Coronavirus Update 3/20/2020

By Whitney Tilson

Friday, March 20, 2020

– Here are the latest versions of the four key charts I track every morning, new cases by day in the U.S., the rest of the world (excluding China), Italy and Iran. As I’ve said before, for now the steep rise is GOOD news for the U.S. and most of the world because it means widespread testing is ramping up and identifying more of the infected people. But at some point (perhaps Italy and Iran now), the rise will reflect mostly new infections, so a continuing rise will be bad news. 

 - Speaking of Italy, a friend forwarded this:

 Attached is a data summary from Italy on the Covid-19 deaths. My Italian isn’t great, but Google Translator’s is fantastic. Basically, there are 3 critical take-aways from this report. First, there is a very wide geographical distribution of deaths. Most areas had single or below single digit death rates in terms of percentage. However, Lombardia at 71% and Emilia-Romagna at 17% were astonishing outliers. Second, the disease affects primarily older people. We know that. Finally, and perhaps most interesting is 99.2% of the deceased has pre-existing acute pathologies. Only 3/355 (0.8%) were free of pre-existing disease. Advanced cardiac disease seems to have the greatest impact with hypertension, AF and ischemia leading the way, followed by diabetes and active cancer within the last 5 years (assuming immunocompromised?)


The average age of deceased and COVID-19 positive patients is 79.5 years (median 80.5, range 31-103, Range
InterQuartile – IQR 74.3-85.9). There are 601 women (30.0%). Figure 1 shows that the median age of the patients
COVID-19 positive deaths is more than 15 years higher than that of patients who contracted the infection (median age: patients who died 80.5 years – patients with infection 63 years). Figure 2 shows
the number of deaths by age group. Women who died after contracting COVID-19 infection
they are older than men (median ages: women 83.7 – men 79.5).

Table 1 presents the most common pre-existing chronic pathologies (diagnosed before contracting
infection) in deceased patients. This figure was obtained in 355/2003 deaths (17.7% of the sample
total). The average number of pathologies observed in this population is 2.7 (median 2, Deviation
Standard 1.6). Overall, 3 patients (0.8% of the sample) had 0 pathologies, 8 9 (25.1%)
had 1 pathology, 91 had 2 pathologies (25.6%) and 172 (48.5%) had 3 or more pathologies.

– I asked a friend who’s lived in Shanghai for decades what China did in terms of a lock down to successfully combat the coronavirus, and what was different in Wuhan and Hubei province vs. the rest of the country. Here was his reply: 

On January 23rd the Chinese government started to “lock down” Wuhan and a number of cities around Wuhan in Hubei province by closing roads, canceling trains, flights, and boats. This gradually expanded to include all of Hubei Province in the days that followed.

The complication, and to some extent blessing of this “lock down” timing, was that January 25th was start of the Lunar New Year holiday, officially scheduled to go until February 8th. Starting January 10th and definitely by January 17th, much of China was already on the move, heading home for the holidays. There are a various estimates of the scale of travel during the broader 40-day (10th January – 18th February) Spring Festival, but it’s likely in the range of three billion individual trips. Estimates are that millions had already left Wuhan prior to the January 23rd “lock down”.

The blessing of the “lock down” timing was that during the Lunar New Year holiday, especially the 15-day period between January 24th and February 8th, most of China was already scheduled to shut down, including schools, factories, company offices, and even many retail and restaurant operations. In Shanghai, we first noticed the exodus (earlier this year given the timing of the Lunar holiday) just after January 10th, when “kuaidi” deliveries fell dramatically, as many workers had left the city for their home towns.

As a result, there was initially no need in China for a “shelter in place” along the lines of what is being discussed now in the United States. As the crisis unfolded during the holiday, the Chinese government at various levels gradually extended school, office, factory closures – initially until the end of February. Restaurant and retail operations that were not already closed were shut down, except for delivery/pickup business.

Our office opened on February 10th with a basic administrative team and most other folks working remotely. We were given a general guideline by the local government to keep on-premises staffing at around 50% until the end of February. Our son’s Shanghai middle school began online learning classes on February 11th. Online learning has now been extended by the Shanghai government for all middle and senior high schools until April 6th

In Shanghai, there has been no confinement to homes other than initially for those coming from Wuhan/Hubei (for 14 days); this was eventually extended to anyone coming from other parts of China outside Shanghai (also 14 days), and now includes a growing list of countries (including the United States).

Otherwise, folks have been able to move freely around the city, but must wear masks on public transportation and be subject to ubiquitous temperature checks. Most folks initially stayed close to home other than for food or medical reasons.

As I wrote earlier, gradually things have been coming back to more normal levels, though we still have a ways to go, especially in terms of retail and restaurant recovery. Here are some graphs showing daily subway ridership in 2019 and 2020 in four of China’s largest cities. As you can see, utilization is gradually coming back, especially in Shanghai.

– Australian fund manager John Hempton of Bronte Capital is no fan (to say the least) of Pershing Square’s Bill Ackman, but he’s in agreement with him on taking the strongest possible measures to stop the spread of the coronavirus. Here’s what he posted on his blog yesterday: Coronavirus – getting angry. Excerpt:

The right policy is not “herd immunity” or even “flattening the curve”. The right policy is to try to eliminate as many cases as possible and to strictly control and test to keep cases to a bare minimum for maybe 18 months while a vaccine is produced.

The alternative is literally millions of people dying completely unnecessarily.

What is required is a very sharp lockdown to get Ro well below one – and put the virus into exponential decay.

When the numbers are low enough – say six weeks – you let the quarantine off – but with Asian style monitoring. Everyone has their temperature measured regularly. Quarantine is rigid and enforced. You hand your phone over if you are infected and your travel routes and your contacts are bureaucratically reconstructed (as is done in Singapore). And we get through.

And in a while the scientists save us with a vaccine.

The economic costs will be much lower. Indeed life in three months will be approximately normal. 

The social costs will be much lower. 

Every crisis has its underlying source. And you want to throw as much resources (and then some) close to the source. Everything else is peripheral.

The last crisis was a monetary crisis and it had a monetary solution. 

This is a virus crisis and it has a virology solution.

Asian Governments are not inherently superior to ours – but they have done a much better job of it than ours. The end death toll in China (probably much higher than stated) will wind up much smaller than the Western death tolls. I do not understand our idiocy.


PS. Longtime followers of this blog will know that I have rarely publicly agreed with Bill Ackman. I do here. This minimises economic and social cost of the virus. I am not sure the stock market bounces hard with a rational policy, only that it minimises the damage.

I regard the current course of English speaking democracies (other than New Zealand) as mass murder by the political elite. I think history will regard it that way too. 

– Not everyone is in agreement with Hempton and Ackman, however. Richard Epstein isn’t an epidemiologist – he’s a legal scholar at Stanford’s Hoover Institution – but he nevertheless makes the best case I’ve heard for why the coronavirus isn’t going to be anywhere near as bad as many fear. Coronavirus Perspective. Excerpt: 

From this available data, it seems more probable than not that the total number of cases world-wide will peak out at well under 1 million, with the total number of deaths at under 50,000 (up about eightfold). In the United States, if the total death toll increases at about the same rate, the current 67 deaths should translate into about 500 deaths at the end.

… Much of the current analysis does not explain how and why rates of infection and death will spike, so I think that it is important to offer a dissenting voice. In what follows, I look first at the trends in the American data, and then, building on my conclusions there, I construct a theoretical framework to evaluate the evolution of the coronavirus in other places. 

Based on the data, I believe that the current dire models radically overestimate the ultimate death toll. There are three reasons for this.

First, they underestimate the rate of adaptive responses, which should slow down the replication rate. Second, the models seem to assume that the vulnerability of infection for the older population—from 70 upward—gives some clue as to the rate of spread over the general population, when it does not. Third, the models rest on a tacit but questionable assumption that the strength of the virus will remain constant throughout this period, when in fact its potency should be expected to decline over time, in part because of temperature increases.

– Along the same lines, Victor Davis Hanson, also of the Hoover Institution, calls for a more measured response: Some Coronavirus Humility. Excerpt: 

With new draconian measures of containment, we are entering the realm of cost-benefit analyses, given that for every drastic action there is an equally radical reaction—calibrated by everything from physical and mental health issues to economic, financial, security, legal, and political upheavals. Whether we like it or not, the current sweeping measures to curb the virus come at a huge cost—and the tab isn’t just financial or economic, as is sometimes alleged, by both advocates and critics of quarantines, cancellations, and radical social distancing. It involves health issues as well. 

If the country goes into a serious recession or even depression; if trillions of dollars more of investment and liquidity continue to be wiped out while businesses crash and jobs are lost; if millions of unemployed cut back on their scheduled health care; if they increase their use of drugs, alcohol, or tobacco, and get less exercise and suffer depression holed up in their homes or must borrow or scramble to find daycare for their school-age children; if they even contemplate suicide—then the human toll spikes in concrete terms of life and death. In the long term, arming ourselves against the virus could be as serious as the virus itself, though to suggest that in these dark days of plague is heresy… 

Issuing dramatic warnings can be as much about life-and-death decisions as not issuing them. Not going to work for those under 65 can pose as much a collective societal risk as going, and panic may be as deadly for a country of 330 million as infection is for those not in high-risk groups—and all such suppositions can change by the time this essay is read. 

Humility, not certainty—much less accusation and panic—should be the order of the day. 

– Tom Friedman is spot-on, as always: Our New Historical Divide: B.C. and A.C. — the World Before Corona and the World After. Excerpt:

 Will American culture or politics be fundamentally changed by this pandemic? I know for sure one joke Republican politicians will not be telling on the campaign trail this year. It’s the one where they impugn the deep state, government bureaucrats and get the audience to laugh by saying, “Hi, I’m from the government and I’m here to help.”

We’ll get through this crisis because of the depth of talent, and selfless commitment, in our deep state, our Big Government: the scientists, the medical professionals, the disaster professionals, the environmental experts — all the people whom Trump tried to prune. Right now I am rooting for both Big Government and Big Pharma to rescue us. 

…It’s been pretty obvious, said Gelfand, that “famously ‘tight’ societies like Singapore and Hong Kong … have demonstrated the most effective response to Covid-19.” 

At the same time, our deficiencies in White House coordination and reckless public figures — like Larry Kudlow, Sean Hannity, Laura In­graham, Rush Limbaugh, Kellyanne Conway, Devin Nunes and Trump himself —– who initially minimized the virus’s potential impact or imputed political motives to those pounding the table for action, helped compound the risks to us all.

So, Gelfand concluded: “In all of the uncertainty, we need to remember that the trajectory of the virus has as much to do with the nature of the coronavirus as it does with culture. Our loose cultural programming needs to do a big switch in the days to come.”

The Greatest Generation did it in World War II. But can we now? 

– Good to see NY pass a good sick leave bill. We need the same nationally! 

Earlier this week, the New York state legislature passed S8091/A10153, which was subsequently signed into law by Governor Cuomo the same day. The law provides unpaid and paid sick leave benefits to those employees subject to an order of quarantine or isolation due to COVID-19. The law is limited to the COVID-19 illness and takes effect immediately.

COVID-19 provisions

Leave due to mandatory or precautionary order of quarantine or isolation issued by NYS due to COVID-19.

  • Employers with 10 or fewer employees must provide unpaid leave to an employee under quarantine until end of quarantine or isolation
  • Employers with 10 or fewer employees with $1 mil or more in net taxable income in the previous year must provide 5 days of paid sick leave to an employee under quarantine and unpaid leave until the end of quarantine or isolation
  • Employers with 11-99 employees must provide 5 days of paid sick leave to an employee under quarantine and unpaid leave until end of quarantine or isolation
  • Employers with 100 or more employees must provide 14 days of paid sick leave to an employee under quarantine
  • Public employers must provide at least 14 days of paid sick leave, with each employee compensated at their regular rate of pay, and without loss of an employee’s accrued sick leave

In instances, where the paid leave does not cover the full quarantine period an employees will be eligible for paid family leave benefits and disability benefits subject to certain limitations.

  • Upon return to work following COVID-19 leave, the employee shall be restored by his or her employer to the position of  employment held by the employee prior to any leave taken with the same pay and other terms and conditions of employment.
  • The legislation also waives the 7-day waiting period before New Yorkers can apply for unemployment insurance for loss of employment due to closure of an employer for a reason related to COVID-19.

– A good interview with Scott Gottlieb, the former FDA commissioner, who calls for targeted lockdowns, not nationwide: (6:42) 

– Forwarded from a friend: 

I got this last night from my sister-in-law in Palo Alto where they are in Shelter in Place mode…there is a link explaining what the rules are and then a very strong letter from a doctor that all young people especially should read so please pass it on!!  Also, I called Cuomo’s office this morning asking him to allow de Blasio to enact it for NYC.  Here is what I got from Palo Alto: 

Passing along something from a friend re being asymtomatic:

Dear friends and family,

For those inclined to “cheat” or slack on the social distancing.  Please read and please act. 
Shelter in place rules are here.  Today the Bay Area, tomorrow the country?

Stay safe,    Lynn

P.S. I know the source and trust the instructions, which were directed to a local neighborhood within our town.

From: Dr. PJ Utz
Date: Tue, 17 Mar 2020 21:50:12 PDT

Dear Ladera Neighbors:

My Stanford lab and all nonessential Stanford labs have been shut down today. So I have time to finally post something on the Ladera List Serve about the pandemic. This is my first posting since the Alpine Road Trail issue many years ago. I apologize for the length, but please read it carefully.

Many of you are compulsively following guidance from Tony Fauci at NIH, local government, and CDC, and should be commended. But many are not following guidelines and are placing the broader bay area community at great risk. The COVID pandemic should be taken much more seriously than I have been observing in the last 24 hours – at Bianchini’s (grocery), on the streets, at Ladera field and playground, at the gas pump, in social media posts, and across the country in general. This virus is far more contagious than people realize, and far more dangerous. Young people in particular need to lead this effort to change behavior, both by using social media and by changing their social behavior. Older adults also have to take this seriously.

The most compelling new data was published yesterday in Science magazine. It is now very clear that a majority of viral transmission is occurring from asymptomatic young people who propagate the infection and then infect people who are at greater risk. These groups include the elderly; people who are immunocompromised (eg, are being treated for cancer or autoimmunity); and people with preexisting conditions like diabetes, heart disease or lung diseases like emphysema and asthma. In Wuhan, it is estimated that 30% or more of young people were infected and spreading the virus despite feeling well. This coronavirus is behaving differently than the ones that caused SARS and MERS. Those viruses pretty much only infected others if the infected person had symptoms. The World Health Organization is also considering recommending more rigorous respiratory precautions for healthcare workers. This is not just a “cold” or the “flu”. And our shelter in place order is not a drill.

Please share this email with anyone you like. Our best hope to end this pandemic as quickly as possible, and with as little impact as possible, is for the whole country (not just our 6 bay area counties) to shelter in place. Because of the exponential spread, a delay of even one day could lead to an increase in cases of 40% when this infection peaks weeks or months from now. Governor Newsome just announced the National Guard has been placed on alert, so the next step is a full lockdown. I personally don’t want to see the National Guard on the streets of Ladera.

Is it time to panic? Absolutely not. Is it time to 100% shelter in place and mobilize Ladera’s emergency response network – Absolutely.

To all:

  • If you have symptoms, rigorously self-isolate for 14 days – or longer if guidance from public health officials changes.
  • If you have symptoms and have been tested and are negative – still assume you are positive. There are many reports of people here in our county who initially tested negative, assumed they were negative, then converted to positive later when their viral load increased. By then, they had potentially infected others in the interim. Especially young people. Donovan Mitchell of the Utah Jazz was infected over a week ago, tested positive, yet reported on social media yesterday he feels absolutely normal and has never had symptoms. Kevin Durant and 4 other Nets tested positive today.
  • If you learn you have been or may have been exposed – self isolate and discuss with your healthcare provider for next steps.
  • Bottom line, if you have symptoms regardless of testing results – enter strict quarantine until you have guidance from your healthcare team.

To Elderly, Immunocompromised, and those with Other Risk Factors:

  • Don’t leave your house. Shelter in place.
  • Walking outside is fine but maintain strict distancing at all times.
  • Don’t have your visiting kids or grandkids or frankly anyoneenter your house unless it is absolutely necessary – a well-meaning, healthy teenager coming in to visit who is not aggressively self-isolating is a great way to infect those who are at risk.
  • If you have kids or grandkids living with you, and they are also being strictly isolated – enjoy the family time! But don’t let other kids into the house…
  • People should leave you food and supplies once or twice a week, knock on your door, and say hello from more than 6 feet away. Then leave until the next drop off.
  • If you absolutely have to leave your home for doctor’s appointments or important therapies (eg chemotherapy, etc but not elective visits or PT), wipe down door handles or anything the public touches, wash your hands regularly, and don’t touch your eyes, nose or mouth at all.
  • If you don’t have the virus, and you do these things, then there is essentially no way to get infected and you’ll ride this out just fine.

To Parents of Kids Under the Age of 18:

  • Shelter in place.
  • Do not let your kids interact with other kids outside your immediate household. There were kids playing in large groups on Ladera field today. Stop!
  • Play dates are not OK. As one Laderan posted on the list serve – “This is not a snow day!”.
  • Please, please, please do not take your kids to Bianchini’s or any other public place. Keep then in the house or the back yard or playing on the street (without playing with other kids outside the household). They are much more likely to have no symptoms but are still able to spread to others. Decreasing the density of people in stores like Bianchini’s and Safeway reduces everyone’s risk, including the workers there.
  • Designate one healthy adult to shop with a targeted shopping list. Get in and out quickly. Distance yourself from other shoppers by 6 feet or more. Use wipes for touching surfaces. Wash your hands after. And don’t panic buy – yesterday at Bianchini’s was terrible. The staff there did a phenomenal job under trying circumstances. It is unfair to place them at such risk. I drove by Safeway tonight and the parking lot was largely empty. Shop when few people are around.

To Pet Owners:

  • If you take your pet for a walk, maintain social distancing with other pets and with other walkers.
  • This virus is thought to have come from bats. Because we know so little about it, we don’t yet know if pets can also become infected and serve as asymptomatic shedders.
  • Current guidance from scientists is to not allow others to touch your pets until more is known about the virus. This will likely take several months to understand better.

To Young Adults:

  • You are by far the most socially active, and thus at greatest risk of infecting others.
  • You are also uniquely positioned to make the greatest impact on stopping the pandemic.
  • Before you disregard any or all of the advice in this posting, think about your parents, grandparents, and other family and friends who are at high risk of getting really sick and potentially dying if you infect them. It is true that you are much less likely to die or to even be sick. That is comforting. But is hanging out with your friends in person more important than infecting vulnerable people? Other Laderans? Your own family and friends?
  • It is your responsibility as an adult to try to help your community, and to change your behavior to break the chain of infections.
  • Instead of interacting with each other in person, think about ways you can use social media to get other millennials to shelter in place voluntarily – even in places around the country that are not yet in lockdown.
  • Finally, think about ways you can help those who are elderly have preexisting conditions, or are immunocompromised here in Ladera. They  can’t leave their houses for at least 3 weeks, and possibly longer:
    • Help organize other millennials to get them groceries, medications or other supplies each week – leave them at the front door.
    • Bake them something.
    • Call or face time them regularly to decrease their sense of isolation.
    • If they are outside walking (which is allowed now but could be stopped if we go from shelter in place to a full lockdown), stop and talk to them for a while (at a safe distance).

The bottom line here is that ALL of us have to change our behavior right now. Based on Wuhan and Italy, the wave of infections will continue to rise even if we make all these changes TODAY. We will not peak for weeks to months. The length of time before we peak in the bay area, and the height of the peak, depend largely on whether we change behavior, and how quickly. We need to learn from Wuhan, Singapore, and Hong Kong. And from Italy and France where healthcare workers are overwhelmed.  

The only thing that should “go viral” right now is social media imploring people to take this pandemic seriously and follow the advice in this posting. Below I share advice sent to me by a Stanford Faculty member yesterday:

Thanks, PJ Utz

Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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