Experts started saying very early on, pretty much as soon as Xi imposed travel restrictions, that quarantines (city/country wife travel bans, not quarantines of suspected cases) probably won’t work and could make things worse. Three reasons that kept coming up:

1. People hide the sicknesses even when they are sick, make good data collection near impossible
2. People flee, accelerating spread
3. People panic and jam into hospitals (not contradictory to 1. because most people would have just stayed home usually), creating Petri dish conditions where thousands of vulnerable people wait next to other sick people... very few of whom walked in with the disease but many more will walk out with it. This also overwhelms the system to make proper diagnoses and treatment far more difficult. It also dramatically increases the risk of infecting the medical personnel since proper precautions are rendered neigh impossible.

All of the above have come to pass. CCP is already trying to climb down. Their tabloids are out in full force today blaming the US and other countries for spreading panic while they impose far more draconian measures at home that actually panic people far more.

https://www.npr.org/2020/01/25/79947...tions-in-wuhan

i'm obviously more biased in TS's direction (i personally think that mortality rate on this thing is between 2 and 5%), but grizy does make a good point that the statistics are easy to bungle here. you can have a lot of people showing symptoms that aren't showing up in the stats, therefore raising the case rate and lowering the effective mortality%

THAT BEING SAID, i think there's even more evidence of china suppressing mortality rate, assigning corona deaths as generic pneumonia-related deaths.

we can debate forever what the true mortality% is, but for purpose of this thread its largely regarding china imports. AAPL especially. i read somewhere today that if AAPL's primary manufacturer in china extends the shutdown past next monday you're gonna see it spill over in a real way with product shortages and all of that stuff.

It's not a good point, it's been well discussed. The long lag between infection and death (deaths are soaring in Hubei and zero elsewhere) combined with exponential spread puts a very large bias toward the death rate from current infections (90% of which are too recent to have died yet) being far higher than reported. Enough to cancel out most of the undersampling bias (probably 90% the other way) which would make the rate be lower. China is also greatly underreporting/misattributing deaths as the NYT discussed yesterday.

Simple question: If this is as bad the flu, why is the Chinese government spending large expense building multiple field hospitals in locked-down Hubei to deal with the casualties? Does it do that for the flu? Why are hospitals overflowing with the critically ill, on oxygen bottles stacked like sardines in the halls? Does that happen for the yearly flu?

Product shortages are a given at this point. We were already a week into the national holiday when the lockdowns started, so inventories were already being drawn down. Some suppliers are being unofficially told shutdown until the 17th at least. Apple should take a nice hit at these $308 crazy highs, both from the production shutdown and their only growth market going into extended lockdown.

According to reports, death rate outside of Hubei is about 0.3%. Hubei’s denominator is most likely to be vastly underestimated, even by CCP admission. From very early on they admitted a shortage of testing kids and prioritizing testing the most severe cases.

We also have data outside of Chinese control. 1 dead out of ~150 and some elderly patients have already recovered.

Short answer is yes. Imports will be down pretty dramatically for February.

However, because there is dawning recognition the response has been a dramatic overreaction and because Chinese factories, governments, and workers can’t afford to stay out of work for too long, factories will likely be back at full (likely over, to catch up) capacity soon after end of Feb-mid March (when some experts expect the infections to peak). Chinese government will declare the virus contained and itself victorious then everything will be back to normal quickly.

Except the annual flu season in China, and quite probably rest of the world, will claim a not insignificant number of additional lives.

Please get your flu shots.

i'm not insinuating the insane position that corona = the flu in terms of damage

i'm just saying it's not unreasonable to assume that the chinese statistics are totally ****ed by noise right now both in terms of underreporting deaths and underreporting cases.

grizy,

again this is where stat positions are gonna be mis-aligned, i think the 0.3% death rate outside hubei is potentially misleading because we're too early in the progression of symptoms -> realized death rates.

Is this the man behind the Coronavirus pandemic? This article appears to have got zerohedge life banned from twitter.

https://www.zerohedge.com/health/man...virus-pandemic

This is not the first time nor the last time the markets panic about some random disease. SARS, Ebola, it was all quite a lot of Panic for a few weeks. Three months later, these diseases that supposedly could've wiped out millions just disappeared and with proper treatment, did not seem nearly as dangerous. No, this time is not going to be any differerent. It is the same story. And yes, CDC/etc HAVE TO overreact, it is their job to overreact and contrain as early as possible.

I am not a doctor and I do not plan to pretend to play one in this thread and quote you random statistics I read on random news sites. What I am trying to say is that markets usually overreact to news. Undobtedly, this will have some effect on GDP numbers, and chances are that it will drag on long enough to depress the economic output of the country.

While many businesses are hurt by this, some are thriving. In particular, this is a huge boon for Chinese online with many services reporting record numbers/servicers going down/etc. And as record number of people explore and try these services, it may accelerate tech adoption/comfort and have long term positive reprecaussions for the Chinese economy.

The markets are at all time highs. How are they panicking? They are completely complacent. It is not the first time the markets have been insanely complacent about real threats at the end of a long bull. They in fact have a reliable history of same.

Your view is the view of most, hence why the market has shrugged this off so far. SARS had a much lower rate of infectiousness and was caught at a much earlier time (maxed out at 10K total infections vs 40K confirmed and likely over 200K not confirmed) when China wasn't much of a global hub and the Chinese were poor and barely traveled (so very few infection routes out of the country). Ebola was never a threat because it can only be transmitted by actual bodily fluid contact. There's been nothing that compares to this since the Spanish Flu in 1918.

Weeks of shutdown in the world's largest economy/supply chain source will by itself hurt GDP and hence corporate earnings. An impact is already guaranteed, which SARS never had, with a fat tail of massive global impact/a recession. It's a lock that the market is behaving irrationally here.

Perhaps these will help you understand why this is no SARS:

I also dont get how people think the mortality rate is 2%. Thats dividing current deaths over known cases. If it takes a week for the illness to play out divide deaths by known cases a week ago. makes the mortality rate closer to 5%.

also shocked levered copper stocks are not down more. china consumes half to worlds copper, very likely we get some major inventory builds in the next couple months that depresses prices for a long time.

for the very few businesses thriving thousands are hurting. when hundreds of millions of people are stuck at home under quarantine instead of producing goods and services its a massive negative for the global economy.

I wonder what percentage of confirmed cases are patients who contracted the virus in a hospital.

A recently published study tracking 138 patients in a Wuhan hospital between 1st Jan - 28th Jan demonstrates the transmission rates of ncov and/or the abysmal state of affairs in their overwhelmed healthcare infrastructure. Of the 138 patients, 41% tested negative upon entry, then picked corona virus after admission for other illnesses.

edit: Worth noting, the ~40% transmission figure is consistent with current test results on the cruise ship in Japan.

Totally agree. Even in the best case scenario the economic effect is not priced in to the market imo. Just spoke to a friend who predicts his business revenue for 2020 will be down 50-75% due to this. He is already laying people off. Said others in his industry are declaring bankruptcy.

Hospitals in China, cruise ships, and the part of Wuhan where the outbreak occurred, are all densely populated, which increases the number of human-to-human contacts, and transmission rates. Central Wuhan is ~20,000 people per square km (~8000 per sq mile).

The disease likely started mid Nov imo, so Day = Day+15 but even in that case the graph still dwarfs SARS.

QFT. You can see likely transmission routes and nodes in this model: http://rocs.hu-berlin.de/corona/docs...ual_analytics/

There is basically no chance fatality rate is over 2%. It in fact is almost certainly under 1%.

We already know this because outside Hubei death rate is ~0.2% over 10,000 people. Outside Hubei, the recovered/dead ratio is like 40/1, accounting for almost 20% diagnosed. Even that rate is probably a pretty dramatic overestimate since “diagnosed/confirmed” is in the denominator, not estimated infected.

Hubei’s conditions (and death rate) are terrible in large part because the CCP created a panic and Petri dish like conditions and completely overwhelmed the medical system. As despacito pointed out, lots of people were catching the bug at the hospitals (experts predicted this by the way.) By the time CCP started testing in earnest, the virus was already widespread so infected in Hubei is dramatically underreported. The Petri dish like hospitals were packed with particularly vulnerable people (you know, people already sick with something else) and that contributed to higher death rate. Finally, by CCP’a own admission, they only had the capacity to test ~1500-2000 cases a day in early Jan and they tested patients showing most sever symptoms first. All of these contribute inflating death rates in Hubei.

This is completely bankrupt logic. It's comically bad. The lead time from infection to death is 4-6 weeks. The rest of China hasn't been infected for long enough to start seeing these deaths.

You can see this lag effect already in the serious/critical cases. A week ago the rest of China had plenty of infections yet almost zero serious/critical in non-Hubei provinces. Now they stand at about 10% serious/critical in non-Hubei provinces. About 1/5 of those will die if it follows Hubei patterns for a...wait for it..2% death rate.

The amount of ******ed logic about this whole thing from lots of people is shocking to me. The above is obvious after 0.000001 milliseconds of thought, yet people keep saying the same things. It's incredible.
Again more awful logic. There are two competing biases here in the death stats:

1) The milder cases not counted/only the more serious get tested, skewing the death numbers
2) The 2-4 week lag between confirmation of infection and death.

(1) puts a bias somewhere between 2x and 10x of over counting the death number.
(2) puts a bias somewhere between 3x and 7x (given the rate of spread) under counting the death rate.

The two numbers largely cancel out. And here's a prediction to back up this analysis: the death rate (on the 10K currently infected cases) is about to soar in the rest of China from near zero now (with 10K infections) to over 1% in the next two weeks. If grizy's take is correct, this will not happen/is impossible.

https://www.worldometers.info/corona...navirus-cases/

As of February 11, 2020, 13:40 GMT:

Cases with Outcome = 5354
Recovered/Discharged = 4336 (81%)
Deaths = 1018 (19%)

NOTE: This is "right-censored" data, so 19% is a likely lower bound.

(yes this ignores grizy's comment about the people catching this in hospitals are more likely to already be ill; only time will tell how much effect that has)

(yes this ignores some other factors like it might take different times to die vs recover: https://www.worldometers.info/corona...us-death-rate/)

Juk

The "recovered" is more right-censored than deaths for fairly obvious reasons. The data is also likely heavily truncated because less severe cases just never get diagnosed/confirmed in Wuhan/Hubei. Both would tip death rates up significantly.

Overall death rates, with data split by Wuhan/Hubei vs. rest of the world have been relatively stable for weeks.

This is in the context of apparently still limited testing kits in China.

Dead/(known outcomes) outside Hubei is sub 2% by the way... and dropping.

On the contrary: There is a high chance the case fatality rate is over 2%. It's almost certainly over 1%.

Just quoting this again to laugh at the silliness of this analysis, not even realizing there's a long lag between infection and death that accounts for 100% of this discrepancy. I mean, you're not alone in this, lots of people who should know better are saying the same thing, but it amazes me that people can't do basic logical analysis outside of what they rote learn.

Case in point: the death rate outside Hubei has jumped to 0.4% in the last two days. And there are 1000 serious to critical, about 20% of which will die, for, wait for it, a 2% death rate.

As predicted, the deaths outside Hubei will be over 1% within 2 weeks, probably 1 week. grizy manages to get absolutely every bit of analysis he posts on 2p2 wrong, this is no exception.

Here is a plot using the second method mentioned on this page: https://www.worldometers.info/corona...us-death-rate/



Using their "conservative estimate of T = 7 days" you get a mortality rate of about 5% using today's data.

Juk

When corona news was hitting the world stage, the markets had some of the bigger losing days, which is a typical over reaction. The markets are back to doing fine because investors realize that the impact is minimal.

Stocks are priced on future earnings and future earnings growth. One or two crappy quarters does not have a huge impact on stock price, if the poor performance is due to temporary and unique circumstances like this. Corona is not a sign that company A is doing poorly and their future earnings and future earnings growth will be poor - everyone knows this is temporary.

Additionally, these sorts of forced and temporary shut downs are generally followed by a mini boom, where all the pent up demand creates a stronger than usual quarter. This is not the case for every industry and every company, but it is the case overall. If the shut down means Apple runs out of smartphones to sell, it just means the factories will be working extra hours and producing extra goods to fill all the pent up demand when things clear up. Yes, some people will forgo buying that Iphone altogether which is why there will be 1-2 bad quarters, but then things just go back to normal. Impact on future earnings and future earnings growth is nearly nonexistent, which is why stock prices are staying high.

Is there any industry that long term suffers from this? Perhaps some agri business that will have long term import ban. Or B&M takes an incremental hit as Chinese customer is forces to acclimate to online. Is there any industry that benefits from this? There are probably some companies that thrive from these sorts of events and offer all sorts of prevention and remediation solutions.

I made the chart with data from here. https://github.com/CSSEGISandData/2019-nCoV

The ratio actually started off in the 70% range in the early stages so I cut data from January off.

Their latest update at
https://gisanddata.maps.arcgis.com/a...23467b48e9ecf6

Suggests the death/(known cases) ratio is now below 2%.

dc_publicus,
It's all a question of how likely you think it is to be a pandemic with the economic impacts that will have. I agree a transient issue like this isn't a big deal. For example, if China is now contained and the rest of the world goes into permanent decline, then a 1-2% decline in the market from the economic impact is the rational result.

There's a very fat tail where this becomes a global pandemic with meaningful economic impacts. The market is pricing that chance at 0%. It is a not 0%, and is a long way above 0% according to all experts. Ergo, the market is completely irrational. The market is frequently irrational (which is why we can make money - remember the clowns in 2018 when vol blew up who thought they could make money selling vol forever? remember the .com bubble? Remember zero value subprimes bid up to trillions?), so there's nothing special there.

Is this using data for cases outside China only then?

If so, then I don't think anybody will disagree that it is expected to be much lower in Western countries currently, BUT:

- https://www.kingsfund.org.uk/publica...al-bed-numbers

That's for 66 million people here in the UK.

If a significant proportion of our population get infected then I don't think we are actually going to fare much better than China...

Juk