First 100 days after shelter-in-place – where are we now?

Today markes the 100th day since the shelter-in-place in the northern California Bay Area, with some interesting reflections in The San Francisico Chronicle on what happened – and going forward:

Wednesday will mark 100 days since shelter-in-place orders were issued on March 17. Experts believe the move prevented thousands of deaths and tens of thousands of infections. It kept hospitals from being overrun and gave cities and counties precious time to learn about this new virus and mount a defense against it.

But more than 500 Bay Area residents died of COVID-19 in that time. More than 18,000 tested positive. And the coronavirus that drove millions of people into isolation remains as sinister and unpredictable now as it was 100 days ago. What’s changed over the past three months is not the virus, but the way the Bay Area lives with it.

…No one in public health really expected [three weeks] would be enough time to suppress the virus and let life resume as normal — but few predicted that 14 weeks later there would be no end in sight to this pandemic.

What is most remarkable is that many experts believe “the world is going to be cozy with this virus for a long while…coronavirus is still here…it’s probably far more widespread now than it was in March,”  which certainly gives pause to the last three and a half months. It is further interesting to note that the shelter orders were self described as a “draconian strike,” with profound consequences:

But understanding that their decision would have profound repercussions was not the same as watching those effects play out, said Louise Rogers, chief of San Mateo County Health.

…I didn’t really have a full understanding of how deeply impacted so many people would be, and how much it would reveal some of the deep systemic issues that already exist in society – the inequalities and the disproportionate effects.

See the full post here.

WSJ: A question of purpose as many go back to work

Purpose, satisfaction, and relevance have been ongoing topics of discussion in a workplace that has changed over the last several decades but is especially felt in our present time as the Wall Street Journal points out:

Companies may have to address the angst some workers feel about their relevance and the purpose behind their jobs. Decades of research show people crave a sense of purpose to feel motivated at work. Without the coffee dates, meetings and camaraderie of time with colleagues, “you’re left with the work itself,” and if the work starts to feel wanting, it can lead to painful reckonings.

It is probably not a stretch to say that everyone has had extended, contemplative stretches of time as many (if not most) of us have had more time on our hands (even those working) than in our entire adult lives, and it would appear rotating back into the workplace is more abrupt than expected:

“Purpose” has been invoked in recent years by business leaders and employees, who say they want their careers to have meaning broader than the bottom line. Companies have embraced the term as they recruit young employees, casting their work and mission as solving important problems.

In addition to several suggestions, I would add don’t miss this unique opportunity, while it is still fresh in our minds, to contemplate why and how we are not meant to be isolated. See the full post here.

COVID-19: Ioannidis vs. Taleb (International Institute of Forecasters)

The International Institute of Forecasters facilitated a very interesting discussion in the form of two scholarly blog posts – COVID-19: Ioannidis vs. Taleb, Learning from the positions of Nassim N. Taleb and John P. Ioannidis in the COVID-19 debate. The idea of this match up of differing views from such profound thinkers is literally brilliant. The setting is what may be the closest thing we have seen of an old fashioned discourse. Pardon me for being old fashioned but actual, respectful dialogue and discourse is what is desperately needed in our present time and has been missing for decades. How much more do we need such a thing in an age where many of our national and international challenges have taken on a complexity due to the natural order of progress, technology and globalization. From the introduction page:

“Two…voices have been highly visible in the public debate, with seemingly diverging opinions. I am thinking here of John P. Ioannidis and Nassim N. Taleb (arguably two of the greatest living thinkers) holding opposing views about how to deal with the present pandemic and its potentially destructive consequences.

…Nassim N. Taleb believes that all efforts and resources should be directed to halt its spread and reduce the number of infected and deaths without any concern about forecasting its future course as the uncertainty of doing so cannot be measured and the risks involved are highly asymmetric. John P. Ioannidis, on the other hand, claims that more reliable information is needed to make multiple billion-dollar decisions and that forecasting has failed us by being too pessimistic about the future growth of the pandemic and by exaggerating its negative effects.

…This debate will not only allow us to better understand the points of view of the two great thinkers but be also left as a guide for how to deal with future pandemics.”

I would only take issue with the comment, billion-dollar decisions, since we are already well north of multi-trillion dollar decisions. Of the two positions, Taleb remains consistent with his central theme for more than a decade, namely, the profound consequences of risk versus upside benefits, and this is only amplified in pandemics, where he states they “represent existential risk.” In other words, survive now:

“Science is a procedure to update knowledge; it can be wrong provided it produces interesting discussions that lead to more discoveries…for matters that have systemic effects and/or entail survival, the asymmetry is even more pronounced.”

Ioannidis, on the other hand, has been one of the few critics of our nation and the world being put on “horror-alert,” with models that he states have:

“Failed when they used more speculation and theoretical assumptions and tried to predict long-term outcomes, e.g. using early SIR-based models to predict what would happen in the entire season.”

One note that I frequently see as both a criticism and straw man argument against Ioannidis that is worth mentioning: he is clearly not saying to do nothing, or that COVID-19 is trivial. He opens his post with the following, “COVID-19 is a major acute crisis with unpredictable consequences.” Later he and his colleagues state, “a doomsday forecast may come handy to protect civilization, when and if calamity hits. However, even then, we have little evidence that aggressive measures which focus only on few dimensions of impact actually reduce death toll and do more good than harm.” See introductory post here, Taleb here, Ioannidis here.

Epidemic Forecasting Challenge: Human Behavior

It is interesting to search and review older articles (looking for pre-COVID perspective) and realize how long we have been discussing these topics that have monopolized our current discussions in the last six months. In The Journal of Infectious Diseases, a study from 2016, Epidemic Forecasting is Messier Than Weather Forecasting: The Role of Human Behavior and Internet Data Streams in Epidemic Forecast, the authors explore the challenges of forecasting the spread of epidemics and compare and contrast with the progress of weather modeling.

The authors note in the abstract:

In the past 3 decades, the weather forecasting community has made significant advances in data collection, assimilating heterogeneous data steams into models and communicating the uncertainty of their predictions to the general public. Epidemic modelers are struggling with these same issues in forecasting the spread of emerging diseases.

Sound familiar? Here’s why, “epidemic models rely on human interactions, multiple data sources such as clinical surveillance and Internet data, and environmental or biological factors that can change the pathogen dynamics.” This reminds me of the hasty rush to a positive affirmation of test and trace (which I would not argue against) but could prove fraught with problems associated with the many and variegated variables of human behavior, requisite cooperation, and potentially unknown interactions (such as if asymptomatic superspreaders prove as accurate as is being posited). On this side point, I am not arguing against the activity of test and trace as it may be the best option we have, but the declaration of its success, given the myriad of unknowns.

The authors make a very interesting observation given what we, the entire world have experienced in the last six months, with some profound policy decisions that have been ostensibly driven by data:

Epidemic forecasting is still in its infancy and is a growing field with great potential. The challenges for accurate epidemic forecasting include data availability and emergent changes in human behavior and pathogens.

They conclude with this hopeful note which could prove prescient from four years ago, as phones and data have only increased, “there will be a parallel world, similar to that for weather forecasting, where billions of sensors will be uploading real-time information to obtain personalized disease forecasts.” Full study found here.

Census: More Centenarians – New Challenges as Well

More Centenarians Than Ever

Last year, a post at the Pew Research Center included some very interesting trends in population shift and aging. In a mind-boggling projection, the total number of centenarians is expected to continue to accelerate to seven times the current number of one-half million:

Centenarian Growth Rate

The full study is found in a U.S. Census Bureau report on aging, where a subset of that report states the following regarding centenarians:

Centenarians, people 100 years or older, made up a very small portion of the total population in the 2007–2011 ACS, accounting for 55,000 people (0.02 percent). By comparison, the 65 years and over population accounted for 40 million people or 13 percent of the total population. The majority of centenarians were female (81 percent). Women were also the majority of the 65 years and over population (57 percent). This disproportionately female representation in both the 65 years and over and centenarian populations was expected, since sex differences in mortality over time contribute to higher percentages of females than males at older ages.

Want to live to 100? Then get married??

From the same report, some very interesting statistics emerge regarding marital status:

100 Marital Status

U.S. Leading the Total Count, But Fewer Per Capita

U.S. has the most centenarians overall in 2015, but fewer per capita than other top countries

What Could Possibly Go Wrong?

Aside from a number of questions for social scientists, what could possibly go wrong with living longer? (Which seems to correspond with fulfillment in life.) Life insurance caps. According to the Wall Street Journal, Happy 100th Birthday! There Goes Your Life Insurance, life insurance policies carry “a standard feature that…calls for the termination of the death benefit and payout of all of the built-up savings when the policyholder reaches the specified age.” This is an interesting challenge as it was simply not an issue in the fairly recent past, “the limits weren’t an issue in the many decades when very few people lived beyond 100. But they increasingly are a problem for the U.S. life-insurance industry as more people become centenarians.”

See the study in brief here and the full study here a the U.S. Census Bureau.

Purchasing Power Parity GDP Per Capita – Geo-FRED Interactive Map

As with a number of measures that have recently called our traditional models into question and the way we understand economic activity, the FRED Blog suggests there may be limitations to some of the mechanisms we have used for more than seventy years:

GDP has been used as a measure of economic well-being since the 1940s: It measures the total economic output by individuals, businesses, and the government and is a tangible way to quantify the state of the economy. However, some economists have questioned how well GDP measures well-being: For example, GDP fails to account for the quality of goods and services, the depletion of natural resources, and unpaid jobs that are nevertheless important (e.g., household chores). Although this criticism may be well founded, GDP is highly correlated with other measures of well-being, such as life expectancy at birth and the infant mortality rate, both of which capture some aspects of quality of life.

It’s a self-obviating point that developed nations would have much “higher levels of per capita GDP have, on average, higher levels of income and consumption,” or purchasing power. But other factors weigh into the question of how well off we are in terms of quality of life. Measures such as life expectancy and general health add to the discussion of well-being.

See the interactive map below for a “correlation between GDP and other measures of well-being” where GDP is “still a reasonable proxy of the overall well-being” for any given economy:

See the full FRED post here.

Fog of Business War Turns to the Skills Sets of Generals as Leaders

With so much emphasis on how to reach millennials and the superiority of sitting around cross-legged on the floor of an open office design, it might seem odd that high-level military experience is sought after for leadership, but should it? From the Wall Street Journal, Generals Bring Battlefield Expertise to the Business World:

In the fog of war, and in peacetime, generals are trained to anticipate unknown risks, build high-functioning teams and make quick, strategic decisions in high-pressure situations. “They are the same traits necessary in the fog of business,” says Henry Stoever, a captain in the Marine Corps who is now chief marketing officer of the National Association of Corporate Directors.

…Companies, especially those in crisis, covet the reputational boost that comes from seeking the counsel of a former military leader, says Wendy Monsen, president of executive recruiter Korn/Ferry ’s federal-government practice. Whereas more than three-quarters of Americans trust the military to act in the public’s interest, according to a 2016 Pew Research Center survey, only 41% feel the same way about business leaders.

What is surprising to learn is that the leadership styles do not reflect the command and control caricature that we might think, “Rather than barking orders and enforcing hierarchy, military leaders who succeed in the corporate world know how to coax different groups into collaborating, says retired Army Maj. Gen. Michael J. Diamond, an organizational leadership consultant.”

In other words, these backgrounds not only bring the strength of strategic vision and experience but character and leadership traits that are associated with the most effective and successful leaders, such as emotional intelligence, the ability to collaborate and getting others to cooperate. Not to mention a keen understanding of risk assessment. See the full article here.

CEPR: Dodd-Frank’s Seventh Birthday – Will It Be Around to Celebrate Its Eighth?

CEPR economist Eileen Appelbaum gives a concise overview of some of the implications of the Dodd-Frank Act, which may not see its 8th year:

As memories of the great recession and financial crisis fade, the landmark financial reform law passed seven years ago today, in the aftermath of that economic disaster, is on the chopping block. A Republican Congress and the Republican President are intent on rolling back the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that have increased transparency and limited risk in our financial system. The Financial Choice Act, first introduced in Congress in 2016 by Texas Representative Jeb Hensarling, is poised for a comeback.

…Key provisions slated to be rolled back are those that kept private equity funds and hedge funds out of the shadows. In the first 30-plus years of their existence as major financial actors, private funds were able to structure themselves in ways that exempted them from the many laws designed to protect investors and enabled them to avoid regulatory scrutiny by the Securities and Exchange Commission (SEC). Dodd-Frank introduced oversight and regulation that has been a boon to investors in private equity. Now, Section 858 of the CHOICE Act proposes once again exempting private equity fund advisors from registration and reporting requirements. It states, “no investment adviser shall be subject to the registration or reporting requirements of this title with respect to the provision of investment advice relating to a private equity fund.”

See the full post here with links to peer reviewed articles and helpful background information including SEC actions.

FRED Blog: Healthcare Inflation vs. General CPI

In an interesting post from the FRED Blog, Healthy inflation? Inflation in the healthcare industry vs. general CPI, a comparison is set up between elements of the consumer price index, versus the rate of rising costs related to healthcare. The authors point out (what most of us have known for decades) that medical care has risen faster than the other components in the CPI basket:

Going back as far as the series are available, since 1948, the price of medical care has grown at an average annual rate of 5.3% while the entire basket, headline CPI, has grown at an average annual rate of 3.5%. In the past 20 years, in the regime of stable inflation, headline CPI has grown at an average annual rate of 2.2%, whereas the price level of medical care has grown at an average annual rate of 3.6%—about 70% faster.

The post continues addressing why this matters, beyond the obvious and anecdotal, namely, policy implications, impact to the average consumer, retirees and those with stagnant wages:

The implication of these two features is far reaching: It’s symptomatic of the increasing share of income the U.S. spends on medical care. Beyond macro trends, the features of these two series themselves have policy implications. Indeed, indexing government healthcare budgets to overall CPI rather than medical care prices has implications for spending in real terms. This gap could also widen during recessions, when government help may be most in demand.

This does not bode well given current policy discussions, as noted in the Wall Street Journal, “any replacement health plan that satisfied GOP conservatives was likely to be opposed by the party’s centrists, and vice versa.” See the full FRED post here.

Mathematical Sweet Spot of the Wave? Right Inside…

Well, I guess we just figured out who won the lottery for the coolest postdoctoral work in existence…from Scripps Institution of Oceanography:

For surfers, finding the “sweet spot,” the most powerful part of the wave, is part of the thrill and the challenge.

Nick Pizzo, a Scripps Institution of Oceanography at the University of California postdoctoral researcher, has found the exact location on the wave where a surfer gains the greatest speed to get the best ride.

In a study published this month online in the Journal of Fluid Mechanics, Pizzo applied principles of physics at the ocean’s surface—where air and water meet—to study how energy is transferred from the underlying wave to a particle on the surface, in this case, a surfer.

“Based upon the speed and geometry of the wave, you can determine the conditions to surf a wave and also where on the wave the maximum acceleration, or ‘sweet spot,’ will be located,” said Pizzo, the author of the National Science Foundation and Office of Naval Research-funded paper and an avid surfer.

Pizzo and fellow researchers in the Air-Sea Interaction Laboratory at the Scripps Marine Physical Laboratory and Climate, Atmospheric Sciences, and Physical Oceanography division are studying the mass, momentum, and energy exchanged between the atmosphere and ocean due to breaking waves, to help improve our understanding of weather and climate.

As a wave breaks at the ocean surface, currents are generated and water droplets in the form of sea spray are ejected from the ocean into the atmosphere. These small-scale processes are critical pieces of information to improve weather and climate models to better forecast major storm events and the future climate.


If you really want to be inspired, this work was made possible by grants. Specifically, the Collaborative Research: A Lagrangian Description of Breaking Ocean Surface Waves from Laboratory Measurements and Stochastic Parameterizations. From the abstract:

The goal of this collaborative research is to build a stochastic Lagrangian parameterization of surface wave breaking that can subsequently be applied to wave and ocean modeling. The students and postdoctoral researchers employed in this project will gain experience in the disciplines of science, technology, engineering and mathematics (STEM). The data and breaking parameterization developed here will subsequently find direct application in atmosphere and ocean modeling.

 The following articles were the output of this research:

Deike, L., Popinet, S. & Melville,W.K.. “Capillary effects on wave breaking,” Journal of Fluid Mechanics, v.769, 2015, p. 541.

Deike, L., Melville, W.K. & Popinet, S.. “Air entrainment and bubble statistics in three dimensional breaking waves,” Journal of fluid mechanics, v.801, 2015, p. 91.

N. Pizzo, L. Deike and W.K. Melville. “Current generation by deep-water breaking waves.,” Journal of Fluid Mechanics, v.803, 2016, p. 275.

See also a post on this subject from the U-Cal site.

Motor Intelligence June 2017 Auto Sales

Earlier this week MotorIntelligence released its update and SAAR data. As expected, sales are somewhat reduced on a year-over-year basis:

ALTSales 2017 06

Most notably, the seasonally adjusted annual rates for autos are continuing to fall with truck sales continuing to post positive results for most manufacturers – Nissan with a whopping 21% + year-over-year truck sales with an additional 73,186 units sold over the prior year (though the company’s total car sales are off almost 12%). The Wall Street Journal cites that part of the reason for reduced sales is due to fewer vehicles being sent to rental companies:

The move away from rental sales reinforces a newfound discipline for domestic players that have been riding a seven-year growth streak since GM and Chrysler sought bankruptcy protection in 2009. The Detroit 3 reported tens of billions in profits during that span, bolstered by tailwinds from falling gas prices and surging demand for profit-rich trucks and SUVs.

Overall industry demand softened over the first half of 2017, however, falling about 2% through six months, according to JD Power. The development ushers in an expected plateau for auto sales, an important driver for the broader U.S. economy.

The fleet-sales pullback is having a disproportionate impact on wider volumes. Sales to retail customers at dealerships is down less than 1%, but sales to non-retail customers such as government fleets, commercial buyers and rental-car companies is off 7.8%, according to JD Power.

WSJ Summer Slump

 As mentioned previously, this was not unexpected given the volume of auto sales in the last three years that have extended beyond most expectations. Auto manufacturers seem to be signaling more slowdowns as the New York Times reports:

Automakers said this week that sales dropped in June for a sixth consecutive month, falling by 3 percent from a year ago, a trend that analysts do not see letting up anytime soon. And as demand falls, there is less work in the nation’s auto-assembly plants — primarily those that build traditional passenger cars…scaling back jobs in car plants is part of a newfound discipline among automakers to avoid bloated payrolls and inventories when sales start slipping.

While this trend is not all that alarming, two things are worth noting in this “post peak” period, both related to the financing of new vehicles and leases. The first is from Edmonds.com, where based on their analysis:

The average loan term for new vehicles soared to a record high of 69.3 months in June, an increase of 1 percent from June 2016 and up 6.8 percent from five years ago. In addition, the average amount financed by new-car buyers jumped to $30,945, which is a 2.6 percent increase from this time last year and 17.2 percent more than five years ago. And the average monthly car payment is now $517: That’s 2.1 percent more than in June 2016 and an 11.3 percent increase over five years.

In addition, according to the St. Louis Federal Reserve, close to $400 billion has been added to securitized loans as a result of auto sales in the last five years. Unless this trend continues, it could put a dent in sales:

FRED Auto CDO

Philadelphia Fed Forecast: Slightly Stronger vs. Three Months Ago

According to the Philadelphia Fed’s Real-Time Data Research Center, the outlook for 2017 is slightly upbeat, particularly compared to a few months back:

The U.S. economy over the next four quarters looks slightly stronger now than it did three months ago…forecasters predict real GDP will grow at an annual rate of 3.1 percent this quarter, up from the previous estimate of 2.3 percent. Quarterly growth over the following three quarters also looks improved. On an annual-average over annual-average basis, the forecasters predict real GDP will grow 2.1 percent in 2017, 2.5 percent in 2018, 2.1 percent in 2019, and 2.3 percent in 2020.

An improved outlook for the unemployment rate accompanies the outlook for growth. The forecasters predict that the unemployment rate will average 4.5 percent in the current quarter, before falling to 4.4 percent in the next two quarters, and 4.3 percent in the first two quarters of 2018. The projections for the next four quarters (and the next four years) are below those of the last survey, indicating a brighter outlook for unemployment.

The forecasters assign the following mean probability to GDP growth rates this year:

Mean Probability

Note on Inflation

One persistent element is the inflation outlook in the coming years.  The forecasters note a downward revision:

The forecasters expect current-quarter headline CPI inflation to average 1.6 percent, lower than the last survey’s estimate of 2.3 percent. Similarly, the forecasters predict current-quarter headline PCE inflation of 1.2 percent, also lower than the 2.0 percent predicted three months ago.

Measured on a fourth-quarter over fourth-quarter basis, headline CPI inflation is expected to average about 2.3 percent in each of the next three years, little changed from the last survey. The forecasters have revised downward their projections for headline PCE inflation in 2017 to 1.8 percent, but they pegged the rates for 2018 and 2019 at 2.0 percent, unchanged from the last survey.

Over the next 10 years, 2017 to 2026, the forecasters expect headline CPI inflation to average 2.30 percent at an annual rate, unchanged from the last survey. The corresponding estimate for 10-year annual-average headline PCE inflation is 2.09 percent, little changed from the 2.10 percent predicted in the previous survey.

While not completely unexpected, this inflation forecast demonstrates an interesting shift, especially given the state of full employment. See the full writeup with lots of stats here.