SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

Kim

Coronavirus and its Impact on the Markets

150 posts in this topic

Recommended Posts

2 minutes ago, Topcat said:

 

Good question:  The answer I think has partially to with modeling and advertising.

 

Other questions:  I think the other question that needs to be asked is why isn’t credence being given to other deaths caused by the shutdown?  

 

Not an either  deaths vs $s :

Not only does the shutdown create the hardships you mentioned but it kills. Suicides are already the #10 leading cause of death in the U.S., almost 48,000.  Every 1% increase in unemployment results in .9% increase in suicide and thousands more committing suicide. ( medical journal Lancet) and the increases tend to be chronic lingering for years. For a concise analysis see the following  that estimates an increase from suicide and drugs of 70,000. These don’t count?   https://www.realclearpolitics.com/articles/2020/04/13/shutdown_could_kill_more_americans_than_covid-19_142934.html

According to OC Register there has been an 8,000 % increase to suicide prevention calls. Normally one center that gets 22 calls a month last month got 1,800 calls, and sadly an increase in calls does correlate to an increase in suicide  https://www.ocregister.com/2020/04/19/suicide-help-hotline-calls-soar-in-southern-california-over-coronavirus-anxieties/

 

Advertsing pays.  In advertising there is a measure called GRP, gross rating points, it measure the breadth and depth of advertising. Marketers can predict with uncanny accuracy that if you increase the GRPs on an item it increase awareness an sales, just test yourself with some advertising slogans,  The point is simple increase the GRPs and the GRPs on Covid-19 have been off the charts, more on any single day than the football on Superbowl Sunday.

 

Modeling in Medical Field vs Facts: My background is in data analytics,  but over 30  years  I have met with friends in the health profession and we would discuss how poor the health field is with data analytics and computer science in general. Many studies done in the medical field fail to establish what the baseline vs incremental are and what the health field calls meta -studies have sample sizes that are so small that they would be laughed off the table by a consumer company.  I could access AC Nielsen's 60,000 person database on any food item  to check trends and had baseline numbers of over 1 million. I could distinguish the difference between baseline and incremental. The health field cannot easily do this To fill this void, the health field uses models. The problems with models is there is a high degree of supposition. You just change a number or two in a spreadsheet. And you can prove bumble bees cannot fly.

Dr Faucci , who btw has never practiced a day of medicine, said as late as a Feb. 29, 2020, interview, Dr. Fauci said that at that time and under the circumstances pertaining to that date, “Americans didn't need to change their behavior patterns.” Then on March 31st  he reversed course and cited models that said we could have 1.5 to 2 million deaths (not cases but deaths). This was widely repeated again and again without any allowed challenges to the model.  

 

What the baseline might be:  Those of us in data analytics have been saying for some time either the infection rate , the basic reproduction Number (R0) is wrong or the fatality rate is wrong.  Otherwise millions would be dead already. Remember the double a penny every day question, well in 34 days a penny  ends up being worth over $ 160 million and the (R0)  factor was stated at over 2x.   It looks like the fatality rate is much much lower. This will only create cognitive dissonance  for some people who are running with the emotion of the constant message, GRPs,  but these are the facts on the ground. I know emotion almost always wins over logic but for a fact based study/analysis see comments by MD Dan Erickson, who with his partner has done half of the test in Kern County , over 5,200 hundred at last count.  He has done 5,213 COVID-19 tests at its five Bakersfield locations, Erickson said — which is more than half the 9,197 tests done so far in Kern County. Of those, 340 were positive (6% of those tested) , according to Erickson. He says that If that percentage of positive cases (65) were assumed to represent the entire population of Kern County, which is roughly 900,000, it would mean about 58,000 people in Kern have had the virus, far more than the nearly 700 official confirmed, Erickson said.

Using the same calculation, Erickson estimates 12 percent of the population statewide, or some 4.7 million Californians, have already had COVID-19. "Well we have 39.5 million people, if we just take a basic calculation and extrapolate that out, that equates to about 4.7 million cases throughout the state of California. Which means this thing is widespread, that's the good news. We've seen 1,227 deaths in the state of California with a possible incidents or prevalence of 4.7 million. That means you have a 0.03 chance of dying from COVID-19 in the state of California," said Dr. Erickson.

Dr. Erickson asked if numbers that low necessitated people sheltering in place, shutting down medical systems and putting people out of work.

"I also wanted to mention that 96 percent of people in California who get COVID recover," he said. He has been censored for even asking these questions, if you want to see it I think you can still see it here:  https://www.kget.com/video/local-doctor-from-accelerated-urgent-care-gives-take-on-covid-19-in-kern-county/5416469/

 

And to try and understand the censorship I understand them to say yes, but he hasn’t tested everyone in the US, extrapolating isn’t right but bear in mind he wasn’t advocating running around but essentially asked the same questions Kim did

 

 

You mention the problem correctly - SHIT in SHIT out - or as Churchill put it: I only believe the statistics I falsified myself. The data input due to China lying about the real numbers wrongfooted everyone. The rest of your argumentation falls when you see that a modern healthcare state like Northern Italy and the Netherlands was unable to cope with the flow of patients. This wasnt theory or data analytics - this was reality. So the answer was brutal and you are right confinement also costs lives - in fact people that are unemployed can be shown to live shorter lives than people who work. However they do not cause the collapse of the healthcare system.

Right now there is no realiable data like AC Nielsen - the closest you can get to real numbers are those from Germany as they test really widely but even that is a presumption that they are doing it right for which there is no proof. Its easy being the Monday morning quarterback - my gravest concern right now is that the same people who got burnt advocating herd immunity and have switched to lockdown are unable to let go of the extreme control they have imposed. We are going to have to relax the system and sooner rather than later, if they hold onto strict rules for too long morale will start to falter among the population and it will be worse. We took a huge emergency step and by and large the reaction of the population has been admirable - the authorities should now trust them to work at getting back to normal gradually. If they let it come to a boil that people have had enough of it we are sure to see a bad resurgence of the virus. A resurgence which we will see by the way, its unavoidable.

Share this post


Link to post
Share on other sites
7 hours ago, DubMcDub said:

 

  • On the flip side, if you don't shut things down and that turns out to be wrong, the hypothetical worst-case scenario is devastating and completely irreparable. 

 

 

This is what it boils down to in my opinion.  Putting your seatbelt on after the wreck doesn’t do much good. 
 

When the potential risk on one side is ruin, even if there is low probability of achieving an extreme outcome, then it’s necessary to take precautions to prevent that outcome from occurring.   

 

One thing we learn here at SO is that even if probability is low, it’s a mathematical certainty that eventually we experience the extreme result if we have repeated exposure to such risk. Many traders have learned this the hard way.  

Share this post


Link to post
Share on other sites
7 minutes ago, Kim said:

Thanks Kim.

I try to not to put politics in this forum (i personally pushed myself to read from both sides and get outside my bubble), but i have followed very closely this virus since the end of january. What got my attention was the lockdown of Wuhan and start my research when the consensus from experts at that time was 'look at the flu, it's not worse' or 'we don't have evidence, let's wait and see'.

On the link you linked, i do think that there are 2 points that we can't say definitively if they are true or not : 'The virus escaped from a Chinese lab' and 'COVID was created as a biological weapon'.

There are multiple sources that talk about the research at the Wuhan lab about gain of function research (messing around with virus to increase transmissibility or lethality to do reseach).  Do i believe it was a 'biological weapon' ? No, probably not.

But that type of research to mess around with viruses happened, and is dangerous. I don't think there is a scientific consensus on whether doing that gives us more benefits than the risk a releasing a pandemic-type virus.

Is it possible that an accidental release happened ? Yes, there are multiple incidents in the past even in the US.

What we do know is that the index patient is not from the Wuhan wet market.

So where did it come from ? That we don't have definitive facts to decide which the theory is the correct one : a jump from a wild animal ? an accident from a research lab where they were doing gain of function research on exactly this type of virus and is few miles from the wet market ?

For me, until we get more facts, we should keep an open mind and keep critical thinking as this is a very new virus and there is not much that we do know.

https://www.vox.com/2020/5/1/21243148/why-some-labs-work-on-making-viruses-deadlier-and-why-they-should-stop

https://www.washingtonpost.com/national-security/chinese-lab-conducted-extensive-research-on-deadly-bat-viruses-but-there-is-no-evidence-of-accidental-release/2020/04/30/3e5d12a0-8b0d-11ea-9dfd-990f9dcc71fc_story.html

https://www.economist.com/science-and-technology/2020/05/02/the-pieces-of-the-puzzle-of-covid-19s-origin-are-coming-to-light

 

Share this post


Link to post
Share on other sites
5 hours ago, RapperT said:

This is what it boils down to in my opinion.  Putting your seatbelt on after the wreck doesn’t do much good. 
 

When the potential risk on one side is ruin, even if there is low probability of achieving an extreme outcome, then it’s necessary to take precautions to prevent that outcome from occurring.   

 

One thing we learn here at SO is that even if probability is low, it’s a mathematical certainty that eventually we experience the extreme result if we have repeated exposure to such risk. Many traders have learned this the hard way.  

I was going to make this exact same analogy, but I didn't want to sound flippant about something much more serious than trading (you didn't sound flippant at all, so I think my concern was unfounded!).

Share this post


Link to post
Share on other sites

Going back to trading, I just went back to some PMs I had with @Yowster back in February and found this:

  On 2/6/2020 at 11:08 AM, Kim said:

On a related note, I think we should try and increase our straddles exposure. I don't believe for a second the coronavirus numbers that come out of China. In my opinion, the real number of deaths if in thousands if not not tens of thousands. If and when the real numbers become public, we can see a severe correction, and I want us to be prepared.

I had a feeling from the beginning of February that the market is severely underestimating the potential impact of the virus. I have the same feeling now. With all the bad news coming almost every day, I think we can see at least 5-10% correction from the current levels, potentially more.

In my personal opinion, this rally is built on hope. I'm not sure why the market doesn't realize it, but re opening will cause a big second wave. Which will force the governments to implement lockdowns once again. Whole industries will be devastated: tourism, restaurants, taxis, etc. Commercial real estate will collapse. Healthcare industry will suffer tremendous losses. These industries employ massive numbers of people. 

Increased diplomatic and economic tensions between the US and China will also have a big negative impact.

Latest comments from Buffet and Munger also show that they are bearish short term. 

In my opinion, it will get much worse before it gets better.

Please note that I DO NOT make trading or investment decisions based on my opinions, and I encourage everyone to do the same. I would like to position our SO portfolio in a way that we can benefit from the next leg down, but at the same time not to lose if I'm wrong. Our straddles and hedged straddles will benefit greatly if the next leg down comes, but at the same time they can make small gains even during consolidation phase or rallies.

 

Share this post


Link to post
Share on other sites

I understand markets can stay illogical for quite awhile... but consumer behavior really seems to indicate that, independent of restrictions from government, we may be in for some prolonged pain...

 

https://www.nytimes.com/2020/05/07/upshot/pandemic-economy-government-orders.html#click=https://t.co/Z2QTq7zFWM

 

 

F6B9BC8A-0EB5-49CD-91E5-DA198A0F83AE.jpeg

Share this post


Link to post
Share on other sites
12 hours ago, RapperT said:

I understand markets can stay illogical for quite awhile... but consumer behavior really seems to indicate that, independent of restrictions from government, we may be in for some prolonged pain...

I'm working on something around this right now for a paper I'm putting together.  But upshot is, when we controlled for a bunch of factors including the fact that issuing a stay at home order isn't random, we're seeing something around a 2-3% increase in time spent at home due to the stay at home order.  The majority was done by people on their own prior to the government action.  I'm updating that now with data from places that are opening up but if people stayed home independent of any government order just rescinding those orders may not have any as big of an impact on the economy as people think. 

 

I like what @Kim was saying above on that.  We could see a second leg down.  I bought some longer dated puts a few weeks ago on businesses that would likely run into serious problems if people were overestimating the recovery.  All of those positions are in the red right now but if this continues or requires long term that restaurants operate at 50% capacity the bankruptcies are just starting. 

Share this post


Link to post
Share on other sites
On 5/6/2020 at 2:46 PM, Kim said:

Going back to trading, I just went back to some PMs I had with @Yowster back in February and found this:

  On 2/6/2020 at 11:08 AM, Kim said:

On a related note, I think we should try and increase our straddles exposure. I don't believe for a second the coronavirus numbers that come out of China. In my opinion, the real number of deaths if in thousands if not not tens of thousands. If and when the real numbers become public, we can see a severe correction, and I want us to be prepared.

I had a feeling from the beginning of February that the market is severely underestimating the potential impact of the virus. I have the same feeling now. With all the bad news coming almost every day, I think we can see at least 5-10% correction from the current levels, potentially more.

In my personal opinion, this rally is built on hope. I'm not sure why the market doesn't realize it, but re opening will cause a big second wave. Which will force the governments to implement lockdowns once again. Whole industries will be devastated: tourism, restaurants, taxis, etc. Commercial real estate will collapse. Healthcare industry will suffer tremendous losses. These industries employ massive numbers of people. 

Increased diplomatic and economic tensions between the US and China will also have a big negative impact.

Latest comments from Buffet and Munger also show that they are bearish short term. 

In my opinion, it will get much worse before it gets better.

Please note that I DO NOT make trading or investment decisions based on my opinions, and I encourage everyone to do the same. I would like to position our SO portfolio in a way that we can benefit from the next leg down, but at the same time not to lose if I'm wrong. Our straddles and hedged straddles will benefit greatly if the next leg down comes, but at the same time they can make small gains even during consolidation phase or rallies.

 

I’m not sure a 5-10% correction is enough. I still think we could retest the March lows. 

Share this post


Link to post
Share on other sites
20 hours ago, Kim said:

Dr Fauci just testified that the COVID-19 death toll is likely meaningfully higher than the 80,000 reported.

https://www.theguardian.com/world/2020/may/12/fauci-testimony-coronavirus-reopening-deaths-hearing

It’s hard to reconcile the official numbers with the all cause mortality data.  Something isn’t adding up.

 

its mind blowing to me that NYC wasn’t counting anyone who died at home for a significant period of time 

Share this post


Link to post
Share on other sites
17 minutes ago, RapperT said:

It’s hard to reconcile the official numbers with the all cause mortality data.  Something isn’t adding up.

 

its mind blowing to me that NYC wasn’t counting anyone who died at home for a significant period of time 

In the Netherlands the amount of deaths per week rose by 50% above the normal annual weekly average. I think this number is the most reliable indicator of Corona deaths because it is the only extraneous factor that could cause such a jump. In fact due to lockdown the number of deaths should drop a little as there is less risk to get - say - run over whilst in confinement. The officially reported corona deaths are 50% of these extra deaths - rounding the numbers it looks like this

- Normal average deaths per week 2600 (this average varies per week and is influenced by seasons - however the relation below has been in existence for the past 2 months more or less)

- current deaths per week 3600

- deaths officially attributed to CORONA 580

If we take that as a reasonable extrapolation then the current amount deaths in the US would be 160,000 or so. This is a lot but compared to Spanish influenza its still very modest. That killed overall 675,000 Americans on a population of ca. 100M. which is 0.6%

Currently there are 325M Americans and the percentage of deaths by CORONA (if we take the extrapolation I made) is 0.05% - of course we are just at the start. The Spanish influenza lasted about 4 years in total so we may yet get to the 0.6% on the longer run before we have this thing under control. Extrapolating further we could say that the virus has been with us 3 months - if it were to last 4 years - then we need to expect a 16 fold increase (presuming its linear which it certainly is not) - this would get us to 0.8% deaths of the population or a staggering 2.6M deaths. The Spanish Influenza showed that lockdowns and social distancing works to curb the curve - if we dont hit the 2.6M number in the US you can say you did better than might be expected. Anything over would show a failure of leadership, anything substantially lower would show good leadership.

The numbers really are quite similar to the previous epidemic and the reactions and pitfalls remain the same. Finding a vaccine and producing it in sufficient numbers (I understand from my clients in that sector that 1B vaccines are needed world-wide) is key to breaking this chain. In the mean time we can only mitigate the process by acting responsibly.

Share this post


Link to post
Share on other sites

Thanks for sharing @TrustyJules

From my talks with some medical professionals, the estimate is that this will not be over till 30-50% of the population is infected. In US, that's 100 MILLION people. Taking a very conservative mortality rate of 0.5%, that's half million deaths in US only. Worldwide, it translates to over 2 BILLION infected and 10 MILLION deaths.

I really hope those numbers are not correct. Any medical experts here can comment? 

Share this post


Link to post
Share on other sites
5 minutes ago, Kim said:

 Any medical experts here can comment? 

As an aside, part of the problem with this is that there doesn't really seem to be consensus among the experts.  Still a lot of unknowns.  It's very difficult to model/forecast something like this as we've seen from the disparity among the various models. 

 

The tails can be so extreme that if one relies on averages, the vast majority of occurrences would likely fall below any average that's used. 

 

Share this post


Link to post
Share on other sites
Just now, RapperT said:

As an aside, part of the problem with this is that there doesn't really seem to be consensus among the experts.  Still a lot of unknowns.  It's very difficult to model/forecast something like this as we've seen from the disparity among the various models. 

 

The tails can be so extreme that if one relies on averages, the vast majority of occurrences would likely fall below any average that's used. 

 

Yes and this is where China bears a burden of guilt in my opinion. They were not truthful in the original numbers, lateral investigation showed that crematoria in Wuhan were running 24/7 for months suggesting far greater fatalities than admitted to. This is why its important to stick to things that can be certain to be valid: dead is dead so the count of the number of daily or weekly dead is meaningful. Likewise is historic weekly/daily deaths data - this is reliable and we know it swings with the seasons. Whatever the difference is must be COVID.

As regards @Kim the vaccine manufacturers would have good news and bad. First of all you likely need 60% coverage before you are sure the virus is under control. The trick will be to get the right percentage infected, i.e. those with lower mortality rates than 0.5% and protecting those at risk in the mean time. At the mid to tail end of Spanish influenza this is exactly what was done - protect vulnerable, immediately isolate hotspots but keep the rest of society rolling. This problem has many asymmetrical aspects to it and the poor quality of data makes it all the more difficult.

The much touted Swedish example claiming to arrive at 25% infected and recovered persons in Stockholm is based on nothing except a computer model that was fed with the data we know to be unreliable. On the other hand we have hard proof that the death rate in Sweden is twice that of its neighbours and their nursing homes and elderly are disproportionally affected. They accepted scenarios like in Bergamo with elderly people having mild underlying conditions are left to die for lack of ventilators and care.

Like I said, dead is dead and that is easy enough to ascertain. Any other numbers are interpretative - I can tell you that home tests kits are being manufactured and will be rolled out in the summer. This should hopefully give a better impression of reality than the uncertain numbers we have to work with today.

Share this post


Link to post
Share on other sites
18 minutes ago, TrustyJules said:

Finding a vaccine

That's not even a guarantee that we are able to create a vaccine that works and is safe. I hope that we find one, but there is always the possibility that we are not able to find one that fast.

9 minutes ago, Kim said:

From my talks with some medical professionals, the estimate is that this will not be over till 30-50% of the population is infected. In US, that's 100 MILLION people. Taking a very conservative mortality rate of 0.5%, that's half million deaths in US only. Worldwide, it translates to over 2 BILLION infected and 10 MILLION deaths.

I'm not a medical professional nor an epidemiologist.

But a crude rule of thumb is that the herd immunity threshold is equal to (1 - 1 / R0), with R0 the basic reproductive number (depending on the virus and how people are behaving, on average 1 persons infects R0 other people). Keep in mind that R0 is behaving kind of 'exponentially', so going from a R0 of 1 to 2 has huge consequences.

Here is the table.

R0 of 12-18 is for measles (as a reference).

R0 depends on the virus itself but also how society and people behave (washing hands, density of population, masks, public transportation, etc).

Estimating that R0 is quite difficult from what i understand, and you can see the effect of the error of measure on the thredshold needed.

Maybe R0 is between 2 and 6 ? If that's the case, then you need between 50% and 83% of the population immune to the virus to break new infections.

image.png

 

Share this post


Link to post
Share on other sites
9 minutes ago, Djtux said:

 

Maybe R0 is between 2 and 6 ? If that's the case, then you need between 50% and 83% of the population immune to the virus to break new infections.

 

Yes. I was trying to be conservative, but many sources did mention 50-70%. Then the death numbers are even higher. And even if we take only 0.1% death rate, which is really conservative, we are talking about 4 million deaths worldwide.

P.S. And yes, not all models are reliable (most probably are not), but it's probably better than nothing. If you look at US, the initial death estimates were 37k if I remember correctly - they more than tripled in just couple months, while the country was on lockdown. Imagine where they will be when they start to re open?

Share this post


Link to post
Share on other sites
14 minutes ago, Djtux said:

That's not even a guarantee that we are able to create a vaccine that works and is safe. I hope that we find one, but there is always the possibility that we are not able to find one that fast.

Failure is possible but with the world's resources focussed on this problem and the fact that the virus is not in fact that extraordinary I am sure we will get there. In fact trial runs of vaccines are in the process of production and going through first safety testing. A client of mine who makes an essential ingredient for any RNA vaccine is for example churning the stuff out at unseen numbers at the moment. I'm half convinced that technically the problem is cracked, the problem is safety and testing.

Unlike a medicinal product which you give to a sick person, a vaccine is injected in a healthy person. So in the former case you might try something - after all if I am near death WTH - take the medicine and see what happens. From that a lot can be learned and introduction and safety more quickly established. For a vaccine this is totally different and you need a lot of time to get it 100% ascertained as safe. A client of mine has an HIV vaccine, he knows it works but has been working for 8 years to prove that and show safety. If it wasnt for COVID it might be on the market soon. For COVID they are likely to cut some corners but not all - presuming we have something in the lab which works (and I believe we do) then one year is the bare minimum we will require to prove safety, manufacture it (remember the numbers are huge) and distribute it. Personally Q1 2022 seems more realistic.

Whilst I am at it - dont forget manufacturability. Most common flu vaccines are produced in chicken eggs that need to be processed for 3 months before you have an actual vaccine. If you are developing a vaccine and need to adapt it then you could look at months delays during manufacturing. During the Ebola crisis Merck was the first with a vaccine but managed to produce only 100,000 doses in the first year. J&J with a different vaccine and more sophisticated manufacturing produced 1M doses in 3 months but this is still a way short of 1B vaccines we need for Covid

Edited by TrustyJules

Share this post


Link to post
Share on other sites
14 minutes ago, Kim said:

P.S. And yes, not all models are reliable (most probably are not), but it's probably better than nothing. If you look at US, the initial death estimates were 37k if I remember correctly - they more than tripled in just couple months, while the country was on lockdown. Imagine where they will be when they start to re open?

There is a canadian that did a website to track the earlier projections of the IHME model https://www.covid-projections.com/

It seems that the IHME model was good to 'time the peak' but bad to extrapolate the decrease of death.

You can see the projections from the end of april was not even matching the deaths per day.

image.png

Some references :

https://twitter.com/CT_Bergstrom/status/1250304069119275009?s=20

https://www.sportsnet.ca/hockey/nhl/hockey-analyst-helping-experts-fight-covid-19/

 

Share this post


Link to post
Share on other sites

There are at least 5 studies that suggest the actual fatality rate is much lower,  and even Public Health Director Barbara Ferrer  of LA County , who has been aggressive in her shutdown recommendations, said of one such  USC study that found through testing that 12-15% already had Covid 19.  Dr Ferrer said, "the study suggests that 0.1 percent to 0.2 percent of people infected by the virus will die, which would make COVID-19 only somewhat more deadly than the seasonal flu". That finding is consistent with the results of an earlier antibody study in Santa Clara County. "The mortality rate now has dropped a lot," Ferrer conceded.                                                                                                                                                                                                                                                                                                              And this is despite doctors  being pressured to blur codes when it comes to Covid-19. The corona virus relief legislation created a 20% premium, or add-on, for COVID-19 Medicare patients so we shouldn't be suprised. if someone who dies of COPD is then coded as Covid-19.  I know of at least 2 cases where the code was changed to Covid-19 when it may not have been as the patients were never tested for Covid,  despite test being available, this is within the guidelines. The CDC  guidelines, now say: "... it is acceptable to report COVID-19 on a death certificate as 'probable' or 'presumed.' "                         

Share this post


Link to post
Share on other sites
7 minutes ago, Topcat said:

There are at least 5 studies that suggest the actual fatality rate is much lower,  and even Public Health Director Barbara Ferrer  of LA County , who has been aggressive in her shutdown recommendations, said of one such  USC study that found through testing that 12-15% already had Covid 19.  Dr Ferrer said, "the study suggests that 0.1 percent to 0.2 percent of people infected by the virus will die, which would make COVID-19 only somewhat more deadly than the seasonal flu". That finding is consistent with the results of an earlier antibody study in Santa Clara County. "The mortality rate now has dropped a lot," Ferrer conceded.                                                                                                                                                                                                                                                                                                              And this is despite doctors  being pressured to blur codes when it comes to Covid-19. The corona virus relief legislation created a 20% premium, or add-on, for COVID-19 Medicare patients so we shouldn't be suprised. if someone who dies of COPD is then coded as Covid-19.  I know of at least 2 cases where the code was changed to Covid-19 when it may not have been as the patients were never tested for Covid,  despite test being available, this is within the guidelines. The CDC  guidelines, now say: "... it is acceptable to report COVID-19 on a death certificate as 'probable' or 'presumed.' "                         

Even if mortality numbers are not much higher than the flu (and this might be very true), the total number of cases and total number of deaths from any case is significantly higher than previous years. So I think we are already beyond the point when people can claim "it's just the flu". I was in the same camp at some point, but you cannot argue with numbers. 

Share this post


Link to post
Share on other sites
12 minutes ago, Topcat said:

                                                                                                                                                                                                                                                                                                            And this is despite doctors  being pressured to blur codes when it comes to Covid-19. The corona virus relief legislation created a 20% premium, or add-on, for COVID-19 Medicare patients so we shouldn't be suprised. if someone who dies of COPD is then coded as Covid-19.  I know of at least 2 cases where the code was changed to Covid-19 when it may not have been as the patients were never tested for Covid,  despite test being available, this is within the guidelines. The CDC  guidelines, now say: "... it is acceptable to report COVID-19 on a death certificate as 'probable' or 'presumed.' "                         

I've already addressed the CMS diagnostic related group payments in this thread.  This talking point is largely BS and propagated  (in my experience) by virus truthers that dont understand managed care reimbursement .

 

As a senior level employee of one of largest healthcare providers in world, I work with this stuff every day.

 

 

Share this post


Link to post
Share on other sites

I dont know what the right answer is around how widespread the virus is at this point (probably more so than we think due to testing restrictions) but that Santa Clara study got destroyed basically on all sides. Shoddy science

 

 

Share this post


Link to post
Share on other sites
2 hours ago, TrustyJules said:

Currently there are 325M Americans and the percentage of deaths by CORONA (if we take the extrapolation I made) is 0.05% - of course we are just at the start. The Spanish influenza lasted about 4 years in total so we may yet get to the 0.6% on the longer run before we have this thing under control. Extrapolating further we could say that the virus has been with us 3 months - if it were to last 4 years - then we need to expect a 16 fold increase (presuming its linear which it certainly is not) - this would get us to 0.8% deaths of the population or a staggering 2.6M deaths. The Spanish Influenza showed that lockdowns and social distancing works to curb the curve - if we dont hit the 2.6M number in the US you can say you did better than might be expected. Anything over would show a failure of leadership, anything substantially lower would show good leadership.

Wow. Even Neil Ferguson, Professor Lockdown himself, projected ONLY 2.2 million deaths in the US given no behavior adjustments whatsoever. Ferguson is not known to underestimate the severity of new infectious diseases. (That was an understatement on my part.) The number of cases and deaths from the coronavirus follows a Bell curve in each country and state, it's wrong to assume that the mortality would stay the same for the next 4 years. The 2.6 million number is so ridiculous that it doesn't seem to have any other purpose than absolving the policy makers and the panicked public from any responsibility in this crisis.

By the way, there were no stay-at-home orders during the Spanish flu pandemic in the US in 1918-19. While movie theaters were closed, other businesses remained open. Though some of them had to adjust opening hours. The lockdowns imposed on the world in 2020 are much more severe than in 1918. It limits what we can infer from the Spanish flu responses.

1 hour ago, TrustyJules said:

The much touted Swedish example claiming to arrive at 25% infected and recovered persons in Stockholm is based on nothing except a computer model that was fed with the data we know to be unreliable. On the other hand we have hard proof that the death rate in Sweden is twice that of its neighbours and their nursing homes and elderly are disproportionally affected. They accepted scenarios like in Bergamo with elderly people having mild underlying conditions are left to die for lack of ventilators and care.

As of today, Sweden has fewer deaths (per 1M pop.) than Belgium, Italy, Spain, UK, France, New York, New Jersey, Connecticut, Massachusetts, Louisiana, Michigan, Rhode Island. I live in one of those states and I'd rather have fewer deaths and less lockdown insanity. As for Sweden's neighbors, in Finland and Norway the BCG vaccine was used significantly longer than in Sweden.

 

Forgot to add that the protection of nursing homes is lacking everywhere. In my state 60% of deaths happen in long-term care facilities. Sweden, unfortunately, didn't do better in this area.

Edited by agsb

Share this post


Link to post
Share on other sites
7 minutes ago, agsb said:

The number of cases and deaths from the coronavirus follows a Bell curve in each country and state

That's not always the case. See for example https://twitter.com/CT_Bergstrom/status/1241551788454473728?s=20 (and the whole thread).

There are still many things that we don't know about the virus, i would not be so quick to jump to any conclusions.

image.png

 

Share this post


Link to post
Share on other sites
29 minutes ago, Kim said:

Even if mortality numbers are not much higher than the flu (and this might be very true), the total number of cases and total number of deaths from any case is significantly higher than previous years. So I think we are already beyond the point when people can claim "it's just the flu". I was in the same camp at some point, but you cannot argue with numbers. 

I've never said taken the position it is just the flu , what I and my coworkers in data analytics  have been saying for some time is that either the reported infection rate: the basic reproduction Number (R0) is wrong or the fatality rate is wrong, I believe it is the fatality rate , it is still  very serious I believe because of the  (R0) but many  addressing  Covid-19 are not using facts but just try emotional statements like "that's largely BS"  and rather than refute with numbers or  facts.  At best it is really poor data analytics and at worst well,  the most disturbing thing is that free speech or discussion isn't  even allowed to take place. 

Edited by Topcat
grammar

Share this post


Link to post
Share on other sites
6 minutes ago, Topcat said:

 but many  addressing  Covid-19 are not using facts but just try emotional statements like "that's largely BS"  and rather than refute with numbers or  facts.  At best it is really poor data analytics and at worst well,  the most disturbing thing is that free speech or discussion isn't  even allowed to take place. 

I'm the one who said the DRG payments talking point was largely BS and I already posted facts about how that works earlier in the thread.  I'm not going to take the time to repost again.

 

It's not an emotional statement.  The payment issue is misrepresented and it is bullshit to imply there is widespread fraud in reporting of COVID cases by hospitals.  I'm not saying you're making that claim but several others have on social media etc. 

 

 

 

Share this post


Link to post
Share on other sites
18 minutes ago, agsb said:

As of today, Sweden has fewer deaths (per 1M pop.) than Belgium, Italy, Spain, UK, France, New York, New Jersey, Connecticut, Massachusetts, Louisiana, Michigan, Rhode Island. I live in one of those states and I'd rather have fewer deaths and less lockdown insanity. As for Sweden's neighbors, in Finland and Norway the BCG vaccine was used significantly longer than in Sweden.

 

I don't know why people continue comparing Sweden to New York or Italy. Completely different density population and many other parameters.

Apples to apples comparison would be to Denmark (92 deaths per 1M), Finland (51), Norway (42), while Sweden has 343. 

Share this post


Link to post
Share on other sites

I think the problem with the statistics and models right now is that there is a HUGE margin of error in them - caused by incomplete/errorneous data going in.    The problem is this margin of error is not communicated when the models and stats are presented to the public.   Comparing stats from around the world is very inaccurate too, as many coutries are understating totals, while others are as accurate as they can be.   Many people wind up not believing the models because, not surpringly, they can be inaccurate.   Governments are forced to make life changes decisions against the competing medical and economic factors - not an easy decision, made even worse (in the US at least) by everything being highly politicized.

 

My "crystal ball"...

  • As more randon testing occurs we find that infection rate is much more widespread, so mortality rates are much lower (more in-line with flu).
  • But, unlike flu, the diseases spreads much more easily so many more people are impacted.
  • Wide disparity in mortality between younger/healthier people compared to older/co-morbidity people.
  • As more time passes with many people facing severe financial hardship, I think its inevitable that governments will be forced to open their economies as much as then can while trying to isolate and protect those with higher risks as much as possible.    Once we hit this phase is where we will be forced to see if the hospitals can keep up with the volume.

Share this post


Link to post
Share on other sites

 

I appreciate your POV and I realize you are very sensitive to this issue since you work for a large heath care provider and probably have pride in that, BTW my wife is a health care professional who started with the American Heart Association over 30 years ago .

 So know  I did not mean to impugn you or your/her profession and yet you must know  that even prior to Covid-19 , $2.6 billion was recovered from fraudulent claims in the U.S,  just the facts.   I can’t say how much is going on now, I just know from two cases my wife told me  that she heard a doctor say, "let’s just put it down as Covid-19".  If you don’t think a 20% increase  (or think 20% increase in stock dividend) when you can do it based on probable then we just have to agree to disagree on the nature of human nature.  

 

Share this post


Link to post
Share on other sites
27 minutes ago, Kim said:

I don't know why people continue comparing Sweden to New York or Italy. Completely different density population and many other parameters.

Apples to apples comparison would be to Denmark (92 deaths per 1M), Finland (51), Norway (42), while Sweden has 343. 

Much closer countries. Ukraine--early lockdowns, Russia--late lockdowns, Belarus--no lockdowns.RU BY UK.jpg

Share this post


Link to post
Share on other sites
47 minutes ago, agsb said:

Wow. Even Neil Ferguson, Professor Lockdown himself, projected ONLY 2.2 million deaths in the US given no behavior adjustments whatsoever. Ferguson is not known to underestimate the severity of new infectious diseases. (That was an understatement on my part.) The number of cases and deaths from the coronavirus follows a Bell curve in each country and state, it's wrong to assume that the mortality would stay the same for the next 4 years. The 2.6 million number is so ridiculous that it doesn't seem to have any other purpose than absolving the policy makers and the panicked public from any responsibility in this crisis.

By the way, there were no stay-at-home orders during the Spanish flu pandemic in the US in 1918-19. While movie theaters were closed, other businesses remained open. Though some of them had to adjust opening hours. The lockdowns imposed on the world in 2020 are much more severe than in 1918. It limits what we can infer from the Spanish flu responses.

As of today, Sweden has fewer deaths (per 1M pop.) than Belgium, Italy, Spain, UK, France, New York, New Jersey, Connecticut, Massachusetts, Louisiana, Michigan, Rhode Island. I live in one of those states and I'd rather have fewer deaths and less lockdown insanity. As for Sweden's neighbors, in Finland and Norway the BCG vaccine was used significantly longer than in Sweden.

 

Forgot to add that the protection of nursing homes is lacking everywhere. In my state 60% of deaths happen in long-term care facilities. Sweden, unfortunately, didn't do better in this area.

You might want to review your knowledge of the reactions in 1918-1922 pandemic. I posted a great article earlier about it. Lockdowns occured and where they did incidence was less severe e.g Seattle.  Where they did not result was the worst e.g. Philadelphia.

 

Sweden cannot be compared to the countries you mentioned  the population density is far greater. Norway can and it does much better than Sweden. Denmark less comparable but the same as Norway.  Finland also comparable and again twice as good as Sweden.

 

As for the deaths after four years. I posted in my note that this was a linear extrapolation and it wouldn't be linear but it's a good bad case baseline. Let's talk in 4 years and see how far off I was for Ferguson's claims please he didn't even know enough to lockdown himself.

Share this post


Link to post
Share on other sites
5 minutes ago, TrustyJules said:

You might want to review your knowledge of the reactions in 1918-1922 pandemic. I posted a great article earlier about it. Lockdowns occured and where they did incidence was less severe e.g Seattle.  Where they did not result was the worst e.g. Philadelphia.

From your article:

Quote

 

Seattle offers a very different story. On 20 September, the city’s commissioner of health, Dr JS McBride, acknowledged that “it was not unlikely” that influenza would reach the city and warned the citizenry that, if it did, isolating cases would be necessary. When soldiers at nearby Camp Lewis came down with the flu, the camp was quarantined. On 4 October, the story broke that large numbers of students at the naval training station at the University of Washington had contracted influenza. Within two days the city had, despite significant opposition, closed schools, prohibited church services and shuttered many public entertainments. Crowding was prohibited in those businesses still operating.

In the days to come, other measures followed. A local hotel was requisitioned for use as an emergency hospital. Spitting in public could mean a jail cell and public shaming, the wearing of masks was required in public, business hours were shortened and further limitations were placed on those allowed to remain open. Though he had initially hoped the pandemic would pass in less than a week, the health commissioner maintained the restrictions, even as the number of cases began to decrease. Finally, on 11 November, both the city and state announced an end to closures and masking. Not uncommonly, the city soon faced a return of the disease. Again the city acted, this time quarantining the sick. As a result of these actions, Seattle suffered one of the lower death rates on the West Coast, substantially lower than Philadelphia’s.

 

I cannot find here orders to stay at home for the general population. Nor can I find evidence of widespread closures of many businesses.

Share this post


Link to post
Share on other sites
1 hour ago, agsb said:

The number of cases and deaths from the coronavirus follows a Bell curve in each country and state

This is not correct.  A bell curve generally means that each observation is independent of others and that mean=mode=median etc.  The spread of a virus never follows a bell curve.  A distribution with one peak is not necessarily a bell curve.  For example, a cauchy distribution can look like a bell curve but has no mean and is dominated by the tails.

 

Share this post


Link to post
Share on other sites

Rapper Listen , I'm not trying to get you upset and I'm open to your POV  and seeing data and any fact based posts you have . The only post of yours that I saw see in regard to CMS and DRG rates is below in regard to policy procedure. Are there others?   On the mortality rate I first had a messages from Mark Cuban (we have communicated over the years) who  questioned the shift in normal pneumonia deaths and BTW given the CDC guidelines that wouldn't be consider fraud -just misleading baseline data . Wan't advocating anything and takes Covid-19 very serious.-but asking good data questions.  Per CDC, about 8,000 people die every day  on average from all causes in the US, normally .161 from regular flu weekly so yes there is an increase in Covid -19 vs flu-no doubt . I haven't tallied the total US fatality numbers (source CDc) since April-see below (and of course NYs looked different) so fatalities must be up but at that time they were not actually exceeding YAG  total  fatalities -and even if they don't exceed it does not mean Covid-19 isn't serious and while the lagging increase in suicide (.9% for every 1% in unemployment per data  the National Bureau of Economic Research and the medical journal Lancet.)  is not getting much credence now , it will only increase the fatality . My answer to Mark is it is conceivable that regular flu deaths and regular pneumonia and  regular COPD  etc deaths are down due to shut down but data  as Ywoster points out is very poor..

image.png

Your post: There’s no flat reimbursement for covid19 treatment.

For  patients utilizing Medicare, CMS groups Covid-19 with other respiratory illness and part of the reimbursement is calculated using what’s called DRG rates which are rates specific to a diagnosis.     There will be a delta between various DRG and final reimbursement will depend on the specifics of treatment and what procedures were performed.

 

commerial insurance would be unaffected in most cases by CMS guidelines.  Approximately 70% of the population utilizes commercial insurance.  Obviously the folks that don’t but have coverage ( Medicaid or Medicare) would likely be disproportionately represented on the high side among covid patients ( elderly are typically experiencing most severe cases). 

 

again, even if we want to argue deaths are being fraudulently calculated (no evidence), we would have to reconcile that belief with the fact that all cause mortality is up significantly in the US since the outbreak started and is up massively in certain other countries.   

 

Edited by Topcat
grammar

Share this post


Link to post
Share on other sites
1 hour ago, Topcat said:

 

I appreciate your POV and I realize you are very sensitive to this issue since you work for a large heath care provider and probably have pride in that, BTW my wife is a health care professional who started with the American Heart Association over 30 years ago .

 So know  I did not mean to impugn you or your/her profession and yet you must know  that even prior to Covid-19 , $2.6 billion was recovered from fraudulent claims in the U.S,  just the facts.   I can’t say how much is going on now, I just know from two cases my wife told me  that she heard a doctor say, "let’s just put it down as Covid-19".  If you don’t think a 20% increase  (or think 20% increase in stock dividend) when you can do it based on probable then we just have to agree to disagree on the nature of human nature.  

 

I would disagree that I'm sensitive to anything because I work in the industry.  There is a lot of stuff that healthcare orgs do that i think is ass backwards from an operational perspective.   I think the implication that healthcare providers are committing widespread fraud is unfounded. 

 

CMS reimburses based on what they refer to as diagnsotic related groups.  Final reimbursement will depend on what interventions are employed during someone's stay and this will vary, even from one covid patient to the next.  There is a delta between various DRG.  If doctors as a  whole were prone to being dishonest when it comes to diagnosis, they don't need a pandemic to line the pockets of the hospital.  They can do this now by choosing a DRG that differs from the actual primary diagnosis.  If one has ever interacted with CMS, one would know how unwise this is to do.  That's the only reason I brought up my personal experience. 

 

 

But aside from being unwise, I  dont believe that as a whole this group is  driven by dishonesty (obviously there will be exceptions).  Nor do i think individual doctors care how much the hospital makes in most cases

Share this post


Link to post
Share on other sites
41 minutes ago, Topcat said:

Listen, I'm not trying to get you upset and I'm open to your POV  and seeing data and any fact based posts you have . The only post of yours that I saw see in regard to CMS and DRG rates is below in regard to policy procedure. Are there others? 

Im not upset.  I was only replying to the billing point you made.   I haven't read your other posts so not sure if we disagree or not.  I'll check em out now.

 

 

Share this post


Link to post
Share on other sites
6 hours ago, TrustyJules said:

In the Netherlands the amount of deaths per week rose by 50% above the normal annual weekly average. I think this number is the most reliable indicator of Corona deaths because it is the only extraneous factor that could cause such a jump. In fact due to lockdown the number of deaths should drop a little as there is less risk to get - say - run over whilst in confinement. The officially reported corona deaths are 50% of these extra deaths - rounding the numbers it looks like this

- Normal average deaths per week 2600 (this average varies per week and is influenced by seasons - however the relation below has been in existence for the past 2 months more or less)

- current deaths per week 3600

- deaths officially attributed to CORONA 580

If we take that as a reasonable extrapolation then the current amount deaths in the US would be 160,000 or so. This is a lot but compared to Spanish influenza its still very modest. That killed overall 675,000 Americans on a population of ca. 100M. which is 0.6%

Currently there are 325M Americans and the percentage of deaths by CORONA (if we take the extrapolation I made) is 0.05% - of course we are just at the start. The Spanish influenza lasted about 4 years in total so we may yet get to the 0.6% on the longer run before we have this thing under control. Extrapolating further we could say that the virus has been with us 3 months - if it were to last 4 years - then we need to expect a 16 fold increase (presuming its linear which it certainly is not) - this would get us to 0.8% deaths of the population or a staggering 2.6M deaths. The Spanish Influenza showed that lockdowns and social distancing works to curb the curve - if we dont hit the 2.6M number in the US you can say you did better than might be expected. Anything over would show a failure of leadership, anything substantially lower would show good leadership.

The numbers really are quite similar to the previous epidemic and the reactions and pitfalls remain the same. Finding a vaccine and producing it in sufficient numbers (I understand from my clients in that sector that 1B vaccines are needed world-wide) is key to breaking this chain. In the mean time we can only mitigate the process by acting responsibly.

some additional evidence re true death counts:https://www.economist.com/graphic-detail/2020/04/16/tracking-covid-19-excess-deaths-across-countries

Share this post


Link to post
Share on other sites

This is more micro than total market but I just heard from someone in the Stronach Group ( they own Santa Anita racetrack, Gulfstream etc), that Santa Anita Racetrack has been given clearance to open this Friday 5/15.  What makes this newsworthy is Santa Anita racetrack is in Los Angeles County. Los Angeles County's  Dr Ferrer  made national news yesterday when she  said yesterday that Stay-at-home order will likely remain in place for next 3 months,  https://abc7news.com/la-county-coronavirus-update-stay-at-home-order-date-shutdown-quarantine-extension/6176163/  So go figure.

idk if there is a stock/market play here. I had shorted CDHN Churchill Downs back when it was at 160, cashed profit at 120 (now at 98)   I picked up DKNG, Draft Kings when it formed a cup at about 16, now 25.8 and know from discussion with executives that there is a pent up sports/gambling demand out there. UFC's Dana White is pulling it off with repeated testing of everyone. He said he as already been tested 3x and will continue to be tested. He has a relatively small stable of athletes compared to football, basketball etc.  As much as I am for a more fact based nuanced approach  to  Covid-19 I just don't see how  these sports or in person casino type gambling works now.  Horse racing as many know allows online betting and the majority of their handle (race track term for betting $s) comes from online so they may have some opportunity but do your own fact based research. 

 

 

Share this post


Link to post
Share on other sites

 

I still have a fair number of individual shorts open, thinking about a lot of what has been mentioned in this thread.  Most were opened after the big leg down and when things had "stabilized" a bit.

 

Best performing so far:  SPG

 

Worst performing:  GRUB (ouch!...but not much downside left on this position so keeping these contracts in place).

 

 

Share this post


Link to post
Share on other sites

ykotowitz thank you for well thought out reference to The Economist. I've subscribed off and on since 1986 and even had few small contributions in The Economist  so I will take another look at the article you highlighted. tku

Edited by Topcat
grammar

Share this post


Link to post
Share on other sites

Nick, I think you can safely assume that almost everyone on this board had investments in stocks, commodities or real estate and they have all been impacted by the shutdown. i hope you can recover soon. Best

Share this post


Link to post
Share on other sites

I am surprised the "relief rally" has lasted this long and taken the S&P 500 as high as it currently is. One would think it cannot sustain this for very much longer. Feels like a "house of cards" adding too many floors while the Covid-19 virus is chewing away at the foundation. Look out below.

Share this post


Link to post
Share on other sites

Now specifically related to COVID but does anyone have any hunches on what is with the market this week? After weeks of reliable up and down its as if a committee decided that the correct number is 3100 (but VIX needs to stay stable as well despite the lack of realised volatility).

I read about there being a near record expiry of SPX options expiring tomorrow...is that just filler news or is it likely to be causing some serious pinning of the market?

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.