Month: January 2021

View from Holland: The core innovation of lockdown

by philg

From a Dutch university professor: “The Nazis got tired of digging graves for people they’d shot, so they figured out that they should make them dig their own graves first. It’s the same strategy governments have pursued with lockdown. Make people work to pay for their own cells. It’s not Arbeit macht frei, but Lockdown macht frei.” From my 1999 trip to Dachau:

IMG0044.PCD

Governors and public health officials in the U.S. work together in the same ways as the medieval prince and priest: “You keep them stupid and I’ll keep them poor.”

Aside from politicians and the billionaires, who has done well in West’s Year of Lockdown? “It’s been a Godsend to the sad and lonely. The West has been the center of family disintegration and there are more people living alone than at any other time or place in history. The sad and lonely are not any better off, but everyone else has been dragged down to their level.” [Divorce lawsuits are more lucrative in the U.S. than in Europe and, perhaps not coincidentally, the U.S. is statistically more disintegrated than any of the European countries.]

How about the college students? Are they rioting? “They’re used to having a world imposed on them by Baby Boomers, so it doesn’t occur to them that they can object. They’re having parties in basements and trying not to get caught.”

Unlike Maskachusetts, the Netherlands allows residents to roam outdoors without masks. My friend goes to a private riding club in which the government cannot require masks. “If it were a public for-profit club, they would be subject to the mask law,” he said. Executives generally cannot issue orders that eliminate citizens’ rights, but the parliament can meet expeditiously and change the law, which it has done.

What has muscular government action in the Netherlands accomplished? A similar-shaped profile to masked-and-shut UK or US and also similar to unmasked and un-shut Sweden:

“About half of the older people still believe that masks and lockdown can save us,” he said, “but the other half are disillusioned by the continued epidemic.”

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Maine coast helicopter photo series: Cape Elizabeth

by philg

Fifth of a series… near the peak of foliage season (mid-October) we decided to fly from Boston to Bar Harbor, Maine, following the shoreline, in a Robinson R44 helicopter. Tony Cammarata was in back with a door removed (frosty!) and a Nikon D850. Instrument student Vince Dorow was with me in the front seats.

Cape Elizabeth, just south of Portland, Maine:

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Maskachusetts takes aggressive action against climate change…

by philg

… starting 14 years from now: “Massachusetts to Ban Sale of New Gas-Powered Cars by 2035” (Car and Driver).

Climate change is an existential crisis, which is why we are going to do nothing about it (other than abandon public transport in favor of private cars) until 2035.

I am waiting for our legislature to ban the sale of Wright Flyers.

How much will this help to heal Planet Earth? At least for now, a battery-electric vehicle actually emits more greenhouse gas over a 10-year life than a plug-in hybrid:

Note further that driving a small conventional gas-powered car would actually result in less emission of CO2 than driving a mid-sized electric car. Also note that the difference in lifetime CO2 emission between a virtuous Tesla and an evil non-hybrid Honda Accord is minimal. If you hate emitting CO2, #StayHomeSaveLives and/or ride a bike.

Related:

  • from the October 2020 debate between Virtue and Evil: Biden: Climate change, climate warming, global warming is an existential threat to humanity. We have a moral obligation to deal with it. And we’re told by all the leading scientists in the world that we don’t have much time. We’re going to pass the point of no return within the next eight to 10 years. (My comment on the foregoing: “Humanity is facing an existential threat? Why is Biden worried about Covid-19, which kills as many people as a few bad flu seasons even when a country mostly just gives the finger to the virus? Why not take the $trillions we’re still spending on Covid-19 and instead spend it on preventing Earth from turning into Venus?”)
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Why aren’t Arizona and California vaccinating people at midnight?

by philg

The CDC map currently shows Arizona and California right at the top of the current plague level chart:

Former media whipping state South Dakota (unmasked and un-shut, with a heretical governor who says that government cannot stop a respiratory virus) is way down the list at 48 daily infections per 100,000 people, half the AZ/CA level. Yet South Dakota is #1 in “Percentage of distributed vaccines that have been administered” at 69% (Becker’s Hospital Review). Arizona is #49, behind only Georgia, at 18%. California at #47 with less than 24% administered.

California and Arizona would seemingly have more motivation than almost all of the other states to move vaccines out of warehouses and into bodies. Why wouldn’t they be doing clinics at midnight if that’s what it takes to use up the vaccine as soon as it arrives? Shouldn’t we see dramatic TV footage of coffee-and-donut-fueled late night shot clinics in hospitals, nursing homes, etc.?

(It does not seem to be the case that California and Arizona received extra vaccine. They’re also near the bottom of states ranked by percentage of population that has been vaccinated. 1.3 percent for California and 1.2 percent for Arizona (NYT))

Admittedly it is tougher to get organized to administer shots when the same personnel are needed to give COVID-19 tests, etc., but New Jersey and Rhode Island are near the top of the infection chart and are managing to administer vaccine shots at the same time. And Israel, which has its own raging plague, has managed to vaccinate over 18 percent of its population so far over roughly the same time period.

Related:

  • TIME vaccine page
  • percent population vaccinated by country (U.S. is #5 at 1.8 percent; the infrastructure and manufacturing champs in China on whom I would have bet are at just 0.31 percent)
  • “Why 300 Doses of Vaccine Sat Unused in Freezers for 2 Weeks” (NYT): Dr. Peter Meacher expected to receive just a small supply of Moderna’s coronavirus vaccine to inoculate his staff at a network of clinics that he oversees in New York City. Instead, 600 doses arrived late last month, far more than he needed. … Dr. Meacher said he would like to give the extra vaccine to high-risk patients, but had not for fear of violating strict eligibility rules from the state and city about who can receive it. … “It’s stressful and frustrating to have vaccine and to be unable to start giving it to our patients as quickly as we would like,” said Dr. Meacher, chief medical officer for the Callen-Lorde Community Health Center in Manhattan, which serves some 18,000 L.G.B.T.Q. New Yorkers.
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Maine coast helicopter photo series: Old Orchard Beach

by philg

Fourth of a series… near the peak of foliage season (mid-October) we decided to fly from Boston to Bar Harbor, Maine, following the shoreline, in a Robinson R44 helicopter. Tony Cammarata was in back with a door removed (frosty!) and a Nikon D850. Instrument student Vince Dorow was with me in the front seats.

Old Orchard Beach, Maine:

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Is it ethical for a physician to vaccinate a healthy 20-year-old against COVID-19?

by philg

Doctors take the Hippocratic Oath, in which they promise, depending on the version, to “do no harm”, do what will benefit their patients, and avoid “overtreatment.”

Suppose that a healthy slender 20-year-old calls up to a doctor’s office and says “By governor’s order, I am not allowed to leave my house unless you stick me with a COVID-19 vaccine.” Is it ethical for the doc to vaccinate him/her/zir/them?

A healthy slender 20-year-old is more likely to be killed in a car accident driving to/from the doctor’s office than he/she/ze/they is to be killed by COVID-19. Can the doctor ethically and consistently with the Hippocratic Oath intervene in this person’s body? Even if we had years of data proving these brand-new vaccines safe, they are unnecessary for a 20-year-old with no health conditions that would render him/her/zir/them vulnerable to COVID-19. A doctor isn’t supposed to do unnecessary things to patients.

How about the argument that sticking Patient A with a vaccine with help Patients B, C, D, and E? That’s a fine public health argument, and maybe a technician working for the state could do it, but it doesn’t seem consistent with the physician’s oath.

I asked a medical school professor friend for his thoughts on this. He couldn’t think of any other situation in which doctors apply procedures to patients for whom there is no medical benefit with the justification that others will benefit. He did not believe that vaccinating the young/healthy against COVID-19 was consistent with the Hippocratic Oath.

Readers: Are we breaking new ethical ground here? Is there an ethical problem? (If the answer is that there isn’t an ethical problem, can we start harvesting organs out of young people in order to keep old people alive? Common sense organ control tells us that young people don’t need two kidneys and a full-size liver, right?)

Ethical question #2: Is it ethical to throw out vaccine doses because you’re too lazy to post on Facebook or Twitter or call a few friends? From “CEO of Health Center Explains Why COVID Vaccine Doses Had to Be Thrown Out” (NBC Boston):

The CEO of the Brockton [Maskachusetts] Neighborhood Health Center says doses of the COVID-19 vaccine were thrown away on Christmas Eve while they were vaccinating health care workers, due to some of those workers not showing up for their inoculations.

“Since the vial is only good for six hours after we start using it, there was no way we could put it in your fridge like we do the other vaccines and just use it in the morning,” Joss said. “There was just no way to salvage the remaining doses.”

“For our staff, that vaccine is just like gold. They’re protecting it like nothing else,” said Joss. “And yet, I think, at the same time, just by the fragility of the vaccine, I think it’s probably, it’s probably going to happen here and there.”

It’s like gold, but sometimes we need to throw gold away because it is too tough to find additional humans in thinly settled eastern Maskachusetts (Brockton itself has a population of roughly 100,000 and a continuously raging coronaplague among its low-skill immigrants). (Of course, in New York “providers who knowingly administer the vaccine to individuals outside of the state’s prioritization protocols may face penalties up to $1 million, as well as revocation of all state licenses” by governor’s order, but our governor hasn’t issued any new orders since #59 on December 22 (the “emergency” declared nearly a year ago continues, but we’ve had no new orders for two weeks).)

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What will Democrats do with the U.S. and what should investors do?

by philg

Based on the Georgia Senate races, in which my friends who call themselves “feminist” cheered for the idea of someone identifying as a “woman” losing her important job, it looks as though the Democrats will be in charge of the U.S. (Regarding today’s events at the Capitol, an immigrant friend said “it’s like BLM just with white people.”)

Now that elite insiders are ruling again, what should we do as investors? To answer that question, first we have to try to figure out what the Democrats will do.

Let’s assume the first priority for the Democrats is to stay in power forever. The simplest way for that to happen is by ramping up low-skill immigration, which has been at the rate of more than 1 million low-skill migrants/year for more than 50 years (Pew). A migrant single mom in public housing is not going to vote for a white male Republican empty suit! A 70-year-old chain migrant parent who consumes $40,000/year in Medicare is not going to vote to trim the Federal budget. The procedure for becoming a citizen is not frozen into the Constitution, right? The Democrat-controlled Congress can streamline citizenship into a 1-year web-based process. That will guarantee a ton of new loyal Democrats for the 2022 elections. Ramp up low-skill immigration to 2 million/year to ensure continued power indefinitely.

(How can we be sure that this is the right strategy for Democrats? The Republicans thought it was, which is why they sought to curtail immigration during the dictatorship of the Trumpenfuhrer.)

The American working class will be the biggest losers (Harvard study), paying higher rents and receiving lower wages, with a massive transfer of wealth to upper-income Americans (the transfer was already at $500 billion/year 10 years ago, according to the Harvard eggheads). Life will be good for the rich, who will pay the same prices for Ubers, restaurant meals, etc. that they would pay if they went to some of the world’s poorest countries. The rich will receive higher rents for the urban real estate that they own and pay lower wages to the workers they employ (either directly or through corporations whose shares they own).

Can one trade on this expectation? We can’t short working class people or go long rich people, though.

Similarly, Bigger Government means the biggest enterprises will thrive. Many of the small businesses that accidentally survived 2020 will be destroyed going forward as increased regulation requires companies to “Go Big or Go Home.” But small businesses are not publicly traded, so there is no obvious way to short them.

How about buying a REIT that holds urban apartment houses? My theory for why urban Americans vote for Democrats while rural/suburban Americans vote for Republicans is that Big Government spends most tax dollars in cities: public housing, hospitals, government jobs, etc. In 2016 for example, Donald Trump won only 4 percent of votes in Washington, D.C., the ultimate example of a city that gets richer when government expands. The low-skill migrants will migrate primarily to cities where taxpayers will fund their housing for the next 100+ years (“means-tested” public housing programs of various kinds, not “welfare” when you pay $125/month, including utilities, for a 3BR in Manhattan or San Francisco!). Increased demand and the river of federal cash will drive up rents even for apartments not occupied by migrants.

Bigger Government is good for cronies. Here in Maskachusetts, for example, we are floated on a tide of federal cash subsidizing Big Pharma Big Higher Ed, and Big Health Care. (Where does the money come from? Medicare/Medicaid and tax subsidies for health insurance, $66 billion for the federal Department of Education, most of which ends up subsidizing student loans and grants) We can’t buy stock in universities or hospitals, though, as they are nominally non-profit. How about the companies that give money personally to Democrats, just before and just after they are in office? “Biden’s treasury secretary pick Janet Yellen earned more than $7 MILLION in speaking fees in 2 years from financial firms and tech giants including Goldman Sachs and Google” (Daily Mail) gives some insight into which publicly traded companies might look forward to favorable treatment.

(A neighbor’s house, photographed from the helicopter by my friend Tony, part of my poorly received #InThisTogether series on Facebook:

Note the solar panels that will be funded by middle-class taxpayers in Maskachusetts.)

One of the best features of the U.S., from the point of view of folks in New York, California, and other high-tax states, was that residents of lower-income lower-tax states had to subsidize rich Democrats in higher-tax states via the deductibility of state and local taxes. This program was cruelly ended for 2018 with the Trump tax law. It seems reasonable to expect that one of the first things a Democrat-controlled Congress will do is restore unlimited deductibility for state and local taxes. How to trade based on that expectation, though? Buy the Case-Shiller Index for houses in New York and San Francisco and short the South Florida sub-index? A house in New York should have a higher value if property tax and personal income tax associated with living in that house become deductible once more.

The Democrats are the party of the American rich. From the NYT:

Joe Biden has outraised President Trump on the strength of some of the wealthiest and most educated ZIP codes in the United States, … In ZIP codes with a median household income of at least $100,000, Mr. Biden smashed Mr. Trump in fund-raising, $486 million to only $167 million — accounting for almost his entire financial edge.

(see also “Biden is vastly outspending Trump in the final week of the 2020 race” and “Trump spent about half of what Clinton did on his way to the presidency”)

If the Democrats are funded by the rich, presumably the rich will be getting much richer in the coming years under Democratic rule. We can’t short the middle class and buy the rich. But maybe we can buy companies that make the things that the rich want. Let’s consider American cities. They’re on track to have Chinese levels of population density (with all of the new low-skill migrants) combined with Nigerian levels of infrastructure quality. Rich people will be happy to pay to escape these crowded virus breeding grounds. We already saw this to some extent in 2020. Luxury oceanfront real estate boomed. My friend who runs a Gulfstream charter operation had his best year ever. Could we trade on this expectation by purchasing shares in General Dynamics, Gulfstream’s parent company, and in luxury hotel chains?

How about Bitcoin? I personally think that Democrats’ stress on LGBTQIA+ issues is a way of delivering social justice without having to reduce personal spending. What if I’m wrong as usual, though, and President Harris does raise tax rates dramatically? We should expect a big rise in Bitcoin (but maybe this is already priced in via the recent lift? BTC is 3X what it was in October) as Americans try to move money offshore and/or out of reach of the IRS. (I personally know a fair number of folks who have big unrealized gains in BTC that are inherently hidden from government and financial institutions.)

One of my savvier friends (he doubled his wealth during coronashutdown, for example, by betting (with public equities) that Americans would be champions at cowering in place)):

If you hold cash, it’s about 3% value loss per year, accounting for inflation. I want to take out a huge mortgage to lock in a 2.5% 30 year rate. No way inflation stays below 3%.

Maybe this will be an even better strategy if Democrats lift limits on mortgage interest deductibility, which is a question of basic fairness. The current mortgage interest deduction limit is $750,000, which is a 1,200 square-foot apartment in a righteous area and a 4,000 square-foot single-family house among the Deplorables.

How about a simpler strategy of investing in Asia and selling off stocks that are mostly dependent on the U.S. economy. Kids in China spend 2020 in school; kids in the U.S. spent 2020 on Xbox and will probably stick with Xbox/Netflix for 2021. If education drives wealth, we have to expect Asia to perform better than the U.S.

Very loosely related… a 2008 photo of one of the whale sharks at the Georgia Aquarium, funded by Trump supporter and Home Depot co-founder Bernie Marcus.

Readers: What are your best ideas to profit from the return to rule by elites?

Related:

  • Programs to raise female wages will secure a voting majority for Democrats? quotes the Economist: “unmarried women are spectacularly loyal to the Democrats … The ‘marriage gap’ dwarfs the sex gap, by which women as a whole have long favoured Democrats.” (if women can earn a lot in the labor market they won’t bother getting married; another way Democrats can benefit is by making divorce lawsuits more lucrative; if more women are divorced that means more votes for Democrats, but this depends on state-by-state initiatives)
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Maine coast helicopter photo series: Kennebunk

by philg

Third of a series… near the peak of foliage season (mid-October) we decided to fly from Boston to Bar Harbor, Maine, following the shoreline, in a Robinson R44 helicopter. Tony Cammarata was in back with a door removed (frosty!) and a Nikon D850. Instrument student Vince Dorow was with me in the front seats.

Kennebunk (home of restricted airspace) to just before Old Orchard Beach, Maine:

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Travel to get an adenovirus-based COVID-19 vaccine?

by philg

One of my instrument flying students recently traveled back to his native Russia and got the Sputnik V vaccine (his wife had it too and the result was two days of fever for her, no significant negative effect for him). Although the U.S.-approved Pfizer-BioNTech and Moderna vaccines are supposedly quite effective, they’re also brand new technology that has never previously been tried in humans (see, from 2018 Nature, “mRNA vaccines — a new era in vaccinology”).

What about the idea of traveling to a country where a vaccine based on more conventional adenovirus technology is available? In addition to the Russian vaccine, the Oxford/AstraZeneca product meets this definition (explanation of function in NYT).

Why not take a trip to a Mexican beach resort, for example, and pay a private clinic for a dose of the AstraZeneca product? (produced and/or packaged in Mexico) Then go back a month or two later for some more poolside margaritas, a stop at a UNESCO World Heritage site, and the second dose?

(Why not get one of these vaccines here in the U.S.? The FDA might not approve it before 100 percent of Americans are infected (roughly half are already if we use the 8X multiplier that the CDC suggests). Even if the FDA does approve it, the centrally planned distribution strategy might make a adenovirus-based vaccine impossible to obtain as a practical matter.)

Readers: Which would you rather have? A leading-edge mRNA vaccine or a slightly-more-conventional adenovirus vaccine? (or no vaccine at all?)

[A medical school professor friend: “The adenovirus vaccine is more likely to have a known side effect than the mRNA vaccine. The mRNA is much more likely to have an unknown side effect.” Why did he prefer? “I don’t want to feel bad for a day or two and the probability of a significant negative effect from the mRNA vaccine is small, so I’d rather have the mRNA vaccine. In reality, it doesn’t matter because so many Americans will have been immunized by a COVID infection by the time I get my vaccine that my actual protection will come from herd immunity.” He does work in a hospital, but seldom sees patients and therefore is not likely to get a vaccine before March.]

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We ran but could not hide: more than half of Americans have now had COVID-19

by philg

The CDC says that multiplying the laboratory-confirmed COVID-19 “cases” by approximately 8 is the best estimate of the actual number of Americans who’ve been infected by the SARS-CoV-2 virus (i.e., “had Covid,” though if there were no symptoms, this is not the medically accurate term). See “Government Model Suggests U.S. COVID-19 Cases Could Be Approaching 100 Million” (NPR) and the academic journal paper on which it reports, “Estimated incidence of COVID-19 illness and hospitalization — United States, February–September, 2020”.

As of today, the CDC says that the U.S. has had 20,732,404 “cases” of COVID-19. Multiplying by 8, that’s 165,859,232 (important to have 9 digits of precision when guessing wildly for #Science). The Census Bureau’s pop clock says that the U.S. has 330.8 million residents (though Yale says that the error bars on undocumented migrants are in the millions).

I’m not sure that we’ll ever get a better estimate so it is reasonable, in my view, to say that today was the day when the majority of Americans had been infected, at least to some extent, by the virus we call “COVID-19.”

Related:

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