect

[jcc]

The US stock market recovery is boggling my mind.

Never before have I felt so tempted to time the market and just sell a big chunk of my developed nations stock to rebuy it after the next dip.

Trump is looking to reopen the country, deaths are going to go up again and I can't imagine that would stabilize the stockmarket. Am I crazy?

For all the other action in the last couple of years I've never felt as tempted to time the market as right now. Has anyone already pulled the trigger?

I don't know where the market will go next, but one interpretation of the market action is that money has become less valuable so more yen/dollars/euros are needed to purchase the slices of companies we call "stocks." I agree that it's counter-intuitive that markets are rising while the economic news worsens. I made the decision a long time ago to just stay invested so I'm either going down with the ship or riding the waves.

Yeah, I pretty much decided the same when I started out.

I believe this will recover before the time I actually need the money(5-15 years from now). So I really could just do nothing and stick to the plan.

On the other hand, it seems like a golden opportunity to make a bit more on top by selling high(ish) and buying back in after the (what I believe to be) inevitable drop in a month or two. Not because I believe the drop is rational(for long term investors selling just doesn't make sense), but because I think the market isn't rational and once we see "reopening america" bring a huge resurgence in cases, things will drop.

I am seriously wondering if number of death is a criteria for the stock market?

Well, I think the deaths are going to be significantly ahead of normal death counts if places allow it to just run rampant. Even moderate cases can become fatal without treatment, and other ill people find themselves without the ability to get treatment. So we're not talking about 1% mortality rate, but a lot more once people can't get treatment and other illnesses become collateral damage. Many of those cases are going to be very impactful, and fear of the virus will still keep many voluntarily isolated(as we are in Japan) impacting the economy until a vaccine is found. Never mind the impacts of civil unrest. Even if you ignore the morality of letting millions die to "save the economy" I don't think it can be saved, the impact can only be lessened by balanced measures that attempt to keep the virus in line while minimizing economic impact.

Eventually the economy will recover, so maybe everyone is just suddenly being very rational and thinking long term, but historically that has not been the case in the past.

I think I'll just strike a balance by not selling anything but holding back a bit on my monthly investments to put them in a bit later.

[Bubblegun]

I am seriously wondering if number of death is a criteria for the stock market?

Every year 8 million people die from smoking around the world. Does it affect stock market or even tobacco companies?

This is supposed to be the worst event since whenever so should not the market collapse?

Very brave to time the market!

Actually the comparison between tobacco and the virus isn't quite logical because although 8 million die from smoking, those 8 million would have died anyway, but the rate of return on the tobacco was phenomenal. Say a 20 a day habit for 40 year. On top of that the company is able to gain another 8 million customers in the developing world. In fact as the research is coming in,in the developed world, these very same companies are now buying up the vaping and electronic tabacco companies to replace those who died. On average the smoker dies 10 years earlier, but this average figure is a minority in itself when you add on the outliers. There are smokers who live to 80 and there are smokers who start at 13 years old. But, the company understands that older smokers will compensate for the death of the younger smoker. There is also an interesting way the companies can manipulate the smoker, and their profits. Buy reducing the nicotine levels, the addict would then need to increase the number of cigeretes they would need to maintain their habit. I think this is also seen in the US where the vaping products are seen as an alternative to smoking, and have much much higher levels of nicotine, compared to the UK and others which see vaping as a way to reduce smoking and a path to giving up. Infact the US has not legal limit on nicotine levels. What we are seeing is the same marketing in vaping that the companies used historically.
Covid19 is a very different beast altogether.

[adamu]

Here's a nice graph (I completely didn't check if it was accurate, so judge for yourself) that's great for arguments such as "The number of deaths are the same as people who die from heart disease, and the economy tolerates that", etc.

[Bubblegun]

Looks scary indeed.

But do we think we are going to see same rate of death in years to come for COVID? Because other diseases are quite stable over time so over next 5 years I think COVID will have killed much less than most other causes of death. At least I really hope so!

Also we compare COVID no treatment no vaccine to other diseases that have treatments even if not perfect.

Let’s see when all is more stable and we know more. For now looks mortality rate is much less than we thought but contagion rate is much higher.

Good question and this is where you have to understand the math of infection or reproduction.

So the rate of infection is Ro so it can inform you if an infection will 1) die out, 2) remain stable,3) increase.

1) So If the Ro is less than 1. the spread will die out and a good example of that is SARs which has disappeared, or when a vaccine stops its spread.
2) If theR0 is equal to 1 then the spread will remain stable and i suppose we might call that endemic.( very different from a pandemic)
3) if the Ro is greater than 1 then the spread will continue to increase, and overwhelm the health care system.
So we need to get the Ro down to under 1,but at the moment it is about Ro 2+.
Financially it's like a pyramid scheme.It needs more to people to keep it going.
At the moment i expect this to increase further, especially in poorer countries who don't even have the basic tools we take for granted to fight this virus.
E.G India, Bangladesh, Brazil,sub sahara africa etc etc. where high populations are in close contact, may not even have toilets, water to wash hands-on access to health care.
The season dip that some have put forward is a possibility but the virus will be happy to settle in the other hemisphere, as they enter their influenza season, only for it to return this year in the northern hemisphere.
Only this time we will have influenza plus coronavirus, plus all the other conditions we have,asthma, heart attacks, strokes, cancers, car crashes, etc etc. It is not “instead" of influenza, but is “ON TOP OF” everything else.

We shouldn't think a lower death rate as the only bench mark without considering other factors.
You need to consider that the death rate is lower because of
1) social distancing,
2) hygiene.
3) the health care systems we have
4) Intensive care beds,Nurses,Docs
5) access to treatment.

It would be like comparing soccer v basketball. Totally different rules, and needs but it’s all about the points.

The infection rate is high, and most people will survive, but we can see that it has overwhelmed the health care system especially the respiratory departments.
Coventry hospital in the UK went from 2 wards to 8 wards and they've had to triple intensive care beds.
We accept the influenza risk, but on top of that, we have a vaccine which limits its impact, and we planned for it.


For comparison, in the U.S. alone, the flu has caused about 38 million illnesses, 390,000 hospitalizations and 23,000 deaths this season, according to the Centers for Disease Control and Prevention (CDC), but we know from experience how many roughly will get every year, so we can prepare beds. So that's about 0.01%. pretty good odds of survival, if there are no pre-existing conditions.
How many deaths have occurred in the US in such a short time with corona ? Nearly 50,000. So the death rate, depending on many things is 1.3+ for all ages,so more than 10x higher. I certainly wouldn't want to be older where the death rate jumps to 14%. An intesive care doc in the UK said 50% have died in his intensive care and some report zero. Not the same odds.The last thing we want is something like the 1918 pandemic.

It’s about the health care system to cope with all the patients who need that "specialised care", so they can survive, not just the fit, healthy, and "Jack".
We should be very careful about the simple %, because there are subgroups, cancer patients, asthma, diabetics, smokers, etc etc
In japan we found out some comedian died, and today a women died Kumiko Okae died, who underwent cancer treatment.

So the contagion is much, much higher which will result in a much higher death rate, unless we flatten the curve.
Lets hope this virus doesn't mutate before a vaccine is found.

Here's a nice graph (I completely didn't check if it was accurate, so judge for yourself) that's great for arguments such as "The number of deaths are the same as people who die from heart disease, and the economy tolerates that", etc.

Excellent example of how the growth of a virus can over whelm a health care system and its Rox2 power.
I remember in the early 1980s when HIV came out, before they understood the virus, how it could have brought a health care system to it's knees, and thankfully with health education, safe sex, needle exchanges etc. Thankfully We managed to limit it, but I do remember being scared of it, and treating some of these patients.

[TokyoWart]

This is a clear explanation.

How can we explain that some countries managed to keep this under control?

Sometimes I feel the narrative of countries where the situation is really bad is more like : this is the fault of China, we have great healthcare but the virus is so bad so we do our best.

But we have examples of countries which managed this relative ok. Have they such a developed healthcare? Did they take the right decisions early on? Are they lying? Is the virus different in those countries?

In Germany at the height of the crisis 45% of ICU beds were empty. How did they manage that? Why are France, Italy and Spain doing so bad in comparison?

In France almost 70% of the country is disease free and therefore there are some hospitals that are empty. They closed the only mask factory in 2018. They have most of their basic molecules and medical instruments made in China. They reduced hospitals beds by the thousands in previous years.

So I am really confused when I see how different similar countries have been impacted.

The pandemic isn't over yet so it's hard to pass final judgment on how well countries have handled it. Despite the relatively relaxed nature of our restrictions in Japan this country is doing very well in terms of limiting deaths. If you check the worldometers website for deaths per million population (diagnoses are too dependent on testing to tell you anything about disease control and even hospitalizations depend on local practices for how nursing home patients are managed). Some countries like South Korea and Germany really stick out for their good performance. Despite all the bungling in the US and relatively poor lack of access to healthcare there, it's still doing better than many EU countries with their universal healthcare systems in terms of deaths. I have seen analyses on Italy which point out that it generally does poorly during flu epidemics and has an unusually low number of ICU beds per million population. If you've ever had to try to run a business in France (or, much worse, try to close one) you will understand why manufacturing moves out of that country whenever it has a choice. But France's experience of 70% of hospitals being relatively unaffected is I think similar for most countries simply because of how the disease concentrates in certain communities (not always the most populous ones; one key is whether or not nursing homes get infected or hospitals become a focus of disease spread). In the US many of the conservative "red" States which have been slow to put in movement restrictions still have minimal disease burden or have passed the point of projected peak resource use, while more urbanized liberal "blue" States like New Jersey and New York which have been draconian in stay-at-home orders have suffered the highest population-adjusted death rates. I think it will be difficult to draw simple conclusions about what was or wasn't effective for disease control beyond the advice that the next time a pandemic hits you might want to move to Seoul.

[Bubblegun]

This is a clear explanation.

How can we explain that some countries managed to keep this under control?

Sometimes I feel the narrative of countries where the situation is really bad is more like : this is the fault of China, we have great healthcare but the virus is so bad so we do our best.

But we have examples of countries which managed this relative ok. Have they such a developed healthcare? Did they take the right decisions early on? Are they lying? Is the virus different in those countries?

In Germany at the height of the crisis 45% of ICU beds were empty. How did they manage that? Why are France, Italy and Spain doing so bad in comparison?

In France almost 70% of the country is disease free and therefore there are some hospitals that are empty. They closed the only mask factory in 2018. They have most of their basic molecules and medical instruments made in China. They reduced hospitals beds by the thousands in previous years.

So I am really confused when I see how different similar countries have been impacted.

Excellent questions. First of all there are certainly cultural, social and political/health differences.

You mentioned Germany. Germany has a health care system that is universal. So everyone has an incentive to go and see a doctor, and they used Test,Track Treat ( isolation) so they could reduce the Ro number, limiting spread, especially to vulnerable groups.So Germany tested much earlier, at at higher numbers so those being diagnosed were isolated. Now numbers count. If you test more, there will be more negatives so the death rates will look lower.
They managed to slow the curve and managed to flatten it. Early access and early intervention may provide better outcomes for those who need hospital treatment, compared to the US system which has a financial barrier to seeking treatment, especially when health care provision may be linked to their employment. I would like a link to see those figures on german ICU beds .

France,Italy Spain may have thought the distance from china or Italy would provide some protection and waited, the football season, kissing, hugging, packed bars, touching may all have contributed. You mentioned Japan. Is it possible Japans lack of bar culture, lack of public kissing,lack of hugging culture, not to mention other hygiene culture offered some slowing down of the spread. Demographics may play a part, especially Italy as it has one of the worlds largest but oldest population. Lets also consider how these countries in dealt with austerity, and how they treated their health care systems.I will put the UK in this group, Cut,Cut and more cuts. The size of spains health care system is also much smaller that Germanys. Look at the numbers of beds available to patients.

Here is a list of ICU/ventilators/beds by country You'll notice Japan,Germany, Korea, compared to the USA or the UK has way more beds and higher numbers.

I am sure the numbers infected will be much higher, reducing the eventual mortality rates, but at this point, the health care systems are under huge pressure, and the numbers of deaths have increased. I think the UK saw a doubling of its weekly death rate, with some deaths unaccounted for.
Lets assume the death rate is as low ( as some would like)... this isn't enough, because the disease may have a much higher hospitalization rate, as patients need more medical intervention. Coventry hospital in the UK is testament to that, from 2 wards to 8 wards.

I will use a financial analogy 1% tax cut on a billion dollars is very different from 1% tax cut on 25,000 dollars. The percentage is the same, but results just don't really compare.

70% percent of the country is disease free but most people don't live in those areas. They live in huge cities.

There is another part that people will point to and say "see..I said it wasn't that bad" and that is herd immunity. As more become infected and recover, then less people will become infected.( which people will point to confirm their point of view) So at least 80%> is needed for that. It's bit like the antivaxers saying POLIO isn't a problem, so I don't need to be vaccinated, but they only get the protection, because the other 95% of the population are immunised.

https://en.wikipedia.org/wiki/List_of_c ... ds#Numbers

[Bubblegun]

As requested

https://www.japantimes.co.jp/news/2020/ ... qJp_iWRXYU

I just wished some countries would just admit they did not react efficiently and learn from it rather than always trying to deflect. Anyway those will most certainly not get elected again. I am not worried their pensions are safe.

Well I have to agree. Unfortunatly politics within each country comes into play, and health care is one of the biggest political footballs there is.
Wether it is the UKs, and how everyone envies our system, because it is free at the point to delivery to the US that thinks theirs is the best in the world because they do some unbelievably rare operations and have pretty equipment. The nurse and docs don't care who is in front of them. Unfortunately it's just the politician having one eye on the electorate, one on health care, but there is a third eye, nobody sees it.....but it is the one that watches the costs.

I think Donald Trump is the best example of that, Blaming democrats, Blaming Obama, Blaming china, Blaming the W.H.O. downplaying the cost, or the numbers, overhyping treatments,( which incidentally did not work) and actually made things worse. But the truth is, he's the boss.He's in charge. He gave tax cuts to companies, but couldn't provide health care to every single person. Seriously the man is now talking about bright lights and cleaning products.

Anyway, here is something that we need to think about. If herd immunity occurs at a minimum of 80% of the population, you can imagine how many people in Japan or the US/UK/etc would need to be infected. JAPAN would need over 80 million infections, the UK would need nearly 50 million and the US would need....at over 320 million you can do the math to obtain that immunity.(if there is no vaccine) Hopefully, we can see how this could crush system even if 1% of those infections needed hospitalization. Basically the death figures are grabbing the headlines, but even if it has the same death rate as flu, ( and i am not saying it is) this isn't what I would just focus on... it is the number of people who NEED to go into hospital.

Beds, equipment could be procured but the biggest problem is the staff number. ICU is 1-1 nursing with a floating nurses 24 hours a day, plus docs, physiotherapists, etc, etc and that's just ICU. It doesn't include ordinary respiratory units, Emergency rooms, etc etc,

The US has one huge problem, and that is their health care system... if you can't pay, you basically turn up late at hospital, needing longer and more intense treatment. Not only that, if people delay seeking treatment, they provide an opportunity to pass it on. If you loose your job, you may loose your health insurance. Not to mention that the companies themselves are the first to deny treatment...especially if you have a pre-exhisting condition.
Imagine having asthma and the you have coronavirus I can only imagine the insurance company doc trolling your medical records looking for a reason to deny coverage. As an ex nurse I will always see these companies looking for a reason not to pay out, because they loose money every time they have to pay out. Every time someone dies, they save a ton of cash so they can pay their dividends.
The US often says you're going to war with the weapon made by the lowest bidder. Imagine saying your going to hospital with a policy that's going to cost that company money, and you're just not cost effective to treat. Sadly that is a fact.
We're lucky in Japan,UK,France, Germany et al that every single person is covered FULL STOP. No small print,No commission,No profit.
They found money to bail out the bankers, buy that new F35, pay for the recent the wars, but somehow they "CAN'T " pay for health care, and the thing is,
Joe public use health care everyday, or someone in your family does.

[Bubblegun]

We discussed quite a few very intersecting points but there two more that are worth mentioning.

The first one I warn you is very controversial and I apologize in advance If some are shocked.

The point made by some is that average death age is 81 and that it is unfair to have the burden of paying the bill to the younger generation.

The second and much more interesting and I think the most important is that we will have more and more pandemics in the future. And we cannot afford the same approach to the COVID one. So we will have to learn to live with this and just have a good plan ready when it happens.

I am not sure what you mean about the average age of death being 81 and it's unfair to let the younger generation pay the bill.

The bill is payed by everyone, even pensioners pay tax, via sales tax. Some even work, and many still work. You could argue that for say any age and condition. So I'm not sure what your driving at. Are we saying let them die? Well that all comes down to rationing and the thing is we do do that.
The ethical dilemma of what give the kidney to, who to give the bed too, who to spend the drug on. But it isn't just on age.

Or the 75 year old who has payed there tax, worked all their life, never used the health service, v a 20 year old women with cancer?
Of course this gets worse when several people are the same age, you may give them all a chance and rule out the pensioner, but that would also depend on the clinical situation.


So consider this, giving a 35 year old, unemployed drug addict treatment or a 70 year old man who has worked all his life, with two kids, a wife, and giving him treatment for the exact same corona virus?

Or something which I think could really happen if
a country develops a vaccine, (let’s say the US) they may say, to other countries pay us $$$$ for each vile, or don’t get it, or sorry, America first?
It’s one reason why Trumps attack on The W.H.O shows you how,&¥@/£$ he is. As the W.H.O needs countries and companies to work together, and not just see the immediate financial boom they’ll see. $100+ is nothing to say a Japan, US, UK etc but could be out of reach to say people in India, Thailand, Brazil, etc etc.

I recommend the Trolly problem which is a great example, and the ethical decisions every doc has to make globally. Or if you have Netflix i recommend the show the HAPPY PLACE.
https://en.wikipedia.org/wiki/Trolley_problem


Well they have been going on about pandemics for years, they've seen it in africa and we dodged one with HIV when that first came out, and that was new too. I suppose the governments would rather invest in a new stealth fighter, a new tank, Aircraft carrier and prepare for war by exercises, than prep
for a pandemic that they think only lives in hollywood.
Maybe politicians think they are more likely to go to a shooting war than go to war against a tiny virus.
I suppose one looks awesome, exciting, pretty cool and makes big bangs, but the other is silent, scientific and frankly looks boring and is taken for granted.( until it is needed) sadly there aren't many parades of doctors and nurses, and pushing beds down the street doesn't quite look as good as tanks, jets and soldiers on parade. Unfortunately both services are chasing the same dollar.

[Bubblegun]

For the first point, yes it is ethical and moral. I can understand the dilemma when it is for instance the case of organ transplant.

Well this actually goes for everything in medicine. The transplant is just an example but the real ethical question is, and this site is about money, “Who do you spend the money on?”
How about a premature baby? v Coronavirus ICU, and the baby may be productive, but the baby may have a disability.The young man may, be unemployed, but has a 3 year old daughter. So the financial side you propose isn’t really valid, and Certainly not a good reason to deny treatment to any group of people.
Otherwise we may go down that slippery slope of eugenics and we know where that led to in the 20s 30s,and 40s. And even more recently in Japan.
,
We could do 20 operations v 5 operations, but the docs still need to replace those pacemakers today. someone who has Down syndrome v or some one with HIV? Should we allocate resources to say IVF, or just use the resources for cancer screening?

The money needs to be allocated, and every single person has payed their tax, and will argue they’ve payed so their needs ought to be met.
Now all things being equal” apart from age, then if both people need the same bed, the same treatment, then there are guidelines and that’s based on QUALYS.
https://en.m.wikipedia.org/wiki/Quality ... _life_year

Life and medicine is never that simple.

For second point we have spent all the money anyway for this pandemic. If we have a new pandemic in 5yr time can we afford a lockdown again?

I think there would be no problem in dealing with a pandemic financially in 5 years time. Historically every single president/prime minister has said, “we Can’t afford something”.
But the reality is, if we look at it objectively, they have. The found money for 2 gulf wars, Afghanistan, and they found money for tax cuts.
So financially I have no doubt they’ll find the money. It’s just how you wish to allocate those funds, just the same as the QUALY above.
I suppose every leader wants us to believe their narrative, but the truth is, they just have a different philosophy on how money should be spent and dare I say it, redistributed.
Should anything come out of this, it should be the leaders should invest in health care now for the future.

[adamu]

Money Stuff had a really interesting opinion piece the other day, stating that index funds may be contributing to persuading drug companies to work together to find cures and treatments for coronavirus, instead of competing with each other.

We talk all the time about how weird it is that the big shareholders of every big company are also big shareholders of all of the other big companies. Typically we talk about it in the antitrust context—“won’t they want the big companies to compete with each other less aggressively?”—but in the current crisis that seems a little trivial. In the current crisis it seems like an interesting opportunity that all the companies have the same shareholders. It is good, right now, that big drug companies are getting phone calls from their owners, and the owners are saying “look, don’t worry too much about competition or profits or shareholder value right now; we’re your shareholders, and what we value most is a cure for this disease and a path to reopening the economy.”

Investors Want a Cure, Not a Winner.