Equal Time: Listen To Trump Activists March 31, 2020March 30, 2020 You don’t want to miss this. It’s going to be hard to change their minds.
The Doctor Is In March 30, 2020March 29, 2020 But first . . . I’m guessing you’ve seen this 30-second spot. It challenges Tom and Carl’s view that the pandemic is being handled well. To those baffled or disheartened by Trump’s rising poll numbers, it should be noted: Presidents usually become more popular in times of crisis, but by historical standards, Trump’s surge is puny. George H.W. Bush, a fine and decent man qualified to be president, saw his approval rise to 89% during the first Gulf War . . . and still lost re-election the following year. Fareed Zakaria argues here that it’s not just Trump’s fault — decades of demonizing government, beginning with Ronald Reagan, have laid the groundwork. “Afraid of commitment? Here are 22 one-season shows to stream right now” . . . from The Washington Post. And now: This 55-minute Zoom that a doctor with a unique overview did for friends and family. Informative and reassuring. Follow the rules, he says, and you’ll be fine.
The Word From St. Louis: Not Your Ordinary Recession March 27, 2020March 26, 2020 But first: Five tips from Natan Sharansky. He knows something about solitary confinement. (His fifth tip obviously applies to people of any background.) And second: And now: Douglas Symes: “Please see this brief analysis by St. Louis Fed Chairman James Bullard. Calls for getting young people back to work fast to avoid a recession are understandable if you think of the pandemic in terms of a normal business cycle — WHICH IT ISN’T. Bullard estimates that 30% of workers will have to stay home and economic output will drop 50% in the second quarter — but this would not be a recession because it is the desired outcome of ‘hunkering down’ — an investment in public health. Reading Bullard’s article was like suddenly having everything come into focus.” In the meantime, it’s really important we not pack the churches by Easter. As posted at the end of yesterday’s column — calculate your own death toll. Oh! And have a great weekend! Follow those Five Tips! Do your brain exercises! Watch a free short film each day you’re shut in! (Not just this weekend.)
Using This Time Well March 26, 2020March 25, 2020 Stuck inside? Use BrainHQ a few minutes a day and drastically reduce your chance of ever sliding into dementia. And lower your chances of being in a bad car crash. And, if you’ve just been traded to the Tampa Bay Buccaneers, lead your team to the Superbowl. It may also help with tinnitus, PTSD, and a bunch of other stuff. I know it sounds too good to be true, but if you scroll down their web site, you’ll see . . . The BrainHQ brain-training program represents the culmination of 30 years of research in neurological science and related medicine. It was designed by an international team of neuroscientists, led by Michael Merzenich—a professor emeritus in neurophysiology, member of the National Academy of Sciences, co-inventor of the cochlear implant, and Kavli Prize laureate. With tons of peer-reviewed studies to back it up. Just keep scrolling down that page and try a few exercises. For free, unless you decide to upgrade and make me rich. Imagine coming out of this quarantine having not only watched every VEEP and Curb, but also protecting yourself from dementia years down the road. (Studies show that the exercises have long-lasting effect.) Suggest this to your parents as well? My guess is that a cure for COVID-19 will come fast, perhaps even before “next season,” if it proves to be seasonal. A million smart people are working on this problem. As one example, check out the press release from Ridgeback Biotherapeutics (a private company, so not out to hype its stock) or listen to the story on CNBC. Maybe I’m too optimistic, but there’s no harm in being hopeful. And speaking of optimism . . . Enjoy The Democrats Don’t Understand Their Own Strength. It’s no cause for complacency — click here! — but I sure prefer our odds. Finally . . . Mark Jansen: “Sheltering in place here in Silicon Valley, California, I often think how, if we all just do a little, it makes the world better. I think about how *fortunate* we are to have all we do: Thanks to science, we know what COVID-19 is, not just ‘something we can’t understand is making us sick.’ We have food, and power, and clean water, and the Internet for Heaven’s sake! USPS and UPS and DoorDash and Amazon are still delivering our necessities and little luxuries. Only kings of old would have such ease! My wonderful wife and I, both serious introverts, invited our most beloved neighbors to a ‘virtual cocktail party’ over Internet video tonight (her idea, of course). We went black tie — she in a gorgeous gown and I in my tux — in hopes it would be fun, add cheer, and help weave us together. Our outfits alone drew a laugh. But the real point was to show that in a difficult situation, where the biggest enemies are panic and fear, we can connect and show our genuine affection for each other. And you know what? The party made things a little better. I think our neighbors had a good time, and I know we did. We feel…lifted by the love of these special people we are lucky to live in community with. That is precious. If we support each other, we will work our way through a scary, challenging situation.” → Have I got the best readers, or what? Finally, finally . . . I’ll post this again tomorrow. It lets YOU decide how long to enforce social distancing, YOU guess at the effect of summer weather and contagion and mortality rates . . . so as to be, in effect, your own mock death panel. Check it out. Given the strain on the economy and people’s sanity, how long would YOU keep us six feet apart? There are no easy answers.
Take It From An Idiot March 25, 2020March 25, 2020 OK: First things first. And now, re yesterday’s post: Ralph Mason: “I think the vast majority of folks who know something about virology, epidemiology and public health in general disagree pretty strongly with Friedman and Katz. I keep looking to what’s going on in China and especially South Korea and the evidence from these places does not support their views. I think this is probably a much better approach at least for the next month as we learn more and more about the virus and the full scope of this outbreak.” → Agreed. Hours after I posted last night, I posted an update. (So now I look like an idiot, but . . . oh, well. It’s a challenging time.) Here was the conclusion of that update, in brief: << . . . I LISTENED TO “THE DAILY” PODCAST WHY THE AMERICAN APPROACH IS FAILING, AND NOW THE ONLY THING I’M SURE OF IS THAT NONE OF US SHOULD RISK EXPOSING ANYONE ELSE UNTIL WE’VE “FLATTENED THE CURVE.” >> We should know lots more soon. Until then, we should err on the side of caution. Have a great day! Can you imagine going through this without the Internet? Wanna watch a guy jump out of a plane from 24,000 feet without a parachute?
Potential Good News? UPDATED March 24, 2020March 24, 2020 As Tom Friedman synthesizes it here, the smart thing to do may be to get healthy young people back to their normal lives fairly soon — to school and to work, to restaurants and bars — while taking all possible precautions to protect and care for older and less healthy people. I’ll come back to this — it’s controversial for sure. But if wise, compassionate, science-trained minds decide there’s something to it, then things could start looking up in a few weeks rather than a few months . . . IF — ONE URGENTLY ADDS AFTER LISTENING TO THIS MORNING’S “THE DAILY” — ALL BUT ESSENTIAL WORKERS (AND THOSE WHO’VE DEFINITIVELY RECOVERED) RIGOROUSLY SELF-ISOLATE. In Philadelphia, the 1918 flu reportedly took 16,000 lives within 6 months of the massive Liberty Loan Parade the city decided not to cancel. In St. Louis — which cancel its parade — just 700 died. There were surely other factors involved, not least Philadelphia’s larger population (1.8 million versus 800,00). But it matters what policies governments adopt, and — especially when something is “going viral” — how quickly they adopt them. One wishes we had the same kind of deeply professional, deeply experienced, federal government we did before 2017 . . . . . . or that they have in South Korea, where — though their first case was recorded the same day as ours — the virus seems to have been contained. You’ve seen this calendar, right? This summary of the risks by age group, though certain to be refined as more data become available, is key to charting a sensible path forward. If — just to make the point — we knew that NO ONE under 50 died from the virus or required scarce hospital beds, then, clearly, we’d be crazy not to encourage all such people to go about their daily lives — while keeping old folks away from them until a cure or vaccine were found. In reality, people under 5o do die from the virus and do compete for scare hospital beds. Like this otherwise-healthy 26-year-old who made NBC Nightly News after she recovered. So — and this is the point of the Tom Friedman column (and of this column by David Katz) — some sensible balance should be found. Just as the incoming Bush administration was warned of a “tremendous,” “immediate” threat it ignored* . . . and then over-reacted by invading the wrong country at a cost of trillions . . . so this incoming administration was warned (and again) . . . ignored those warnings . . . and now — having missed the opportunity South Korea seized — our nation may be on the brink of an over-reaction. If the rapidly accumulating data bear out the notion that it’s almost entirely older people who are at serious risk from the virus, and/or people with serious underlying medical conditions, then we should do everything we can to keep them in loving isolation until there is a cure and/or vaccine . . . and certainly until we have a giant stockpile of ventilators and masks and gowns. But what about healthy younger people who don’t live with their grandparents? If we decide it’s acceptably safe for them to go back to school and to work and to restaurants — elbow bumping, hand-washing, and staying home if they feel sick — well, that’s much of the U.S. economy right there. That’s the debate we’ll be having in the days and weeks to come. Good people can have differing views on how and where to strike the balance. For example, yesterday’s sobering must-read New York Times report on defeating the virus — BY THE SAME NEW YORK TIMES SENIOR SCIENCE REPORT DONALD MACNEIL YOU’LL HEAR ON “THE DAILY” PODCAST — suggests it may not be wise to shut most schools. When will it be an acceptable trade-off to allow healthy young-ish people to go out to dinner (again: if they don’t share living quarters or work space with the vulnerable)? All this will be much easier once testing is widely available. And once there are ways to “certify” survivors who’ve become immune, who could play a particularly important role in this fight. I read conflicting opinions and try to make sense of it all. But as bad as the next few weeks will be, I’m beginning to think that I — or at least my young friends — will not be quarantined as long as feared. And that depression-style unemployment rates may not last more than a short time. AND THEN I LISTENED TO “THE DAILY” PODCAST, TITLED, “WHY THE AMERICAN APPROACH IS FAILING,” AND THE ONLY THING I’M SURE OF IS THAT NONE OF US SHOULD RISK EXPOSING ANYONE ELSE UNTIL WE’VE “FLATTENED THE CURVE.” OTHERWISE, THE DEBATE IS STARK: DO WE ALLOW THE HEALTH CARE SYSTEM TO COLLAPSE , LEAVING POTENTIALLY MILLIONS TO DIE — INCLUDING MANY WHO CANNOT GET HOSPITAL CARE FOR ALL THE NON-VIRUS RELATED CONDITIONS THAT ORDINARILY KEEP OUR HOSPITALS CLOSE TO FULL — IN ORDER TO KEEP GET THE ECONOMY MOVING? I HAVE AT LEAST ONE YOUNG FRIEND WHO THINKS SHUTTING DOWN THE ECONOMY WOULD ULTIMATELY BE WORSE THAN LOSING A FEW MILLION (MOSTLY OLDER) AMERICANS. SO +THAT’S+ THE DEBATE. *You can read about it in Bob Woodward’s largely pro-Bush Bush at War. Go to Amazon and ‘Search Inside the Book’ on “About a week before Bush’s inauguration” and you’ll find it at page 34 of the paperback. You will see that “President Clinton had approved five separate intelligence orders authorizing covert action to attempt to destroy bin Laden and his network.” The CIA was urging Bush to continue or step up those efforts; instead, he shut them down and (we know from Bush’s first Treasury Secretary’s book) turned his attention to Iraq.
Investing Perspective . . . And A Possibly Good Idea? March 22, 2020March 23, 2020 The possibly good idea would help tens of millions of Americans quickly at low cost, so please read on if you have time. But first: In Hebrew. Ninety seconds. Funny. And funny’s good, because the news is not: Former CDC director: There’s a long war ahead. Scary. The Economic Devastation Is Going to Be Worse Than You Think. Scary! [UPDATE] As some of you have suggested, I’ve deleted the 4-minute audio advice that appeared here, given that the New York Times debunks many of those tips as, at the least, unproven. And now: investment perspective, followed by my suggestion for helping tens of millions quickly at low cost. INVESTING: This, too, shall pass. Had you invested in the early days of the 1918 global flu pandemic (that probably did not originate in Spain), you would have watched your portfolio soar over the next decade to famously crazy heights in 1929. Might this be a good time to invest, too, if your time horizon is five or ten years? Had you invested just before the 1929 crash — with no global crisis in sight — it would have taken decades to recover. We’re facing the prospect of a recession or possibly worse . . . there’s no way to know . . . but buying some shares today will not likely prove equivalent to having bought them in 1929 for three reasons: (1) The market is already 30% off its all-time high. (2) That peak last month (yes! just last month!) was not as famously crazy as the peak in 1929, when stocks were wildly overvalued. . . . so between (1) and (2) the market has a lot less far to fall than it did in 1929, if it falls further at all, as I suspect it will . . . (3) We have more mechanisms and safety nets in place now to avoid a depression (thanks, FDR; thanks, Dodd, Frank; thanks, central bankers) . . . or, worst case, to moderate its severity and shorten its duration. This isn’t to say the sky can’t entirely fall. (Russian stocks and bonds purchased in early March, 1917 did not rebound . . . ever.) But in America it never has and likely won’t now. Though I’d be surprised if the bear market has bottomed, people buying stocks today will likely not be sorry a few years from now. There’s even the possibility of surprises on the upside: > China may have solved its pandemic crisis, allowing its huge share of the global supply chain to come back on line. Same for South Korea* and Japan and some others. > So many smart people are working on a cure (just one example), we may not have to wait for a vaccine for life to return to normal — it could be safe for healthy not-old people to go back to work and restaurants and bars and concerts quite soon. Some would argue that already makes sense, so long as seniors remain largely isolated and super vigilant. To say a total lock down will have proved worth it “if it winds up having saved even a single life,” as one prominent, well-meaning politician recently did, sounds good, but if taken literally is inane. (“If you lived for 650 years, as I know you plan to,” writes my pal and DNC/Elizabeth Warren donor Zac Bissonnette, whose off-the-charts analytical aptitude is matched only by his joyful hyperbole, “and spent every day of those 650 years compiling all the stupidest things you could find anyone in the world ever having said, you would not find a single quote to match that one for stupidity.”) Shut down the American economy to save a single life? Ban all driving to save 30,000 annual highway fatalities — let alone a single one? I think we can all agree on this much: Bold, sensible measures need to be hammered out — immediately — and adjusted nimbly as circumstances change — even as science rushes to develop, and our government rushes to make available, cures and vaccines. And the same for the economic piece of the crisis. So how about this? THE IDEA: Allow people to borrow with from their IRAs and 401k’s with no taxes or penalties, interest-free, with up to five years to repay. Uncle Sam covers those loans, in bulk, so the pension fund managers — Fidelity, Vanguard, etc. — don’t have to sell assets to fund the withdrawals. Almost no paperwork: you’d just make the withdrawal, clicking a box to characterize it as a loan (even after the fact, if need be, to avoid delays in changing websites); and Fidelity, et al, would daily tell Uncle Sam how much to cash to lend them, interest-free, to cover those withdrawals. The cost to Uncle Sam — which can currently borrow for 5 years at less than 1% — would be minimal. Not everyone has a retirement plan, to be sure; this doesn’t solve every problem. But for the tens of millions who do, being able to borrowing a few months living expenses, as needed, would relieve a lot of the pressure on them and the economy. And to the extent the failed to repay the loans, well, that’s not the end of the world, either. After five years, whatever remained outstanding would be deducted from their retirement fund balance. But in the meantime, it would have been growing (one hopes) as if it had been invested the whole time. Details could be added to encourage early repayment . . . to prevent rich people from taking giant interest-free loans they don’t need . . . and to address other issues I haven’t thought of. But the big idea is simple, and virtually cost-free. Whadya think? *South Korea — a well-run democracy — registered its first case the same day we did but took drastic action immediately. They have had 8,800 cases, 102 deaths (a 1.2% mortality) and aren’t seeing new cases. Imagine if we had taken bold action two months ago, rather than follow this calendar.
Don’t Bail Out The Airlines! Watch “After The Truth” On HBO March 20, 2020March 20, 2020 But first: Here’s what leadership looks like — barely a minute. Tom thinks it’s remarkably good leadership. Carl remains fully on board. But with regard to the pandemic, Peter now rates Trump “2” on a scale of 1 (“horrendous”) to 10 (“fantastic”). We’re making progress. How can so much of the country have come under Trump’s spell? Watch After The Truth: Disinformation and the Cost of Fake News on HBO. You’ll find yourself recommending it to everyone you know. And second: Here’s what insider trading looks like — the Richard Burr story. And third: Could we please restore the deep state? It’s nothing more sinister than deep competence, deep experience, deep dedication. The kinds of public servants who used to staff the office of Medical and Biodefense Preparedness. And the State Department. And the EPA. And the FBI. Don’t you wish they were still there? And could we please embrace a 20-year vision that tips the balance modestly from private consumption, like larger homes, to public consumption, like revitalized infrastructure? Imagine spending 5% less of our GDP on the former each year and 5% more on the latter, gradually making up for decades of under-investment. Over long periods, modest shifts become transformative. (If you missed it, here again how the Federal Government and our national infrastructure were undermined from the right.) And now: Airlines used to go bankrupt on a regular basis. The shareholders lost everything but the planes kept flying just fine. The creditors and bondholders became the new owners. With limited resources, we shouldn’t be bailing out shareholders; we should be helping those who’ve lost their jobs pay for food, rent, and utilities until things return to normal. Tons to be concerned about on this first day of Spring. But if you’re safe and healthy and have broadband, the world is your oyster. Free TED talks! The free Khan Academy! The nearly free Netflix and Hulu and all the rest. Have a great weekend.
Take The Census Right Here And Now March 19, 2020March 18, 2020 But first . . . LEVERAGED ETFs. I forgot a second caveat when I warned Pete off leveraged ETFs yesterday: the problem of “slippage,” as explained here and here. TAKE YOUR OWN CENSUS: No need to have anyone knock on your door. Click here. Even if you haven’t already gotten a census form in the mail or under the door. CHOOSE YOUR OWN DEATH TOLL: A sobering way to put it all in perspective, from the indispensable New York Times. And finally, a contrary view: more people will die if people under 60 don’t go about their daily lives. With best of intentions, is it possible we are getting it all wrong? (To preview the 30-minute YouTube, take five minutes to flip through just the slides.)
The Deep State March 18, 2020March 18, 2020 Deep competence, deep expertise, deep experience, deep integrity. As promised, Trump has made great strides in gutting it. South Korea, by contrast, has not. Watch how that democracy, with less time to react, seems to have kept the virus from becoming calamitous. Tom offers this March 16 Washington Post piece explaining how Trump didn’t really shutter the office of pandemic preparedness. His perspective is worth considering, but I find this piece, from three days earlier, somehow more persuasive: I ran the White House pandemic office. Trump closed it. One thing for sure: despite having more lead time than South Korea, we haven’t handled the crisis nearly as well. And it’s not as though the White House wasn’t warned. Before Trump’s inauguration, a warning: ‘The worst influenza pandemic since 1918’ In a tabletop exercise days before an untested new president took power, officials briefed the incoming administration on a scenario remarkably like the one he faces now. Even as recently as March 6 — after the entire world had for several weeks been focused on China and Italy and Iran — Trump spent a visit to the CDC misrepresenting the state of coronavirus testing, praising himself, and attacking his critics: . . . [E]xperts have argued the biggest issue with the administration’s coronavirus response so far is . . . Trump has “made it primarily about himself.” And this concern was on display at the CDC when Trump took time to talk at length about his own intelligence . . . “I like this stuff. I really get it,” Trump said. “People are surprised that I understand it. Every one of these doctors say, ‘How do you know so much about this?’ Maybe I have a natural ability. Maybe I should’ve done that instead of running for president.” For a Trump-virus timeline, click here. It’s devastating. But Tom is fine with it. Pete: “Give up on Tom. I know you find it fascinating that an Ivy Leaguer could join a cult, but perhaps he was a legacy. Can we switch topics? How about this? For those of us who are certain the market will recover in the next 2-5 years, and are betting money we can’t afford to lose, are leveraged ETFs for the DOW30 and S&P500 subject to contango, like commodities?” → Wait — did you mean betting money you CAN afford to lose? Quite a different answer if you did mean CAN’T. Pete: “No, I meant can’t. Going into this panic I had 50% (of 500K total) cash on the sidelines. My intention had been to jump back in when Dow30 = 20,000, assuming it would come back to 30,000 in two years. . I’ll take that return any time. If the Dow never returns to 30,000, then I won’t be retiring. Then, I hear there are 2X and 3X Dow30 ETFs. Management fees are less than 1% on all. Just concerned that there may be contango on the leveraged funds that I am not considering. 2 years of contango could suck.” → You’ll only remember this advice if I turn out to be wrong, but: don’t gamble — let alone use leverage — with funds you CAN’T afford to lose. If you buy a 3X exchange-traded fund (ETF) and the Dow (or whatever index you’ve chosen to bet on) drops 20%, you’re down 60%. As to “contango” — no. It doesn’t apply here. With commodity futures (which index funds are not), buyers frequently PRICE IN some of the future appreciation they expect (that price premium is called contango), so if the price (of oil or cotton or sugar or whatever) doesn’t rise faster than expected, there’s no profit to be made. The real problem with leveraged ETFs — and it’s a very big one — you’ll find explained here. Right now, for money you CAN’T afford to lose, the bank is not a bad place for money. For money you can, you might nibble various places (though I’d be surprised if with hindsight we discover that the bear market ended Friday night). For example, I bought more CNXM under $7 yesterday. It’s acting as if its going to zero, and perhaps it will. But coal and oil — worse polluters than the natural gas flowing through CNXM pipes — still generate way too much of our electricity. So it’s possible the guidance the company is providing is legit: a yield of 20% or so, which they believe they think they can increase in each of the next three years. We’ll see.