That's a stupid question

I've been watching too much news lately. Maybe this pet peeve blog is the result of too much cabin fever - but here goes.   

I'm tired of guests being interviewed answering a reporter's question with:  "That's a real good question"; or "That's an important question"; "Thanks for asking that question; or various derivatives.  

Let me first say that we were taught in school, There is no dumb question or always ask when you don't understand.  So when a person say's that's a real good question, would they be telling the truth if your question was not a good question?  Or if they don't respond measuring the quality of your question, are they by default considering your question dumb?

Maybe they are just "buying time" to think about their response.  Maybe they are just over aggrandizing you with platitudes.  Maybe it's just an irritating habit similar to saying ugh, and ah during speaking to fill silence. Maybe it is just a walkie, talkie version of acknowledging hearing - "Over".

Colin Powell said "There are no such thing as a stupid question, only stupid answers"

I would add - a likely stupid answer begins with -  "I'm so glad you asked that question, it is so..... important".

What Day is it?

No wonder prisoner's and castaways need a system of tracking days.  Even though this is Sunday, the routines are all off.  It will take discipline to keep the daily and weekend schedule.  Today was totally a family day -  working in the yard, flying kites, and watching movies together. 

Such a windy day and and variable enough to challenge the best kite flyers.  Yes - we lost one temporarily - still awaiting gravity.

This evening I decided to line the Badminton court early.  It is always and ordeal to find the holes for the net since I always forget to put the tin can over the top of them each winter.  Now the lockdown at the house will provide extra sports available for family play.  I know the New York Governor recommended no contact sports -  I put badminton in that category :)

It was a great day to put the crisis out of memory -  but what day is it?

  

Truth and Consequences

Truth will reveal itself over time.  Consequently arguments are really about time - should we wait or not in our decisions today.  Probability adds into that equation and expected values.  And so the argument continues about COVID-19 and the decisions that are being made - individually, community, nationally and globally.

Questions about the utility of life and what measures we take to save lives we constantly be argued.  Close to 75% of all deaths in the USA are the result of 10 causes (top three are 50%) -  Heart Disease, Cancer, Chronic Lower Respiratory Disease, Accidents, Stroke, Alzheimer's, Diabetes,Influenza and Pneumonia, Kidney, and Suicide.

So add three of them up - Respiratory (147K), Influenza (55K) and Suicide (43K) -  245K deaths.  Now put the cost of a life into this equation - let's assume $10 million (Value of Life) per life.  So we lose $2.45 Billion a year in lives for these three conditions.  This is likely overstated since the value of one's life varies over time and the older you are the less future earned income you can produce.  But save that thought for a different blog entry.

Let's switch to USA GDP - $21.73 Trillion and growing at 2-3%.  So here is the question -   What reduction of the GDP growth rate would you accept to save 500K lives?

If GDP growth slowed to zero in 2020 (say down 2.4% -see  Coronavirus could cost the Global Economy $2.7 Trillion. Here's How) the that would be a cost of $522 Billion.  Would you accept a $522 Billion economic opportunity loss to save 500K lives?

Bloomberg  3/6/2020  Coronavirus Could Cost the Global Economy $2.7 Trillion

Back to the equation of $10 million a life -  $5 Billion for 500K lives.  Here is where the logic breaks down - let the 500K die to save the economy.  It's 10 times the return on life.

Looking at it a different way - "At least $26 Trillion in global market capitalization has been lost since February"  (Goodbye, Dow 30,000! Hello Dow 10,000?). Obviously this drop is not entirely due to COVID-19 - but assume 50% was - $13Trillion.  What would if have been worth to prevent COVID-19 from entering the USA back in February?  What would it be worth to stop COVID-19 from spreading, get back to work, and put calm back into the Stock Market?

As you can tell - I have no answers, only questions.   Our governmental officials must wrestle with these questions but ultimately they must "bet" on time - act now or wait and see.  Different states are being allowed to make their own bets.  The Federal Government provides oversight and can "Trump" their decisions.  When is the right time for that?

Truth will be known this time next year and the historic bloggers that were right will point out their prowess.  Those that we wrong will justify their logic and decision "at that time".

Everyone will claim the Truth - yet no one knows the Truth.

Boston Legal #18

Physical distancing has always been a challenge for regular Boston Legal gatherings  (two of the participants were in Florida). But with the aid of Zoom Video Conferencing, KC, JP and I met this evening to reflect on the crisis and speculate on what the future may bring.

Of course I had to show off my new green screen virtual background skills recently acquired.  Posing as Captain Kirk in the Star Fleet Enterprise was a hoot.

A wonderful distraction during a very serious crisis.  It shows the importance of letting social connections continue despite the physical restrictions. 

No food, no movie this time.  Just good conversation and virtual drinks.

Technology Comfort Food

Sequestered at home, I found a diversion that will help the social separation and tickled my technology and investment passions - Zoom Video Conferencing.  All this brings back the memories when Mom and Dad would spend time with me in the late 90's testing and experimenting with voice over internet communication - first audio and later video.

The ZM stock has Zoomed beginning in January from $68 to $165 recently due to the press and sudden need for distant communication and education.  While there are other alternatives, Zoom has benefited from its own viral explosion that started just nine days ago ($103 per share).

My first introduction to Zoom was Friday Morning Bible Study with 22 guys conferencing in the study of Deuteronomy.  Given a wide range of technology capable men, this was a great testimonial of the simplicity of the tool.

Last night, I put together an extemporaneous meeting with A.M., Ellen, Paul and myself so that I could determine whether to use it for my meetings coming up next week.  There were no real technology glitches,  and the effort to coordinate as the host was simple and intuitive. 

Tonight, I began playing with the virtual background feature.  It took Paul and a some amount of time positioning the light to get a decent picture.  I can see the challenge of lighting for portraits for photography and special effects. 

Tomorrow I'll show off at our normal monthly Vistage meeting which will now be virtual via Zoom.  However the lighting will be significantly different with sunlight streaming through the window - yet another test.

I can see why the stock is vaulting up -  I was so impressed, I immediately signed up for a year subscription $160 including tax.  And believing I needed a green screen to enhance the virtual background, I popped on to Amazon to buy that too.

Technology Gadget toys are my weakness.   But like some who are using food and other "comfort" coping mechanisms - I am not immune either.   

  

Coronvirus Lockdown Remorse

To reopen or not to reopen - that is the media question of the day.

Already doubt is setting into the minds of those taking swift lockdown measures.   It's like "Coronavirus lockdown remorse" - as cabin fever sets in and economic malaise appears on retirement savings statements.  The DNA of the USA is our risk taking entrepreneurs and they (like me) have the temptation to measure the costs and benefits of this crisis.  Then using the utilitarian philosophical model of the greatest good as measured in total utility we can make the logical Spock like decision.   But how does this apply in human life. 

Spock in his final exchange with Captain Kirk gasps  "The needs of the many......" and Kirk finishes for him "outweigh the needs of the few". 

How appropriate that J.P. and I on Saturday re-watched Michael Sandel's  first four lectures from his book "Justice - What's the Right Thing to Do?"

You can add to this philosophical debate the attempt to allocate money to those in pain and you can see why Congress can't agree on a stimulus package.  Re-read the quote as you reflect on OPEC's fight about production of oil allocated among the Saudis and Russians. Measuring utility will always create disagreements.   

How appropriate that my Bible devotional today was Matthew 16:26  "For what will it profit a man if he gains the whole world and forfeits his soul?  Or what shall a man give in return for his soul?"

What happens when you reverse the quote -  "The needs of the few, outweigh the needs of the many" - suddenly you enter the world of human rights - the very soul that God created.  There is no measurement of human life or the soul - it is infinite. Nothing finite can be given for something of infinite value.

When worldly crisis and suffering tests our resolve - it is the mathematics of the many weighed against the few that will measure our humanity - and determine the return for our soul.





 

Is the Light at the......

Today as I arose to go to my office for the last time until the Ohio lockdown is lifted, I looked out our master bedroom window an saw complete blackness.   A normal morning would see the twinkling lights of Milford, Terrace Park, Newtown and the commercial areas in-between. Granted the eerie fog was cloaking the distant lighting, but I can't remember a morning when it was completely dark.

Yet the sun rose and the light emerges.  But in the tunnel of the virus contagion and economic panic each day brings more fear and darkness into our minds.  

K.C. sent me an interesting site to add to my data sources for modeling Worldometer. Finally, I discovered a chart worth pondering:

The beginning tunnel - Death rate 41.8% vs Recovery Rate 58.2  -  very scary.   Today's opening - Death rate 12.93% and Recovery rate 87.07%  - much more comforting.   But it is a moving target day by day.   The concern is the two curves are not flat yet AND..... only 32% of the known cases have outcomes.  That is because it can take 24 days (that is my guess at a number)  to determine an actual outcome.   

Now - for the higher math.  The key to any exponential chart is to view the logarithmic chart which converts an exponential chart to linear view.  Again bad news - the line is not yet straight to yield a rate of change that is consistent.  We were feeling good from 1 to 3, but now the new trend is 4. 

Each day brings new light to new data but no visibility to the future.  But as long as there is light there is hope.  

Sieze the Day - EVERYDAY MATTERS

Everyday matters in the containment of COVID-19.  As a statistician and numbers obsessed individual, I have been tracking my own spreadsheet of growth rates and predictions for the USA, Ohio and Cincinnati..  My first discovery is the problem with public data sources, timing, and the relative misinformation (or misinterpretation) provided by various sources of well intended reporters doing their own analysis (like me).

As I have previously pointed out, you should focus on what most matters - outcomes - which  means deaths and recoveries (life). The absolute number of recoveries (96,958) is increasing slowly (growth rate is 3.3%) while the absolute number of deaths (14,573) is increasing rapidly (growth rate 12.5%).  The growth rate of worldwide infections is 11% percent and based on cumulative infections to day the death percentage is 4.3%  and slowly inching up  (based on worldwide data - 340K infections and 14.6K deaths). What do all these numbers really mean?

This data analysis is a moving target. So here is a case where the input of new infections is like a fire hose filling a water bucket while the data about the outcomes of death and recovery are only a few tiny holes letting the water out of the bucket. We are trying to plug the death holes and widen the recovery holes while trying to slow the rate of water going into the bucket. Since the outcome holes are small and are slow in flow (5% or less) , the most important variable is the input - which is overwhelmingly large and fast in flow (11% Worldwide). The bucket is filling rapidly!

With that in mind, I have concentrated my thinking with the rate of input - compound growth rate of new infections in the USA and Ohio (35.9% and 45% respectively).   Next most important question is to determine when that growth rate begins to diminish - predicting the PEAK of the growth rate curve (with the only data available and suspect - Wuhan and China).

Using March 1 as a starting point in the USA with 62 cases of COVID-19, I have been tracking with various data sources reporting the cumulative number of infections in the USA , Ohio and most selfishly where I live Cincinnati.  As of 3:00pm EST the USA compound growth rate in infections is 35.9% for 21 days (3/1 - 3/22) and 45% Ohio for 7 days (3/15 - 3/22) and in Cincinnati - no growth rate yet but 4 known cases. To be fair, this analysis assumes a start date in March versus the real ground zero infection point which likely occurred sometime in mid February.

Look at these charts:

This shows why the implicit growth rate is so important and dramatic.  Why we hope that we are on a 20% curve versus a 42% curve and why we hope the curve peaks at 26 days versus 61 days.

This is why the Governors of each state in the USA (like China already has done) are rapidly ordering "draconian" measures to attempt to minimize the  absolute numbers in new infections regardless of the real compound growth rate  and the unknown death rate as a percentage of infections.  This also why EVERYDAY MATTERS!!!!

Next blog entry coming -  WHEN IS THE PEAK?  ---- pray for 26 days or less.

Death provides Life

Susan and I just finished a walk with the dogs and then a Bird Scooter cruise around the neighborhood. It is a chilly but sunny Sunday morning when most are still sleeping evidenced by the Sunday Cincinnati Enquirer and NY Times awaiting proper pickup at the each of the driveway entrances.  There will be plenty of people throughout the USA feeling a bit of cabin fever today.

R.M. emailed me a set of beautiful pictures from his walk titled "Serenity and Beauty". The two portraits that struck my eye with beautiful contrast were the black and white and full color photographs of large-leafed waterleaves sending out their basal leaves. 

Courtesy of Robert Miller - 3/19/2020 

"Our Pileated Woodpeckers continue to peck away at a large tree snag.  Death provides life. The trunks of fallen and decaying trees supply nutrients to a variety of mosses and lichens.  Cooperation reigns."  R.M portrays.

Appropriate to the crisis we are experiencing, we have the choice of viewing the events in either black and white or the full vibrancy of color that beauty reveals.  Death provides life - Cooperation reigns.

There will be more death than we desire from this virus and how well we cooperate will be a large determinant of the amount of death that will result.  This death will provide life in many mysterious ways.  New light (life) and color will emerge. Both pictures have beauty!

"Mankind can make progress in the pursuit of Truth. Mankind can also make progress in the sphere of Goodness, advancing from less to more perfect political, social, and economic institutions or arrangements.  But there is no possibility of progress in the sphere of Beauty."  - Mortimer J. Alder "Six Great Ideas".

Only the creator of Beauty can reveal the mystery in "Death provides Life".

New Normal?

Saturday starts a weekend of what may be a "New Normal" for many in the USA.  Several days ago I read the Washington Post article "Coronavirus will radically alter the US".  In that article was the following graph

 

 

Referencing the 1918 Spanish flu, we can expect a second wave of this virus and should begin now to prepare for various scenarios from the best to the worst. 

How can the Investment community prepare their expectations from the best to the worst.  Yet another chart to reference.  This appeared from M.L. (R.M.'s friend) in her firm's newsletter to her clients:

US Financial Services LLC  (973) 882 3600

It's time to take a deep breath and begin planning life in a "New Normal". Some of our leaders have been criticized for calmly saying that "this too shall pass". There is a balance of avoiding panic and preventing complacency needed as we problem solve around this virus.  As my brother (D'Lane) said to me when I was nursing my Dad back from his fall in ICU - "One step at a time".

 

My homegrown spreadsheet model of the growth numbers - World, USA, Ohio still shows greater than 30% growth with a hospitalization between 12% and 25% and no peak in sight.  We are still climbing the rollercoaster with the hope of quickly getting to the top as our fear mounts.  What a relief it will be when we start down the hill!!!

 

How appropriate we want to flatten the virus curve as it heads to the peak.  The faster we flatten it the quicker that same curve (flipped in reverse) will let the stock market bottom. 

 

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TGIF

For Wall Street Investors the adage "Thank God It's Friday" may be an understatement.  As I write this blog at 3:06 EST the DJIA has dropped 16% for the week, 33% for the month.  The market drop is better defined now as contagion - the combination of emotional fear from the economic impact of lockdowns with the Saudi/Russia Oil fight, and a sprinkle of political uncertainty. 

In this environment - cash is king, physical supplies is queen.  This is my second day locked down at the house.  Taking a walk in the neighborhood, it felt like grand central station - cars, people walking, children playing outside, even an Indian Hill Ranger patrolling and stopping to say hello.  Of course it helps that it was a sunny day with temperatures in the 50's.

Ellen cooked some brownies, Jenna was outside playing fetch with her dog Wally, Paul was working making client phone calls, and Susan attempting to collect receivables for her clients.  I sat transfixed on the red and green ups and downs of individual stocks while listening to the gloom and doom of CNBC.

Will the pressure cooker of this week's activity continue to build over the weekend?  With little routine outlets available for weekend decompression, everyone will be trying to find new activities and ways to fill their time.  What a great opportunity to re-evaluate how we spend our time together and what we can do to be emotionally supportive of each other. Like the feeling of being snowed in during a winter storm, we can practice ways to create calm and peace.  Here are some ideas:

(1) Turn off the media
(2) Read a book
(3) How about a puzzle; or art; or a family game
(4) Take a walk outside in the neighborhood
(5) Do one of those home organization projects you have put off indefinitely

Take the time to appreciate your home and feeling safe at home.

Call to Action

Decided to stay at home today and due to various circumstances everyone else was here at home also -  Susan, Ellen, Jenna and Paul. It felt like Thanksgiving or Christmas holiday. Also today was the celebration of  32 years of marriage - with anniversary gifts of Bird Scooters - but unfortunately a rainy day -  so no ability to ride in tandem.

There was  relative calm in the stock market (even with a 1200 point range on the DJIA).  Everyone is figuring out how to live socially with virtual connections.   Friday Morning Men's Fellowship will be via ZOOM web conferencing tomorrow morning.

With continuous updates of news it is hard to concentrate on anything except the future unknown of this virus.  The opportunity for cooperation domestically and internationally is yet another test for all of us.   I enjoyed seeing the Brazil way of promoting this:

Instead of searching for blame and shame, we need to use this crisis for world-wide cooperation in preventing future pandemics.  It demonstrates how futile nationalism is and our interconnectedness is comes with both risks and rewards. 

As boredom sets into the isolation of cocooning, courage to risk face to face relationships will again emerge.  There are countless times Christians "run toward the plagues", stay in the cities to help the suffering, and put their own lives at risk to help others.   Jenna faces this as she returns to work after to cancelled vacation plans. So many Doctors and Nurses will be called upon in this crisis to help others.  They are the front lines - now we are called to back them up.  How will you help?

PANIC or NAP

The stock market seems to be in free-fall and the word PANIC seems appropriate.  The fourth circuit breaker (7% down) in two weeks and the S&P graph appears to mirror the wall chart that I face in my office for the 2008 recession (1.6 years and a drop of 57%).  My personal capitulation day back then was Dec. 3, 2008 just before the market bottom of March 9, 2009.  I have great memory of this because of my personal financial logs that recorded my feelings and trades.

For the past four days, I have watched the market continuously aided by the recommendation to physically distance from others.  I suspect that has exacerbated the panic and created more nervous energy of people liquidating accounts.

The fluid nature, next to zero transaction costs, and real time ability to move large sums of money has contributed to the volatility and steep intraday movements.  Even the ability to watch global markets - CNBC Asia allows a person to remain glued on minute by minute futures market.

Temptation and regret slips in when the market vaults up as the "market timers" try to optimize the bottom.  I also get tempted to play in this game but have avoided making any trades or timing decisions.

How do you control PANIC -  I C NAP :)

Educational Pandemic

Even though schools may be closed, there is much learning going on - at least for those interested in learning more about this global crisis.

(1) Exponential growth and various statistics about calculating mortality rates
(2) Country and Culture comparisons in approach to dampening the virus progress
(3) Biology of animal to human transmission of virus (yes I had to look up  pangolins and civets).

(4) Generational respect -  Asking the youth to stop partying and transmitting the COVID-19 to us old folks.
(5) Political laws about cancelling primaries or elections.
(6) Powers of Executive Branches (Federal, State and Local) in declared emergencies
(7) Charts depicting the damping and slowing down process
(8) Social customs of greeting and how to perform social distancing
(9) Specific instructions on hygiene and how to wash your hands
(10) Statistics on how often you touch your face (about 3000 times a day)
(11) How to amuse yourself without Sports, Bars, Parades, Restaurant, Gym, ....  you name it.
(12) Maybe seek some additional spiritual growth and education
(13) How to work from home
(14) Learning how to use technology (e.g. Amazon order; Echo Show communication; Overdrive for library books)

I even liked the creativity and actions this virus is drawing out of businesses:
 
(1) Restaurants now considering the delivery business
(2) Specific store hours by age distribution  (maybe to help in the normal flu season)
(3) Work Conferencing
(4) Communicating with customers and suppliers
(5) Expediting supply chains in critical industries
(6) Accelerate the vaccine development and delivery process
(7) Business interruption plans and contingency


Yes - a crisis like this can create new ways of thinking and doing business.   Additionally it can create a sense and need for global cooperation and problem solving.  Yes - there will be plenty of suffering, but maybe it is the very suffering that will point us to the single source of joy.

In spite of all the recommendations to manage social distancing physically, a crisis like this can only be managed by socially interconnecting virtually and spiritually.

Cocooning

The effect of globalization is front and center during this perfect storm of Corona Virus Pandemic, Oil fights, and globally fluid capital markets.  The only industry benefiting from this panic is likely the 24 hour news.  

The S&P is down 30% in a matter of days.  Travel and Entertainment is locked down in a matter of days also.  It demonstrates how fragile the feeling of security can be - emotionally, financially, physically, and …. for some spiritually.  As Warren Buffet says - "You never know who is swimming naked until the tide goes out".   

I'm amazed at the distribution of attitudes about the rapid response by our Federal and State leaders.  The challenge of absorbing the various media bias (including social media) and the lack of understanding of statistics and numbers has contributed to both extremes of fear and indifference.  

Personally this has affected me in the cancellation of my trip to visit Dad in the Nursing home.  Susan and the girls also cancelled their spring break vacation to Arizona.  On the financial side - like others net worth (on paper) drops at least 20%.  Aside from the personal social distancing, this feels eerily like the great recession of 2007 and 2008.  Since my blogging only started in August 2009, only my manual journals (Spiritual and Financial) have any measure of my emotions and actions at that time.

Over the weekend, I decided to create my own forecast using the numbers from the World Health Organization situation reports.  In our data hungry world the numbers are suspect from even this source.  The two most important numbers are the daily rate of growth in new cases and the rate of growth in recoveries (and by default deaths).  Once again the human mind just has difficulty understanding the power of growth (April 16, 2012 Growth and Patience) and patience.  T.A. in our Vistage meeting talked about the dangers of nervous energy - on health, finances and relationships.  This time is no exception -  it is a time for patience and careful reflection. 

If this virus is growing at 30% daily (doubles about every 3 days) in USA (which is about what the W.H.O. shows since 3/1/2020) and the hospitalization rate is 20% of cases then we run out of hospital bed in the USA by about 4/13/2020 (assuming a discharge rate of prior admissions every 7 days).  The CNBC news states the doubling rate is every 6 days (about a 12% growth rate) and using that assumption my cryptic spreadsheet models a run out of beds by 5/21/2020.  That's not much to be encouraged about.  

Now the good news - if we can trust the Chinese Data -  the exponential curve of new cases peaks at about 16 - 24 days (but very dependent of population diligence in distancing).

This data seems to be consistent with the South Korean numbers (about 26 days) as it potentially is peaking.  The next few days will be critical to watch.

In Ohio there are 37 cases identified and 350 in testing.  The real answer about the risk of the virus is a local issue and community response.  For me - I'm cocooning.