Hope, Faith, and Destiny

By Charlie Bilello

26 Mar 2020


Hope

“Hope is the thing with feathers
That perches in the soul
And sings the tune without the words
And never stops at all.” – Emily Dickinson

One month ago, Wuhan and the Hubei Provence were the epicenter of the coronavirus outbreak. In the past week, new reported cases there have moved down to zero.

In broader China, the number of Active Cases is at its lowest level since January 26.

https://www.worldometers.info/coronavirus/country/china/

China has started sending millions of masks, test kits, and other resources to countries that are most in need, including Italy and Spain.

Jack Ma (founder of Alibaba) has sent 1 million masks and 500,000 test kits to the United States, and his foundation is sending supplies to Europe, Japan, Iran and Africa to help combat the virus.

South Korea is sending test kits to the U.S., as active cases in their country continue to decline. The South Korean model is being studied closely by Italy and the world, being implemented in parts wherever possible.

https://www.worldometers.info/coronavirus/country/south-korea/

For the return to normalcy that we are all seeking, there is hope…

“For many in China, life is slowly returning to normal, giving other countries a glimpse of what might await them once the worst of the epidemic has passed … In Beijing, traffic has begun to return and more residents can be seen out on the streets, in parks and in shopping and restaurant districts.”

Faith

“Without faith a man can do nothing; with it all things are possible.” Sir William Osler

The world is united like never before to defeat a common enemy, and we’re blessed to be living in an age of unprecedented scientific capabilities.

The result is a global race to find an effective treatment that will improve outcomes and save lives. There are currently 4 promising therapies, and the WHO has launched a global trial in addition to the many other trials going on in various nations.

The two most promising:

Remdesivir: an antiviral previously studied as potential treatment for SARS, MERS, and ebola.

Chloroquine or hydroxychloroquine combined with azithromycin : drugs used to treat malaria and lupus coupled with a common antibiotic.

It’s too early to say if these treatments or others will prove effective, but I have faith in human ingenuity and grit. We’ll figure out a way to combat this, and faster than ever before.

Destiny

“It is not in the stars to hold our destiny but in ourselves.” – William Shakespeare

“I guess it comes down to a simple choice: get busy living, or get busy dying.” – Andy Dufresne, Shawshank Redemption

The Dow was up 11.37% on Tuesday, its 4th largest gain in history.

If we look back at the top 25 daily gains historically, 15 occurred during the Great Depression (August 1929 – March 1933) and 4 during the Great Recession (December 2007 – June 2009).

A deep recession at this point is a given, and its impact is already being felt across every industry and household in America. Millions of jobs will be lost. But whether this turns into a Depression is up to us; the outcome is not preordained. The choices we make in the next few weeks will determine our destiny.

Let me explain…

With extraordinary speed and coordination, we have decided to shut the economy down for a few weeks in an effort to “flatten the curve.” Whether this was a prudent decision or not we’ll never know, because we cannot prove the counterfactual (what would have happened otherwise).

The shutdown has undoubtedly slowed spread of COVID-19, and in turn will likely save lives. The question is how much longer we can continue to do so without suffering irreparable long-term harm.

If this was the modern-day plague, expected to kill 30-60% of the population, we might all concede that a continuation of draconian measures would be warranted.

But a plague this is not, and how its severity compares to prior pandemics is still very much a matter of debate.

Thus far, 22,000 people have died of COVID-19 around the world and over 1,000 in the U.S. since the first reported death in China on January 11. These numbers will continue to grow in the coming weeks and months, and without proper context (that the media never provides) could lead to panic and hysteria. In a world with over 7.7 billion people and 150,000 deaths per day, perspective is always necessary.

So let’s provide some context…

  • These are the leading causes of death in the US each year…
Souce: CDC
  • And the leading causes of death globally…
Source: WHO
  • The seasonal flu is estimated to kill 468,500 globally (range of 291,000 to 646,000) each year, infecting up to 1 billion people. Thus far in the U.S. this season, an estimated 38-54 million have contracted the flu with 390,000-710,000 hospitalizations and 23,000-59,000 deaths.
Source: CDC

Now that we have some perspective, we need to address the primary concern: that this could be exponentially worse than H1N1 and the seasonal flu. Some extreme fear-mongers are saying that there will be tens of millions of deaths and the end of life as we know it.

In their assumptions, they are using a) a high reproduction rate (how many other people each positive case will infect, R0) that continues unabated, and b) a high case fatality rate (number of deaths over number positive cases, CFR).

The major problem with these doomsday predictions: they are entirely dependent on worst-case scenario inputs for two unknowns.

Even today, our best estimates of R0 and CFR are severely flawed, as we don’t have any idea how many people in the broad population currently have the virus or have had it and already recovered.

As John Ioannides (professor of Epidemiology, Biomedical Data Science, and Statistics at Stanford) wrote in a thought-provoking piece, “we don’t know if we are failing to capture infections by a factor of three or 300.”

That huge difference is everything. For if the case fatality rate is not materially higher than that of the seasonal flu (0.1%), how many of us would choose a certain Depression as the “only option”?

Some still might, but I suspect the vast majority would not, as they understand that shutting down the global economy will impact billions of lives. The negative health effects from a global Depression would far exceed the number of lives saved.

Which is another way of saying that you cannot eliminate all risk of death in the world without dire consequences. There are 36,000 traffic-related deaths in the US each year (1.35 million around the world), but we still let people drive cars because the collective benefits of freedom and mobility are massive.

The best predictor of general health outcomes and lifespan is economic prosperity. If you choose to push the world into a Depression, then, you better have a really good reason for it. It had better be akin to the plague because a Depression will most certainly lead to a plague of a different kind.

So how do we get a better estimate of the true death rate, so that we can choose our destiny wisely?

By swiftly testing a broad spectrum of the population, from newborns to the elderly. Blood tests that can detect anti-bodies would be preferable to swabs as they could show who has had the virus and already recovered. To date, that has yet to be done, and as a result we’re leaving out unknown multiples of positive cases that are asymptomatic or mild. In a virus where everyone gets severely ill, this wouldn’t be much of an issue, but in a virus like COVID-19 where we already know a huge percentage is mild/asymptomatic, we are making society-alternating decisions using bad data.

On this front, though, there are some positive developments.

Iceland, a country of 364,000 people, is attempting to randomly test as many of its citizens as possible. They have tested on a per capita basis more than any country in the world. The results are being tallied daily, but thus far roughly 1% of the random sample has tested positive with about 50% of positive cases showing no symptoms at all.

The Iceland example confirms an earlier case study in the small town of Vo, one of the initial lockdown towns in northern Italy. All 3,300 people in the town were tested, with 3% (89) showing positive results and the majority of positive cases having no symptoms. When they re-tested the population two weeks later, only 6 tested positive and they were all asymptomatic.

With widespread testing and isolation of all positive cases, including those who were asymptomatic, Vo was able to stop the spread of the virus in its tracks.

In most of the world, testing is still limited to those showing the most severe symptoms. This creates an extreme selection bias, showing a much higher fatality rate than is actually the case. In testing the broader population, we can come closer to the true number, and attempt to isolate everyone with a positive test, regardless of their symptoms.

And so, we as a society have a choice to make in the coming weeks: get busy living or get busy dying.

We can continue to treat this like the plague, drive the world into a Depression, and get busy dying. Or we can take a few week hiatus, get smarter about broad testing and isolation, and get busy living.

Living your life and protecting those most at risk are not mutually exclusive. We should continue to do everything we can to save lives (social distancing, protecting those most vulnerable, researching treatments, mass testing, etc.). But we cannot stop the entire economy on the false narrative that it will save every life. It won’t and if we pretend that it will many more lives will be lost in the Depression that ensues.

The doomsayers will tell you to stay home forever, that shutting down the economy is the “only way” to save us from extinction. They are wrong, operating on faulty assumptions, and we cannot let them win.

Over 350,000 babies were born into the world today as life goes on in spite of everything. Let’s make sure they have a bright future to look forward to.

About the author

Charlie Bilello

Charlie is the founder and CEO of Compound Capital Advisors.

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