Stansberry Research

Doc Eifrig's COVID-19 Briefing No. 15

July 9, 2020

Editor's note: You can find a full transcript of Doc and Matt's briefing, complete with slides, below the video. If you'd like to view a pdf of the slides, click here.

Dr. David Eifrig: Hi everybody and welcome back to COVID conversation No. 15. If this is your first time with us, welcome. And if you've been here before, welcome back. I'm Dr. David Eifrig and with me is Matt Weinschenk. We are socially distant. Matt, welcome.

Matt Weinschenk: Welcome, Doc. How's it going?

Doc: Good. Great.

Matt: Good. All right. Yes, I did. I did. I guess let's jump right into it because we got a lot this week. And just to remind people, this is, I think, good to remind…

We've got a lot of exploration of things here. This is an unedited, free-flowing conversation where we're exploring what's happening. So please join us if you have any questions And then we've got completely free That's our free daily e-letter with all sorts of information and also feel free to share this with anybody who you feel could benefit from what we're talking about which, these days is probably just about everybody. So, alright, let's get into it.

Doc, let's start with some information you had.

Doc: Yeah. So I wanted to share with people a little bit of history of how this all began. And to point out that Neil Ferguson was a guy who people ran with his initial prediction of 2.2 million US deaths by now. That's down at the bottom. And problem is this guy has had really long and regular stretch of making predictions about diseases and utterly failing at it. So I don't know what modeling system he's using, but he's not using Matt Weinschenk to vet his model. I just want to point it out. I want to point out this guy's been way off by you know, 177 deaths Mad Cow. I remember that when it came out and laughing about it really as a resident. Bird flu, same thing. Swine flu, we wrote about it… a plane landed in Baltimore that come from Mexico, they quarantined the plane. And turns out everyone was vomiting because they been drinking too much tequila down in Mexico.

And then COVID, the guy's missed it by a factor of 10 and a half. So next slide is, I want to point out that the model that we use…

To lock everyone down as opposed to I think, Matt, you might agree with me, doing contact tracing and focused that way instead of locking down society. This model was something started with a 15-year, 14-year-old I think she was when she wrote the paper with her dad, who was a scientist at Sandia, and this next slide kind of goes…

And shares with you a little more details about it. But it… by shutting everything down, the paper, the high school paper concluded using a computer model for spread a bird flu, that that's what you needed to do. Dad published the paper or at least circulated amongst some folks that got a hold of it in the administration of Obama, and next thing you know, that's what we tried and in this run, which still doesn't make any sense to me. But I wanted to share that with because I know people did not know that. So that's why I'm sharing it with you.

So next slide, we'll turn to an interesting thing that came out yesterday. And this looks at if you look at the purple line on the top, this is what's called influenza-like illnesses and the fatality rate is on the vertical axis. So this shows you that the infectious fatality rate from influenza-like illnesses is much higher than these guys model who said there's actually more people that have COVID-19 than we realize and some other diseases circulating. And so this lower so-called adjusted line is where the infectious fatality rate really sets, that gives me a little bit of comfort. I don't want anybody to die, but we all are going to die. But it's suggested it might be less, again, more suggestion as more data comes in, less dangerous than Ferguson and others have suggested. So, next slide.

Matt: So we'll move on to our normal, some of our normal charts here just to see where we are. So we came, had this headline last week, new cases go crazy. And that was when we were here, about 35,000 new cases a day and that's just shot way up. Of course, this is the seven-day average. Yeah. So you know, the current number is even higher than that.

And it is localized. Most states are rising, we've got only two on the decline. Some of those are moving pretty fast. You know, it's still the same trouble states: Florida, Texas, Arizona, Georgia. Some others have… bigger problem in the south and the West. A lot of you know states that have been declining: New York, Maryland now they're calling them flat. So we'll see. You know, we'll see if they can decline. But the number of positive tests coming back is just it's….

Well, it's… I mean, it's almost off the chart. It is now in in virgin territory as things rise, we're up to 50,000 a day.

Doc: Yeah. Shocking. The other thing I want to take sort of a slightly tempered approach and suggest that what's critical, and Matt, you've alluded to this in conversations we've had here and in private. What's critical is how close you get to that where the curve has to be flatter. And here's looking at North Carolina current hospitalizations from COVID. And around 900, and so hospitalizations. But I want to put that in context

To the actual supply of beds. And as you can see, on the left, the dark blue shows you that they're about three quarters full of inpatient hospital beds and the ICU is a little bit higher than that, exactly three quarters. But being on a ventilator, they've got plenty of ventilator supply there. So is it something to worry about? If you're in North Carolina, you start to when it gets up to those levels, but from a nation's point of view, and this goes back to maybe my belief in more local government control, as opposed to a Governor Cuomo shutting down Western New York based on what's happening in New York City, or somebody in Southern California shutting it down for North Carolina, I mean, for Northern California.

So anyway, I hope I said that I say Southern California and Northern California.

Matt: Yeah.

Doc: Yeah. So it shows that this will show you the next slide is how localized things are

And put in perspective. In orange is New Jersey hospitalizations, which you can see peaked, really, almost now two months ago. And relative to the size of what's happening in North Carolina that makes North Carolina look like, you know, hey, who cares, right?

Matt: Yeah.

Doc: So I just wanted to point that out and show people. And I also want to remind folks that I, I don't want to say I don't worry about it. But if you look at the next slide

That shows where the deaths are happening. You can see down in the bottom, the percentage of cases is low relative to the ones in the 18 to 49. Those two rows that are highlighted in yellow, where those are almost 60% of all cases. It's really the greater than 80 years old, have almost half of the deaths. So that's what I worry about is deaths in people. Again, if you're older, be careful. So cases surging, you know, if it's in the younger crowd, I'm kind of okay. I'm not okay with any deaths in the younger crowd, but I'm less worried about that huge spike, especially if it's a lot of younger folks.

Matt: Yeah. Well, I mean, there's a few that I think I can think of three reasons we watch hospitalizations just to summarize some things. One, we saw these positive tests, and we wanted to make sure it wasn't an artifact of more testing. Right. And it seems pretty clear that that's not the case. You know, maybe it's part of it, but there are more people going hospitals so they're not, you know, they're not faking it.

And two, we want to make sure hospitals are hitting capacity. Most places don't seem to be in trouble on that, aside from the ones that we know are trouble spots: Arizona, Texas, Florida, Georgia is at 60%, South Carolina at 60. But I mean, Texas is now 80, Arizona's like 95% capacity. So those areas have problems but the rest are probably okay. At least for now. And the third reason we're watching them again, is we, we've been talking about how there's younger people are getting it and maybe that's okay. But those hospitalizations are still going up. Still, I don't know, eight or nine or 10% of people ending up in the hospital. And so, you know, I think, in general, I'm more concerned about things, but I'm not, you know, I don't want to, I don't want to go to the hospital for two or three weeks, you know. I'm sure even as a young person, I would likely survive, but that's, that's something we don't want…

Especially when the hospitals are full. So let's…

Doc: And we'll get to that. My, you've thrown some nice physiology charts in later that you were researching this week about why we're concerned about it, maybe a little more than I was last week because of how this disease mechanism works. But yeah, go ahead.

Matt: Well, there's interesting stuff we'll get to and again, we don't have… we, you know, we go back and forth. One day I'm scared, one day I'm not. And you'll see it happen in real time as we go. So again, deaths trending down still, again, is this because younger people are getting it? Is this because it's just, you know, there's a lag in cases to deaths. You know, we'll see.

We have some more info on that in just a moment. This is a little out of place, but just, you know, this is the U.S. versus developed countries in the European Union. They didn't really have more severe shutdowns than us, you know, use social distancing and masks, I think, is all you need. But now we're sort of off to the races, and just a very different result. So again, if you're talking about younger people, talking about all these things, they're not seeing it in the European Union. So maybe there's something… there's something else going on, you know. Our deaths per million are many multiples here, we're at two and they're at almost, you know, off the charts these days.

So, other than zero. So let's try and dig into where what's gonna happen with these deaths

Because I think it's going to go up and I'll tell you why.

And it comes out…

Doc: I mean look before you go into this, Matt, I think I should throw in here that Matt told me that he was doing some modeling off of those curves. Can you go back a little bit, two slides

Matt: Mm-hmm.

Doc: And because you're concerned that this deaths will spike and follow the case curve up, right and you were wondering how much it was. And so, when I spend my evenings at night I'm usually trying to decide which Cabernet in which vintage to drink. Matt on the other hand, is doing this incredibly in-depth mathematical modeling of this and you got a little scared last night, so scared that you didn't want to show it to us yet and me and put it in here, but I… You got me nervous now.

Matt: Yeah.

Doc: I'm probably gonna drink more wine tonight.

Matt: Okay, well, I do have a beer while I'm doing this.

But let's… All right. So what what's at issue here is something called Simpson's paradox. And this is a, this is when you take data, and you put take groups and you put them together, you can hide what's actually happening there. So let's look, here's just an example that I think makes sense, right? Who's a better batter Derek Jeter or David Justice? Well, if you look at the overall batting average, Jeter is better, right? If you look at 95, David Justice is better. If you look at 96, David Justice is better. Right? If you combine them, Derek Jeter is better, right? Isn't that strange? So you, if you break things down in different ways, you find different results.

Let's… this is just a kind of a toy example. If you were looking at these data points through time, you would ascribe this downward trend to it. But if there's a difference between the blue ones and the red ones, you would say, well, these are going up and these are going up, right? So if you break it down, you get a different result than the aggregate data.

So it… If you take this daily deaths, seven-day average, and you just said, "Okay, here's how it's going," and you just kind of drew a line to extend it, here's what you'd get. Things are headed down. But if you did the same exact thing, and you took each state, and you added them up, you would see that we're actually starting to head up. Right? So deaths are rising in Texas, Florida, Arizona, a whole bunch of states, you add those together. And that shows you what may be hidden in that overall data. And let me… Here Doc, I'll show you here. Can you see this?

I'll show you what I didn't want to include. So I did the same thing. This is messy. And you know, you see the declining death.

If you do it state by state, I got this.

Doc: Oh my gosh. So you only have… you only had one beer when you saw that?

Matt: I know I know. I was like okay, I actually… This I finished about 20 minutes before we started talking. So I want to make some adjustments to it.

But the point is, if you do it state by state, it looks a lot different than that national chart. So, it's not even a delay. It's just a fact that there's a lot of states that are doing well, and they're hiding some of the states that aren't doing so well. So I think we're gonna see that death number go up, that total death number, and we'll get to who's dying in a second. But as financial analysts, you know, the market's been fine with this rising case count so far. There's been a few days here and there. Are they going to be fine if the death count goes up? You know, I don't know. That would be another weird thing to throw in there. Are we going to see more shutdowns? You know, I think Texas is shutting down now again.

Doc: Look, before you scare everybody with the death stuff, you got to show this chart. Yeah, perfect. So this is by age group, each color is an age group. And you can see that the top is 85 years and over and down at the very, very bottom, the blue across the bottom is zero to 24 years. So you essentially, if you get infected, you really are not going to die from this. And if you're 85 years and over you are and especially if you have these so-called comorbidities.

So I want to keep echoing this.

Matt: And again…

Doc: Matt wants to show us that the death rates are, are going to turn up higher and make us nervous. Let's not get too nervous yet.

Matt: Well, it makes me nervous about the economy, maybe in the market. It doesn't change my view of my personal... But I also just to point out in this and it goes back to the California chart, so this is the count of people of those ages, but those age groups are relatively small numbers of people. Right. So, so this isn't even a proportion. And I think on that California data, it's at 45% of the deaths were people over 80. They only made up 4% of the California population. So yeah, I mean, so even this is sort of masking how safe it may be for some of these younger groups. But, alright…

So when we, when we first started doing these, we kind of talked a lot of biology and kind of trying to figure out what was going on and what this virus meant. And we haven't done that in a little while, but there's some new stuff coming out. And now I've seen enough about it that I think it's worth talking about. And it's a new way of looking at COVID and what it actually does. This is the sort of a chart of over time if you get it and you're a bad case, you start with just your normal cold and virus response and your lungs get a little messed up. And as things get worse, you have all sorts of inflammation and cardiac distress monitors, and actually 40% of COVID deaths, the actual you know, final mechanism is a cardiac episode. And what is happening…

Is and what this new thinking is, is that…

Doc: Hey Matt, go back, just one second, I want to just highlight this. So when you're first exposed to the virus, on the Left, it says lymphocytopenia. So what happens there is your body's white blood cells go and try to attack the virus. And then if you've been exposed to it, if you have antibodies to it, it can upregulate it using memory cells that saw this before, which was what happens ideally with a vaccine or exposure to COVID or other diseases. Ramps up but they go and attack this thing. And that sort of ends up killing them. And so you see your low levels, that's the "penia" of your lymphocytes, white blood cells drop and plummet. And that's one of the first biomarkers you see. And then if it heads into your lungs, you get these X-rays, which for COVID-19 has been some kind of weird, what's called "ground glass" X-rays where it looks like an acute respiratory distress syndrome. Not a normal… I say normal, but not quite like what influenza is early on. But anyway, I don't mean to interrupt you. But now let's look at it at the cellular level.

Matt: Yeah.

Doc: Next slide.

And before you go, I just want to point out something to me that's one of the fascinating things I learned in medical school. This is a chart of the lung, next to the blood vessels that line the lung. So the gray is the air sac. And then the red - that's where blood cells are sitting there, those round little donuts in red, and then blood, it's sitting in the fluid. And then these endothelial cells are this light pink. And just look at that. It's one cell. Look at the space between the lung cell and the air and the blood, and it's flat.

So people talk about this being about one cell width thick. So it's really, really, really, really, really, really tiny. And because of that interaction, it allows oxygen and carbon dioxide to diffuse across those membranes, across those cell walls, and exchange gas and exchange fluids. But it's also a problem when you get infection. You're going to go ahead and tell us about it. But I, I mean, I was fascinated by how thin… it's thinner than Saran wrap. I mean, it's just truly amazing that it even works in my mind.

Matt: Yeah, so the virus doesn't attack these lung cells. It comes in and attacks these endothelial cells on the blood vessel. And as those break, you get leakage, fluid into the lungs, you get the platelets leaking out, you get the cytokine storm, which is a, sort of an over-enthusiastic immune response.

Doc: And well, go back to platelets for a second, too. So if the platelets are involved, they start to go crazy, they spread out, they're almost like spiders, and then they grab stuff, and then they shrink up. And when they do that, it's almost like creating a wall or a clot and that's what happened. They started to create clots. And so you don't want your platelets to be sneaking through stuff because that triggers them to explode and then contract and stop things from moving.

Matt: So, yeah, right. So it's not a disease that attacks the lungs. It's a disease that attacks these endothelial cells and they line your entire vascular system in your body.

So they're now thinking this is I think the word is vascular trophic. This is it's not necessarily a lung disease, it's a blood vessel disease. Now, that's interesting, because we have all those weird reports of strokes and blood clots, and people getting like purple fingers and toes, there's kidney damage. There's all these weird things. That makes sense if this is a vascular disease and not a lung disease. Here's just an example…

Here is you know, microthrombi, which are burst blood vessels inside the lungs. And there's all sorts of things along these lines that seem to make sense now. And also, Doc, this is why and I mean, you know this, but this why the ventilators don't seem to work, right? We worry about having all the ventilators we put, they put people on them and not very many come off though. That's because the blood vessels behind the lungs are destroyed, so they can't transfer that oxygen over. So it may explain that too. So explains a lot of things that seem to be strange.

Now, what do you do with this, if you're sitting at home? I mean, I take it to mean there's still a lot we have to learn. But if this is correct, and if this is a new avenue to pursue, maybe there's more opportunity to treat things and to cure things now that we're maybe on a better path and maybe understand it better.

And, again, just to show how this is different than the flu, we've got some data here.

Doc: You really weren't drinking last night.

Matt: I really was. So you know, this is the density of call it blood vessel damage or blood vessel branching for COVID. This is what it is for influenza and this P value of 001 means it's very, you know, this is a very drastic difference. And you can also see the way this proceeds during the course of infection over time. As someone is in the hospital with COVID these blood vessel damage just goes up and up and up. So this is just an interesting new way to look at it. It's different than SARS. It's different than influenza.

And, you know, also maybe if you, I don't want to scare people, but it also means we don't know what it's doing. Like yeah, you know, you might, you've heard there's talk of people having lung damage, it doesn't necessarily come back. I don't know how big that is. There's the Kawasaki – that strange thing that is very rare, but affects children. So I don't know you know. It's in the blood vessels in your brain. It's all over your body. So I think there might be who knows and maybe it's not I think maybe there's more to worry about there. But it's um, it's different. It's different than we thought it was. I would think it seems.

Doc: Yeah. You know, what's interesting, Matt, for me is, I've contended, gosh, since 1999 or 2000, when I sort of asked the question in one of the labs, and then in one of the classes on the pathophysiology of cardiovascular disease. It's always been my belief that there are some diseases like macular degeneration, which is the back of the eye and affects old people. And then I think cardiovascular disease is probably going to turn out to be the same, where it's caused by an infectious agent.

It's clear to me and we've talked about this before people read my writing on cholesterol. We're actually coming out with a report in a couple of weeks on this. The cholesterol model was broken back in '99 2000. I remember fighting with my senior people who I was older than, but they were higher up and supposed to kowtow down to them. Now's not the time to digress to the story of why eggs were thought to be bad for you. Have I told you this? Maybe we will digress for…

Matt: No, no, I know. I know it. But yeah, we could digress, but I think the cardiovascular thing is interesting enough on its own.

Doc: Yeah, let's not. So the cardiovascular disease in my mind is related intimately to infectious disease and it may be coronavirus might be a part of that. It could be other viruses as well. But it's very clear that this has angiogenic effects, which has effects on the growth and regrowth of blood vessels, clotting, all of this fascinating stuff. And I know we got smart people thinking about it, looking at it, working at it. So I mean, gosh, how exciting would it be if COVID-19 research comes out of this that shows us how to stop cardiovascular disease? I get excited when I see this kind of science. So yeah, thanks for bringing that to my attention. I was excited that you were interested in it as well, like I was like.

Matt: And yeah, and actually, Doc, I don't even know if I've told you this theory of yours ties into some of your dental hygiene thoughts. And I've totally bought into that and follow that. I don't know if that's something you want to share if that's just a – All right. All right. So mutations, let's go.

Doc: So we're back to mutations or at least thinking about mutations in places that this happens. We've talked about this earlier on months ago, and then people were skeptical. A couple subscribers wrote in and cited this inside of that and said, no there's not supposed to. I think even somebody in our team questioned me on this, but there are lots of mutations in coronavirus says there are lots in this one. The question is, do they change the function of it or the dangerousness of it?

Next slide shows you that it looks like there's probably two strains, there's a Chinese strain and this one that's in Europe and New York. And the Chinese strain is less infectious. The Europe and New York strain is more infectious. And it's in general thought that the infectiousness is related to the, for the thing to be able to spread quickly, it can't be that deadly. So, the question really is, is okay, if it's if it's more easily gets into humans will there be other mutations that will make it less easy to get in humans?

And my guess is, again, this is data, I'm gonna say something like there's probably five strains of this now, given how many other viruses do mutate quickly. And again, that's why influenza, we have a new shot every year because it's always mutating and which one survives, we make a guess from the Southern Hemisphere, what to put in the next year is Northern Hemisphere influenza shot.

So I think the same things gonna happen. It might not be that the well, it's not known, let's say if the Chinese were making a vaccine for theirs, how that would affect us if our strain is slightly different, right? I mean, that's one of the concerns. It certainly is with influenza. So I just throw that out there.

Next slide talks about this thing…

We've mentioned it before, and I wanted to highlight it because people need to know that by keeping people out of the hospital and out of the health care system, making them stay at home and shelter in place, it's created hardship, it's created problems. It's created stress, distress, more suicides.

And yet at the same time, what's happened now is we've opened up around the U.S. We're seeing these spikes in diseases and death from diseases and diabetes rates that we didn't have. And you can see this as a chart that shows you the annual change for like the last 1617 months, this huge spike of other diseases, specifically heart disease in the states.

Now, Matt, with your stuff that ties into maybe is related to coronavirus, but also you wonder about mortality from these other diseases that people have been putting on hold. It's one thing to say, Hey, I think dad had a stroke, but it's only mild. Let's keep them at home and dad says I don't want to go in because I don't want to get corona. And then he dies from a heart attack two months later. This stuff is in my mind clearly happening, but it's hard to tease out cause and effect. It's just a real piece…

All right, finally here I'm gonna get into the business stuff.

This is some herd immunity things that I've been looking at. Matt you probably sleep with a book on herd immunity next to your bed to try to model this. But in black shows the actual curve of people infected. You can see how it's it was until recently dropping off. This is from an old paper. And then the model in red is suggesting that we still have to go ways up to before we get to so called herd immunity.

You can see that we really did go down, didn't go up, although we're starting to kick back up now. So that does make me nervous.

Next slide talks a little bit about herd immunity.

If you were a medical student, you'd memorize the number you need 70% of the population to get herd immunity. This, as you and I were talking about, may or may not be the number and depends on the disease and the infectiousness of the disease, the so called RT or the reproductive rate, r sub t.

And anyway, so there's this other model called a breakpoint model.

And essentially, these folks fitted this and said, Hey, we might have gotten the herd immunity already with this disease. Matt, I know you're going to say no we haven't. You're going to work on your model and shows that's coming. You can see that huge spike. I'm going to say yes, I don't believe this model. But people are trying to model stuff and figure out where exactly does herd immunity come and how do you get it? So I've read stuff on going back 30 years of papers on some people now think it could be 20 to 50% for, and depending upon the disease. And you, I think, will probably highlight that it depends on the infectiousness of that. So they're connected for sure. What do you make of this model? Are you familiar with it?

Matt: Well I mean, if you know if this is looking back and it's saying hey, look here was the curve of new cases look, we might have hit herd immunity, but if you tend, if the actual data then goes like this, like we now know, I mean, obviously, you know, the model miss something, but you know, it's tough.

So we've talked about that the actual number of cases given asymptomatic, given people who don't get tested could be 10 times what the tested numbers show. Probably not more than 10. But it's certainly a multiple, maybe two, three, four, or five. But to me, even if you take those numbers, we're still maybe at 10% of the population, maybe, you know, somewhere around there. So to me, that means we have a long way to go. Now we so part of this also, Doc, let me just clarify and make sure I understand this is yes, herd immunity is 50, 60, 70%. But there is also a breakpoint where we might not have herd immunity, but we've got enough out there that the infection rates sort of start to tail off and you kind of coast into herd immunity. Is that kind of what this is that?

Doc: Or you might say, you might argue that now, our society and our social functioning has changed so much. So perhaps the herd immunity or the functional herd immunity where the infectious rate drops off and goes away for the season, or truly does fizzle out because people don't go to concerts anymore, don't go to large gatherings anymore, and are much more careful or they're outside and not indoors. I mean, one of the reasons probably, I think, for Arizona and Florida, is this time of year it gets really, really hot. I mean, I know it's a dry heat in Arizona, but in 110 degrees outside you got to go indoors. And we know that if you're in a room with someone who's infected, even if they're just shedding a little bit of it, the longer you stay in there, the more particles are in the air, the more likely you're going to pick up a dose, accumulative dose of it that's going to cause you to react to that and be possibly problematic depending upon your age.

So my answer is yes, I think it's possible to have a lower percentage of people infected. And maybe we have hit that at 10 or 15%. Assuming we still do some social things that protect people from dying. And even if it does spread, let's say it simmers at an r1 forever in the population of 15 to 21, that might be okay for society and might, in fact, be perfectly fine for society.

So anyway, I'm –

Matt: Yeah, no, no, that that makes sense. That makes sense. All right, let's start talking about opening society...

Let's start to get into some economic stuff. Let's see. So this is a great analysis of the counts of the mentions of different words in speeches by us governance, foreign officials and the WHO. So there was a point here where reopen was taking a lot of, you know, a lot of word count here. And that has since narrowed and we're seeing bigger shares for hospital and infection. And, also looked death, you know, death is has narrowed really, because we're, you know, because death counts are doing pretty good mass has surged up. But reopen as lost a lot of the focus here very interesting to see that in visual form.

Doc: Yeah it really is. Is this word count written auditory both? You know what, how –

Matt: So I believe this is briefings and presser so I believe that talks and probably the releases that come with it. So I think this is taken from transcripts of those speeches.

If you look at what people are thinking, you know what the perception is, most people are expecting this to get worse still. This is a little old. So it looks like they were, you know, properly expecting the case count to get worse but you know, we'll see. The market certainly doesn't think it's getting worse.

But as we noted before, it's not just about reopening. It's about people staying safe. This is the National restaurant data. People were coming back and we showed that they were now refraining from going out and that trend seems to be continuing for the most part, and it's especially continuing in problem areas, same data same. But this is for Florida, Texas and Arizona.

You know, they're down 655 to 65% after almost getting back to normal there, so people are not going out in those places.

The most recent jobs report was quite good. But if you plot that, if you point out where that is on the new case, so this is the coronavirus cases, this is a total over seven days. So that's why 300,000 is there. But this is where the jobs data ended. And we have nothing reflecting this. So I think Texas is, Texas closed bars again, there's a few other things closing down. So that recent jobs data is a little stale given the way things change quickly these days.

These are some activity indices. I think these are made by Bloomberg. And they combine Apple data, Google data, all sorts of, you know, jobs, data shopping, credit card data. So they're pretty interesting. And they make sense, you know, where things shut down, and then they started opening up. And you can see we're still on that glide path up. But we're not moving as fast as France, we're not moving as fast as Spain, or Italy or Germany.

At the same time, our stock market is doing much better than any of those. So we'll see it hasn't, you know, I don't know can you call this a turn down here in this blue U.S. line? I don't know. It's early to tell but we'll keep our eye on it.

And I also found this interesting. You know, all travel dropped off. Okay? And now airlines and hotels still pretty far down, but people are going out there just driving they're in a rental car or their own car, but we don't have that data. And they're staying on Airbnb. Actually, that's just what I did for a little beach trip with my family. We drove there and stayed in Airbnb. So there's a big change here in consumer activity and people are out doing things, but they're doing it a different way, which is a safer way if you ask me.

And here is retail bankruptcies. Yep, still trouble in retail. And so, you know, you're going to see if you're going to go out and I think people should go out I know I'm more scared about things but I think masks and staying a little far apart is okay. People can go out to dinner, people can do all sorts of things go outside. But it really doesn't make sense to go into a store and browse and shop like you would do at a clothing store, things like that. That's probably going to be a while. And you can see retail bankruptcies are already up. Retail was already a weak industry and over leveraged industry, high fixed costs. So it's tough. And you're seeing that in what happened to them. 16 bankruptcies over 50 million a liability so far this year, which is a lot.

Doc: So that's what the total of '18, '19 combined, right?

Matt: Yeah, I know. And so far, that's a you know, more than a wait, and we're only six months and seven months in, so. But why is, next few charts will show that U.S. stock markets still doing really good. And this shows what our biggest advantages.

So in the textbook relationship –

Doc: You were up late and drinking beer last night.

Matt: Actually, I didn't last night, but anyway. Textbook relationship is your interest rate goes up, your currency goes up because people want higher interest rates. They'll start trying to buy your bonds and they need to get your currency to do it. And that's usually what you see. But the U.S., so our interest rate has gone down 120 basis points this year, and our currency has gone up. We're the only one that can essentially see our interest rates decline and our currency goes up because we are the U.S. reserve currency. We are the only game in town. When things are scary, when people are scared, they go to the dollar.

So this is our as it's labeled here exorbitant privilege and something like I don't know, this year, they raised their interest rates and their currency still goes down, you know. Brazil's in trouble, they, you know, they can't get people attracted to our currency. So they don't have the same freedom that we do to try and boost our markets. So as long as we have that, you know, we're maybe in good shape.

And we've talked about valuations, how they're particularly high. But this is a new chart showing that the difference between the highest valued stocks and the lowest value stocks is particularly wide. So lowest valued stocks are at 10 times earnings, which is lower than most of these periods ,while we're the highest quintile. So one fifth of the market are way up there. So that's as big a gap as you've seen since again the dot-com crisis. So concerning, but you know, market has mostly shrugged off the new cases, mostly shrugged off the bankruptcies.

This is just simple S&P 500. You know, this was the frenzy things cooled off, but we're still sort of in that range.

Volatility index elevated, but now like it was even a couple weeks ago.

And spreads on high-yield risk bonds still you know, above five is still I don't know if you'd call that crisis territory what the word is, but things are elevated. But way off what they were way even just a month ago. So market is not concerned. And you know, the market isn't concerned until it is concerned. So will death turn up? Will that's spook people? Will there be more shutdowns? I don't know. I mean, the market doesn't seem to care so far, and maybe it won't.

Doc: So I might argue with the bankruptcies and this chart, that 600 basis points, or 589, that spread is greater than it was, you know, back last year, right? You can see it in the middle of the summer it was 400. So 600 is more. But the fascinating thing, and it's related to currency, is that the interest rates are so low that the damage – the interest carrying cost and the interest payments – you can really spread out a disaster because interest rates are so low.

And I think, I don't want to say that I feel good about a 600-basis point spread, but it's still… For me, it's actually a pretty big spread relative to where our interest rates are. So I dunno. I know some folks who will look at this spread and go, Ah it's not that bad. But I still… I worry. And I see these bankruptcies starting in large businesses. Those are jobs lost. Where are those people going to go who are working in retail, you know?

Matt: Yeah, yeah. A lot of upheaval. We'll see. The saga continues and we'll be back next week.

Doc: Yeah, well I hope we've helped in some of our discussion of all the stuff we look at and try to understand. If you have questions – Please keep sharing Share. Spread it. We love it. We're getting great feedback from people who see us for the first time. And we love it. Our egos… This is kinda fun. No, it is. It's like a – I don't want to say a free product – but it's fun, right? I don't, I mean we spend a little bit of time on it, but it's fun to talk about it and share our thoughts. And I think we're getting feedback from people that we are giving them some insight, so…

Matt: Yeah, we love it.

Doc: Great. Thanks, Matt.

Matt: Thanks, Doc.

Doc: See ya.

Matt: Bye.