Covid-19 already meets two. It spreads between people and it kills.
The third is that it has to spread worldwide.
The virus is already in 84 countries and counting.
I’m asking you not to panic, but to act accordingly. Regardless of what “the authorities” have told you…
I’m legitimately scared. This is the first time since the 2009 H1N1 flu pandemic that I’ve got an awful lot to live for.
I hope it’s not that bad, but we should assume it will be until we know otherwise.
It’s important for us to not compare multiplicative pandemics to car crashes or the common flu.
When paranoid, you can be wrong 1000 times & you will survive.
If non-paranoid; wrong once, and you, your genes, & the rest of your group are done.It's a yuuuge mystery that academics who deal w/risk, "rationality", subforecasting & superforecasting fail to get it.
— Nassim Nicholas Taleb (@nntaleb) February 24, 2020
We see this time and time again, politicians coming out and saying that you don’t have to panic. We got this “under control“.
Well, what happens next?
All Hell breaks loose.
Always assume the worst-case scenario even if your neighbors aren’t.
Don’t take a politician’s word for granted.
Don’t panic. Doctors/ virologists I’m speaking to say 98% of people will be fine, even if they get Covid-19. They expect it will go around the world, but that most people who get it will be a little sick, then recover. The danger is to vulnerable people. Hospitals/ old age homes.
— Richard Engel (@RichardEngel) February 26, 2020
What happens to the other 2%?
2% of 8 billion is 160 million people…
In the media, human life is but a number. But I’m pretty sure everyone have older & more vulnerable people they love.
When an infected person sneezes or coughs, more than half a million virus particles can spread to those nearby.
This is an exogenous force.
Its impact on civilization is unknowable.
No entity can help you discern the kind of disruption it brings.
In an economic crisis, the government can at least print itself out of trouble. But you can’t print your way out of a pandemic.
Flu pandemics happen rarely. Only 4 have happened in the past 100 years.
The last one, killed half a million people in the first year it circulated.
The worst one, claimed 50 million victims, more than the death toll in WW1.
So If you’re still trying to be rational, you’re crazy.
This Black Swan Event poses extreme danger to mankind. In particular the weakest and most ignorant.
Remember, it’s survival of the fittest. Not survival of the most ignorant.
To survive, you must first assume the worst. Then prepare for it.
In a way, you are entirely rational to be irrationally panic.
That’s what our ancestors have been doing for millions of years. That’s how they survived & thrived, as opposed to the ones who do not (they did not panic-run at the rustling of leaves. And then a lion ate them).
You can mistake the rustling of the leaves for wind instead of a lion and live. You mistake the lion for wind just once and you’re dead meat.
The Virus
A) HOW MANY COULD GET INFECTED
Harvard epidemiologist Marc Lipsitch told The Wall Street Journal that “it’s likely we’ll see a global pandemic” of coronavirus, with 40 to 70 percent of the world’s population likely to be infected this year.
There might be millions infected who are not showing any symptoms.
All we know is the number of infected who required hospital treatment. We have no idea if this is 100% of people infected or 0.01%.
It’s important not to mistake the absense of evidence for evidence of absense.
Low incidence = low testing
Respiratory machines and ventilators are very expensive and it’s not possible for hospitals to stock up on these. If you are the 50th person entering a hospital in need of treatment you may get help. But what if you’re the 5000th?
If you must panic, panic early!
The 2009 H1N1 Pandemic
You may not remember, but the last flu pandemic (H1N1) was in 2009, it started in the United States, killed up to half a million people in the first year it circulated, and then it just… became another seasonal flu that people get. [Source]
- Seasonal Flu vs. Pandemic Flu
- Death vs. Response Time (The earlier schools were closed, the lower the death rate during the 1918 pandemic)
B) FATALITY RATE
This is pretty hazy, but it’s a disservice by the media to keep pushing the idea that only 2% will be dead.
Since we don’t know how many are infected, there’s no way to know the fatality rate.
Death by age group on the other hand paints a clearer picture (something to do with cardiovascular and the lung condition):
C) IMMUNITY
We don’t know if someone gets immunity if exposed to coronavirus.
A study suggest that the new coronavirus can linger inside the body for at least 2 weeks even after symptoms subside.
This isn’t exactly a bad thing, as the body could have developed a strong immune response against the virus.
However, in Japan, there was a case of an individual who recovered and then became ill with the disease a second time.
Unlike their common-cold-causing cousins, this virus can spark a viral-induced fire throughout many of a person’s organs.
D) IS CONTAINMENT WORKING?
Our chance of containing the virus may already be over.
Again, because those in power have a habit of downplaying the early warning signs. Aggressive and “expensive” counter-measures are often deployed much later.
You should assume that the entire world will get exposed. It’s no longer a question of “if”, it’s now a question of “when.”
BUT, and this is important, we have to continue striving to contain this outbreak.
IT hasn’t peaked in poorer countries yet. If it does, it would quickly overwhelm their medical systems.
The best course of action for them is the Fabian strategy.
Delay dissemination as long as possible by minimizing interconnection “adopt social distancing” to reduce the load on the medical system and buy time for the development of a vaccine.
An example of Extreme Countermeasures: China’s cases of Covid-19 are finally declining. A WHO expert explains why.
Thanks to its precautionary policies & speed of implementation, the safest place for anyone from the #coronavirus may soon be China. – Nassim Nicholas Taleb
The Impact
As I see it, this virus will certainly come and go, as soon as we develop a herd immunity.
Trouble is, the emotional impact can put a dent in the economy which could take years to recover.
The economy is more fragile than it was in 2008.
Like a pendulum.
When the pendulum gets pulled too far out in one direction, the unseen forces of gravity swings it back in the opposite direction.
At the moment, we’re pretty far out there in terms of what’s going on with the financial markets, monetary and fiscal policy.
This next recession would be a massive economic reset – a depression on a global scale.
Much Bigger than the one in 2008.
Not an airline or insurance company will be solvent, nor will the global pensions.
Stock markets will crash.
Real estate prices would plummet.
This is one of those events that happen once in a hundred years that annihilates those who don’t protect themselves. Well, because they’re betting that Black Swan events never happen.
Few industries have a plan B.
While this sounds alarming.
It is how the market restores balance.
If nature ran the economy, it would not continuously bail out its living members to make them live forever.
Bail outs have been the central cause to the fragility of our financial systems.
Also, the harsh reality of widespread shutdowns to major industries and disruption of critical supply chains have not been fully priced in yet.
Amazon sellers would be forced to hike their prices to source from alternatives.
They will not be as cost effective as China.
Some of the most common needs are almost exclusively made in China: Tylenol, all antibiotics, antianxiety medication (18 million subscriptions in the U.S. and heavily physically addictive), tissues, Clorox, vitamin C, salt, pepper, birth control pills, etc.
The list is huge.
Many small businesses expected that after the Chinese New Year, they could restock their inventories.
BUT their factories/suppliers are not even returning calls.
They are CLOSED DOWN and could be for months.
Many of these businesses will go out of business as long as containment is in effect within the next few weeks.
Seven billion people will be affected.
Unemployment will be the worst since the Great Depression.
But no big deal, life goes on.
It is all part of the game. This is evolution at work, as those who survive are the fittest and take over from the dinosaurs.
Long Term Opportunity
It’s odd to look for opportunity in the middle of a crisis but transitional periods always give tremendous upsides to prepped individuals.
There’s not much we can do about something we cannot see, touch, smell or hear.
All we can do is anticipate and wash our hands religiously.
Expect MASSIVE STIMULUS.
With interest rates near the lowest they’ve ever been and a fiscal deficit of $1 trillion, what happens when a recession hits?
Do rates go seriously negative? Tax cuts? MMT? Helicopter money?
The devaluation of your savings would seem inevitable.
This could lead to disaster in 2021 and beyond (or not) but will also cause a potentially massive overheating in the stock market and real estate in 2020 if fears of the virus subside.
Financially:
What are the ramifications of free money? What kind of asset or commodity have more potential upside? What will be the upside AND the downside of massive financial stimulus which will almost certainly happen within the next month or so.
The sociopathy required to fix a series of popped bubbles by creating even bigger, and even more unsustainable bubbles will mark the end of the legacy system.
These are things you should be contemplating about.
There is no time to waste.
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