Coronavirus- Risk (Health, Economic, Market)

[Tim]

Yeah people seemed to forget about that one.

Do they make IPhones there? Follow the money.

[hightower]

There is an ongoing Ebola outbreak in a poor populous war zone. That's the one that weighs on my mind.

I’m not downplaying the horrible things those poor people must be going through, but the reason no one is talking about them is because people there don’t get on airplanes and land in LAX or JFK every day.

[Jaqen Haghar MD]

The market is also short to moderate term overbought. It was looking for a reason to release steam. Any reason would do. So now we release some pressure.

Hopefully, it’s just a flu-like illness that produces a lot of mild cases, and some deaths.

But who knows, maybe in the end Brad Pitt will have to helicopter in and singlehandedly save everyone who isn’t bleeding from their eyeballs and feasting on their neighbor’s bloated carcass.

[Tim]

The amazing thing is I am beginning to hear politically correct solutions or positions. Geez. Give it up please.
Brad Pitt? At least the movie ends. Politics never ends.

[BCBiker]

There is a nejm paper just out describing disease course of 35 yo previously healthy individual with confirmed novel virus infection. It seems similar to the relatively bad cold I had in December. My impression (and like most/all here I’m not an expert) is that this virus is very contagious because it is mild and symptoms are very subtle early in disease course. The death rate to confirmed cases is high. But the confirmed/actual is probably <1% which means the death rate is <<<1%.

I agree with the NNTaleb concern about tail risk and what the health officials are doing is appropriate. However, I don’t think we (people in American cities with < 3 cases with access to excellent critical care) should be up at night worrying about this even for financial reasons. I dislike deeply how the news hypes everyone into frenzies. Like 99.99% of it, this should be acknowledged and quickly ignored by almost everyone.

[BCBiker]

https://www.nejm.org/doi/full/10.1056/NEJMoa2001191

I think we can all agree that most people crossing the street have a risk of death orders of magnitude greater than this patient in an American care context. Maybe this is mild case as this is clearly not scientific, but this supports the hypothesis that this will be short lived. Again I think the governments should freak out and contain but we should be calm.

[Tim]

The problem is the proper healthcare seems to require extensive containment. China seems to require a virtual blockade for containment and to halt the spread. That may be prudent healthcare wise. Contain and treat.
It does have a significant disruption factor intentionally, to disrupt the spread, but it also disrupts the economies not only of China, but of others.
It will be contained, but at an economic price.
Good medicine come with a price. Better sooner than later.

[Zaphod]

Hmm...somewhat surprised about the overall blase attitude towards this. Though much is unconfirmed, this has very bad potential, and I dont mean biblical pandemic but rather its mild enough, a long enough incubation period, asymptomatic shedding, possible post infection spreading, etc...that the ability to contain it will prove difficult and may be late for many countries, some of which do not have high quality healthcare.

The longer term concern is adding this potentially very infectious (all estimates are at least double the flu) and potentially deadly (as usual to susceptible populations) new flu to the normal repertoire of things we deal with, hopefully a vaccine can ameliorate this.

You can add on top of this obvious attempted coverup in china and happening during the worst possible time in any part of the year from the worst possible location ever. Chinese new year is the largest migration of humans and wuhan is smack dab in the center of chinas mass transit system.

Short to intermediate term effects are shutting down of chinas economy, which is 17% of the worlds, and reductions in demand and the usual market reaction/concern to that. Longer term maybe an excellent time to rebalance your portfolio or buy the dip.

[Hatton]

2 things are interesting to me today. The population of Wuhan is 11 million and I had never heard of it prior to this outbreak. It is bigger than NYC.
Also the WSJ has an article today about a plague of desert locusts that is larger than Manhattan flying around the horn of Africa. Ethiopia does not have the resources to combat this. Here comes a terrible famine.

[BCBiker]

Hmm...somewhat surprised about the overall blase attitude towards this. Though much is unconfirmed, this has very bad potential, and I dont mean biblical pandemic but rather its mild enough, a long enough incubation period, asymptomatic shedding, possible post infection spreading, etc...that the ability to contain it will prove difficult and may be late for many countries, some of which do not have high quality healthcare.

The longer term concern is adding this potentially very infectious (all estimates are at least double the flu) and potentially deadly (as usual to susceptible populations) new flu to the normal repertoire of things we deal with, hopefully a vaccine can ameliorate this.

You can add on top of this obvious attempted coverup in china and happening during the worst possible time in any part of the year from the worst possible location ever. Chinese new year is the largest migration of humans and wuhan is smack dab in the center of chinas mass transit system.

Short to intermediate term effects are shutting down of chinas economy, which is 17% of the worlds, and reductions in demand and the usual market reaction/concern to that. Longer term maybe an excellent time to rebalance your portfolio or buy the dip.

Maybe this is a good dress rehearsal for something more serious. The unlikely scenario of the a SARS-related-virus showing up in Wuhan during Chinese New Year is really the only reason this has legs at all.

Aside from the relatively low risk virus from what we know, there is great alignment of interest. China has every incentive in the world to contain it. China also has a highly capable government. I personally have high confidence that they will do what is necessary.

Call me blase but I think anyone that modifies equity positions on this news alone will probably regret it and everyone else will forget about this entirely within a few months..

[BCBiker]

2 things are interesting to me today. The population of Wuhan is 11 million and I had never heard of it prior to this outbreak. It is bigger than NYC.
Also the WSJ has an article today about a plague of desert locusts that is larger than Manhattan flying around the horn of Africa. Ethiopia does not have the resources to combat this. Here comes a terrible famine.

Maybe on St. Patrick's day, they will mistakenly dump red ink into Chicago River and then we wait for the next one.

[Zaphod]

Maybe this is a good dress rehearsal for something more serious. The unlikely scenario of the a SARS-related-virus showing up in Wuhan during Chinese New Year is really the only reason this has legs at all.

Aside from the relatively low risk virus from what we know, there is great alignment of interest. China has every incentive in the world to contain it. China also has a highly capable government. I personally have high confidence that they will do what is necessary.

Call me blase but I think anyone that modifies equity positions on this news alone will probably regret it and everyone else will forget about this entirely within a few months..

Its improper to classify it as low risk without more data. Concerning at the very least. This is much more of a risk than Ebola, which is hard to catch and very lethal, which makes for poor transmissibility.

The last thing the chinese government should be called is highly capable. This is the opposite of what they do, and likely is worse than would have occurred in a more transparent country, ie, they wouldnt have arrested people for bringing attention to a possible new illness, which is what they did.

To your last point of course, but that allows others to get a discount.

[Tim]

For one little insignificant virus, it is raising a big commotion.
Healthcare
Economic
Market
If it’s so insignificant, why so much action? This “thing” came to our attention less than a week ago. The rumblings aren’t trivial and the potential for serious damage is there. And the potential of a swift and easy pass into only a memory is highly probable.

A little common enemy has united the world to defeat this “thing”. No politics, no tariffs, no debates, no propaganda. The Coronavirus must be defeated! Yeah, the world is saved! All in one week. Amazing human behavior.

[BCBiker]

Its improper to classify it as low risk without more data. Concerning at the very least. This is much more of a risk than Ebola, which is hard to catch and very lethal, which makes for poor transmissibility.

The last thing the chinese government should be called is highly capable. This is the opposite of what they do, and likely is worse than would have occurred in a more transparent country, ie, they wouldnt have arrested people for bringing attention to a possible new illness, which is what they did.

To your last point of course, but that allows others to get a discount.

This is a good graphic from NYTimes. Assuming the range is 95% CI, I will give you concerning but not much more than that. The graphic should have a third dimension of how likely a contagious person is to be asymptomatic with HIV being the upper bound and Ebola being the lower bound. Ebola is similarly contagious to flu and other coronaviruses. It is just unlikely that you 1) have Ebola and 2) don't know it. There is a small chance that I shared a subway car with a coronavirus infected person at the peak of this outbreak but a 0% chance that happened when great Ebola scare was in full force.

It seems to me that the current coronavirus is harder to contain because people feel and look fine which probably means the death rate is on the lower side in line with seasonal influenza. The upper bound of deadliness is based on the 250 deaths compared to 12000 confirmed cases and I think we have plenty of evidence that the confirmation rate of all infected is less than 100%. Also the death rate in Western countries is currently in line with the common cold, currently zero and will probably remain that way.

[Zaphod]

This is a good graphic from NYTimes. Assuming the range is 95% CI, I will give you concerning but not much more than that. The graphic should have a third dimension of how likely a contagious person is to be asymptomatic with HIV being the upper bound and Ebola being the lower bound. Ebola is similarly contagious to flu and other coronaviruses. It is just unlikely that you 1) have Ebola and 2) don't know it. There is a small chance that I shared a subway car with a coronavirus infected person at the peak of this outbreak but a 0% chance that happened when great Ebola scare was in full force.

It seems to me that the current coronavirus is harder to contain because people feel and look fine which probably means the death rate is on the lower side in line with seasonal influenza. The upper bound of deadliness is based on the 250 deaths compared to 12000 confirmed cases and I think we have plenty of evidence that the confirmation rate of all infected is less than 100%. Also the death rate in Western countries is currently in line with the common cold, currently zero and will probably remain that way.

Given incubation period, illness, and death period...you cant divide current deaths by current cases as that doesnt account for the lag. They are guesstimating that only 20% have serious enough symptoms to come to the hospital, in some papers 11% of those pts died. Everything will be different in better health care systems.

The relatively mild part is exactly the problem. The r0 has seemed to fall into the 2.2-2.5 averages, which while it sounds flu-ish level its extremely different, and after a few days can result in a dramatically larger population of infected people. Even with low death rates, and I agree will be much lower in US, etc...it increases the chance it spreads to a vulnerable population, which this seems to be mostly getting.

Unsure how difficult coronavirus is from a shifty standpoint, but its got to be easier than the flu, have to think theyll get some kind of vaccine if it lingers.