New infections have been declining at an almost adequate pace (10% per week?) in most parts of the US, and probably the rest of the developed world.

The overall reported new cases look more discouraging, for two reasons.

One reason is the increase in testing. I estimate that two months ago, a bit less than 10% of new infections were being confirmed by tests, and I estimate that now it’s above 20%, maybe getting close to 25%. That means that if the new infection rate were unchanged, we’d be seeing a roughly 10% per week increase in reported cases.

Nearly all parts of the country have done a good deal better than that.

I estimate the change in new infections since the early April peak by multiplying the early April confirmed daily cases by 10 or 12, and the June ones by 4 or 5, and I get a current rate that’s about 1/4 to 1/3 of the peak.

The bad news is that there are some heavily populated areas for which the trend doesn’t look very good over the past few weeks. When the rate of new infections remains constant in some areas, but declines at exponential rates in others, the exponential declines stop affecting the total numbers before too long. E.g. much of California has suppressed the pandemic, but a few cities, such as Los Angeles and Oakland, are enough to keep the state’s total count of new infections steady.

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Long-term investors should stay away from most bonds for the foreseeable future.

Last summer, Colby Davis explained why portfolio managers might want to buy bonds that yield 2%. At the time, I was suspicious, but it felt premature to argue against it.

Since then, yields on 30-year government bonds have dropped to 1.44%. That means bond prices went up. His advice worked well as a hedge against pandemics.

Inflation expectations have dropped along with those yields.

30-year TIPS have an expected yield of -0.045%.

That implies expected CPI inflation of less than 1.5% over the next 30 years, and that, adjusted for inflation as measured by the CPI, investors who buy 30-year government bonds now should expect to lose wealth if they hold to maturity.

So why are investors buying bonds at these prices?

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In this post, I make some conjectures about U.S. economic growth over the next year or two.

Many people expect a depression, due to the current high unemployment numbers. But depressions aren’t caused by unemployment – that’s a symptom, with little predictive power.

The main cause of poor economic growth has been an inability to alter wages so that the supply of and demand for labor are in balance. That typically means deflation, or a large, unexpected decline in the inflation rate, combined with sticky wages.

So I’ll mostly focus on guessing whether we’ll have inflation or deflation.

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Elon Musk has gotten some well-deserved flack for predicting (in March) close to zero new infections in the U.S. by now.

Yet the focus on national or statewide infections has obscured a curious phenomenon: if he’d just predicted infections in Santa Clara county, he’d have been partly right – new cases peaked on April 10 at 83, were down to 23 on April 27, and appear to have dropped more since then (reporting may be incomplete for more recent days). (Santa Clara county roughly coincides with Silicon Valley; Tesla’s plants are a few miles from the Santa Clara county border, technically in Alameda county, but in most senses Tesla’s plants are part of Silicon Valley, which I’ll treat as a city, even though it’s more a city-less suburb).

Meanwhile, the statewide totals fail to show a trend of doing much more than stabilizing the rate of new cases. A good deal of that is due to Los Angeles.

What’s different between LA and Silicon Valley that would explain this difference?

It’s probably not much due to differences in government policy. California is using a mix of statewide rules and county rules, which makes it tricky to say whether there are policy differences. My impression is that most differences between county policies have relatively minor effects. I guessed that the most important difference would be in when they required facemasks use. Yet it looks like LA required facemasks on April 17, in synchrony with most of the bay area. But Santa Clara county differed by strongly urging, but not requiring, facemasks.

Maybe the reason that Santa Clara county didn’t create a formal facemask rule is that residents were sufficiently quick to adopt them that there was less need than in other counties? That fits my intuitions fairly well.

The LA area has been in the news for having crowded beaches. Outdoor activity in warm, sunny weather seems relatively low risk, but I doubt that the people on those beaches carefully evaluated the effects of ventilation, sun, and temperature on their risk, so it’s likely that the crowded beaches are at least a symptom of attitudes which cause the spread of infections.

I can see from Ohio that there are significant regional differences in people’s willingness to wear facemasks. I’m surprised that Ohio voters won’t put up with a rule to make them wear masks in order to enter stores. (Ohio’s Governor DeWine deserves much better constituents than he’s currently stuck with. Here in Berkeley, I get the impression that a majority decided that we needed to follow that rule before our government got around to announcing it).

Another relevant difference is that Silicon Valley workers switched to working from home more readily than most other places. This is likely a moderate factor, but I’d have expected a peak before April 10 if it explained more than half of Silicon Valley’s success.

Another influence might be blood types: type A blood creates higher risk of COVID-19, while type O lowers risk. Judging from the blood type differences between the U.S. and China, the large Chinese population in Silicon Valley ought to lower risk a bit.

LA’s apparently steady number of new cases can’t be very stable. People’s willingness to take precautions will decline at some point if herd immunity looks inevitable. Pushing in the other direction: increasing numbers of people will become immune, reducing the virus’ ability to spread. It seems almost impossible for these forces to balance out.

Robin Hanson sees a world polarized between regions that prevent infections and regions that get something like herd immunity. I expect that many regions, such as LA, will end up at various places in between, with maybe 10% of the population becoming immune. Since the people most likely get infected and to spread the virus will be over-represented in that fraction, it will put a sizable dent in R, enough to enable significant periods of suppression.

Robin expects that variance in R will be harmful. Zvi counters that variance is not bad, given sufficiently effective travel restrictions.

I mostly agree with Zvi here. The cost of restricting nearly all travel to commuting distance or less from home is much lower than the cost of the current drastic restrictions, so voters will typically demand a shift in that direction. My main concern is that these travel restrictions are getting lumped in with “lockdown measures” such as stay at home, and shut down “nonessential” businesses. That means that pressure to reopen activities that ought to be reopened could become pressure to remove most travel restrictions.

How many politicians will see beyond simple categories such as lockdowns versus reopening the economy, to pick and choose between the good and bad pieces of lockdowns? My impression is that at least half of the state and local politicians are on track to doing so, and have enough power to sidestep whatever problems exist at the federal level.

I sympathize with Musk’s desire to reopen Tesla plants, and it’s somewhat plausible that now is the right time for that. But I’m reluctant to side with him until he alters his tweets to be more narrowly targeted on specific, arguably safe, changes. I don’t want the world polarized between openers and closers.

I recently made a bet with Robin Hanson that US COVID-19 deaths will be less than 250,000 by Jan 1, 2022 (details hiding in these Facebook comments).

I gave a few hints here about my reasons for optimism (based on I’ll add some more thoughts here, but won’t try to fully explain my intuitions. Note that these are more carefully thought out than my reasoning at the time of the bet, and the evidence has been steadily improving between then and now.

First, a quick sanity check. Metaculus has been estimating about 2 million deaths from COVID-19 worldwide this year. It also predicts that diagnosed cases will decline each quarter from this quarter through at least Q4 2020, and stabilize in Q1 2021 at 1/10 the rate of the current quarter, suggesting that most deaths will occur this year.

U.S. population is roughly 4% of the world, suggesting a bit over 80k deaths if the U.S. is fairly average. The U.S. looks about a factor of 5 worse than average as measured by currently confirmed deaths, but a bit of that is due to a few countries doing a poorer job of confirming the deaths that happen (Iran?), and more importantly, the Metaculus forecasts likely anticipate that countries such as India, Brazil, and Indonesia will eventually have a much higher fraction of the world’s deaths than is the case now. So I’m fairly comfortable with betting that the U.S. will end up well within a factor of 3 of the world per capita average.

I was about 75% confident in late March that R0 had dropped below 1, and my confidence has been slowly increasing since then.

Note a contrary opinion here. It appears to produce results that are slightly pessimistic, due to assuming that testing effort hasn’t increased.

Yet even if it’s currently a little bit above 1, there’s still a fair amount of reason for hope.

Many people have been talking as if strict shelter-in-place rules (lockdowns) are the main tools for keeping R0 < 1. That’s a misleading half-truth. Something like those rules may have been critical last month for generating quick coordination around some drastic and urgent changes. But the best longer-term strategies are less drastic and more effective.

One obstacle to lowering R0 is that hospitals are a source of infection. I’m pretty sure that will be solved, on a lousy schedule that’s unconnected with the lockdowns.

Within-home transmission likely has a significant effect on R0. Lockdowns didn’t cause any immediate drop in that transmission, but that transmission drops a good deal as the fraction of people who have been staying at home for 2+ weeks rises, so R0 is likely declining now due to that effect.

Most buildings that are open to the public should soon require good masks for anyone to enter. It wasn’t feasible to include such a rule in the initial lockdown orders, but there’s a steady move toward following that rule.

I expect those 3 changes to reduce R0 at least 20%, and probably more, between late March and late April.

Robin is right to be concerned about the competence of institutions that we relied on to prevent the pandemic. Yet I see modest reasons for optimism that the U.S. will mostly use different institutions for test and trace: Google, Apple, LabCorp, etc., and they’re moderately competent. Also, most institutions are more competent at handling problems which they recall vividly than they are at handling problems which have been insignificant in the lifetimes of most executives.

We can be pretty sure based on China’s results that R0 < 1 is not a narrow target. Wuhan got R0 lower than the key threshold by a factor of something like two. They did that in roughly the worst weather conditions – most of the time, warmer (or occasionally colder) weather will modestly reduce R0. So we’ll be able to survive a fair amount of incompetence.

But there’s still plenty of uncertainty about whether next week’s R0 will be just barely acceptable, or comfortably below 1.

Deliberate Infection?

The challenges of adapting to the most likely scenarios took nearly all of my attention in March. So I had no remaining slack to adequately prepare for a scenario that looked unlikely to me, but which looked likely to Robin. For one thing, I ought to have evaluated the possibility that money will be significantly more valuable to me if Robin wins the bet than if he loses.

It is certainly possible to imagine circumstances where deliberate coronavirus infection is quite valuable. But it looks rather low value in the scenario I think we’re in.

I don’t have much hope of getting a sensible program of deliberate infection in a society that couldn’t even stockpile facemasks in February.

I also see only a small chance that talking about deliberate infection now will help in a future pandemic. I expect this to be humanity’s last major natural pandemic (note: I’m too lazy today to evaluate the relevance of bioterrorist risks). I don’t know exactly how we’ll deal with future pandemics, but the current crisis is likely to speed up some approaches that could prevent a future virus from becoming a crisis. Some conjectures about what might be possible within a decade:

  • Better approaches to vaccination, such that vaccines could become widely available within a week of identifying the virus.
  • Medical tricorders that are as ubiquitous as phones, and which can be quickly updated to detect any new virus.

Still, I do think deliberate infection should be tried in a few places, in case the situation is as desperate as Robin believes. I’ll suggest Australia as a top choice. It has weather-related reasons for worrying that the peak will come in a few months. It has substantial tuberculosis vaccination, which may reduce the death rate among infected people by a large margin (see Correlation between universal BCG vaccination policy and reduced morbidity and mortality for COVID-19: an epidemiological study).

Note that tuberculosis vaccination looks a good deal more promising than deliberate infection, so it should be getting more attention.

Other odds and ends

Some of the concerns about a lasting economic slowdown are due to expectations that the restaurant industry will be shut down for years. I expect many other businesses to reopen within months with strict requirements that everyone wear masks, but it’s rather hard to eat while wearing a mask. So I see a large uncertainty about which year the restaurant business will return to normal. Yet I also don’t see people who used to rely on restaurants putting up with cooking at home for long. I see plenty of room for improvement in providing restaurant-like food to the home.

Current apps for delivery from restaurants seem like clumsy attempts to tack on a service as an afterthought. There’s plenty of room to redesign food preparation around home delivery, in ways that more efficiently and conveniently handle more of the volume that restaurants were handling before.

We have significant unemployment among restaurant workers, combined with food being hard to acquire for reasons which often boil down to labor shortages (combined with rules against price gouging). That’s not the kind of disruption that causes a lasting depression. The widespread opposition to price gouging is slowing down the adjustments a bit, but even so, it shouldn’t be long before the unemployed food service workers manage to become redeployed in whatever roles are appropriate to this year’s food preparation and delivery needs.

Finally, what should we think about this news: SuperCom Ships Coronavirus Quarantine Compliance Technology for Immediate Pilot?

Book review: Nutrient Power: Heal Your Biochemistry and Heal Your Brain, by William J. Walsh.

Nutrient Power is an eccentric book about nutritional problems and their effects on the brain. It’s full of information that’s somewhat at odds with conventional wisdom.

It’s a short book, and I wasn’t tempted to read all of it. I usually don’t review books unless I’m willing to read the whole thing, yet this time I can’t resist the temptation.

I expect that it’s important reading if you’re building your own model of how nutrition affects cognition, you’re frustrated about how little you’ve found in peer-reviewed publications, and you’re interested enough to treat this as something closer to a career than a hobby. If, like me, you’re less ambitious than that, you should expect to find at least parts of the book frustrating. And if you just want easy-to-follow or rigorously proven advice, this is definitely not the book you want.

I’ll guess that a bit more than half of the unusual ideas are correct and valuable, and that less than 10% of the others are harmful. Don’t expect it to be easy to distinguish the good ideas from the bad.

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Some links to information sources that I’ve been using:

Food delivery is erratic in Berkeley. GoodEggs seems to have major food shortages, and maybe some labor shortages. Model Meals has been working almost as smoothly as normal, providing I place my order a day before their deadline – they are selling out of most things near their deadlines. I tried Instacart for the first time, and it seems substantially degraded by high demand – I had problems with getting 2 apples when I ordered 2 3-lb bags of apples (no that wasn’t listed as a substitution – the intentional substitutions worked fine). I’m guessing I’ll want to go back to shopping at grocery stores in person in a week or so. Infection rates are almost certainly dropping here now that the shelter-in-place rules have been around for a while, but it will likely be a week before much evidence confirms that.

I hiked in Briones Regional Park on Friday. I expect to see no more than 5 cars at the trailhead on a weekday; this time there were more than 30! People seemed unusually friendly. Most were making a decent effort to keep a 6 foot distance from me, but a few of the younger ones seemed to not care.

I think OPEC just collapsed, and nobody celebrated. I suppose the climate change implications might be a bit bad, but most effects will be pretty good.

Will auto sales be up or down a year from now? Loss of wealth will delay some purchases, and a fair number of existing drivers will drive less. But some people will switch from public transport to owning a car; others will switch from UberPool to UberX.

A modest number of maids will be replaced by Roombas [disclosure: I just bought stock in iRobot].

Politicians are talking about bailing out airlines, with terms that prevent them from stock buybacks. I expect that restriction to be purely symbolic – it will be a while before airlines are tempted to do buybacks anyway. If politicians were really upset about buybacks, they would instead deny the bailout to a single airline that was the most reckless in buybacks (maybe the one that achieved the worst debt to tangible equity ratio? I think that’s Delta). Alas, politicians won’t do that. After all, it might help people see that bailouts are somewhat targeted at helping bond and stock holders, and that the planes, workers, etc., don’t just vanish in the (somewhat unlikely) event that bankruptcy proceedings cause one company to shut down.

Some senators are under fire for insider trading on some sort of COVID-19 insights. If they profited from improved analysis of public information, I think that’s great! I’d like them to have an incentive to listen to experts. It would be suspicious if they profited from secret data, but I can’t find much reason to think that’s what happened – as far as I can tell, the relevant evidence was made public fairly quickly, and what mattered was competent evaluation of that evidence. And the most important question is what else they did to prepare. If, as the news storytellers vaguely imply, they did little else to warn people, then either they were more confused than the reports suggest, or they were recklessly negligent.

Shutting borders can hurt:

One issue has been restrictions on travel intended to stem the spread of coronavirus, which has affected [U.S. ventilator maker] ResMed’s Singapore factory which employs many workers from neighbouring Malaysia. He said ResMed has appealed to the Malaysian government for an exemption so its workers can travel to Singapore.

Biomerica has a new COVID-19 test with some apparently nice features that differ from the common PCR-based tests. However:

Biomerica is positioned to begin filling large international orders of this disposable one-use tests within weeks, assuming international product shipping channels remain open and active.

In addition, Biomerica has begun the application process with the FDA under the COVID-19 Emergency Use Authorization (EUA), aimed at the possible clearance and eventual use of the test in the US. At this time, the product is not available for sale or use in the US.

And finally, some related entertainment about flattening the curve of armchair epidemiology.

The stock market crash of the past two weeks looks like an over-reaction to COVID-19.

Is COVID-19 really the reason for the crash? I can’t find any other news that would explain the timing and which stocks were hit hardest.

Here’s a sample of some of the harder hit stocks, all travel-related (Friday’s close compared to the highest close in February):

  • -37% Hertz (HTZ)
  • -36% Avis (CAR)
  • -29% World Fuel Services Corp (INT)
  • -24% Carnival (cruise line) (CCL)
  • -22% Delta Air Lines (DAL)
  • (compare to the S&P 500: -12.4%)

It is, of course, possible that the market was in a mild bubble in early February, and the virus merely triggered a return to sanity. There were enough high-priced stocks that I’ll guess that’s explains a little of what happened. Hertz and Avis are maybe high-risk stocks due to the risks associated with the upcoming transition to robocars. But the others that I listed did not at all fit my stereotype of overpriced stocks.

And the stocks that I had been thinking were overpriced, in industries that don’t look to be especially hurt by the virus, declined roughly in line with the market.

Outside of travel-related stocks, it mostly looks like a general shift in preferences to more cash, and away from stock. I.e. a general increase in risk aversion.

The gold market is confused as to which direction a pandemic should move it. I agree. I’m confused as to how gold should react.

What scenario could explain the decline? Maybe a two month shutdown of 90+% of U.S. air travel? A multi-year reduction in travel of 10%? It would take something like that for the market reaction to make much sense. Yet I’d bet at roughly 10:1 odds against any one of those scenarios happening.

Metaculus is currently predicting 195k COVID-19 deaths this year.

Metaculus forecast trends ought to look a good deal like random walks, yet the charts I see there look more like exponential growth.

Metaculus is likely to be a more objective source of information than the news media storyteller industry or social media. But it’s likely more susceptible to selection effects and hype than are markets that have lots of money at stake. (Metaculus has token prizes, structured in a way that may encourage more extreme bets than a regular market would).

None of this implies much about where other reactions to the virus are sensible. There’s a much different asymmetry between getting sick versus being paranoid than there is between losing money due to a pandemic versus losing money due to selling on a false alarm.

I’ve got about a month’s supply of food, but that’s my normal preparation for a variety of disasters. I have no special insights about whether the current risks justify staying home.

P.S. Chinese stocks are supporting the view that the situation in China has improved over the past month.

I’ve been using an Oura sleep tracking ring for six months.

In some ways it’s an impressive piece of technology. It’s small enough to not distract me much, and they went overboard in making the user interface simple. Simple, as in there basically aren’t any controls. I just put it on my finger, and occasionally put it on the charger.

Yet it does a poor job of what I expected it to do: track how long I sleep. It occasionally thinks I’m in bed when I’m not wearing it. If I get up to use the bathroom, it’s hard to predict whether it will decide that’s the start or end of my time in bed.

But the Oura reminded me that “8 hours of sleep” isn’t a good description of what I want – that’s just a crude heuristic for “slept well enough that further sleep won’t improve my productivity / health”. The Oura observes other relevant evidence: body temperature, breathing rate, heart rate, and heart rate variability. I.e. things I ignored because they were too hard to evaluate, rather than because I decided they weren’t important.

If I did a strenuous hike yesterday, it will tell me that 7.5 hours of sleep wasn’t enough, whereas if I’d spent yesterday relaxing, it might have told me that 7 hours was plenty, and that I should be ambitious.

It’s somewhat obvious that I need more sleep when a cold raises my body temperature. The Oura convinced me that there’s a much more general pattern of above average body temperature indicating an increased need for sleep.

I’ve tried comparing the Oura’s heart rate variability measurements with those of the emWave2, and I couldn’t see much correlation. I’m inclined to trust the emWave2 more, but I’m not aware of good evidence on the subject.

The Oura also helps track exercise, at least for hiking (it doesn’t seem to do much for weightlifting, but most of my exercise comes from walking/hiking). It reports slightly less calories burned than what I calculate from a cheap Garmin GPS and this calculator. I’m unsure which of those 2 measures is more accurate. If I were only using the GPS to measure calories burned, I’d give up on the GPS, because the Oura doesn’t have problems such as poor reception, or me forgetting to turn it on or off at the start and end of a hike.

It said I slept 3 hours on a red eye flight. My subjective impression was that it was somewhat debatable whether any of that ought to be classified as sleep. But what do I know? I have some evidence that I can sleep without being aware of sleeping (mainly from people reporting that I was snoring, at a time when I thought I was awake and not snoring).

My ring isn’t quite the right size for my ring finger. I ordered it based on prior information about what ring size worked for me, rather than using Oura’s measuring procedure. I’ve ended up wearing on the middle segment of my middle finger instead. That’s works well enough that the difference seems unimportant.

See this comparison with several alternatives for a more detailed analysis.

Mostly, the Oura simply reassured me that I don’t have significant sleep problems, other than the times when it’s obvious that I took too long to fall asleep, or woke up too early. I suspect that the Oura would have been moderately valuable if I had had sleep problems that were hard for me to detect.