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Ever since Trump took office, conversation with many friends and most of my family has been a challenge. They feel about him the way some of  my conservative friends and colleagues feel about Hillary Clinton. When feelings are strong, reason declines and facts lose their context. I like a loud argument as much as any Irish American, but I don’t like an intellectual joust that leaves emotional bruises. Those bruises last longer when ideology insinuates itself into argument. Ideology leads to groupthink. Groupthink leads to war. And war is always destructive.

When news of the coronavirus broke, there was every reason to believe we were in a global crisis. Crisis often galvanizes otherwise opposing factions to band together against a common enemy. I hoped, naively, that this would be the case. Alas, it did not happen. The threat of COVID-19 became, almost immediately, an ideological topic.

The reports we were hearing from China and Europe through the World Health Organization (WHO) were positively frightening. But the numbers associated with those stories didn’t make any sense. So I began to write about it and do some research on my own. The more I studied what was being said, the less I believed it. And when the shelter-in-place solution was introduced as the “scientific” protocol for reducing the eventual death rate from COVID-19, I was challenging it in my blog posts and conversations.  

That was not well received by my friends and family members who were getting their information from the mainstream press. They were convinced not only that sheltering-in-place was the right course of action, they believed that the USA had been hobbled by Trump by not putting it into effect sooner. It didn’t seem to matter to them that Trump’s earlier doubts about  it were not his, but the recommendations of the WHO, the CDC, and the White House panel of experts headed by Dr. Fauci.

We do agree on one thing: The Trump administration bungled its response to the threat. But my friends/family think the mistake was in implementing mass quarantines too late. I think the mistake was in implementing them in the first place. 


Living in Fear of the Fear of COVID-19 

Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” – Ben Franklin

I want to resume my wrestling, but K is worried that I will catch the virus from a training partner and infect the family.

My brother-in-law is worried about the throngs of (mostly young) people that have descended on Atlantic Avenue and its restaurants since they reopened a week ago. “It’s all bullshit,” he says. “Nobody is keeping social distance or wearing masks. Even some of the servers aren’t wearing masks.”

My fellow members of The Mules, the book club I belong to, want to have our next meeting virtually, as we’ve had the last two.

It’s difficult for me to speak about the virus with any of them because I know they are seriously frightened. But I believe their fear is unsubstantiated by the facts. And it angers me to think that they have been prompted into that level of fear by politicians and media that are using this crisis to further their political objectives.

So when I do speak about it, I find it difficult to restrain my anger. I state my opinions in definitive terms in hopes of shocking my friends/family out of their panic. It is a foolish approach. My sister reminded me of that yesterday, and she was right. So I’m writing this today, another essay on what I’ve learned about the coronavirus and why I believe the fear they are living with is based largely on misinformation.

I want to begin with some facts. But before I do, I implore you to read these facts with an open mind. Keep in mind that they all come from sources that you probably trust: the WHO, the CDC, Dr. Fauci and team, and several dozen studies done by respectable research institutions since the last essay I published on the virus itself.

*Fact One: Based on current death rates, COVID-19 ranks 13th on the list of the ailments that people, worldwide, die from each day. It is exceeded by cardiovascular disease, cancer, respiratory diseases, lower respiratory infections, dementia, digestive diseases, neonatal disorders, diarrheal diseases, diabetes, liver diseases, kidney diseases, tuberculosis, and HIV/AIDs. It is also exceeded by road injuries and suicide (which is on its way up). The number of people that die from cardiovascular diseases is more than 20 times greater. (This would not have been true had you made the comparison when the death rate was at its peak, but it is true now.)

You may be thinking that you are not interested in comparing COVID-19 to cancer or heart disease, since they are not contagious. In terms of my topic – which is fear – I think that is an illogical position. But put that aside…

* Fact Two: Of contagious diseases, it ranks 7th, after lower respiratory diseases, neonatal disorders, diarrheal diseases, digestive diseases, tuberculosis, and HIV/AIDs.

The fatality rate of COVID-19 is the primary reason that some epidemiologists were so concerned about the disease in the first place. Early reports had it at double digits, then at 6%, and then at 3.4%.

Those were the numbers that spurred the call for mass quarantining. But those numbers were based on case fatality rates.

As I explained in every essay I wrote on the subject, this is an useless and potentially misleading statistic. The case fatality rate does not measure a disease’s actual lethality rate. It measures only how many people died compared to how many people have been diagnosed as positive.

We can only know the actual fatality rate (some call it the infectious fatality rate) when we know how many people have died compared to how many people have been actually infected.

That was impossible to determine in March or even April because test kits were limited and no one was doing randomized tests of people that showed no symptoms.

Those tests have been conducted in the last four weeks. And what they are showing us is that the earlier case fatality rates overestimated the true fatality rates by a factor of 10 to 50.

For example:

* Fact Three: A new randomized study of 3000 people in New York State found that 13.9% of those tested for antibodies were positive. That means 2.7 million New Yorkers have already contracted COVID-19. When this was reported, there were 257,216 cases with 15,302 deaths. That equates to a case fatality rate of 6%.

But as I explained above, the case fatality rate is meaningless until you know the number of people infected, not just the number diagnosed. I suggested in my April 8 essay that it must be at least 10 times higher because symptoms for so many were flu-like and because of the lack of testing available then.

Adjusting for the latest findings, we can see that the actual lethality rate is a bit more than 10 times case the fatality rate, coming in at about 0.5%.

* Fact Four: This same study found that 21.2% of those tested in New York City were diagnosed as positive for COVID-19 antibodies. New York City’s population is 8.4 million. Extrapolating on that, we can assume that about 1.78 million denizens of the Big Apple were already infected with COVID-19 at the time. This means that even in the worst hot spot in the country, the actual fatality rate was 0.6%.

* Fact Five: These findings are similar to those from antibody studies done in Santa Clara, CA; LA county; and Kansas. Dutch, German, and French studies also show a much higher incidence of the virus than case studies would suggest – which means much lower real lethality rates.

My friends and family members that have a different view than I do tell me that the actual death count from COVID-19 is higher than reported. They tell me that there were surely people that died from it in the early days that were not diagnosed. I don’t doubt that. But if you understand the protocols that were put into place in by the CDC in early March, you can deduce that this must be a fraction of the distortion that occurred during the period of time when the death count was in the thousands.

* Fact Six: The CDC’s recommendations for reporting COVID-19 deaths included patients that died with “symptoms” of the disease, even if they didn’t die “of” the disease. In other words, if a patient that died of pancreatic cancer happened to test positive for COVID-19, the cause of death should be noted as COVID-19. (Note: When the state of Colorado did a study of this recently, differentiating those people that died with COVID-19 symptoms from those that died of COVID-19, the COVID death rate dropped by 25%!)

It’s hard to understand why the CDC would have made this recommendation, since it is patently unscientific. Most symptoms of COVID-19 are similar to flu and other respiratory diseases. Even in hot spots, less than half of those with COVID-19 symptoms test positive. Several emergency room and ICU doctors have commented publicly on this anomaly, complaining that they feel pressured to report deaths as due to COVID-19 when there is no certain reason to think it is so.

A fatality rate of 0.5% is considerably higher than the 0.1% or 0.2% fatality rate of influenza. But as I have explained, there is an important difference between COVID-19 and influenza. COVID-19 does most of its killing among populations of older people that have other life-threatening, “comorbidity” issues.

* Fact Seven: A study by the AMA found that 94% of hospitalized COVID-19 patients in New York City had serious underlying conditions. 53% had hypertension, 42% were obese, and 32% had diabetes. The median age was 63.

* Fact Eight: In New York, the fatality rate for COVID-19 patients between 18 and 45 is 0.1%. For children, the fatality rate is statistically zero percent.

These numbers correspond to the analysis I did in March. Also, multiple studies have shown that children are not significant “vectors” of COVID-19. That means they don’t spread it very well.

The chances of contracting COVID-19 are much greater in confined spaces than they are in the open air.

* Fact Nine: A Chinese study of 3000 COVID-19 deaths found that all but one of the patients contracted the disease indoors. (The one exception contracted it through contact with someone that had just arrived from Wuhan province.) Yet many state governors, like New York’s Cuomo, were forcing elderly COVID-19 patients into nursing homes – which accounts for the severe contagion and death rates that we saw in those facilities across the globe. (This policy has just recently been reversed, weeks after the results of this study were reported.)

There have been several new studies suggesting that herd immunity for COVID-19 might be much lower than the 60% to 80% that was originally projected. I haven’t had time to locate these studies, so I can’t call this a fact. I know the projections are between 10% and 40%. 10% makes no sense. But 40% could explain why we’ve seen the recent drop in mortality.

There is no disputing the fact that you can reduce the speed at which the virus spreads by social distancing and washing hands. This is the strategy of flattening the curve. But flattening the curve is about slowing the spread of infection – not necessarily decreasing the eventual death count – which is what happened because of measures like social distancing and hand washing, not the lockdown.

* Fact Ten: Studies from Germany and Switzerland found that the flattening of the curve of the contagion happened weeks earlier than originally believed. In every case studied, the peak appears to have been before lockdowns were implemented. What that means is that the lockdowns did not work. They were not the reason the curve flattened. They had, if any, only a negligible impact on the curves in those countries.

* Fact Eleven: According to an analysis by Stanford University, there is no statistical correlation between lockdowns and COVID-19 deaths between those states that locked down early and those states that locked down late.

Those are some of the facts. And all of them come, as I said, from the WHO, the CDC, and reputable university and scientific studies.

So this brings me to the point of disagreement I have with friends and family members that believe the lockdown was and still is necessary, and that the movement towards opening the economy puts them and others in danger of dying.

Spend five minutes thinking about the above facts, and you have to agree that the proper response to the coronavirus threat would have been to isolate the most vulnerable (which we did not do) and not shut down the economy.

In fact, there is an argument to be made that sheltering-in-place has caused and will cause thousands and potentially hundreds of thousands of additional deaths. Deaths from depression, suicide, and domestic violence, as well as the deaths of many people with symptoms of heart attack, stroke, etc. that should have gone to the hospital but didn’t because of the fear of getting infected.

* Fact Twelve: Vaccinations for children have abruptly fallen at an alarming rate since the shutdown. In Michigan, fewer than half of infants 5 months or younger are up to date on their vaccinations, which may allow for outbreaks in diseases like measles.

But I won’t make that argument. It’s more important to make another point.

Unless we develop a miracle vaccine in the next few months, there are going to be lots more people dying of COVID-19. We don’t know how many. But based on the facts I’ve listed above, I hope it’s clear that there will be no lowering of the death rate by any continuance of the lockdown.

And speaking of a miracle vaccine, we have seen an historically unprecedented acceleration of efforts, private and public, to find a vaccine. And according to reports on both sides of the argument, we are making progress. At least a half-dozen vaccines have been approved for initial, phase one testing.

But here’s another fact to consider:

* Fact Thirteen: 90% of drugs that are approved for initial, phase one testing fail to make it to phase two.

The logic behind the opinion that many hold – that mass quarantines will minimize future deaths because the spread of the virus will be slowed – is faulty. The opposite is the case.

The only valid purpose for the lockdown that ever made any sense was to flatten the curve and thereby prevent hospitals from being so overwhelmed that they could not properly treat COVID-19 patients. But I’ve not found a single report that verified a death caused by, for example, lack of access to a ventilator.

What the lockdowns did, without question, is slow the race towards herd immunity. That means (again, barring the development and approval of an effective vaccine in the next few months) we will almost certainly have a second and even a third wave of the virus. And when those waves come, they will likely be different – maybe more lethal – strains. Which would mean, for certain, that the lockdown strategy will have resulted in many more deaths.

That is what makes me angry. And that is why I am upset when I hear my friends and family members say that those that favor opening the economy are putting money ahead of lives. It’s simply not true. The facts don’t support it. If we want to reduce the eventual death count, we must allow the virus to spread among the large percentage of the population that has little to no chance of dying from it. We have to reach heard immunity before a new, more lethal strain comes back and infects us. (This, by the way, is what happened with the Spanish Flu of 1918.)

I am angry and I want to blame someone. But I can’t blame my friends and family members who are scared because of the misinformation they’ve relied on.

I blame the mainstream media for not investigating the pandemic with any seriousness. And I blame some newspapers and news programs for pursuing reporting that was evidently meant to scare people.

These reporters and commentators failed very early to do even the simplest arithmetic, which would have made them understand how misleading the early case fatality rates were. Since then, they have ignored the studies that have unearthed the evidence listed above. Why they continue promoting their false narrative is anyone’s guess.

But because they will continue to promote their false narrative, the people that have taken it for truth will likely continue to believe it. They will continue to find ways to blame the Trump administration for the deaths that will follow, ignoring the fact that the mistake it made is clearly the mistake of shutting the economy down.

As I’ll explain in a moment, though, none of that makes any difference. We are already fast into the opening process and that isn’t going to stop.

But before I get into that, a few words on what I think we should have done.

In retrospect, the smarter federal policy would have been to:

  1. Allow those that had a near zero chance of dying from the virus (children and people under 28) to lead their normal lives, spreading the virus among their peers at a controlled but relatively free pace, so that we could move towards herd immunity as fast as could be reasonably done.
  2. Advise healthy people in their 30s, 40s and 50s (whose chances of dying from COVID-19 are less than 1%) to act like responsible adults capable of making adult decisions.
  3. Focus 80% of our resources to quarantine the 20% of our population that is most vulnerable to the disease.

In retrospect, the correct response from the CDC and the president’s task force would have been to recognize, immediately, that the arithmetic that gave us “official” lethality rates of 10% and 6.5% and 3.4% (and the early predictions of millions of US deaths) was obviously wrong.

In retrospect, state and local governments should have kept parks and beaches open so that people could get the exercise and the sun they needed. They should have advised anyone concerned about catching the virus or passing it on to their elders that the likelihood of that happening in the outdoors is tiny compared with the chances of catching it in any sort of “sheltered” place.

In retrospect, we should not have required nursing homes to take back their clients that had been diagnosed with COVID-19. That’s what caused the spike in deaths that we saw. We should have isolated those people and, thus, reduced the huge percentage of deaths that occurred in such facilities.

* Fact Fourteen: 41% of the Americans that have died from COVID-19 were in nursing homes. In Minnesota, the percentage was 81%. In New Hampshire, it was 72%. In Rhode Island, it was 75%. In a dozen other states, it was more than 60%.

The coronavirus is very contagious. And it is lethal to older people that have serious comorbidity issues. But it is not lethal to the rest of the population. To most of those that have been put on unemployment – mostly younger, healthier people – it isn’t a great threat at all. And to those that are vulnerable, shelter-in-place increased their chances of dying from it.

Those are, it seems to me, the facts.

The curve has flattened in most of America, but COVID-19 has not been conquered. Not at all. It will come back and it will continue to kill. In one of my early essays, I predicted that it would kill between 60,000 and 120,000 this year and as many as 600,000 if we don’t reach herd immunity.

The lockdown did not and will not diminish that number. Only herd immunity (either acquired naturally by spreading the infection or with the help of a vaccine) will do that.

In retrospect, it would have been better to if the WHO, the CDC, and the administration had reduced, rather than inflamed the panic that has spread like a virus across our country. It would have been better if they had admitted, early on, that the original arithmetic and modeling were bad and waited for the facts.

I would like to think that anyone that that is fearful now could get a realistic grip of reality by focusing on these facts, but that may not happen. When you have invested so much emotional energy into a fear about the future, it’s difficult to give it up.

I doubt, too, that when this is over, those that have accepted the viability of the lockdown will change their opinions. They will be suspicious of facts that don’t support the narrative they have been sold. And the media and public figures that sold that narrative aren’t likely to admit that they were wrong either.

They make minor adjustments to their stories to accommodate realities that cannot be refuted, but will hold on to the scientific evidence that is more difficult for lay people to understand. They will do this to protect themselves from the shame they must feel when they think about what they have created.

For my part, I’m going to do my best to bite my tongue whenever I hear fearful friends and family members fretting about the opening up of the economy. Biting my tongue is an easy price to pay to avoid saying something that pisses them off.

A tougher issue for me will be how I go about taking advantage of all these openings. For one thing, as I said at the top, I want to resume my wrestling. That would mean rolling around on the floor with young guys who, if they had COVID-19, would likely be asymptomatic. I understand why K has forbidden me from doing that. I believe the actual risk is infinitesimally small, but being wrong is not chance I’m willing to take.

I will have to put off my favorite form of exercise until K’s fear subsides. And I realize that’s not going to happen until the pandemic narrative she has been listening to gives up the ghost of its beliefs about the lockdown and shelter-in-place strategies.

That will happen well before we have an effective vaccine. I can see it happening already. K had her hair done yesterday. My brother-in-law hugged a friend. It is people like this, not the protesters that have been opposing the shutdown, that will bring the American economy back to life.

They will do it not because they believe the shutdown was wrong, but because they are sick and tired of being locked up.

There is only so long that a mentally healthy person can stay locked up in a prison of fear.


This essay and others are available for syndication. 
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Contagious vs Infectious 

An infectious disease is a communicable disease that spreads by contaminating people (or animals) with pathogenic microbial agents, such as viruses, bacteria, or other microorganisms. In other words, a disease where bad germs get into the body in some way, spread, and make you sick by affecting the way your body normally works.

Contagious (or communicable) infections spread through contact. Examples: chickenpox, cold and flu (influenza), malaria, Lyme disease, measles, meningitis, pneumonia, tuberculosis, Ebola, MRSA, polio, hepatitis A and B, HIV/AIDS, and coronavirus.

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April 20-April 24, 2020

a look back at this week’s essays…

The Corona Economy, Part I:

Will America Survive It? 

The trouble with mixing ethics and economics is not that they are incompatible. Quite the contrary, they are inextricably linked. The problem is that if you talk about them simultaneously, you never get anywhere.

Click here to read more.

My Last Essay on the Coronavirus (I Promise!)

5 Important Questions; 5 Conclusions 

Today, I’m going to try to answer the question of how deadly this novel virus is as part of what I promise will be my final essay on the virus itself.

Click here to read more.

The Corona Economy, Part II

Will America Survive It? 

America will soon be “opening up again.” Not because Donald Trump wants it to.  Nor will it happen because we’ve passed the peak of the contagion. (There will be a second wave.) State governors will have lots to say about it, but they won’t actually make the important decisions. America’s people – its entrepreneurs, professionals, corporate executives, and employees will.

Click here to read more.


quick quiz 

  1. How much do you remember about this week’s “Words to the Wise”? Use each of these words in a sentence:

* peremptory (4/20/20)

* perfervid (4/22/20)

* hyperbole (4/24/20)

  1. Fill in the blanks in this week’s quotations:

* “_____ is a subject that does not greatly respect one’s wishes.” – Nikita Khrushchev


* “Imagine preventing health crises, not just _____ them.” – Nathan Wolfe


* “Performance is better than promise. Exuberant _____ are cheap.” – Joseph Pulitzer (4/24/20)

  1. Are these statements True or False?

* In 1920, quarantined in the South of France during the Spanish Influenza outbreak, F. Scott Fitzgerald wrote a letter to a dear friend describing what he was going through. (4/20/20)

* Coronavirus is the biggest killer in America. (4/22/20)

*The Dow Jones Industrial Average has not yet rebounded from its pre-Great Depression levels. (4/24/20)


recommended links from this week’s blog 

* “Questioning Conventional Wisdom in the COVID-19 Crisis” LINK

* “Provisional Death Counts for COVID-19” LINK

* “COVID-19 risk factors: Age, underlying conditions, genetics, and unknowns” LINK

* “How deadly is the new coronavirus?” LINK

* “Odds of Hospitalization” LINK

* “The Deadliest Viruses on Earth” LINK

* “Beware of the World’s Most Deadly Infectious Disease: Tuberculosis” LINK

* “Causes of Death – Our World in Data” LINK

* “Perspectives on the Pandemic, Episode 2”

* “Perspectives on the Pandemic, Episode 3” LINK

* “List of human disease case fatality rates” LINK

* “Matchstick Art” – Got some spare time on your hands? Here’s an idea… LINK

* “How COVID-19 Kills – I’m a Surgeon – and Why We Can’t Save You” LINK

* “Happy Feet!



Your Question:

What do you think about real estate as an investment, given what seems like an inevitable recession and possibly worse?

My Answer:

It depends on the sort of real estate investments we are talking about. If I had a large position in REITs, for example, I’d be concerned because REITs are basically stocks, and the value of stocks is half-dependent on the trust investors have in the stock market generally. If stocks go down further and stay down for five or 10 years, some of the underlying businesses would almost surely go bust.

If, like a good friend of mine (who became very wealthy through real estate) I had a large position in high-end malls, I’d be very concerned. If we go into a deep recession, some of those properties will be all but abandoned. I wouldn’t like to be in his shoes now.

If I were invested in higher-end residential properties, I’d be worried, too. Generally speaking, the more expensive properties carry more debt. (In 2017, the most recent available data, West Virginia had the highest share of “free and clear” ownership at 54%. Maryland and the District of Columbia were on the other end of the spectrum with rates of 27% and 24%, respectively.) More debt means less resiliency in tough economic times and a greater risk of default.

And if I were invested in hotels, I’d definitely be worried. Wait! I am invested in hotels! My worry is not for myself, because I limited my investment to what I can afford to lose. I’m worried about the managing partner. He is jumping through hoops to keep the doors open right now. If things do not go back to “normal” by, say, a year from now, he’s going to be in trouble.

What I’m not much worried about are the apartments I own in working-class neighborhoods (usually referred to as “workforce housing”). The rent rolls would certainly go down in an extended recession. But since my total debt load on those properties is less than 5%, I’m confident I’ll be able to maintain them even at a rent reduction of 40% or more. Plus, the asset value should return when the economy returns because there won’t be much building during a serious recession.

The other type of real estate I favor is buildings that house businesses I own. So long as those businesses stay in business, I’m not worried about rental payments because they account for less than 5% (and usually only 2%) of expenses.

And finally, I’m not worried about my land-banking portfolio. It isn’t designed to have an income, and the maintenance costs, because of the locations, are very low. I will hold onto these properties until prices start climbing. I’m in no rush.

What all this amounts to is this: When it comes to real estate, I’ve always been very conservative. I invest primarily in income-producing properties for which there will always be a demand. And I use leverage (mortgages) on a temporary and limited basis.

My formula is not optimal for increasing wealth in an up market. But it is good for reducing my exposure to a long down market.

Have a question for me? Submit it on our Contact Us page. 

A look back at the stock market LINK

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“Performance is better than promise. Exuberant assurances are cheap.” – Joseph Pulitzer

The Corona Economy, Part II

Will America Survive It? 

Alec writes:

Today marks the 29th day in a row that I have worn pants with a drawstring.

I went into Rand’s room this morning and woke him up. I said, “Rand, you have to get up.”

He raised his head up from his pillow and said, “Why?” Then he went back to sleep.

My wife is running a business with 10 restaurants and goes to work every day. She is busier than ever… as other restaurants gradually close, they are filling a growing number of carryout orders for breakfast, lunch, and dinner.

Her text this morning read, “Has at Costco $1.49.”

How she had time to text me, or what the text meant, I didn’t know. But thinking it might be vital information, I texted back, “WHAT??”

Her reply was, “G gas.”

I thought, “Wow, gas, $1.49 a gallon. I can’t remember when gas was that cheap. I’d better rush to Costco to get gas before they run out.”

I jumped into my car and backed out of the driveway. Then I realized: I hadn’t gone anywhere for 29 days. My gas tank is still full!  (Later, I did the math and I am driving an average of 0.7 miles a day. I may not need gas until the middle of June.)

But America will soon be “opening up again.” Not because Donald Trump wants it to.  Nor will it happen because we’ve passed the peak of the contagion. (There will be a second wave.) State governors will have lots to say about it, but they won’t actually make the important decisions. America’s people – its entrepreneurs, professionals, corporate executives, and employees will.

“Opening up” is  bit of hyperbole. Our economy was never truly shut down. It was regulated into a crippled gait. In six short weeks, the US has experienced a financial collapse it hasn’t experienced in a hundred years.

As I write this, for example, more than 22 million American workers have filed for unemployment. Millions more will surely be filing in May and June. Both Treasury Secretary Steven Mnuchin and the Fed’s James Bullard have said they believe that unemployment will bypass 20% and could end up higher than it was during the Great Depression of 1929.

The unemployment rate hit a record of 25% in 1933 – 4 years after the Great Depression – and remained over 14% during the entire decade of the 1930s. The highest rate since then was 10.8% in 1982.

Another concern: The 2008 financial collapse was triggered by mortgage defaults. What is happening today is just as serious – rent defaults. According to Rent Payer Tracker, as of April 19, one-third of the 13.4 million renters surveyed hadn’t yet paid their April rent, ordinarily due on April 1. An increase in rent defaults isn’t likely to collapse the economy by itself, but it reflects a trend I’ve seen even among friends and colleagues that are financially secure: People are reluctant to pay bills they don’t have to pay.

The big picture is the gross domestic product (GDP), the total output of the US economy. With so many businesses, large and small, inactive or unprofitable, Goldman Sachs projects that GDP could decline by 24% by the end of June.

Think about that. Total GDP output in 2019 was about $21.4 trillion. If it drops 24%, that’s an annual loss of over $5 trillion of economic activity. And that’s on top of the macroeconomic factors we covered in Part I of this series:

* The US government is currently in debt to the tune of $24 trillion.

* It’s been running at a $1 trillion annual loss for years.

* The Treasury itself is broke. Its bills exceed its revenues by several trillion dollars.

* The government recently spent $2.5 trillion it didn’t have.

* On the other side of the ledger, federal tax revenues will be at least $2 trillion less than they were last year.

Add it all up and you have an already broke government increasing its deficit by as much as $10 trillion in a single year!

The government is working furiously to avoid a total collapse. Their strategy is to give away trillions of dollars in paper money. They have already given half a trillion via the Payroll Protection Program and have committed to another half-trillion more. And that’s not counting the 1.5 trillion that went to bail out Wall Street.

As you remember from Monday’s essay, the US government doesn’t really have any wealth to distribute. It’s broke and is getting broker every day by billions of dollars. If, as I suggested, our government were a business, only a fool would invest in it or lend it money. But that’s how it’s been surviving these past several years – by selling Treasury bonds to the likes of China, Saudi Arabia, and Europe.

That’s of no apparent concern to some of our legislators and public thinkers. They are criticizing the giveaway so far for being too conservative.

Regarding the 20% to 24% projection of GDP loss, a NYT columnist said, “This time, with government deliberately shutting down commerce, it could well fall faster.

Only a World War II-scale response can make up that difference.”

And where will government get the money?

His answer: “At a time when inflation is close to zero and the government can borrow for 30 years at less than 2%, this is precisely the moment to borrow to underwrite a recovery that also modernizes the economy.”

Never before in US history has so much money been doled out so quickly and with so little understanding of or regard for consequences. Rarely have so many politicians from both sides of the aisle favored such a level of spending.

As Bill Bonner recently pointed out, the Small Business Administration giveaway is forcing banks to review and approve loans at a surrealistic rate.

“Every half a second,” he writes, “they’ve had to check out the facts… verify the value of collateral… and assure themselves that everything was on the level – after all, they were giving out as much as $2 million per application!”

“Who gets the money?” Bill asks. We can’t be sure. But when money is being given away so fast and furiously, there’s a good chance that much of it will be unproductive. “Like subprime mortgages in 2007,” Bill says, “All you need [to qualify] is a pulse. Even hedge funds are eligible.”

The millions that have been fired or furloughed will be getting a few hundred dollars a week while the shutdown continues. Meanwhile, the hundreds of US senators and representatives and their thousands of aides will continue at full pay while they try to spend our way out of all this mounting debt.

“Don’t worry,” they assure us. “We are going to take care of this.” Assurances from people that have never run a business and have little to no understanding of how a real economy actually works.

So what is it they don’t understand? We’ll talk about that on Monday.

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“Imagine preventing health crises, not just responding to them.” – Nathan Wolfe

My Last Essay on the Coronavirus (I Promise!)

5 Important Questions; 5 Conclusions 

Once again, we were having a family argument about the coronavirus. The topic last night was: “Why Donald Trump Is Killing People With His Plan to Reopen the Economy.” But after a good five minutes of perfervid shouting, it turned into an argument about how dangerous the virus really is.

“And now COVID-19 is the biggest killer in America,” J said.

“That’s not possible,” I said.

“I read it in The Washington Post.”

Now J has been right about that damn lefty rag before, so I had to check my facts. I tracked down the article this morning. It was published on April 16. The author had given COVID-19 the “biggest killer” title based on a single week’s data.

J was right. The article made that claim. But I feel that I was right too. Because the “fact” that it was on the top of some chart last week doesn’t mean it is or is going to be the leading killer this year. As always, it will be heart disease and cancer. Coronavirus will do its share of killing. It will make the top 10, edging out suicide, kidney disease, and maybe even pneumonia (from common colds and influenza). But I doubt it will edge out accidents, lower respiratory, cerebrovascular, and Alzheimer’s diseases.

Today, I’m going to try to answer the question of how deadly this novel virus is as part of what I promise will be my final essay on the virus itself. (I will be following up on Monday’s essay on “The Corona Economy” with two or three more essays, and then I’ll probably join the fray and register my view of how the crisis will change the way we live. But that will be it!) 

There are four reasons this will be my final essay on the virus itself:

* I normally write about subjects I know, like business and wealth building and so on. It’s exhausting to have to research and check facts to support my conclusions about the virus.

* When I began writing about the virus in mid-March, I was presenting ideas that were largely contrary to what I was seeing in the major media. It was fun to make claims and predictions that seemed outrageous and might offend. But in five short weeks, the consensus of expert opinion, along with the media, has moved uncomfortably close to what I was saying then. I have no interest is presenting ideas that the world is accepting as true. There’s no point in it.

* My family, my editor, and even some of my loyal readers have asked me to stop. As SC said recently, “Enough already!”

* If we get the right kind of testing done soon – and it appears we will – there will no longer be an argument about the most important questions.

So what I’m going to do today is present my argument against The Washington Post claim, and then reiterate (with some revisions) the five most important questions and answers about the coronavirus and COVID-19.

Question One: Comparatively Speaking, How Deadly Is the Coronavirus?

Let’s begin with some big numbers. How many Americans will COVID-19 kill in 2020? And how will that number compare to America’s biggest killers?

I’m going to address the second question first, because part of it is easy to answer.

In 2018, the most recent year the CDC had published records for, the top killers were as follows:

1. Heart disease: 655, 381
2. Cancer: 599,274
3. Accidents: 167,127
4. Lower Respiratory Diseases: 159,486
5. Cerebrovascular Diseases: 147,810
6. Alzheimer’s: 122,019
7. Diabetes: 84,946
8. Influenza and Pneumonia: 59,120
9. Kidney Disease: 51,386
10. Suicide: 48,344

The first expert estimates for COVID-19, you may remember, were 2 million to 3 million. Dr. Fauci and team’s first guess was 100,000 to 240,00. Just before they announced that range, I had come up with a range of 85,000 to 205,000, which was published in my March 30 blog. Shortly after that, Fauci and team dropped their estimate to 60,000. But that wasn’t meant to be the death toll for the virus itself. Just how many would die by August first.

So how many will die?

As you’ll see from my answers to the next several questions, that’s impossible to know until we know how many Americans (and other populations) have already been infected. Based on what I’ve seen, I’m sticking to my original guess. But I’m going to narrow down the range. My current guess is more than 85,000 but less than 120,000.

Conclusion and Prediction: COVID-19 is not the most dangerous health crisis Americans face today. It won’t come close to heart disease and cancer, but it will be significant, killing more than 60,000 but less than twice that.  

Question Two: How Deadly Is the Coronavirus by Age Group?

Throughout March, the media focused a great deal on the fact that COVID-19 seems to be especially deadly to older people and people that have “compromised immune systems” or “comorbidity issues.” This had most of my coevals frightened.

Then, about two weeks ago, another narrative hit the headlines: It’s killing younger people too! Even babies!

And that scared the shit out of everybody.

Let’s take a look at these two claims by comparing CDC figures on deaths by age group for COVID-19 against deaths from cold- or influenza-induced pneumonia.

From the beginning of February until the middle of March, 682,565 Americans died.

Of those 682,565 that died, 13,130 (roughly 2%) died from COVID-19 and 45,019 (roughly 6.5%) from cold- or influenza-induced pneumonia.

COVID-19 Percentages (based on 13,130 deaths)

Under 1 to 24: 16 or 0.12%

25 to 34: 113 or 0.8%

35 to 44: 289 or 2.2%

45 to 54: 751 or 5.7%

55 to 64: 1,773 or 13.5%

65 to 74: 2,919 or 22.2%

75 to 84: 3,576 or 27.2%

85 and older: 3,693 or 28.1%

Cold- and Influenza-Induced Pneumonia Percentages 

Under 25: 111 or 1.8%

25 to 34: 117 or 2.2%

35 to 44: 188 or 3.5%

45 to 54: 441 or 8.4%

55 to 64: 963 or 18.4%

65 to 74: 1,152 or 22%

75 to 84: 1,165 or 22%

85 and older: 1091 or 20.8%

At a glance, you can see one thing clearly: The percentage of people under 25 that died from COVID-19 was extremely small – i.e., about one-tenth of 1%. That is less than half the percentage of that same age group (2%) that died from colds and flu.

From this, it seems reasonable to conclude that if you are younger than 25, your risk of dying from COVID-19 is effectively non-existent.

What about the other age groups? From 25 to 34, from 35 to 44, and so on?

To get a better sense of that, I clustered them into three groups: 55 and over, under 55, and under 35.

* 55 and over: 91% of those that died from COVID-19 were 55 years old or older.

* Under 55: 9% of those that died were under 55.

* Under 35: 3% of those that died were under 35.

Now let’s look at the same age groups for cold and influenza:

* 55 and over: 83% of those that die from influenza are 55 years old or older.

* Under 55: 17% of those that die from influenza are under 55.

* Under 35: Only 4% are under 35.

From Dr. Jean-Laurent Casanova, a pediatrician who studies the genetics of disease severity.

“What we’re seeing here is the same for tuberculosis, malaria, all infectious disease of humankind. Some people control the infectious agent very well, others die, and there’s everything in between.”

Comparing the two sets of data points above, we can see that:

* Older people (older than 54) represent a somewhat larger percentage of those that die from COVID-19 than from influenza. But it’s not a huge difference. It’s eight percentage points – 91% as opposed to 83%.

* The percentage of people under 35 that die from COVID-19 is virtually the same as for colds and influenza: 3% versus 4%.

* Virtually no one under 24 dies from COVID-19, compared to 2% for influenza.

In terms of age, COVID-19 seems to be less lethal than cold- and flu-induced deaths for people younger than 25, about 20% more lethal for people over 55, and has about the same true lethality rate for people under 55.

Conclusion: People older than 55 have a higher likelihood of dying from COVID-19 than they would from getting pneumonia. But it looks like it’s only 20% higher, so they shouldn’t be terrified. Their risk of dying from it is still less than 1%. People between 25 and 55 should be as worried about dying from it as they are about dying from pneumonia. And people under 25 shouldn’t worry at all.

Note: Yes, if you are under 55 and are in contact with older people, you should be concerned about spreading the virus to them. But that doesn’t necessarily mean you should be in lockdown, as I’ll explain in a bit.

Question Three: What Is the True Lethality Rate of the Coronavirus? 

If you have been reading my earlier blogs on this subject, you already know that I believe the true lethality rate of COVID-19 is much lower than the case fatality rates (CFRs) that were reported from the end of February. First, the reported CFR was 12% (based on Wuhan and northern Italy). Then it was 6% (based on I can’t even remember right now). Then the WHO announced that it was 3.4%.

In my March 30 blog, using the data available, I estimated the real lethality rate to be between 0.85% and 1.02%.

At the same time, or maybe a day or two later, everyone including Dr. Fauci and team), was estimating the rate to be 1%. (Which, of course, made me feel that I was doing the math correctly.)

But because there was no way of knowing exactly how contagious the disease was and how long it had been in the USA, I said that I thought the true lethality rate could turn out to be as low as one-tenth of that, or one-tenth of 1%.

We won’t know the answer until we’ve done enough random testing of the population (not testing of symptomatic cases). But there have been studies that point towards a rate of less than 1%. For example, in South Korea, which conducted random testing of more than 140,000 people, officials found the actual fatality rate to be 0.6%. And apart from Wuhan, the rest of China has reported a lethality rate of 0.7%.

Conclusion: The actual real fatality rate of COVID-19 is (and will be) between 0.2% and 0.4%, about double the rate for influenza but nothing near the estimates authorities were working with when they decided to shut down the economy.

Question Four: How Contagious Is the Coronavirus? 

On March 30, I said:

Let’s move on to the other metric we need to estimate the death toll: the Ro or reproductive rate – i.e., the rate at which the virus will spread from one person to others in close contact. Like the case fatality rate, this one has been going up in the past month. Since I’ve been tracking it, it’s gone down from 3.0 to 2.3.

A reproductive rate of 2.3 means that [on average] each person that gets the virus will infect 2.3 more.

An Ro of 2.3 may not sound so contagious – but if you do the math, you’ll discover (as I showed in that essay) that the virus can spread from one person to 11.6 million people in just 14 exponential steps!

The coronavirus is a very fast-moving bug. But that rate is not fixed. It’s dependent on its ability to move freely from one host to another. Without barriers, it can grow at these rates. And that’s why some of the earlier articles posted on social media were predicting that millions of Americans would die from it this year.

But nature doesn’t work that way. We are designed to combat viruses just as viruses are designed to infect us. The way we do that – the way we protect ourselves from all threats – is with adaptive behavior. In the case of snakes and lions, we wear shoes and walk carefully though the jungle. In the case of past viruses, those of us that were concerned with catching the flu – generally older people – got flu shots and avoided people with runny noses. As for younger people and their children, it was hardly a concern.

With the coronavirus, we have been practicing much more stringent adaptive behavior. Some of that has been voluntary and some of it has been mandated. These practices definitely slow the spread of a virus but they will not reduce the eventual number of Americans that will eventually be infected. That will be the percentage of the population we need for herd immunity.

One of the many things we don’t know now is how many Americans are now or have already been infected with the coronavirus. This we will find out soon – after we’ve completed several large randomized tests of the population. (Either the swab test for the virus itself, or the serology test for antibodies.)

The guesses I’ve seen ranged from 20 million to 60 million. To achieve herd immunity (more on this in the next section), we’ll need a lot more than that – possibly more than 100 million. Remember, the higher the number of infected, the lower the real lethality rate. Let’s hope that this bug has spread like wildfire. It will mean that we may have reached the peak already. And that means fewer deaths with each passing week.

Conclusion: The coronavirus is very contagious, at least as contagious as influenza. It is likely that it has already infected 30 million to 60 million. If we are lucky, we will discover that the number is much higher than that.  

Question Five: Has Social Distancing Really Helped Us Defeat the Virus

In my March 30 essay, I concluded that social distancing was good and necessary – especially in hotspots – because by slowing the spread of the virus, we reduce the risk of overwhelming our hospitals.

For the moment, at least, that strategy has worked. New York City, the “center” of the pandemic in the USA, is no longer short of hospital beds and ventilators.

But is social distancing the best way to conquer the virus?

Epidemiologists agree that the only way to extinguish a virus is through herd immunity. And as I said on Friday, herd immunity is what happens when a large percentage of the population has developed immunity. Depending on the virus, that percentage can range from 40% to 60%. When you get to those numbers, the virus cannot spread like it needs to because its host population is too small.

That is what happens every year with the flu.

According to the CDC, about 40% of the adult population in the US is vaccinated each year. That gives most of them (virus vaccines are imperfect) immunity for a year or two. In addition, tens of millions of Americans achieve immunity naturally by contracting the flu and recovering. That gets us to the 50% to 80% needed for herd immunity – and the virus dies off. (It usually peaks in two to three weeks and descends in an equal amount of time.)

But by imposing social distancing, we extend the virus’s natural life cycle and slow its spread.

That is why epidemiologists are warning us about a second and third wave. It is almost certain to happen precisely because of social distancing.

Conclusion: Yes, social distancing keeps hospitals from being overwhelmed. But it also interferes with the development of herd immunity. We can (and probably should and certainly will) “open up America.” But we will definitely have other waves of the coronavirus until at least 160 million (50%) of us have immunity.

So What Should We Do?

Everyone’s best hope is the development and deployment of an effective vaccine as soon as possible. And we are certainly working hard on that. Except for HIV, I can’t remember a time when so much effort has been put into creating a vaccine. But effective vaccines are not easy to develop. (We’ve been trying to develop a vaccine for HIV now for more than 30 years.) It’s generally agreed that, for the coronavirus, the best we can hope for is 12 to 18 months.

In the meantime, the virus will rise up and infect people every chance it gets. And if our policy is to continue with shelter-in-place, we won’t be able to stop the spread of the virus until an effective vaccine is ready. (And available in sufficient supply to immunize 100 million Americans.)

The only sensible option is to allow the virus to spread. Not freely, but in a controlled way that is based on what we know about its lethality.

If we accept the facts that (1) herd immunity is the only way to kill the virus, (2) the real fatality rate is 0.1% or 0.2%, and (3) a vaccine is a year or so away, doesn’t it make sense to try to achieve herd immunity as quickly as we can, while doing everything possible to isolate those who are most vulnerable?

By achieving herd immunity naturally, by isolating the vulnerable but otherwise letting the virus spread, wouldn’t that render the second and third waves of the virus weak or even impotent?

The administration has issued its guidelines. They are based on gradually opening up the economy. This makes sense from a distance. But the guidelines do not take into account the data that is most important to know: the fatality rates by age group.

Rather than being guided by social distancing, which segregates everyone, we should have different approaches for different vulnerability groups. We should have a policy that isolates the most vulnerable (over, say, 75 years old and anyone with a seriously compromised immune system), promote social distancing for people between 25 and 75, and let everyone under 25 resume their regular activities. That way, we would allow the virus to spread quickly through the population of people that have the ability to withstand it. And that acceleration will get us to herd immunity soon, probably in weeks. Once we reach herd immunity, we won’t have to worry about a second or third wave. (Most of the 600,000 Americans that died of the Spanish Influenza of 1918 died in the second wave.)

And What Should You Do?

I can’t tell you what to do – but I’ll tell you what I’d do.

If I were younger than 25 and had children, I wouldn’t worry about them or me getting sick and dying of the virus. The odds of that happening are probably the same as the odds of dying in a plane crash.

I would be comfortable interacting with people of my age and younger. But I would not interact with anyone older than 65 or anyone younger that had comorbidity issues.

If my children or I did get infected, I would keep us isolated until I was sure we were not just symptom free but tested negative so that we would not infect others.

If I were older than 25 but younger than 65, I’d feel free to interact with people under 25 and I’d keep a social distance from people of my age group.

And if I were older than 65 and worried about getting infected and dying, I’d self-isolate and stay isolated till there was herd immunity.

I am older than 65 but I’m not worried about getting infected and dying. If I did get infected, my chances of living would be better then 80%. In terms of getting and spreading the disease unwittingly, I’d follow the social distancing rules I mentioned above.

One more thing I’d do and advise anyone else to do. If I got symptoms, I wouldn’t wait to get an appointment with my doctor. I’d get tested not just for COVID-19 but also for any other upper respiratory disorder, including influenza. I’d do that because I understand that you don’t die from the bug itself. You die from pneumonia. And pneumonia, when treated early, can usually be treated with antibiotics.

Looking at it from a social perspective, the bottom line for me is that old and immune-compromised people should self-isolate. And the rest of the world should look forward to getting back to the sensible adaptive behaviors that are recommended for treating influenza.

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A partial list of the sources I used for today’s essay:

“Provisional Death Counts for COVID-19″

“COVID-19 risk factors: Age, underlying conditions, genetics, and unknowns”

“How deadly is the new coronavirus?”

“Odds of Hospitalization”

“The Deadliest Viruses on Earth”

“Beware of the World’s Most Deadly Infectious Disease: Tuberculosis”

“Causes of Death – Our World in Data”

“Perspectives on the Pandemic, Episode 2”

“Perspectives on the Pandemic, Episode 3”

“List of human disease case fatality rates”

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“Every glittering ounce of [good news] should be cherished and hoarded and worshipped and fondled like a priceless diamond.”– Hunter S. Thompson

Coronavirus Pandemic: Hope and Progress 

Today, we are going to take a break from all the noxious news and daunting data about the Corona Crisis to give you some hopeful facts.

Yes, we know that, with shutdowns in nearly every country in the world, economies are faltering. But to provide some immediate relief, governments have pledged to support citizens and businesses with subsidies, loans, suspensions of tax and rent, and other measures.

And all over America (and the rest of the world), businesses, large and small, are stepping up to combat the virus and provide commercial and economic relief.

Across the globe, thousands of doctors, scientists, and researchers are working to find a vaccine. But they are also working hard on treatments to reduce symptoms and improve outcomes. The SARS-CoV-2 pathogen is similar to coronaviruses scientists have studied before, including the SARS virus that struck in 2002. That has given them an advantage in terms of moving in the right direction. They already know, for example, how the virus enters cells.

These early discoveries are being shared through hundreds of medical and scientific journals.

And the pace of all this work and all these actions is amazing. Almost everything listed below has happened in the last 30 days.

 Treatments, Remedies & Vaccines 

* A team of Canadian scientists has isolated and grown copies of the coronavirus. And Australian scientists have figured out how the body’s immune system fights it.

* Scientists at Israel’s Institute for Biological Research said that they have made a “significant breakthrough” in understanding the biological mechanism of the virus, including the way antibodies are produced by those who already have it.

* A team of scientists at the University of Pittsburgh School of Medicine said that they are making “quick” progress in developing a potential COVID-19 vaccine.

* The first US clinical trials for a potential vaccine have begun in Seattle. Biotech company Moderna has fused a piece of the genetic code for the pathogen’s S protein – the part that’s present in other coronaviruses, like SARS – with fatty nanoparticles that can be injected into the body.

* Imperial College London is designing a similar vaccine using coronavirus RNA, its genetic code.

* Johnson & Johnson and French pharmaceutical giant Sanofi are working with the US Biomedical Advanced Research and Development Authority to develop vaccines. Sanofi’s approach is to mix coronavirus DNA with genetic material from a harmless virus. Johnson & Johnson’s approach is to attempt to deactivate SARS-CoV-2 and switch off its ability to cause illness.

* Recent reports suggest that some existing antiviral drugs, including remdesivir and the Japanese flu drug favipiravir, may have an effect on the new coronavirus. Zhang Xinmin, an official at China’s science and technology ministry, said favipiravir, developed by a subsidiary of Fujifilm, had produced encouraging outcomes in clinical trials in Wuhan and Shenzhen involving 340 patients. “It has a high degree of safety and is clearly effective in treatment,” Zhang told reporters.

* Doctors in India have reported success in treating infected patients with a mixture of drugs usually used to tackle HIV, swine flu, and malaria.

* In China and Japan, doctors have had promising results using blood plasma from people who have recovered from COVID-19 to treat newly infected patients. This well-established medical technique could even be used to boost the immunity of people who are at risk of catching the disease.

* On March 27, the Food and Drug Administration issued an emergency use authorization for a new test developed by Abbott Laboratories that can deliver coronavirus results in as little as five minutes. Metro Health Medical Center in Cleveland is already using the new test.

* The Centers for Disease Control and Prevention has started testing for antibodies to see if healthy people previously had the coronavirus. The tests could help the agency better understand the virus and its spread, indicating how prevalent the virus has been and whether a significant number of people have had it without actually getting sick.

* Preliminary studies in China report that the malaria drug hydroxychloroquine shows promise. “Cough, fever, and pneumonia went away faster, and the disease seemed less likely to turn severe in people who received hydroxychloroquine than in a comparison group not given the drug.”

* In hospitals in Boston, Alabama, Louisiana, Sweden, and Austria, researchers are conducting clinical trials to determine whether giving nitric oxide to patients with mild to moderate cases of COVID-19 can help them. The impetus for this was a report that showed good results from earlier trials in Italy that were themselves promising.

* A San Diego biotech company is developing a vaccine with Duke University and the National University of Singapore.

* A new drug, EIDD-2801, shows promise in reducing lung damage. Results of initial tests on mice were published April 6 in the journal Science Transnational Medicine. The tests showed that, when given as a treatment 12 or 24 hours after infection, EIDD-2801 could prevent severe lung injury in infected mice. “This new drug not only has high potential for treating COVID-19 patients, but also appears effective for the treatment of other serious coronavirus infections,” said senior author Baric. What is especially hopeful about EIDD-2801 is that it is a pill.

* Erasmus Medical Center has found an antibody that can fight against the coronavirus. While not a cure, it seems to be halting the infection temporarily and giving the patient time to recover.

Companies Helping Out

 * The sports world is raising money for stadium employees, Uber Eats is providing free delivery to help independent restaurants, professional soccer players are entertaining viewers with a FIFA tournament, restaurants are doling out free food to those in need.

* Formula 1 racing engineers at Mercedes have joined forces with University College London to develop a breathing device that can be used instead of putting patients on a ventilator in intensive care.

* Distilleries across the US are using high-proof alcohol to make hand sanitizer and are giving it away for free.

* Google is digging into its massive trove of data tracking the movements of people around the world to produce a series of reports designed to help policymakers and researchers in the fight against the coronavirus.

* Several major health insurers have promised to cover COVID-19 costs.

 * When the coronavirus outbreak spread through Microsoft’s home state of Washington, Bill Gates teamed up with Amazon, another Seattle-based tech giant, to provide at-home test kits to residents in the area.

* Bill Gates is also funding the construction of seven factories to manufacture vaccines rapidly when they are approved, instead of wasting time by waiting to find out which vaccines work… and then building the factories.

Economic Support 

* The US has passed legislation to give $1200 to most American adults and $500 to most children as part of a stimulus package that also includes loans to businesses and local and state governments, funds for hospitals, and more unemployment insurance.

 * Australia is paying AU$750 (around $445 or £380) to all lower-income citizens, and is offering loans to small and medium-sized businesses.

* Denmark is subsidizing 75% of workers’ salaries.

* France has promised that no company will be allowed to fail as a result of the pandemic. It is freezing tax and rent payments for small businesses and expanding the welfare system for workers.

* Germany has pledged at least 500 billion euros ($550 billion) in loan guarantees.

* Italy has promised help for families and one-off 500-euro payments to people who are self-employed.

* Spain has announced a 200-billion-euro rescue package in loans for small businesses, and is freezing mortgages and utility bills for individuals.

* Sweden is subsidizing 90% of workers’ salaries if they’re affected by coronavirus.

* The UK is guaranteeing 80% of workers’ salaries and providing limited sick pay to those who are self-employed.

 People Helping Out 

 * Many people have joined volunteer mutual aid groups to support the vulnerable in their own communities. When the UK government called for volunteers, more than a quarter of a million people signed up in a single day.

* People and businesses are creating online resources to help ease the tension and inconvenience of quarantine, many of them free or discounted.

* Kind gestures are everywhere, from thank-you signs for garbage collectors to asocially distanced “welcome home” parade for a young cancer patient.

* In the UK, people around the country simultaneously took to their windows, balconies, and gardens to cheer and applaud the health workers of the NHS.

* Apple, Facebook, and other companies are donating millions of face masks.

* Cuban doctors traveled to Italy to help deal with the spread of the disease.

* Celebrities are doing their bit, whether it’s James McAvoy donating £275,000 to health care workers, Amy Adams and Josh Gad reading stories for children, or John Krasinski starting a YouTube channel dedicated to good news.

A Growing Number of “Good News” Sources 

Thanks to the internet, it’s easy to keep up with the “good news” – and, thankfully, there’s plenty of it. I found the following online in less than 5 minutes:

 * “John Krasinski launches ‘good news’ network from quarantine”

* “The Good News Dashboard” LINK

 * “A look at some ‘good news’ across the US” LINK

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I have learned over the years that when one’s mind is made up, this diminishes fear; knowing what must be done does away with fear.” – Rosa Parks

What I’m Doing (and Not Doing) to Safeguard My Wealth

It’s a scary time. The coronavirus is scary. Being in the stock market is, too.

Before I tell you what I’m going to do about my stock portfolio, let’s take a quick look at the biggest crashes in the last 100 years. I think it’s important to remember that we’ve experienced financial hardships in the market, and we’ve been able to rebound from them.

The Crash of 1929

By almost every measure, the stock market crash of 1929 was the biggest and most devastating crash in world history.

It occurred after nearly 10 years of economic expansion from 1919-1929 (the Roaring Twenties). This was a decade of steady, dramatic growth that created a sense of irrational exuberance among investors who were happy to pay high prices for stocks and also leverage those investments by borrowing money to do it.

By August of 1929, word was getting out that times were changing. Unemployment was rising. Economic growth was slowing. Stocks were overpriced, and Wall Street was hugely overleveraged.

On October 24, the market dropped. It dropped again on the 28th. And by the 29th (Black Tuesday), the Dow had dropped 24.8%. On Black Tuesday, a record 16 million shares were traded on the New York Stock Exchange in one day. Investors collectively lost billions of dollars.

Financial giants such as William C. Durant and members of the Rockefeller family attempted to stabilize the situation by buying large quantities of stocks to demonstrate their confidence in the market. But this didn’t stop the rapid decrease in prices.

Twelve years of worldwide depression followed, and the U.S. economy didn’t recover until after World War II.

The Crash of 1987

Like the crash of 1929, the crash of 1987 occurred after a long-running bull market.

On October 19 (Black Monday), the Dow dropped 22.6% – the biggest one-day drop, in percentage terms, ever.

Theories behind the reasons for the crash included a slowdown in the US economy, a drop in oil prices, and escalating tensions between the US and Iran. But the financial reasons were similar to those for the crash of 1929: speculators paying crazy prices for overpriced stocks and purchasing junk bonds leveraged mostly through margin accounts.

On top of that, something new was happening: computerized trading. It made selling easier and faster and, thus, accelerated the sell-off.

When the dust settled, the market was down 23%. But unlike the crash of 1929, Black Monday didn’t result in an economic recession. In fact, it began strengthening almost immediately and led to a 12-year bull run.

The Dot-com Bust of 1999-2000

In the 1990s, access to the internet started to shape people’s lives. Easy access to online retailers, such as AOL,,, Geocities, and, helped drive online growth. It also gave investors a huge opportunity to make money.

Shares of these companies rose dramatically – in most cases, far beyond intrinsic values.

In March 2000, some of them started folding, and investors were shedding tech stocks at a rapid pace. The tech-focused Nasdaq fell from 5000 in early 2001 to just 1000 by 2002.

The “Great Recession” Stock Market Crash of 2008/2009

Besides the crash of 1929, the crash of 2008 was in many respects the most serious financial collapse of the last 100 years. Many investors don’t realize how close the US financial sector came to collapsing.

Like every crash I’ve mentioned, this one followed a long-term bull market (from 2002 to 2007). Also like the others, it was instigated by speculation. Not so much by speculation in conventional stocks, but by the widespread use of mortgage-backed securities in the housing sector.

These products – which were sold by financial institutions to investors, pension funds, and banks – declined in value as housing prices receded. (A scenario that started in 2006.) With fewer American homeowners able to meet their mortgage loan obligations, mortgage-backed security values plummeted, sending financial institutions into bankruptcy.

With investment risk in the stratosphere, investors were unwilling to provide much-needed liquidity in the nation’s financial markets.

And we all remember what followed. The bursting of the US housing bubble and Lehman Brothers’ collapse nearly crushed the world’s financial system and resulted in a damaged housing market, business failures, and a wounded global economy.

A Few Facts That Might Make You Feel Better

None of the four major stock market crashes permanently damaged the US economy. In every case, the markets climbed back up and then went on to new highs. But the duration of the downturns varied.

The 1929 crash was the slowest to recover at 10 to 12 years. (Depending on how it is measured.) It took seven years for the market to fully recover from the crash of 2008. And the crash of 1987 began recovering after a few months.

Even where full recovery took years, the upward trend began in months or just a few years.

Those crashes happened because of a combination of economic imbalances, flaws in the banking and financial sectors, a period of manic investing that brought market values to unrealistic heights, and panic.

In other words, they were caused by economic and financial crises.

The current crash was precipitated by a health crisis. In stock market language, that’s considered an event-based crash.

Past health scares have shocked the market, too. In 2013, for example, the MERS outbreak caused the market to drop by 6%. And in 2003, the SARS outbreak caused a worldwide panic, taking the market down by 14%. But both of these event-driven crashes were followed quickly by a surge back to past highs and then beyond.

On the Worrisome Side

Is what we are experiencing today just another event-driven crash?

I don’t think so. There’s no doubt that fear is the force behind this fall. But the fear we have today is much greater than any in my lifetime. And it is already negatively affecting businesses, banks, and other financial institutions worldwide.

And that’s not to mention the fundamental factors of a history of high debt (both government and consumer), years of increasingly expensive stocks, and lots of speculation.

 As I pointed out in my February 17 blog,

* Half of all investment-grade debt is teetering on the edge of becoming junk. And more of these risky loans are being owned by mutual funds than ever before.

* The national debt continues to grow. It was $5.6 trillion in 2000. Today, it’s estimated to be more than $23.3 trillion.

* As a percentage of the country’s gross domestic product, the debt looks even worse. In 2000, that $5.6 trillion in debt represented 55% of our GDP. Today’s +/-$24 trillion represents nearly 110% of our GDP.

It’s certainly possible that the Corona Crash could be the beginning of an economic downturn as big as or bigger than any the US economy has ever had. The collapse of the stock market is already greater than any crash before.

I’ve written about the stock market at least a dozen times over the past 10 years. And in each of those essays I’ve reminded readers that I don’t have a crystal ball and that my guess about the market’s future is as valid as your next Uber driver’s.

In my lifetime as an investor, I’ve seen several serious bear markets. Had I been able to predict their tops and bottoms, I would have cashed out my stocks early, moved into cash and gold during the descent, and put back that and some more at the bottom.

But since I’ve never had a crystal ball, I’ve never tried to time the market. I’ve always taken the view that, while I can’t know how steeply the market may drop or how long the recession might last, sooner or later prices will return to their pre-crash peaks and then continue to move up from there.

I should say, though, that this strategy makes sense only when the stocks you own are in large, profitable businesses that are “antifragile,” that have the resources a business needs to survive a crash and even an extended recession.

As long-time readers know, my Legacy Portfolio is populated exclusively with companies like that.

 What About Buying Gold?

I bought a fair amount of gold back in 2004, when it was selling for $400 an ounce.

I didn’t buy it as a hedge against the dollar or the stock market. I bought bullion coins (mostly) as a “chaos” hedge. A stockpile of tradable hard assets that might come in handy if the world economy moved into another depression like we had in the 1930s.

If we do see that economic era repeated, the value of my gold will almost surely continue to increase. But I’m not counting on that. Its purpose isn’t to compensate for the paper wealth I’d lose in stocks but to be a form of insurance – “just in case” currency that I could use to buy necessities for family and friends.

Which raises the question: When and how do you buy gold? And the answer is, you buy it just like you buy any sort of insurance. Figure out the likelihood of the risk. Determine how much coverage you would need. Then decide if the premium you have to pay is worth it.

When I decided to buy gold coins, I bought enough of them (at an average price of $450) to sustain my family and my core business for a good length of time. I didn’t buy enough to cover historical expenses for many years. I bought enough to pay for the basics. And that helped me feel more secure.

But that was hardly all that I did to protect my family’s wealth against a stock market crash and a recession. It was just one piece of a financial structure that I began setting up 40 years ago and began writing about in Early to Rise nearly 30 years ago.

What About Stockpiling Cash?

I like having a portion of my net investible assets in cash for all the obvious reasons – doing my own banking, using it for fast moving investment opportunities, and as part of my insurance program against crises like this one.

But that feeling is counterbalanced by the recognition that cash is generally a low- or no-return asset class. Therefore, having a lot of it means that I won’t be taking advantage of the historically high returns of the stock market, the real estate market, private equity, and private lending.

I don’t have a fixed number in my head for how much cash I should have at any one time. I let the markets make those decisions for me.

I don’t, for example, invest in rental real estate properties when I can’t find properties I can buy for less than eight times gross rent. Likewise, I don’t buy additional shares of Legacy stocks when their P/E ratios are expensive by historical standards.

By adhering strictly to these sorts of value-based investing strategies, I am effectively prevented from putting my new earnings into any one of them. And that means I end up accumulating lots of cash while these markets are expensive.

In the past half-dozen years, most stocks – including most of my Legacy stocks – have been so expensive (relative to earnings) that I have not allowed myself to buy them. This means that the dividends I’ve been receiving for the stocks in my Legacy Portfolio have been going into my cash account. And that is okay with me.

I normally put a good chunk of my earnings every year into real estate. About 10 years ago, I began selling off my individual units and buying apartments, where I could get better yields with less hassle. But the number of such deals that I could find diminished to a trickle in the last three or four years. So, again, by sticking to my valuation standards, I’ve been effectively locked out of these markets, too.

I have put some money into private debt and private equity. But only when I knew the borrowers and the businesses very well and felt sure my lending was secure.

 In past essays on the stock market, I’ve said that – to make my wealth as antifragile as possible – I did my projections based on a stock market crash of 50%. When I picked that number nearly 15 years ago, it seemed like quite a long shot. Today, it doesn’t feel so crazy.

My Version of Antifragility

 As I’ve indicated, my core investment philosophy mimics Nassim Taleb’s concept of antifragility.

In his bestselling book Antifragile, Taleb defined antifragility as the ability to not only survive but also benefit from random events, errors, and volatility.

My version of that is very simple:

* I invest primarily for income, not for growth. That means rental real estate, bonds, private debt, income-producing equity, and dividend-yielding stocks. Depending on the economy, not less than 80% and sometimes as much as 90% of my net investible wealth is in income-producing assets.

* I invest in what is proven today, not what might happen tomorrow. Investing in income-producing assets means investing in current facts, not future possibilities. This is, admittedly, a conservative approach to wealth building. I am willing to give up the potential for cashing in big on the upside for a smaller but virtually guaranteed return.

* I don’t gamble. I am as tempted to invest in attractive speculations as the next person. But I’ve learned from experience that is a bad idea. My historical ROI for the speculation I’ve done is nearly perfect. I’ve lost almost all my money every single time. I will occasionally invest in a friend’s business. But when I do that, I consider it a gift. I expect no return and usually get no return. So I limit those “investments” to how much I’m willing to lose.

* I pay attention to value. I invest exclusively in income-producing assets, but that doesn’t mean I don’t pay attention to how much they are worth. As I said above, I invest in stocks when they are well-priced relative to their P/E ratios (among other metrics). I invest in real estate when I can buy properties that are inexpensive relative to their rental income. I buy debt when I can get a yield that is at least better than inflation. Etc.

* I hope for the best but plan for the worst. In terms of antifragility, nothing is more important than planning for the worst. Planning for the worst in good times allows you to survive and even thrive during the bad times. My worst-case planning began by imagining almost everything going wrong at one time. The market collapses. The economy moves into a deep recession. My businesses fail. The whole nine yards.

When you think that way, you have no choice but to include all the fundamental asset-protection strategies in your financial planning, as well as a few more. Most notably, diversification and position sizing.

I won’t waste our time talking about the importance of diversifying financial assets. I don’t look at it as a theory. I see it as a fact. To achieve maximum antifragility, dividing your financial assets into different classes is rule number one.

But in my humble opinion, position sizing (limiting how much money you put into any particular investment) is almost as important. When your investible net worth is relatively small, you might have to limit individual investments to 10% of your portfolio. The goal, as you acquire wealth, is to reduce that percentage as you go along. These days, I rarely put more than 1% of my net investible wealth in any investment.

So What Am I Doing?

Here’s a look at my portfolio:

Stocks: I came into the stock investing game late. And cautiously. When I set up the Legacy Portfolio about 14 years ago, I invested what was at that time 10% of my net investible wealth in those stocks. Thanks to the bull market that followed, my stock account doubled and stood, at the beginning of the Corona Crisis, at about 20% of the portfolio. That’s a good deal. But it’s still only 20%. So when the market is down 30%, like it is as I write this, that means my net investible wealth is down by 6%. If the market continues to fall to 50% – my worst-case scenario –I’ll be down 10% overall. Not good, but not bad either.

My strategy for stocks is to hold on and wait for the market to recover. It might happen in six months (unlikely). It might happen in a year (possible). Or it might happen in 10 years (safe bet). I’m hoping the return will be sooner rather than later – but I’ve planned for later, so I’m not going to fret about it.

Debt: About 10% of my net investible worth is in debt instruments. My debt portfolio is diversified among bonds and private lending. Because of the private debt, I’m getting decent returns – from 4% to 12% on most of my deals. For a while, I’ve not been able to buy good debt at good prices. But that may change. If so, that’s where some of the cash will go.

Ongoing Enterprises: About 20% of my net investible wealth is invested in about a half-dozen private companies, ranging form $10 million to $1 billion. This is where I get the lion’s share of my current income. I’m very concerned that this income may slow or dry up completely in the next year. If it does, I will have to turn to other income sources. Meantime, I’m working hard to keep those businesses afloat.

Real Estate: About 40% of my net investible wealth is invested in real estate, and 80% of that is in income-producing properties in various locations. If all of these properties were leveraged, I’d be worried. But my debt on them is less than 5%. I may see diminished income. But in the worst-case scenario, it will be a 25% drop, which would still be acceptable.

Hard Assets and Cash: About 5% of my net investible wealth is in hard assets like bullion coins, rare coins, and investment-grade art. These are last-refuge resources. For the time being, I have not thought of tapping into them. That could change.

Cash: As I explained above, my cash position has grown in the past several years because my preferred income-producing assets have gotten pricey. I’m expecting that some time before this crisis is over, cash will be king again. I’m waiting for that.

Basically, I’m doing just about nothing right now. I am actively working to protect my businesses, but I’m not selling stocks. I’m not selling real estate. I’m not selling my businesses. I’m not even selling my debt.

We are going to get poorer. That’s for sure. But – for the moment – I don’t feel that I need to make any changes. The way I diversified my assets 20 years ago seems to giving me the protection I had hoped it would today.

But What About You?

If you have been reading my writing these past 20 years and even loosely following my investing strategy, you should be in more or less the same position I am in. If you feel good about that, as I do, you will probably want to do exactly what I’m doing: mostly nothing.

But if you aren’t diversified and have the lion’s share of your money in cryptos or growth stocks – well then, you are going to have to listen to the advice of the people that persuaded you to put so much of your money in those deals.

And while you are doing that, don’t despair. Double down on your day job. Things will (eventually) get better – and when they do, you’ll invest smarter.

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Shaun, my Uber driver this morning, grew up in Atlanta. He had a smooth, caramel-colored complexion and a voice to go with it. He was young and instantly likeable. What made him likable? I’m trying to figure that out.

He was a talker. I don’t normally warm to talkative drivers because I like to spend my commuting time working. But Shaun talked because he was curious. He asked questions, all kinds of questions. And he asked as if he were really interested in my opinion.

He told me how he ended up in LA (on a whim), how he was working two jobs (to save money to start a career). Then he asked me all sorts of questions about what kind of career I would recommend.

I was charmed by his total lack of bravado (which I would have expected from a man of his young age) and his trust in me.

When we arrived at my destination, I wanted to keep talking. Heck, I wanted to adopt him. I gave him my card. I have a good feeling about him. Maybe one day he’ll give me a shout, ask me a question about his career. Maybe one day I’ll be able to help him.

Achieve More in Your Career – Faster and Easier – With a Mentor, Part 2 

It was 1983 – the first “Financial Newsletter Publishers’ Roundtable,” and I was representing a small but up-and-coming publisher based in South Florida.

During the last several hours of the otherwise convivial meeting, the discussion turned towards the “immorality” of selling subscriptions for $49 a year. People were upset. Some were livid. And their ire was directed towards me.

It was confusing. Embarrassing. I felt like I was being ambushed.

What I didn’t know going into the meeting was that the $49 that we were charging for our newsletters was half that of what everyone else was charging. They felt that we were trying to break into their market by discounting our prices. They were right. But I didn’t expect them to care.

After the meeting ended, I was in front of the hotel, about to get into a taxi to take me to the airport, when one of the attendees came up behind me and asked if he could share the ride. I agreed, mentally preparing myself for a lecture. None came. He talked about the weather and the meal we had for dinner the previous night. Finally, I had to interrupt him and ask him why, considering the way I had been attacked in the meeting, he would want to ride with me.

“Oh, that,” he said. “Don’t worry about that. It’s just politics. There is business and there is politics. Politics is bullshit. We are going to move to the $49 price next month. You guys have done a great job with it. People gripe in public, but in private we don’t pay attention to any of that.”

I can still remember the feeling I had. I couldn’t believe that he had been excoriating me a half-hour earlier, and now he was saying he was going to follow our lead. It was a watershed moment for me. I knew I was learning something important, something I would never forget.

There are hundreds of other brief conversations I’ve had with friends and colleagues and strangers that gave me new insights and ideas about my businesses or my role in business – each one a lesson that had immeasurable value to me as I moved forward with my career.

In Part 1 of this essay, I talked about traditional mentorships – where an experienced businessperson works closely with a younger person for a long period of time.

Today, I want to talk about this other type of mentorship – the conversation you have with a speaker at a conference or an author at a book signing or a guest at a wedding… or any other chance encounter.

For lack of a better term, let’s call these experiences – solitary and removed as they may be – transactional mentorships.

Chance Encounters Can Change Your Life 

Is it possible to accelerate your progress in your career by increasing the number of such experiences?

I think it is. Moreover, I think it’s possible to develop a “bullpen” of smart, powerful, and influential players in your industry that you can call on not just once but whenever you need help.

I’m talking about people that would normally be unapproachable.

It can happen. I’ve seen it happen. It’s happened to me. But it can also go badly wrong. To develop your own A-Team of supporters, you have to do more than collect phone numbers. You have to spend some time to figure out a good reason why each one might want to help you. In other words, you have to make the relationships fair. You have to figure out a quid for the quo.

The Quid Pro Quo in a Transactional Mentorship

As I explained in Part 1, “Traditional mentorships work because the benefits of the relationship are shared. The mentee advances his/her career by following the good advice of the mentor, and the mentor shares in the increased value of the business as the mentee contributes to it. At the same time, the mentor has the satisfaction of helping someone else succeed, while the mentee has the comfort and support of someone with power and privilege.”

A transactional mentorship is a different kettle of fish. Since there is no common business interest between mentor and mentee, there’s no natural quid pro quo either.

But you can create one.

At a business conference, industry event, book signing, and so on, experts come expecting to answer questions. “Paying” for the answer you get is as easy as prefacing your question with a compliment – telling the expert something specific that you liked about his book or his speech or his business. Although doing something so obvious may seem cheesy to you, it won’t come across as cheesy if you say it with sincerity.

You can make the same sort of ego payment on paper or in email: one specific and sincere compliment followed by one specific and sincere question.

Note: When I say make the compliment specific, I mean specific to that particular person, to his particular career, or to a particular accomplishment of his.

And when I say make the question specific, this is important. The compliment will let him know that you admire him. But it is the question that is the quid for the quo, because it gives him the pleasure of solving your problem or otherwise giving you his advice.

As someone who has played the role of transactional mentor countless times, I can attest to the fairness of the deal. I’m always flattered to be asked and happy to answer questions, because it makes me feel good. The transaction is balanced. It’s a win-win.

Making the Most of a Transactional Mentorship 

Having a brief interaction with an expert in your field can be extremely valuable. Even better is to convert it into something more.

How is that done? That’s the million-dollar question. And there is no single answer. We are talking about building a longer-term, balanced relationship when the obvious factors – knowledge, access, influence, and wealth – are all on one side. And it’s going to be different for every potential mentor on your list.

This is what I recommend…

You begin with that first contact. It could be a chance in-person encounter… or it could be a quick email that you send to your prospect. You say something specific that is complimentary. And you ask a specific question. (If you’re doing this by email, you can expect to get an answer 20% to 50% of the time.)

Follow up with a personal thank-you note. Make it a handwritten note. Thank your prospect graciously, but don’t go on too long. Insert your business card. It will probably be tossed, but it will be glanced at. And that will increase the chance that he will remember your name.

After you’ve had a chance to implement his suggestion, write to thank him again and to announce the good news – that it has had some positive effect on your life/career. Keep this note brief, as well. And specific.

A month or two later, contact the prospect again. This time, you can do it via email – and this time, he is almost certain to remember who you are.

The purpose of this contact is to remind him of the great help he has already been to you… and ask for a quick personal meeting to talk about your career. In his office, if possible – or, if he’s located out of your local area, via a 15-minute phone call.

If he agrees, and you get along, you’ve got yourself an “occasional” mentor. An important person in your field who would be willing to take your call or respond to your email whenever you have a question.

How great would that be?

What to Expect From This Relationship

Keep in mind: This is not a traditional mentorship where there is a financial quid pro quo in place. With occasional mentorships, there is natural imbalance. The mentor’s reward will always be something he or she can do without, so it’s going to be difficult to maintain equilibrium. There will always be a tendency towards entropy. It will be the rare occasional relationship that continues for years.

Compensate for the fragility of the relationship by having not one but a half-dozen or a dozen people on your occasional mentor list.

Be polite. Be complimentary. Be specific. And be thankful. Make it a habit and your career will take off.

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Santa gave Francis, our four-year-old grandson, a toy named Cosmo.

From a distance, Cosmo looked like a cheap plastic stocking stuffer shaped like a tractor. But it moved in what seemed to be a purposeful way. It approached me and looked up, its digital eyes scanning me.

“That’s Daddo,” Francis said.

Cosmo nodded its head and blinked.

Then it said, “Merry Christmas, Daddo!”

In 1965, Gordon E. Moore, co-founder of Intel, postulated that the number of transistors that could be packed into a given unit of space would double about every two years while the cost per transistor would halve. The leading scientific community of that decade laughed at him. Such a pace of acceleration seemed absurd to them. But Moore was not wrong. In fact, the doubling has occurred about every 18 months.

In recent years, polymath superstar Ray Kurzweil has been predicting all sorts of modern miracles based on Moore’s Law. Kurzweil believes that advancements will speed up even faster because computer and biological technology has accelerated the nature of evolution itself.

It makes one wonder what Cosmo will evolve into.

Here’s my guess: By 2040, biological pets will be a thing of the past. In their place will be unimaginably advanced Cosmos, cuddly, loving, and supremely intelligent technological creatures whose job it will be to entertain, babysit, and socialize children.

Ah, yes. The New Year is always a good time for predictions. And although I don’t believe in betting on the future, Cosmo has inspired me to conjure up 18 more prognostications for your amusement.


Predictions for 2020 and Beyond 

* Donald Trump will be reelected, winning a higher percentage of Latino and African American support of any Republican president in the modern era.

* Sometime thereafter, we will have another financial crash, with real estate prices dropping 15% to 20% and the equity markets falling that much or more – this despite frantic government efforts at “quantitative easing.”

* After the crash, another effort to oust Trump from office will take place and succeed.

* Continuing innovations in technology and biology will gradually unleash a new era of economic expansion that will ameliorate the debt problem and improve the lifestyles of the middle and working classes. (The mega-rich will stay rich and the poor will stay poor, but only relatively. Absolute living conditions will improve everywhere.)

* Meanwhile, lots of ordinary things will improve. For example, in the next 3 to 5 years, weather forecasting will achieve 90% reliability for major threats such as hurricanes, earthquakes, and even forest fires.

* In the next 10 years, children around the world will be learning what their parents want them to learn by playing with addictively amusing interactive robots that will prove to be better teachers than the flesh-and-blood teachers.

* And for those worried about global warming, good news: Accelerating advances in the storage, transmission, and use of solar and wind energy will reduce our reliance on fossil fuels by 30% in the next 10 years. (Mostly in the wealthier countries.)

* After decades of disappointments in the fight against cancer and heart disease, in the next 5 years breakthroughs in immunotherapy and genetic medicine will make most forms of these two primary killers treatable, in the way AIDS is treatable today.

* In the next decade, urban congestion will be greatly reduced by a combination of delivery drones (even for large objects like steel girders), driverless transport, and penalties leveraged on individually owned vehicles.

* Cryptocurrencies will not succeed as independent currencies. Instead, they will be outlawed and replaced by digital currencies issued by banks, brokerages, and other financial institutions that will allow governments to track every financial move their citizens make.

* The biggest economic challenge of the next two decades will be the addition of billions of children born in still poverty-stricken Sub-Saharan Africa… while the non-immigrant population of the “advanced” world will stagnate or fall.

* On the positive side for Africa (and India): Pneumonia, currently the “ultimate disease of poverty,” will be virtually eliminated in the next 7 years.

* During the next decade, many aging, crumbling mid-sized cities in North America will be renovated as urban populations abandon their decomposing neighborhoods and move into newer, cleaner, and less expensive ones, such as the one planned by Kevin Plank in Baltimore.

* In the next 5 years, farm animals – cows, lambs, chickens, and goats – raised in large production facilities will have better food, more space to grow, and healthful amenities such as musical and meditation treatments to improve their immune systems and fatten them up.

* In the next 2 to 3 years, most large chain stores will have eliminated checkout counters, using smart shopping carts with scanning and computing technology to process payments as items are loaded into them.

* The current price wars among ride-calling and sharing apps will end in the next 3 to 5 years, leaving only two or three companies standing. Uber will not be one of them.

* The current CBD craze will be over in the next 3 years, with 80% to 90% of the companies that are currently profiting from the craze going out of business.

* Yuval Harari will be proven right in his prediction that Homo sapiens will begin to be  (in the next 50 years) replaced by a new species of humans that are part robot and part computer.

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