Saturday, March 28, 2020

March 28th Links

  • Some guys at Oxford suggest that that A. a huge fraction, maybe 50%,. of the pop in England have already had it (and are thus immune), and B. that the fraction of those infected that get seriously ill is much smaller than it looks. If both things were true, the death rate numbers might work out, they say. If that were the case, you would think that any set of tests would show a big fraction people with the virus – which is not the case, even though the samples we've tested are high-biased. But, some say, maybe those hypothetically numerous already-infected people have already cleared the virus and thus don't test positive for it. But that can't be right either, since for a fast-growing epidemic (which this clearly is, from the rapid increase in deaths), the majority of all cases are very new – less than two weeks old! So that is obviously untrue as well. [West Hunter]
  • Both bailouts and subsidies are forms of government-granted privilege extended to a few politically connected firms or industries. Both also have some significant costs, many of which are hidden. When the federal government bails out an industry, it shifts resources away from nonsubsidized industries to the subsidized one. Because politics drives the bailout decision, this shifting of resources is done largely independently of the merit of the industry or of its claims of special distress. If it were not for the government action, the resources used in bailouts would be directed naturally by the market to other, more productive uses. So while it is easy to see the companies and the jobs that are today saved by bailing out the airlines, we don't know what goods and services are thereby notproduced and consumed because of the bailout, what non-airline companies don't survive because of the bailout, and what jobs aren't created and sustained in nonsubsidized industries. The history of bailouts also suggests that they prop up weak firms long enough to make their dysfunctions worse, thus requiring further intervention in the long run. [Mercatus]
  • "Not many people are coming to eat," said the server at Yiqingyuan Lanzhou Beef Noodles on a recent visit. "Even delivery isn't doing too well. People are too worried." Getting any customers to confidently eat restaurant food again remains one of the industry's biggest obstacles. Diners are spooked. In response, many delivery orders now often include cards listing the names and temperatures of all the staff involved in preparing your food. Others, like the dim sum chain Jin Ding Xuan, send notes detailing the restaurant's disinfection procedures. On the delivery app Meituan, the cartoon delivery man used to track the progress of your order now covers his face with a mask. Continued social distancing measures are meant to allay fears, too. The popular bubble tea chain Heytea is famous for its long lines, but today customers scan a QR code on the door that launches an illustrated guide to the shop's safety procedures. From there, customers can order drinks and get notified when they can return to pick them up at the doorway. Closer to Beijing’s old alleyways, the staff at Gulou Mantou Shop now sends its steamed buns down a small slide rather than hand them to customers, and asks customers to use mobile payments only. [Eater]
  • Everyone who is infected in South Korea goes into isolation in government shelters, and phones and credit card data are used to trace their prior movements and find their contacts. Where they walked before they fell ill is broadcast to the cellphones of everyone who was nearby. Anyone even potentially exposed is quarantined at home; a GPS app tells the police if that person goes outside. [NY Times]
  • In the 1960s, in "A Modest Proposal," I suggested that companies should be required to pay out 100% of their net income as cash dividends. If companies needed money to reinvest in their operations, then they would have to get investors to buy new offerings of stock. Investors would do that only if they were happy both with the dividends they'd received and the future prospects of the company. Markets as a whole know more than any individual or group of individuals. So the best way to allocate capital is to let the market do it, rather than the management of each company. The reinvestment of profits has to be submitted to the test of the marketplace if you want it to be done right. [Bernstein]
  • While I strongly believe that the true fatality rate of SARS-CoV-2 is many times the rate for influenza, I don't believe that 4.5% is the actual number because there are clearly lots of cases that are unreported, and many are likely to be "sub-clinical," meaning that they may not show symptoms. The problem is that regardless of whether you've got a high fatality rate and a smaller number of cases, or a small fatality rate with a larger number of cases, the number of fatalities is exactly the same. Emphatically, the "ascertainment rate" (reported cases/true cases) cancels out in that calculation. So while reported cases depend on ascertainment, fatalities are "sufficient statistics" in themselves. Indeed, my impression is that the CFR has been trending higher precisely because reported cases are increasingly lagging actual cases. That's good in the sense that the true fatality rate is probably much lower than the observed CFR, but it's bad in the sense that true cases are probably growing much faster than we think. In any case, to dismiss the growing number of fatalities based on the idea of "unreported cases" is to lack an understanding of this arithmetic. [Hussman]
  • To do a walk or shop I have to plan my exits and entrances accordingly and suit up. My KungFlu costume has evolved and it is currently made of one plague resistant glove on my right hand, one disinfectant soaked washcloth in a ziplock plastic bag in the left jacket pocket to disinfect my ungloved hand should I touch anything of "dubious" provenance (every day more dubious items appear and the two glove days are coming soon.). Then I spray a folded paper towel with disinfectant to slide down the handrail on the stairs I share with my still unknown upstairs neighbor (Here nine months and haven't seen her once.). I place folding money and a debit card (after disinfecting) in my front pocket so I don't have to fiddle with the wallet. Then, over all that, I put on the full armor of God and go outside to pretend to shop but really to monitor my town and how it is evolving in the face of the present insanity. I get into the car (please no repair requirements just now thank you ) where I have another bottle of Windex Gold Special Disinfectant spray to disinfect as I go. It works well and has no ammonia so I can spray liberally about the interior. In doing so I decide that "Windex Gold" is going to be my new aftershave. (Not bad. Sort of lemony with a hint of plague-freaked geezer.) [American Digest]
  • One way this should affect us Westerners is by making us worried that an Asian-style containment strategy wouldn't work here. The evidence in favor of such a strategy is that it worked in a bunch of Asian countries like South Korea, Taiwan, Hong Kong, and Singapore. But if there's something about wealthy orderly mask-wearing Asian societies that makes them mysteriously immune to the pandemic, maybe their containment strategies aren't really that impressive. Maybe they just needed a little bit of containment to tip them over the edge. I don't know, things sure seemed bad in South Korea a few weeks ago (and in Wuhan). I am so boggled by this that I don't know what to think. [SSC]

1 comment:

eahilf said...

US Public Pension Funds Have Lost $1 TRILLION In Recent Weeks

Double-digit pension investment losses for 2020

Pension liabilities soar as interest rates fall