Breaking Data

Two numericals to stir into your morning coffee.  First is the report from the Bureau of Economic Analysis that says incomes were going up nicely in January:

Personal income increased $116.5 billion (0.6 percent) in January according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $101.4 billion (0.6 percent) and personal consumption expenditures (PCE) increased $29.6 billion (0.2 percent).

Real DPI increased 0.5 percent in January and Real PCE increased 0.1 percent. The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent.

The other is the Census snapshot of January International Trade:

Advance International Trade in Goods The international trade deficit was $65.5 billion in January, down $3.2 billion from $68.7 billion in December.  Exports of goods for January were $135.7 billion, $1.4 billion less than December exports. Imports of goods for January were $201.2 billion, $4.6 billion less than December imports.
Advance Wholesale Inventories Wholesale inventories for January, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $672.4 billion, down 0.2 percent (±0.4 percent)* from December 2019, and were up 0.6 percent (±0.9 percent)* from January 2019.  The November 2019 to December 2019 percentage change was revised from down 0.2 percent (±0.4 percent)* to down 0.3 percent (±0.4 percent)*.
Advance Retail Inventories Retail inventories for January, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $660.5 billion, virtually unchanged (±0.2 percent)* from December 2019, and were up 0.3 percent (±0.7 percent)* from January 2019.  The November 2019 to December 2019 percentage change was revised from virtually unchanged (±0.2 percent)* to down 0.1 percent (±0.2 percent)*.

Virus Crazies – Staying Rational

This morning harks back to the MBA days and a course on STQM:  Statistical Total Quality Management.  It was where I learned to  look at the data and then make  rational decisions based on the data.

It’s  easy to be misled by “virus data.”  Given that this morning we have 83, 704 confirmed cases and 2,859 (we assume confirmed) dead, what are these numbers inferring?

Several important things.  First, the data  seems to be settling down into a mortality rate of around 3.41%.  HOWEVER, that’s only among  confirmed cases.

There are so many “unknowns” in all that that we really can’t be certain of mortality yet.  The disease is just “getting legs” as it goes global.  Lower than SARS, though, by a lot, so far.

Second point is the number of new cases (as of this morning) was growing at a daily rate of around  1.7%.  That’s between the Chinese low reported and their high – which was around 5-6% before their methodology was changed.

The Big Hidden Variables in this are enough to drive you mad. 

That’s because there are so few test kits (less than 200 for the state of California has one report).  Not only that, but the efficacy of the test (reliability, repeatability, and uglies like that) are only estimated at this time.

This last point is critical, because while there are certain cases of people reported “getting the virus” and then “recovering”  -only to be found with the virus again, we have this 13-foot high question mark:  Is that because the tests are flaky and may report active anti-bodies after a case, OR because the case is active and shedding, again?

Near as I can figure it, no one knows.

With this data in hand, we can only pencil-out some initial projections of where this leads 5-days out, and then further (in 5-day increments) into the future.

Yes, globally 6,256 bodies is a fair-sized stack.

BUT, when you consider world population, that means the odds of dead from this in an N of 7.6-billion is?   8.231578947368421e-7.  In other words, take that 8 and toss 7 zero’s ahead of it.  Think 8.23 X 10 to the -7 power. (Wikipedia will explain engineering notation over here, in case you forgot how it works.)

If we project out even further, the numbers do become more worrisome.  By 17-months out, the number of people dying worldwide will just equal the number of people killed globally in auto accidents annually.  1.25 million die annually, yet people still drive.

One way of looking at COVID-19 is it evens the odds between riding the bus and driving…

How To Prep

The simplest, most direct way to prep is?  Have a month, or more, of food and water for each member of the family.  Something we have advocated for since we started this site in 1997.

Second thing to do is get any general health issues addressed.  Elaine will have her second of the two-part pneumonia vaccine shots next week.  Mine was done in January.  See your doc.  We noticed COVID vics are getting pneumonia as the exit path…

Third step is to get some vitamin C and use it.  Read two articles to understand why.  First one is over on The Daily Health Post under the time “Vitamin C Kills Almost Every Virus Known to Mankind.”  This doesn’t mean it will stop COVID-19,. but it’s an inexpensive bet to place.

Which then gets to the cytokine storm odds where the body gets so zealous in fighting the attacking virus that it starts to attack useful organs and such.  Which is why you might want to read “Vitamin C and Immune Function” because here’s the key part from where I sit:

“Vitamin C deficiency results in impaired immunity and higher susceptibility to infections. In turn, infections significantly impact on vitamin C levels due to enhanced inflammation and metabolic requirements. Furthermore, supplementation with vitamin C appears to be able to both prevent and treat respiratory and systemic infections. Prophylactic prevention of infection requires dietary vitamin C intakes that provide at least adequate, if not saturating plasma levels (i.e., 100–200 mg/day), which optimize cell and tissue levels. In contrast, treatment of established infections requires significantly higher (gram) doses of the vitamin to compensate for the increased inflammatory response and metabolic demand.”

If you want to go further, see your healthcare practitioner or PCP (primary care physician).  But the data suggests to me a series of simple inferences:  Be generally healthy, take half a gram (500 mg) of C per day, and get a pneumonia shot series if you’re a senior or healthcare worker or first-responder.

And, since 1.25 million people die each year in traffic accidents, the analog in infectious disease to “Stay off the Road!” in traffic is avoid unnecessary public contact.

Be sensible about all your risks in Life.  39-people died of dog bite related outcomes in 2017 (and 74% involved pit bulls).  While we expect US deaths will appear shortly, it’s likely to be a few weeks before we get anywhere near dog bite deaths.

Remember, I can still fly and airplane and ride a hog.  But, at 71, where is the “stupid boundary?”  You are your own insurance company!

Back to the STQM question  What problem are you trying to solve, here?

Market Crash Greater Than 1929?

One again, the fear-mongering media (FMM) doesn’t understand STQM worth a shit.

While you can find lots of stories that begin to link 1929 to the events in trading this week, these people are years late to the party because group-think rules America.

We’ve been tracking the relationship between market bubbles and 1929 and hate to break it to you, but anyone who’s making a parallel to 1929 is being disingenuous.

Sure, there number of points dropped was larger than 1929.  The Dow was around 380 at the top in ’29.  So,, d’uh… a thousand points is bigger.

But percentage-wise?  We haven’t even started the main part of the downslope.  What’s more, in the next week, or three, we should get a nice, playable rally.  From which one wild-eyed person who writes a lot may re-enter a short position.  Here’s how I see it:

The top blue sloping arrow MAY be about where we are.  Which means (if the replay is close-enough) a rally could development next week, or the one after.  See where the upper (green) sloping arrow points?

HOWEVER, then another round of Corona-Panic and we could head down to the region of the lower of the blue arrows. running our of parts to make cars or no more UHD TVs coming in would drive that.  We gotta have our toys, right?

In fact, I would not be surprised if we get something of a minor rally next week because we have dropped down (as expected) into the “red zone” where, if we cross lower, this almost certainly will be a larger crash and ensuing Depression than 1929.

There are two trend channels shown.  We are looking at a possible close this week around the lower channel’s lower bound.  But, in event of a strong rally, we could make a case for a move up to the lower bound of the upper trend channel.  Wouldn’t that be golden?

And then, depending on how the future rolls out, re-shorting from there….the mind reels. Sweet dreams of short-term capital gains taxes to come.

But, don’t count your chickens before they crash…and no, this is NOT financial advice.  Ravings of a lunatic so no, don’t do it!!! You’re sure to lose money!

To be sure, the Administration’s response is pretty moderate. Seems to me they haven’t run out where the death toll goes not next year, but the following years after that…   In fairness, if you had the checkbook, where would you buy a fix  for this crap?

Then again, if the dems were serious about stopping the disease – they’re not –  they would seal-up our borders.

When we have a real border  – so ChiComs and OTMs can’t come in that wide-open door (and they do) – THEN I will believe the bleeding-heart idiots are serious.  Not before.

What’s more, they would not support the disease vectors called sanctuary cities and homeless camps. They would clean up their towns and rehab people, not just run for re-election on a “fix it later” tick.

Now, if they wanted to spend some of that $8-billion (money they don’t have yet and will turn around and take from you – and then Blame Trump, which is their whole shtick) on something other than grand-standing, wouldn’t that be great?

Don’t hold your breath.  America’s been so dumbed down by left-wing educators, it’s to the point where everyone’s got a hustle on…and a crooked side-gig/scam.

E.G. – S.C. & Greater Fools

With the long-lead-in to real news out of the way (must be alive to win, though) we can begin formulating the next big “news dynamic” that should appear.

Earning Growth (E.G.)  Look for this to crater because everyone went to China for the “free lunch” implicit in  offshoring.  Now, the bill has come due.  We have virtually zero fallback.

Supply Chain (S.C.)  This means that in short-order we should see the beginnings of the consumer supply chain drying up.  Which makes a certain huge online retailer up at the front of the alphabet an interesting short…  And then there’s the matter of when (what little we have left of) domestic manufacturing shuts down because of a lack of parts, what will  that do to the National Debt?

And then in turn, the Most Humungous Question Of All (MHQOA):  Who will be the Greater Fools who will buy and hold for the long-term?

Come on…at 71, you think I don’t want to make a bunch shorting this pig and not plan on wait around for 10-20 to make The Big Score?  If you’re under 50, what lies ahead at the bottom of Depression 2.0 will be the chance of a lifetime to stack cash and hang up  chasing the bag.  Lucky you.

OK, off to work on breakfast and Peoplenomics.  Have a great weekend and I think it’s prudent to have 3-4 weeks of food slowly accumulating for a potential quarantine months down the road.  Not saying it  will, just saying IF then you might want to have some comfort food stashed.

Only $26.24-billion of repo’s this morning, so further down seems possible, at least at the open.

Write when you get rich,