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Today is a newsy day. Here is the crux of all of today’s update: it’s going to be worse than you think, but that isn’t as bad as you think, as long as we keep doing the right things.

First, a core assumption in our own projections: we assume that COVID-19 is bi-partisan, non-racist and doesn’t respect boundaries or political beliefs. We believe that currently there are not 10 or 5 or 3 different ways to react to protect people from COVID-19, there is just one. As a result, when we see patterns in how policymakers respond in different jurisdictions we assume that typically others will soon follow because that is the way to respond.

We’ve seen this play out the in closing of schools so far, stay-at-home orders, travel restrictions, and other forms of social distancing. This assumption will be relevant later in today’s update.

Second, let’s take a look at the big picture from two different angles before we get into the weeds. This may be the most important part of today’s post.

How bad is it?

Let me just quote a Facebook friend in Tennessee here:

Presently in the U.S. you’re more likely to die of Coronavirus in a given day than all but 2 of the Top 10 Causes Of Death.

Let me explain…

In the past 24 hours [March 31-April 1] we had somewhere around 900-1000 COVID-19 deaths.

Here are the CDCs numbers for the Top 10 Causes Of Death, with total number of deaths per year and then broken down to per day.
1. HEART DISEASE 647k –> 1772 per day
2. CANCER 609k –> 1670 per day
3. ACCIDENTS 169k –> 463 per day
4. COPD 160k –> 438 per day
5. STROKE 146k –> 400 per day
6. ALZHEIMER’S 121k –> 331 per day
7. DIABETES 83k –> 227 per day
8. FLU 24-62k –> 100-258 per day
9. KIDNEY DZ 50k –> 136 per day
10. SUICIDES 47k –> 128 per day

When it gets to 2200+ per day {and it will…soon} you’ll be more likely to die of coronavirus in a given day than all but the Top 2 Causes combined.

Buffy Jay Cook, April 1, 2020

Of course, we live with all ten of these things and don’t call it a national emergency, but none of the other ten double their deaths every 2-3 days. When we had 8 suicides in one day in Knox County our county mayor and congressman both took notice, as they should have. The same urgency applies to COVID-19.

Axios asked today if you can remember what March 1 looked like, when there were only about 7,000 cases — total — outside of China. The US alone added 30,000 cases today.

And it’s supposed to get worse before it gets better. At 30,000 new cases, today is probably the best day we’ll have until mid-May.

Red line is constant 1,000 deaths/day

You’re probably thinking we’re trying to scare the bejeezus out of you. We’re not, this is just what the data and models predict, right now.

How bad will it be?

Our director of operations noted today on a call that the total number of US deaths the currently projected high end of reasonable estimates roughly matches the number of people killed in an hour in 2004 when a tsunami hit the Indian Ocean.

In 2017 the US had roughly 2,800,000 deaths according to the CDC. We’re on track to have a year that comes in 3.5% to 10% above that in total deaths [1]. We don’t want to minimize any given death — each and every life is precious. Yet, in the grand scheme of things this isn’t the zombie apocalypse.

…but

Remember that these current projections are based on all the shutdowns and social distancing we are currently practicing. Change our behavior, change the results. Right now, our behavior is changed for more favorable results. Go back the other direction and we’re in a spot where that peak — two to three weeks out — is much higher and much farther away.

We are in a situation where cases/deaths are doubling every few days. The lower the number we stop the doubling at the less bad it will get. By a factor of 2 or more!

In sum, it’s going to be worse than you think, but that isn’t as bad as you think, as long as we keep doing the right things.

Important News Items

Georgia called off school for the rest of the year today, as did Indianapolis. You recall our assumption at the top? We expect to see a lot of other places follow suit. We’re all for that, it makes more sense to acknowledge reality now and plan for it than to keep introducing new delays every two weeks.

In Tennessee Governor Bill Lee issued Executive Order 23 which changed Executive Order 22 from “urging” people to stay at home to “requiring” people to stay at home, unless engaged in essential business. As we noted when Executive Order 22 was signed, the list of “essential” businesses is very large. We expect that this will close out the remaining recreation (golf courses, parks, etc.), we’re not sure what else.

News reports cited the same Unacast social-distancing scorecard we referenced a few days ago as playing a part in Gov Lee’s decision. In short, Tennesseans aren’t staying home. Honestly, just getting out the last few days (by car) has produced enough data to make that clear to us.

Mayor Jacobs made it know that he wasn’t really happy about the order. Here we will simply note that there is a long line of policymakers ahead of him that were against a stay-at-home, until they weren’t, including: President Trump, Gov. Lee, UK Prime Minister Boris Johnston, Gov. Cuomo of NY, Gov. Stitt of OK, Gov Scott of FL. We’re sure we don’t have them all. The point? The data seem to have a way of convincing principled policymakers that these orders are entirely justified after things get to a certain level.

Dr. Fauci thinks that all states should have a stay-at-home order right now.

There are a number of articles out today that indicate that banks are not ready for the flood of SBA 7A PPP applications that they are set to start receiving tomorrow. There are 30,000,000 small businesses in the US. In 2019 the SBA issued 47,000 7A loans. We are 100% confident that no bank or government agency is ready to receive a 5000% increase in a single day compared to all of last year [2]. And while everyone is trying to figure out working from home.

At JM Addington we’re working on ensuring that we have other sources of cash (e.g., a line of credit) available while the loan works its way through and are working on preserving all the cash that we can in the interim. Your author spends close to a quarter of his day every day on this currently. Also, the guidance on supporting documents changed since it was first issued. See First Horizon’s info here.

Self-employed persons can now apply for Pandemic Unemployment Insurance in Tennessee. This is huge. If you know a small business owner, “gig worker,” or anyone that doesn’t work for a company who is out of a job send them to jobs4tn.gov and the FAQ here.

Thanks to the West Knoxville Farragut Chamber for this tidbit.

Also, we’re really proud of our state for stepping up in this way. It’s the right thing to do.

I am self-employed, when can I start applying for Pandemic Unemployment Assistance?

You should apply for unemployment insurance now, even if it the system shows no earnings. Once the federal government provides states with guidance on how to administer the Pandemic Unemployment Assistance program, Tennessee will start providing those benefits.

https://www.tn.gov/workforce/covid-19/faq.html

A DENSO employee has tested positive for COVID-19. The person was last at the facility March 25th, “We are taking this matter very seriously and have closed Building 102 and other areas in which this person may have been, so a professional third-party cleaning service can thoroughly disinfect the building,” a spokesperson said. Given the contagious nature of COVID-19 we are not optimistic that these measures will be adequate for DENSO.

Memphis is reporting that the first wave of COVID-19 patients is hitting the hospitals there. “So that volume is already coming into our hospitals in a big way. And the public just doesn’t know that, I believe.” Again, watch how policymakers respond in TN when media coverage in Memphis looks like New York or Italy. (Also, remember, that by volume it’s not comparable, but expect some compelling photos and video that would make it seem so.)

Numbers

We’re not even going to update today. New cases and new deaths are up, unemployment numbers are up, etc., etc. None of that is news.

We think the more useful measure for today is: how far into this are we? This graph gives us the best answer:

Note that Tennessee is set to peak about a week later. We haven’t seen sub-state regional breakdowns.

International Numbers

Italy’s new cases are still, overall, going in the right direction.

Source: Worldometers

Spain, Germany, France and the UK are all still on the upward curve, or at least not clearly trending down.

Hong Kong shut down restaurants and pubs for two weeks. Hong Kong’s population density is similar to LA, they are obviously closer to COVID-19’s outbreak than the US, has the population as Tennessee and only 1/3 of the cases. And only now had to close down the restaurants and pubs. So what? There are clearly more effective ways for fighting pandemics than the route we’ve taken in the US. Hong Kong may be the world’s leading example.

Other

Thanks to those that have shared kind words or liked these posts. We’re doing out best to put out data-driven analysis, each one of these takes about 2 hours. It’s helpful to know that they are being read.

If you want copies of the Excel sheet and PowerBI Reports we use to put these together email us, info@jmaddington.com. Right now, our PowerBI combines data from JHU, NYT, COVID Tracking Project, IMHE and the TN Department of Health. Most sets are updated daily.

[1] Not correcting for the fact that a large number of the COVID-19 deaths will hit the same people most likely to die of other causes this year.

[2] Obviously we don’t know how many businesses will apply. This number assumes half of all small businesses apply. Even if you drop it down to 1% of all US small businesses that is over 6 times the amount of 7A loans the SBA processed last year.

Today is about map reading, and accuracy.

The biggest we face — at least at JM Addington — in projecting out what the next few weeks look like is the lack of consistent, quality data. First, a really quick primer on the stats we are watching:

New hospitalizations: Number of new people admitted to the hospital. This is not the number of beds in use as most people will stay more days or weeks. Lots of new hospitlizations indicate pressure on the entire healthcare system.

New deaths: New number of deaths attributed to COVID-19. Unlike cases deaths don’t depend on someone running a test. However, they can still be undercounted (someone dies without ever having a test) or overcounted (a person with multiple health issues happens to get COVID-19 and pass away, but they may have regardless). Best used in combination with new cases.

New cases: New, confirmed (i.e., tested) number of cases of COVID-19. Best used in combination with new deaths.

Tests: Number of tests performed. Typically, one test = one person although that doesn’t have to be true. The data on testing in the US is not consistent. Tests are often broken out into pending/positive [cases]/negative.

Ok, let’s roll.

We have two significant issues with testing, at least as far as the data tell us. First, we haven’t tested that many people.

While testing is clearly ramping up, testing less than 1/300 just isn’t where we need to be today. Just as significantly, those tests are performed in heavily concentrated areas:

New York, a state with less than 9 million people, makes up 18% of total US tests. California has 8%, and so on. On the one hand we certainly expect that NY has the most tests as they also have the most cases far and away. But if we test them the most we’ll also find more cases. It also overweights the data for the US as a whole. In some fields, this could be corrected. We haven’t seen any convincing evidence that such statistical correction (cleaning up dirty data) is yet possible with the COVID-19 tests.

We wanted to see how those IMHE projections were mapping up with reality. These are some of the projections that the White House has been relying on when giving guidance over the next month. IMHE updates the model as new data comes in so we compare current data against their first mode (March 27th) and today’s:

The blue lines are IMHE’s worst-case scenario, best case scenario and their splitting-the-difference scenario for new deaths by date. The pink is where we actually are, you can see that it is tracking closely.

Today’s updated model looks remarkably similar:

Actual New Deaths from The COVID Tracking Project

Four days isn’t a long time out for a model to predict but it’s enough to give us some confidence that it is off to the right start. The new hospitalizations (today’s model), in contrast, seem to be off by a fair bit. It’s also possible that the data is lagging.

Actual New Hospitalizations from The COVID Tracking Project

As long as these models show accuracy we’ll keep them up as a way to score where we are on the curve.

It’s also important to remember that these curves can be highly localized, that is, TN is different from NY and even Knox County is different from Davidson County. All of the US-as-a-whole charts around COVID-19 are heavily weights towards NY right now. That does not mean to dismiss the data, just remember that portion of the data is telling you a different story.

In Tennessee, we continue to have two counties dominate the number of total cases — and tests:

Candidly: the numbers for the Knox County area continue to surprise us. While still increasing exponentially, the absolute number of cases is still incredibly small, on the whole.

Only 157 positive cases as of today in the 9-county area.

It is, almost, unbelievable.

That also brings us back to our beginning problem: how good is the data? 700 tests out of 200,000 people (Knoxville) wouldn’t be an awful statistical sample if it were randomized. At the same time, the signals coming from the Knoxville County Health Department and Mayor Kincannon are, subtly, that they believe these numbers are too low as well.

Data from the New York Times.

We don’t have a good answer for you right now and we’ll refrain from guessing. We’re just going to present the data that we have.

International Numbers

Italy’s new cases are still, overall, going in the right direction.

Source: Worldometers

Spain, Germany, France and the UK are all still on the upward curve, or at least not clearly trending down.

Other

Thanks to those that have shared kind words or liked these posts. We’re doing out best to put out data-driven analysis, each one of these takes about 2 hours. It’s helpful to know that they are being read.

If you want copies of the Excel sheet and PowerBI Reports we use to put these together email us, info@jmaddington.com. Right now, our PowerBI combines data from JHU, NYT, COVID Tracking Project, IMHE and the TN Department of Health. Most sets are updated daily.

Today is a trees day more than a forest. Most of today isn’t news, it is a report on where we are on the upward curve.

KNOXVILLE: Mayor Kincannon issuing her own “safer at home” order in addition to the order issued by the county health department. Kincannon’s order is specific to the city of Knoxville but gives the city enforcement authority.

“The number of COVID-19 cases in Knox County has doubled in the last few days and is rising daily. Too many people are not taking this seriously. I issued this order so our codes enforcement officers, Parks and Rec employees, KFD inspectors and KPD officers will be empowered to enforce this life-saving order,” Mayor Kincannon said.

Mary Kincannon

Knox County COVID-19 Cases
Source: New York Time data, chart by JM Addington

We already wrote earlier in the week that, anecdotally, the safer-at-home order didn’t seem to be being followed. So what? Cases are still rising and leaders are reacting. We expect that more will follow suit if the voluntary orders aren’t followed. We’re not panicking, just observing that (1) social distancing appears to work, (2) our community isn’t doing it well, (3) policymakers are doing their best to avoid turning a bad situation into a true crisis.

It’s not complicated. If we can all manage to actually stay at home for the time this doesn’t have to be worst case. If we can’t manage that it’s going to be worse.

Models: For the third day in a row the feds issued updated models, this time with an estimate as broad as both of the last two days’, 100,000 – 240,000 deaths. If there is news here it is that the medical community seems to be coalescing around the 100k-200k number. This is better than before. The early estimates went (roughly) from 1,000,000 to 10,000,000.

Testing: At least two governors separately said this week that testing isn’t widely available yet. That means that we may still see a jump in cases, comparing them with deaths will remain important to understand the trend.

Hospitals: Four hospitals in the Boston area report to NPR high levels of staff COVID-19 infection. We’ve seen at least two reports today about hospital staff across the country being disciplined for speaking out about the lack of PPE. So what? We wrote last week about how flattening the curve is about avoiding systemic failure in the healthcare system. And this week about how images of overrun hospitals will affect policymakers. We are beginning to see what that would look like, at least in areas with dense populations.

Forbes has a good primer on getting your stimulus check. If you filed taxes this year or last year the IRS will use that data for your tax return. Your author is working to expedite his 2019 return to ensure that the IRS is aware of his newest dependent. You can file a tax return even if you don’t owe anything and you might want to consider doing so if you are not on social security or another federal plan where the IRS would already know where to deposit the stimulus money.

The IRS sent most employees home yesterday but hasn’t said how it will affect taxes or stimulus payments.

The San Francisco Bay Area is reporting that social distancing there is working. If you remove Santa Clara county (h/t FollmerK) you can see it in the data. The chart is for total cases, you can see that new cases are steady, instead of increasing.

Bay Area COVID-19 cases w/o Santa Clara county
Source: New York Time data, chart by JM Addington

China is going to officially report asymptomatic cases. This could result in the worldwide case count taking a jump for cases from February and early March. It also decreases the case mortality rate for China. China’s manufacturing is also bouncing back with a PMI of 52 (growth) in March. However, malls and theaters remain empty even as people are allowed to return. We expect the US return to look similar: even after stay-at-home orders are lifted we don’t expect people to return to large group activities in mass.

In Hong Kong there are rice shortages being reported, as Vietnam put export controls in place. We expect that we’ll feel those effects in the US but it isn’t clear how the global trade will balance out yet. We expect that, practically, this will be a bigger issue in Asia than the US.

For Businesses (and non-Profits)

New guidance from the SBA on the EIDL loan: if you applied before with the old COVID-19 application you must re-apply. It took us about 15 minutes to get through the new form at https://covid19relief.sba.gov/#/

Even if you don’t end up being accepted for the EIDL you may be eligible for a $10,000 grant.

Secondly, the best information we have on PPP (see yesterday’s post) is that you can use it with along with an EIDL. However, you have to use the money for different purposes, you cannot use both of them for payroll for instance. Our bookkeeper has gone so far as to recommend that we set up separate accounts to receive the funds if necessary to clearly show how they are used.

The PPP is even available to non-profits and sole proprietors, independent contractors.

PPP Applications Available

While we were writing today’s post we got an email from one of my bankers with information on the PPP. You can download a sample copy here. It is identical to the copy we received from our banker.

Read the best summary of the CARES Act we’ve found here. If you own a small business read it right now.

Generally, the amount of the loan is capped at the lesser of $10 million and 2.5 times the average monthly payroll costs incurred in the one-year period before the date of the loan.

National Law Review

Intuit is matching GoFundMe’s setup for SMBs, you can find out about it at https://quickbooks.intuit.com/smallbusinesshelp/

International Numbers

Italy’s new cases are still dropping:

Source: Worldometers

Today’s new cases are currently set to come in around yesterday’s. It’s a great sign that the social distancing measures that Italy imposed (late, and progressively instead of suddenly) are paying off. There is a subtle warning in the data as well, the US also implemented social distancing measures late and progressively. Our daily new cases may also take time to level off. We don’t watch Italian deaths at JM Addington because of how the Italian attribute deaths to COVID-19.

Other

Thanks to those that have shared kind words or liked these posts. We’re doing out best to put out data-driven analysis, each one of these takes about 2 hours. It’s helpful to know that they are being read.

If you are or know a math-whiz that can answer a question on exponential regressions with time series data we’d love the help.

What we are watching next: The things we are internally focusing on next are: (1) what is going to happen in hospitals: we expect that if hospitals are overrun, that will trigger new responses from policymakers. (2) How long is COVID-19 going to be around in a significant fashion. We believe we need to update forecasts just to run our own business but expect that we need 5-7 more days worth of data at minimum, and 10-15 would be preferable.

Governer Bill Lee issued a “safer at home” order today. Like what we have in Knox County already, it isn’t a mandated “stay-at-home” order but closes “non-essential” businesses. Page 7 of the order and after defines Essential Services in the executive order, it appears to be the same list we linked to from CISA last week. Religious institutions are explicitly listed as essential.

Outside of closing some obvious businesses like salons, barbershops and entertainment venues statewide we’re not sure what impact this will have. The list of essential services is incredibly broad. For instance, the manufacturing section reads:

25 . Manufacturing, Distribution and Supply Chain for Critical Products and Industries. This includes, but is not limited to: manufacturing companies, distributors, and supply chain companies producing and supplying essential products and services in and for industries such as pharmaceutical, technology, biotechnology, health care, chemicals, sanitization, waste pickup and disposal, agriculture and agricultural products, food and beverage, household consumer products, transportation, energy, steel and steel products, petroleum and fuel, mining, construction, defense and national defense, and communications, as well as products used by or component parts of other Essential Services;

TN Executive Order 22

That sounds like every business that does business for other businesses, or close to it.

Yesterday Dr. Fauci was publicly talking about 100,000 to 200,000 deaths. Today, Dr. Birx reminded the country that the worst-case scenario is closer to 2,200,000 deaths and she seems to think that 200,000 is a lower bound.

Texas is mandating and enforcing a two week self-isolation quarantine for anyone coming in from out of state. Rhode Island put in a similar measure yesterday. Florida has been requiring this for New Yorkers for a couple of days. These mandatory self-quarantines based on travel have been a staple of other places such as China & Hong Kong. We believe that like the statewide shutdowns — which were new less to two weeks ago! — travel based quarantines are likely to spread much more broadly.

Also, don’t be surprised if they don’t discriminate based on where you’re from. Legally, it seems, states are in safer territory by making it all-encompassing. For residents on state borders that regularly cross over this could have a dramatic effect.

CNN ran an article today reporting that President Trump was moved by the hospital situation in New York City and that impacted his policy response. That is significant because we don’t think he is a unique leader in that way: we expect leaders at all levels to become more protective as we progress towards the peak.

For Businesses (and non-Profits)

Remember that these SBA programs apply to businesses AND non-profits!

It seems that most of the headlines we’ve seen about the help that’s on the way is still being figured out. First, we have the Paycheck Protection Program (PPP) which is part of the CARES Act. Download a FAQ on it here.

  • It goes through an SBA lender
  • “The loan is forgiven at the end of the 8-week period after you take out the loan”
  • You may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan.

The bankers I spoke with today were clear that they didn’t know how this was all going to work out, even though they are the ones who will be orchestrating it. It seems like guidance from banks is days out and funds are likely weeks out (through the SBA programs).

The SBA EIDL has been updated to include a $10,000 one time grant. That grant doesn’t have to be paid back even if you are denied the EIDL. Also, the new EIDL application site is up at https://covid19relief.sba.gov/#/ The EIDL is direct through SBA instead of going through another lender.

If you already have an EIDL in progress, “For loans submitted prior to the new process, you will automatically be included in the up-to $10,000 Advance loan that is ‘supposed’ to be distributed within three days. As I understand, even if the loan is declined, the Advance will still be paid. The Advance will not need to be repaid.”

We absolutely cannot recommend the TSBDC highly enough in their help and knowledge about the current SBA loans. The TSBDC at PSCC – Knoxville Chamber of Commerce has been phenomanal answering all of our questions.

Intuit is matching GoFundMe’s setup for SMBs, you can find out about it at https://quickbooks.intuit.com/smallbusinesshelp/

Mortgages

We missed an announcement from Wells Fargo, Saturday, already rolling out mortgage grace periods nationwide:

Mortgage customers: If you’re unable to make your payment due to COVID-19 related hardships, we’re offering a 90-day payment suspension. To request this assistance, sign on to online banking and email us through our secure Message Center. We’ll respond to you within 3 to 5 days. You can also contact us by phone at 1-800-219-9739. We are experiencing high call volume, resulting in longer than normal hold times and ask for your patience and understanding as we work to serve all of our customers.

US Numbers

We’re really not as focused on the specific numbers as we were a couple of weeks ago. We believe that a strategic mindset is more focused on the next two to four weeks than than today. However, for comparison, we’ll continue to visit these. Be sure to note that cases are on the left axis, the one with the big numbers.

Source: COVID Tracking Project, chart by JM Addington

Overall, new cases are starting to level off. New deaths are not yet doing that. We can break this down into two charts for a better look:

Source: COVID Tracking Project, chart by JM Addington
Source: COVID Tracking Project, chart by JM Addington

New York continues to be the clear lead, however, in both of these.

Source: COVID Tracking Project, chart by JM Addington
Source: COVID Tracking Project, chart by JM Addington

International Numbers

Italy’s new cases are finally dropping.

Source: Worldometers

Today’s new cases are currently set to come in under yesterday’s. It’s a great sign that the social distancing measures that Italy imposed (late, and progressively instead of suddenly) are paying off. There is a subtle warning in the data as well, the US also implemented social distancing measures late and progressively. Our daily new cases may also take time to level off. We don’t watch Italian deaths at JM Addington because of how the Italian attribute deaths to COVID-19.

Source: Worldometers

Spain is also looking better than it was last week. France and Germany’s data are not as neat, we’re going to pass on them today.

Tennessee

Tennessee remains on an upward trajectory, if not nearly as steep as some other states. The top several counties continue to make up the vast majority of the cases. This, of course, could change.

Source: COVID Tracking Project, chart by JM Addington

Source: COVID Tracking Project, chart by JM Addington

Knox County cases are small, relatively, but clearly headed on an exponential trend still. The age distribution shows that most confirmed cases are aged 50 and below.

Source: WBIR
Source: TN Department of Health; Chart by JM Addington

Other

What we are watching next: The things we are internally focusing on next are: (1) what is going to happen in hospitals: we expect that if hospitals are overrun, that will trigger new responses from policymakers. (2) How long is COVID-19 going to be around in a significant fashion. We believe we need to update forecasts just to run our own business but expect that we need 5-7 more days worth of data at minimum, and 10-15 would be preferable.

It’s hard to write any one of these and feel that we’ve covered it adequately. There is a lot more analysis that could be done just on the topics we touch on here today. Consider this update a look at the forest more broadly than the trees.

Just this evening President Trump extended the social distancing guidelines from Easter all through April. Since Mid-March we’ve been using 6-10 weeks (total) as an estimate. This update takes us to the shorter side of that estimate. Dr. Gottlieb is publically supporting shutdowns through April as well.

This morning, Dr. Fauci was estimating 100,000 – 200,000 American deaths, in total, due to COVID-19. This is mixed news. The CDC estimated that the last flu season killed 34,200 Americans. An early study out of London suggested that 1,000,000 to 2,000,000 Americans could die from COVID-19. Dr. Fauci’s estimate clearly lands in a serious but less apocalyptic zone.

Hospitals

COVID-19 patients in CA ICU beds doubled overnight (March 28th). New York is starting to share ventilators, which was not a thing until now. You can watch a clip at the bottom that shows an Italian ICU using SCUBA gear as a makeshift ventilator.

A not-yet peer-reviewed paper and website has been set up to predict hospital supply and demand, including vents, over the next 4 months. There is more than one key takeway, lets look at their projections for the US as a whole:

Source: IHME

Yikes, that’s a lot of needed resources. At this level, however, it looks like the shortage is in the entire US. They are kind enough to let us download their data, let’s look at just that date, April 14th, and see who needs beds. [1]

Source: IHME, Chart by JM Addington

Basically, on the nationwide peak data (projected) there are 4 states with critical hospital bed shortages. The data is more nuanced than this, total hospital beds are not the same thing as ICU beds and ICU beds still need vents. The goal here is to highlight that the data shows different parts of the country getting hit very differently.

Source: IHME, Chart by JM Addington

Ok what about Tennessee?

Source: IHME

As far as global pandemics go, we are looking pretty good. This model has us peaking nearly three weeks out and landing at around 1,550 COVID-19 deaths by early August. We think that is a long way out to predict, however, it gives us an idea of where the next month is headed.

What we don’t have is county by county breakdown for these projections. If we look at TN counties with more than 10 cases it is clear where they are located right now:

Source: TN Department of Health; Graph by JM Addington

Nashville & Memphis are going to have a much different experience than most of the rest of the state.

Mortgages

New Jersey is following CA in allowing 90-day grace periods on mortgages. Anecdotally, I’m hearing that people outside of CA & NJ are getting grace periods on a case by case basis. Let’s talk about this for a moment because it is really important.

A typical recession, such as 2008, has at least two things common to it that our current situation lacks. First, there is some sort of structural problem with the economy. Too much debt, overinvestments, outright fraud, a combination of the above, etc. Second, it’s beginning and endpoints are unclear, especially in the middle of it. So, if you are a bank or a mortgage company and you have customers that are failing to make their mortgage payments on time you do what you always do and take the house back.

In 2008 this caused massive problems. We’re not going to rehash that, but suffice to say everybody lost. No one wants that today. First, there are not known structural issues like in 2008, 2000, 1982, whatever. Second, it’s really clear when this started and kinda clear about when it is going to end (weeks or months, not years or decades).

I was on a conference call with other Knoxville business leaders last Thursday, including a commercial realtor executive and a bank CEO. Both of them made it clear that no one wants to be taking properties over. The landlords don’t want to take over strip malls and the banks are getting encouragement from the FDIC is help people make it through, including giving people grace periods on mortgages.

All of this matters because the alternative is a cascading failure of banks, mortgage-backed securities, the housing market, construction and more. NOBODY WANTS THAT. Because we know that this won’t last forever the major players seem much more interested in ensuring that there is a healthy, functioning market on the other side of this.

If making your mortgage is going to cause you problems call your lendor. Today. Also, expect to see more of these deals announced: we’re don’t think that the big banks would commit to them in CA/NJ without being ready to commit to them everywhere.

How we are shifting our thinking

The data that we have had time to analyze suggests that COVID-19 is going to play out in different areas of the US very differently. It may be more helpful to be thinking of COVID-19 responses in stages: shutdown (weeks), soft-open (months) and longer term effects (2-3 years), and to consider that different areas of the country may hit these stages at different times.

We really don’t if that will be the case, current policy is being made primarily at the state and federal levels. However, the vast differences in how this is already playing out would suggest that different policy responses could be anticipated.

Other

What we are watching next: The things we are internally focusing on next are: (1) what is going to happen in hospitals: we expect that if hospitals are overrun, that will trigger new responses from policymakers. (2) How long is COVID-19 going to be around in a significant fashion. We believe we need to update forecasts just to run our own business but expect that we need 5-7 more days worth of data at minimum, and 10-15 would be preferable.

Side note: the report about Advil worsening COVID-19 has been pretty much debunked.

Below – see a two minute clip inside an Italian ICU. Why does this matter? This is a recent clip but similar ones have been circulating for around a week. If NYC and LA end up like this you can expect much bolder changes from US policymakers, at least in the areas with the biggest projected hospital shortages.

[1] We are simplifying the model here, don’t miss that. Different states will peak at different times.

Today is a highly abbreviated update: we are going to take a day or two to step back to make sure that we can see the forest for the trees.

Numbers: The US, Italy, NY, and NJ are all up yesterday and today. Moreover, testing still seems inadequate in many areas, at best. We keep hearing more stories about people that ought to be tested and either aren’t or it is medically safer for them to ride it out. We’d much prefer to have hard data on this than stories but no one is counting “not tested people,” so quantitative data is impossible to come by.

The lack of quality data will continue to hide two critical numbers: the total cases — how far has COVID-19 spread — and IFR, how deadly is this. Missing those numbers have real effects on the ability of policymakers and medical professionals to make sound decisions.

Tennessee Cases: At 1,200 we are still at exponential growth as a state. Which is the same thing as yesterday.

Hospitals: New York is sounding the alarm bell as loud as they can about how their hospitals are at capacity and close to being overrun. They are attempted to triple beds available inside about three weeks. So what? Your local community had better be watching NY to get an idea of what is coming next. Or take much more drastic actions than we have seen to date.

The Stimulus Bill is now Law: Read Axios’ summary of it. At 873 pages we’re pretty sure that there is going to be a lot more to learn than the summary. Be skeptical of anyone telling you to do something to get your check! The reporting — so far — is that it will be direct deposits without tax payer input. We’ll update you here if we see that change.

Social Distancing: Like non-testing quantitative data is impossible. Your author drove around West Knoxville today and observed that many places — especially gardening stores — were slow for a Friday but not that slow overall. This will show up in the case numbers, eventually. Exponential growth won’t stop with halfway-social distancing, that’s not how the math works.

What we are watching next: The things we are internally focusing on next are: (1) what is going to happen in hospitals: we expect that if hospitals are overrun, that will trigger new responses from policymakers. (2) How long is COVID-19 going to be around in a significant fashion. We believe we need to update forecasts just to run our own business but expect that we need 5-7 more days worth of data at minimum, and 10-15 would be preferable.

US cases are at 83,200, up from 65,650 yesterday. New York continues to make up about half of those cases, with a significant jump in New Jersey.

Tennessee is up to 957 cases from 784 yesterday. Knox county moved up to 28 from 20. We continue to expect that the real number is higher.

Before we jump into anything else let’s mention the one thing we won’t talk about yet: the stimulus bill. It’s passed the Senate but not the House. We know that there are calculators and bill run-downs already. It’s still a bill and not a law.

Update Summary

US cases are up, a lot, half still in NY which isn’t really slowing down yet. Italy, at best, is easing up on the gas pedal, definitely no brake. The Department of Labor has a summary page on the new required COVID-19 sick leave. We take some time today to explain how to understand cases, deaths and hospitalization rates together, instead of separate.

We’re going to continue to back off on the things that are not new: the US will have lots more cases tomorrow and so will New York. We’ll do our best to shift our focus in time forward to what happens next.

Different Numbers and their Relevance

Let’s take a minute to talk about the different terms and statistics that are getting thrown around. First, we have confirmed cases, which is, exactly what it sounds like. The number of cases we know that we know. The problem with cases is that (1) tests take 4-7 days for results and most people still aren’t tested without symptoms, so there is an inherent lag between confirmed cases and actual cases, (2) without randomized testing they really don’t tell us about the broader population. I.e., 83,000 cases in the US really don’t tell us the total number of people infected.

Second, is deaths. Deaths are important because (1) someone died and that’s the big thing we are trying to avoid, and (2) deaths don’t wait on a test to be counted. There is less of a lag. If you know the infection fatality ratio (IFR, deaths / actual cases) you can figure out roughly how many cases there are. For instance, if the IFR is 1%, one death would indicate roughly 100 cases more generally.

What we can do with confirmed cases and deaths is compare how the two are moving: if they are both going in the same direction that ought to indicate real progress. If they are moving in different directions that indicates an issue with the underlying data, or a lag at minimum.

Third, we have hospitalizations. These are important because (1) a high number of hospitalizations can overrun the entire healthcare system and drive up mortality rates across the population, not just COVID-19 victims, and (2) if you know the hospitalization rate you can, again, take a guess at the broader number of cases even if they aren’t tested.

Here is the real rub: the IFR and hospitalization rates are both calculated ratios that require you know at least 2 of the 3 numbers. I.e., IFR = DEATHS / ACTUAL CASES but we don’t know ACTUAL CASES, we know confirmed cases. Hospitalization rate has the same problem. The case fatality rate (CFR) is DEATHS / CONFIRMED CASES, and is the one ratio we can know, but we can’t extrapolate anything further from it.

There are real questions as to how big of a deal COVID-19 is or will be. There are some articles that try to answer that question by taking an IFR from another country and applying it to the US. For instance, if you look at Germany’s 0.6% CFR[1] and New York’s 385 deaths you might conclude that New York’s actual number of cases is closer to 65,000 rather than 37,000.

There are a number of people using this kind of math[2] to demonstrate that COVID-19 may not be as bad as is reported. We don’t think they are wrong, and we don’t think that they are right. We think that the unknown variables make it pretty much impossible to extrapolate from the data in this way. In other words, the guesses are about how big or small COVID-19 are right now are just that: guesses.

A couple of final notes for those of you reading headlines about fatality rates, Italy’s skews high because of the way they attribute deaths to COVID-19. China’s rates skews high as well because they didn’t count everyone who was infected as being infected. That means the generally reported 3.4% case fatality rate is the worst-case scenario based on current data.

So Where Are We Today?

US confirmed cases continue upwards. They’ve actually dropped below the trend line, which would be good if that was from a lower infection rate. It’s probably from test lags or not enough testing, or both.

Source: COVID Tracking Project, chart by JM Addington

Above will be the most interesting chart we have today, the height of that arrow is the same as the increase in cases in the last week. If we look at hospitalizations we find that follows a similar trend. Most of them are in New York (6,800):

Source: COVID Tracking Project, chart by JM Addington

New York continues to lead the US in cases by far and away. However, we can see both that all other US cases are increasing faster than New York’s, but New York isn’t doing great. The best you can say is that the last five days look better than the five before it, in terms of how fast things are accelerating. Our own notes are that New York went into shutdown on March 20th, meaning that “social distancing” effects to decrease cases shouldn’t be observed for at least another week.

Source: COVID Tracking Project, chart by JM Addington
Source: COVID Tracking Project, chart by JM Addington
Source: COVID Tracking Project, chart by JM Addington

Tennessee is in roughly the same bucket, but with far fewer cases:

Source: COVID Tracking Project, chart by JM Addington

It’s an interesting comparison, the exponential growth rates of both TN & NY are close to 0.36 but NY’s overall increase is about 20 times higher than TN.

International

Italy’s new cases are going to come in at least at 6,200 for today. That’s not what we want to see. Deaths also are set to come in at over 700.

Remember earlier we said that cases and deaths moving in the same direction would indicate that’s really where things are going? If you overlaid the trend from the peak to today on both of these it would be only slightly pointed down to the right, so, decreasing, but not by much.

Source: Worldometers
Source: Worldometers

If there is a bright spot that data would still come out of China, where both new cases and deaths would have a similar trend after their peaks around February 15-18:

Source: Worldometers
Source: Worldometers

However, the caution here is two-fold: (1) we’re getting close to finding data to support what we want to see, and (2) China went into a much harder, more sudden lockdown than anywhere else we’re aware of.

Other Headlines

Families First Coronavirus Response Act: Employee Paid Leave Rights: The Department of Labor finally put up a great summary of what rights you have as a worker to paid sick leave related to COVID-19. In short, two weeks at full pay and 10 weeks at 2/3rds pay. If you have to stay home with the kid because school/daycare is closed that counts as well. Only applies to companies with less than 500 employees, companies with less than 50 employees can ask for an exemption if they’d go bankrupt following the law.

Companies: find a post for your breakroom Microsoft Teams channel here.

A private company called Unacast is combing “location data” [your cell phone data] to put together a dashboard on how well the US is doing with social distancing.

They grade the US a B. We think that’s optimistic if the target number is closer to -100%:

Source: Unacast

The big banks in California have agreed to a 90-day mortgage grace period. We believe that is incredibly significant and expect other states to soon follow suit in the same way they have issued stay-at-home orders.

More states are shutdown, spoiler, almost all of them have something in place:

How We Are Adjusting

Our time horizon is still floating at 6 to 10 weeks out (so, late May at latest for the end to mass shutdowns). We’re beginning to feel that ten weeks may be optimistic based on the slow measures taken by the majority of the country.

Our biggest adjustments ahead will depend on where we believe cash will be in 4-5 weeks. We don’t believe we will have adequate visibility into late April until later this week.

Notes

[1] This is technically a CFR. However, the general reporting is that Germany has tested widely enough that their IFR and CFR are probably closer than any other population we have measurements for.

[2] The linked article is calculating the IFR by estimating the total infections, which only shifts the uncertainty from one variable to another.

US cases are at 65,652, up from 52,900 yesterday. New York continues to make up about half of those cases.

Tennessee is up to 784 cases from 667 yesterday. Knox county officially moved up to 20 from 13. We continue to expect that the real number is higher.

We don’t have much to say today, so we won’t say much. So far, the cases are doing what the models suggest, going up exponentially.

Where are things today?

We doubt that it is news by today, but cases are up everywhere. Comparing NY to all the other states and territories, except New York is interesting:

Source: COVID Tracking Project, chart by JM Addington

The US as a whole follows a fairly steady curve, whereas you can see when New York starts to accelerate. On the one hand, great news, NY is driving this whole thing. On the other hand, this curve still leaves out of hospital and ICU beds inside of 7 to 10 days. It’s got to get significantly less steep to avoid that scenario.

How is Tennessee today?

Source: COVID Tracking Project, chart by JM Addington

Less flat than yesterday. The Department of Health has actually been actively lowering expectations, letting the public know that they still expect cases to increase. Total tests are still somewhere around 11,000, which amounts to about 1/7th of 1% of the population.

Here is a snapshot of how TN is shaping up geographically:

Source: JHU

The thing you notice right away is that denser populations have higher cases, which isn’t a surprise in and of itself. The issue that is less obvious is that cases spread faster, faster in more densely populated areas. Also, this map appears to use the county center as the place to put the circle: the cases are not perfectly spaced apart.

International

Italy continues to be down from its peak, today’s data will probably end up close to the 24th:

Source: Worldometers

This is what we hope to see if social distancing and lockdowns are indeed effective.

SBA Loans

The advice we’ve gotten both from the local SBA office and a reputable firm that specializes in SBA loans is to apply for both the disaster relief (EIDL) and a traditional SBA loan. Then see what comes back faster and take that. The SBA said that that the EIDLs are 2-3 weeks plus another 7 to 10 days to process. The local SBA also said that we were ahead of the curve and that they expect this time to increase as we get further into this.

It sounds like loans are broken out in tiers from $0 – $350,000, $350,000 – $1,000,000 and over $1,000,000. Online research says that over $350,000 typically requires some level of security.

Of course, the current bailout making its way through Congress may offer additional relief. Our view is that we’re not locked out of anything until we take a loan, however, waiting to apply could effectively close that door due simply to timing.

Other Headlines

The big banks in California have agreed to a 90-day mortgage grace period. We believe that is incredibly significant and expect other states to soon follow suit in the same way they have issued stay-at-home orders.

More states are shutdown:

How We Are Adjusting

Our time horizon is still floating at 6 to 10 weeks out (so, late May at latest for the end to mass shutdowns). We’re beginning to feel that ten weeks may be optimistic based on the slow measures taken by the majority of the country.

Our biggest adjustments ahead will depend on where we believe cash will be in 4-5 weeks. We don’t believe we will have adequate visibility into late April until later this week.

For the last few days we’ve been preparing internal reports twice a day for staff. We’ve decided to release these publicly to help you plan.

US cases are at 52,900, up from 42,400 yesterday morning. New York state makes up nearly half, coming in near 26,000 alone. New Jersey is the state closest behind at 3,700. Both of these are still on a very steep curve upward.

Tennessee is up to 667 cases from 615 yesterday. Knox county officially moved up to 13 from 12. We expect that the real number is a lot more.

We’re dropping the AM updates until there is new news. The last few mornings have just been more cases, more shutdowns, more crazy stock markets. We expect more of the more.

Where are we at?

Yesterday we went over a rudimentary model that said cases are following a curve that is:
y =91e0.3026x

In not-math language means that cases are increasing each day, by an increasing amount. If the number of cases is our speed then the curve says we are going faster faster.

As a whole, the US actually overshot the curve which predicted 52,440 cases today. The day isn’t over and we’re north of 52,900. Half of those are still in New York, which is coming up on 26,000 cases. New Jersey is second at 3,600 cases.

Source: COVID Tracking Project, chart by JM Addington

The above is meant to give you an idea of how fast things are progressing. Can you remember what you were doing a week ago Wednesday? US cases had started to surge but unless you were in NYC, LA or WA you might not have been paying much attention. Today’s case count is off of the chart compared to what we were using 2 days ago.

Let’s forecast that out 7 days again:

Source: COVID Tracking Project, chart by JM Addington

Again, don’t take our Excel forecasts as deep expertise. These are quick and dirty and there are a lot of factors at play. Here’s the rub, if nothing changes then this forecast is probably more right than wrong. Also, because New York has so many cases it may overweight the series.

Alright, what about Tennessee?

Source: COVID Tracking Project, chart by JM Addington

Hey! Who likes good news? Our forecast says we should be 1,000 cases and instead we’re only at 667. This is exactly what flattening the curve means. For Tennessee, one day isn’t enough to declare victory. Why it dropped mattered and we — at JM Addington — don’t have enough information on the underlying testing to determine why it dropped. Maybe we just tested all the sick people up front and now we’re on to healthy ones. Maybe we hardly tested at all today. Maybe the labs were just late reporting their numbers.

All of the graphics we’ve shown so far are total cases, they can only go up. Of course, the thing we really care about is active cases, who is sick today. For active cases to decline we need people to get better or die faster than new people are getting sick.

Here is China on both of those counts:

Source: Worldometers

Ignore the one giant spike. China began hardcore lockdown January 22, by early February new cases started dropping and by mid-February total cases were in decline. That is flattening the curve.

Italy is also showing evidence of flattening the curve:

Source: Worldometers

March 24th will probably show an increase from March 23rd, but below the peak. Italy is a top place to watch because they are entering the critical period where the expectation is for the curve to flatten. If it doesn’t there will be important questions as to why not.

Why is this a big deal?

It’s not clear to a lot of people why COVID-19 matters. OK, so it’s a deadlier cousin of the flu, why don’t we just go about daily business like they did in 1918?

Well, first, to state the obvious it isn’t 1918. In 1918 it took weeks to cross the ocean, not a few hours. We were barely driving (less than 0.2 cars per person) and we didn’t have freeways. In 1917, the year before the Spanish Flu, the life expectancy in the US for men was 48 and women 54.

We could go on but you get the picture. 1918 isn’t a good comparison.

Let’s talk about systemic failure, points I am going to largely summarize from Tomas Pueyo.

What is systemic failure? The failure of a system. When your power goes out, that is an incidental failure, a storm brought down a pole, the pole gets repaired and your street gets power back on, not a big deal.

When your entire state has rolling brownouts because (1) it is hotter than normal increasing demand, (2) the grid can’t redistribute electricity fast enough and (3) local providers are unable to increase supply fast enough you have a systemic failure. The whole thing is broken.

That’s what is happening in Italy, and what Gov. Cuomo of New York is so concerned about.

The curve for New York looks just like the curve for the US above, except that it is only half as far along (26k cases instead of 53k). 7-8 days out looks like nearly 300,000 people infected. As of yesterday, about 1 out of 8 COVID-19 positive New Yorkers were being hospitalized for the virus. That comes out 37,500 hospitalized in New York state alone a week from today.

The state only has 50,000 hospital beds and, guess what? They already use most of them in non-pandemic times. Only 3,000 of those 50,000 are ICU beds. “Health officials estimate that the state will need 110,000 beds and 18,000 to 37,000 ICU beds.”

Let’s assume that they can’t get that many beds (6x ICU beds at minimum) inside a week, or even two. Then what happens?

The hospitals get completely overrun. As they get overrun, doctors, nurses and other healthcare workers in the highest demand ever start to get sick, and some die. Possibly while cases are still increasing as a whole. So the demand on the system is past its capacity and its capacity starts to shrink in response.

We can run the same scenarios for ventilators and oxygen machines but it amounts to the same thing. Our healthcare system isn’t built to handle a once in a hundred years pandemic.

As the system is overrun the mortality rate increases because of the shortage of beds, staff and critical machinery. People die that would not have otherwise because there just isn’t enough to go around.

And it won’t just be COVID-19 patients. Anyone who needs access to doctors, nurses, ventilators, etc., will find them hard to come by. 20 year old in a car wreck needs a ventilator? Get in line. Have a current medical issue that is manageable but needs management? Get in line. Every sick person that exceeds the capacity of the healthcare system has a higher chance of dying than when the system is operating within capacity.

In IT we call this a cascading set of failures, as a failure in one area causes failures in other areas, like dominos.

This, of course, would not last forever. Eventually, it would die out. However, it’s really hard — maybe impossible — to estimate what the cost and impact on society would be.

This also is at the heart of “flatten the curve,” the entire idea is to keep cases within the capacity of the system. Plus, the math of exponential growth is that the faster you cut off exponential growth the less pain you have to go through.

Headlines

Gov Bill Lee calls for Schools to be off until April 24th. We applaud the governor for finally making a call that parallels our reality, even if it isn’t popular. Our $0.02: we still think that’s tad optimistic but we’ll watch the data. If our TN curve stays flat then we just might be able to have life back to kinda normal in a month.

India is entering lockdown. We are unable to keep up with the number of states in shutdown, or in some level of shutdown. The NYT is tracking that well.

There are prominent voices talking about when to end the shutdowns. Our read is that the facts on the ground are guiding actual policy over what we wish was happening. NY, the US, and the UK have all reversed course at this point after the number of cases spiked.

Bill Gates still thinks we’re on a 6 to 10 week shutdown time horizon.

The Smokies are closed: this isn’t a surprise. If you follow Tennessee’s progressive shutdown, the “next” place is continually where people go to after the last place was shutdown.

Two Sunday Required Reads

I’m reposting this, you really should read through both of these to understand why we’re all staying at home.

The Hammer and the Dance” does an amazing job mapping out our different options on how to react to COVID-19. A completely separate effort from academia, highlighted in the NYT, reaches the same conclusion,

How We Are Adjusting

Our time horizon is still floating at 6 to 10 weeks out. We’re beginning to feel that ten weeks may be optimistic based on the slow measures taken by the majority of the country.

Our biggest adjustments ahead will depend on where we believe cash will be in 4-5 weeks. We don’t believe we will have adequate visibility into late April until later this week.

For the last few days we’ve been preparing internal reports twice a day for staff. We’ve decided to release these publicly to help you plan.

US cases are at 42,400, up from 26,900 yesterday morning. New York state makes up nearly half, coming in at 20,900 alone. New Jersey is the state closest behind at 2,800. Perhaps the most troubling number is that NY has tested 78,000, which equates to a 27% positive test rate. Either they are getting a lot better at testing people, or a lot more people are testing positive. We are going to return to this point below.

Tennessee is up to 615 cases from 505 yesterday. Knox county officially moved up to 12 from 5. We expect that the real number is a lot more.

It’ll be a Rough Week

At this point, you should mentally prepare to have a pretty rough week of headlines. Here is what to expect.

1. Cases will continue to skyrocket.

[Edit 8:20PM, each time period below should say through March 22, and forecast out through March 29]

Here are total US cases through yesterday. The trend line is dotted and it’s a very good fit.

If we forecast it out another 7 days it makes our current state look pretty mild:

That leaves us just shy of 250,000 cases in the US alone. Could we really jump 200,000 in a week? The world jumped 100,000 cases in 4 days. In either event, the point is that the number of cases are about to skyrocket, even if the specific number we end up at is unknown.

In Tennessee, specifically, our curve is slightly less steep but nothing like you what you want a pandemic to look like:

A 7 day forecast brings us out to a little under 8,000 cases.

Again, there are very rudimentary forecasts, the kind of thing you studied in high school even if you don’t remember it. We’re not aiming for precision so much as demonstrating why you can expect it to be much worse before it gets better. By cases, we are only a few days behind Italy whose curve is close to our own.

Source: Worldometers

2. Governments will react accordingly

The UK followed Germany’s lead today in putting the entire country on lockdown, including gatherings of more than two. Domestically, we are up to nine states in some form of lockdown, MI, OH, LA, DE, CA, NY, NJ, IL and CT. It’s possible that more are in place since I began writing this post. Knox County released such an order at noon, effective at midnight.

We still see some people questioning whether all of this is worth it, would it be better to let hundreds of thousands or millions of people die than grind our economy to a halt?

We don’t have answers: but we’ll note that everywhere the virus surged reacted the same way. Unless you believe that the Chinese just hate making money, as do Italians, Germans and New Yorkers it is worth considering that maybe the view from inside the storm is different than the view outside of it.

Also, if you want to know what your locality is going to do next, look at the cities/governments/nations ahead of you in cases. Tennessee, New York was at 524 cases on March 14th, 20,000 today.

3. The Worst Economic Numbers in History are about to come out

Unemployment numbers will be updated this week and Wall Street putting out projections for how much the economy will shrink the second quarter. Comparisons are already being made to 2008, 1982, The Great Depression, you name it.

We’re not a fan of these comparisons.

The modern economy has never, ever, ever had the pause button pressed on it. This is something new.

We’re not sure if it’s better or worse. There are more moving parts to the economy than any one person can comprehend, much less adjust. Put in my industry terms, we’ve never tried to turn this economy thing off and back on again. It remains unknown if we can actually do that.

So, this week ignore the headlines with comparisons. We don’t even have something to compare this to. If you want to read some genuine analysis go at it.

Is there any Hope?

I have a lot of hope. Let’s start with data.

Source: Worldometers
Source: Worldometers

If ever a country had been designed to fall under the weight of a pandemic it would be China. A country roughly the size of the US, with four times the population that, practically speaking, only lives in the half the space due to the geography of wide swaths of the country.

Hubei sits just outside the more densely populated area of the northeast.

If China can defeat this thing inside of three months there is no reason that the rest of the world — especially the West — can’t either.

But it isn’t guaranteed.

Source: China-Mike

We still aren’t anywhere close tot he lockdown measures that China put in place. No one would be on any of the beaches if there were the case. Wuhan went into hard lockdown on January 22, they are coming out of it two months later, slowly.

The chart below maps out in yellow official cases of COVID-19 while the teal shows the actual number of cases, figured out in retrospect. You can see that there is an 11-12 day lag between when the testing catches up with the downturn of actual cases. That means, be patient, this staying at home thing really stops the virus but our detection methods take awhile to catch up.

Source: Tomas Pueyo

We promised to return to New York’s numbers earlier. New York went on lockdown on the 20th. It is entirely possible that the number of new cases in New York is already dropping and the testing is still catching up. We won’t know for sure until April, give or take.

History – a different form of data – gives me hope as well. The one charted thing about being in uncharted waters for America is that we are always going into uncharted waters. From our beginning as a grand experiment with democracy, to our involvement in winning the two largest wars in human history to overcoming the Great Depression or eradicating Polio we are extremely adaptable.

None of the forecasts given above are inevitable, and we continue to expect that people will make rational decisions — after running out of other options.

Two Sunday Required Reads

I’m reposting this, you really should read through both of these to understand why we’re all staying at home.

The Hammer and the Dance” does an amazing job mapping out our different options on how to react to COVID-19. A completely separate effort from academia, highlighted in the NYT, reaches the same conclusion,

How We Are Adjusting

Our time horizon is still floating at 6 to 10 weeks out. We’re beginning to feel that ten weeks may be optimistic based on the slow measures taken by the majority of the country.