Stansberry Research

Doc Eifrig's COVID-19 Briefing No. 16

July 16, 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: Hello everybody and welcome to COVID conversation number 16. I'm Dr. David Eifrig and with me is Matt Weinschenk, and we are socially distant, although currently in the same state in the United States.

Matt Weinschenk: That's true, that's true.

Doc: Welcome Matt.

Matt: Hello, Doc. How you doing?

Doc: Good, good.

All right, well, let's get right into this. People remember, if you have questions, any comments as well. And then please pass this around, We've had lots of signups in the last couple of weeks. Spread our stuff…

And we're happy to explain it to anyone that will listen. Matt, hop back in, let's go.

Matt: Yeah, I mean, so the basic news is it's the same as last week only further, you know, test rate, the positive tests just keep climbing at a very rapid rate.

Again, and the problem areas and mostly the same problem areas. We'll get to the state by state, again.

But some information on testing here, Doc, let's go with you.

Doc: Yeah, so one of the things that I've been complaining about is testing folks that didn't have any signs or symptoms. And we don't want to dive into too much depth on when testing is valuable and what level of contact tracing… it's a different question. But in medicine, and in healthcare, what you want to try to do is test people, you want the prevalence to be high in an area where you're testing. So your testing characteristics make it easy to distinguish who does and doesn't have disease. And the CDC now has guidelines about what to do and how to do it, which is you need to have signs and symptoms. That's the first line.

So if you're been around people and exposed to people, same thing, so this is more of a common sense view. And finally, we've got it from the CDC. But on the other hand, let's turn to this next slide. I think we show what's happening in Florida, where we've seen cases shoot up.

And then specifically in Miami, they're testing everyone who comes in the ER. So two things are shocking about that. One, it doesn't make any sense from… medically to me to do that. But the 25% of people are testing positive. That's very interesting, because I think herd immunity is going to happen pretty soon now. I think closer to 30, 35%. So I'm excited about that. Do you have any thoughts on this, Matt?

Matt: Yeah, so I am not against, I think this is a good idea. I think wait… let's go back here.

So I think, you know, part of why they would test everybody is maybe this is this last one - individuals being tested for purposes of public health surveillance for SARS-CoV-2. So again, we're trying to, to find people.

I mean, I almost think if someone has signs or symptoms just not statistically, but treat them as a COVID patient, and there's no need to waste the test on them. So we only want to test people with no symptoms. But yeah, I totally agree with you if the prevalence of this is actually 25% in Florida, that would be great. You know…

Doc: Yeah, right.

Matt: We would be much further along. So if that 20. So let's think about this for a second. I'm just thinking about this now. If 25% was purely random, right, like if it was only car crash victims and heart attack patients, we would be in great shape now, though.

Doc: Yeah. And those people would be random people, which you might claim or not, which I get. Yep, go ahead.

Matt: Yeah. So but now some of that 25 is going to be people who are being tested first, because of symptomatic reasons, right. So there's a blend there. So it's not a pure 25% at random, but that would be great, great progress towards herd immunity at least, if that were the case.

Doc: Great.

Matt: Okay, location by location, basically the same. A few more states have moved into rising but nothing too drastic, you know, Florida's crazy Texas, California, Georgia. Same things we've been seeing, only worse. So no surprises there.

But there is a you know, as always one of the themes of this is questioning the data and what we can count Doc, this is just a note that you had found.

Doc: Yeah, so, I know this is where you've done some of your work at Johns Hopkins. So I don't want to bash your alma mater too badly. But I do want to point out that what has happened and what I worry about are things like we've talked about Florida whether they've actually tracked and done stuff properly. I think you said I'll bet you anything that they've messed up on this.

What's clear to me when I look at this stuff and see it, is that there have been places where they're double and triple and even quadruple counting. So, for example, I know of a couple hospitals, because I know some nurses. And they tell me that administration now is having the patients swabbed every four days, even if they test positive. And part of it is research, part of it is data. But you can imagine who's putting that data in? And how's it getting recording, recorded? And you know it. I know what Matt, you know, you don't have necessarily rocket scientists doing the data entry. And so that's going to lead to problems.

And I don't have the other slide set to this, but my understanding of it is there are a couple states now they've looked and gone Oh, crap. We were double, triple counting these people because we tested them multiple times. Now, it's not everybody. It's not all cases, it doesn't mean it's going to drop in half but just to… just to point out to you the difficulty of trusting data early on, and something like this, where death is a fear that drives us to be cautious or, you know, on the edge of on the side of caution. So. Fair enough. Am I being reasonable?

Matt: Yeah. Well, I mean, this… that, you know, that's this isn't a Johns Hopkins bash, this is a, this is Hopkins saying, look, there's something in this data we don't know. We're getting positive test results. But we can't say that's a new case. That's a problem. You know, this. And this is a problem, you know, on the, on the CDC level of not having the proper data collection set up. And there's sort of a controversy breaking today. I don't know if it'll turn into anything with the CDC and their data and all sorts of stuff. But yeah, this is a problem. We, you know, we don't have a good system to track these things. And we won't know until the end, how we should have been doing it.

Doc: So yeah. And then again, just to remind people, Medicare is paying. If you have a Medicare patient in your hospital, and you go and decide to go and test them, even if they were there for cancer or heart attack, and they test positive, ding, ding, ding, ding bonus, you get an extra 20% on top of their bill. So for an average stay, let's say 13,000 bucks for a couple days in a hospital, boom, that's an extra 20% you do the math extra $3,000 a patient. You got a couple hundred patients, you're looking at real money to your hospital if you can test some positive. So let's test everybody. Let's get some more money.

Anyway. Next slide.

Matt: And we've been watching, are these case counts gonna turn into deaths? A little bit, you know, this is a seven-day average. So there's a little lag there, but we're seeing a little bit of an upturn, and we'll just have to keep watching …

Doc: Matt, remind me, what's the jump what's a little hump, the double hump before this.

Matt: this is June 26th, probable earlier deaths added and July 1 probable earlier deaths added. So those were rule changes that, obviously look discontinuous. That's it, they have a little note as to as to why.

Doc: So hey, let's go back and get an extra bonus money for our Medicare deaths.

COVID-19 boom, all right. Pop up in deaths. I like it. This is an old thing, Farr's law. The idea here is just to share with you. I don't think Matt liked this. He'll tell us why in just a moment. But the idea is, you see infections, and then you get deaths and pandemics and epidemics like this. And there's a lag of you know, here they say three to four weeks, but… Then tell me about this. You know of some papers.

Matt: Oh, yeah. So, yeah, Fars law is useful. It's basically tells you that pandemics follow a bell curve and the infections go up and then they come down sort of at the same rate, and Farr's law was used in 1990, to predict that the HIV epidemic would peak at 200,000 cases and we're at forty million now. So it you know, as we always talk about models can be useful or not.

So the key here is it will help us, it'll kind of give us a path when we're over the peak and then down. But you can see in the case numbers we've showed that we're, we're not at that peak yet. So it's an interesting exercise. We just got to figure out, you know, when we've hit when we're going here, you know, it'll help us figure out what it looks like from there. So, let's see…

Let's see, digging into deaths. This is from the Economist. For just some reason, we don't know why yet, but the share of deaths in the US are skewing younger, and now still not particularly young, but younger than other countries. So particularly this chart on the right shows that in these European countries in blue, 60% of deaths were 80-plus. Only about 45% of deaths for the US in red were 80-plus. And you see here, these 52-59 and the 62-69, we had larger shares in the US. Maybe that's… maybe that's some of the problems we had in nursing homes, maybe that's our, you know, poor health compared to some of those European countries. We don't know yet. But it's just an interesting artifact in the data.

Doc: Yeah, and I just want to point out, The Economist to me is a little bit of a liberal rag. And because the print is so small as you get older, you can't read it without reading glasses. So as I've gotten older, I've liked The Economist less and less.

I want to point out I can read this and they say, and I quote, "a relatively small share of the dead is over 80 years old," and I just tap the bullshit button. That's 40… What is that? How many percent?

Matt: Yeah, yeah. 45, but it's relative to this.

Doc: Over 80!

Matt: That's relative to 60.

Doc: That's a lot of people! Relatively small. Whatever. Oh my God.

All right. So what's going on here? This is Florida cases spiking. But essentially, I want you to look far left column, that's from June 29, a couple weeks ago. And you can see the top line there only 36,000 negatives, and you can essentially go across and see that they're doing a whole lot more testing and getting a whole lot more negatives, and they've gotten double the number of positives. Again, because they're doing a lot more testing, they're getting a lot more positives, even though the percentage positive is down a little bit from then. So again, good, the percentage positivity is staying low and not going off the charts.

Suddenly, and then also good news, there are a lot of people that are negative but more importantly, a lot of testing is being done. Like I said, back when I showed the ER, the you know, they test everyone in the ER. So that's what's happening in Florida.

Doc: And I'm excited to see that because that to me this is a hinting at… And maybe not to you, Matt, but it's hinting at to me herd immunity. And then again young people aren't dying in Florida. Look at the far-right column, deaths of the 4,277 in Florida deaths. You can see the majority of them are 75 years and older. That's close to 63%. And it really goes up to about 83, 84% are 65 and older. So when they talk about all these nursing homes, people dying, they talk about all these ICUs filling up. It really is with older people. And if you're older and go to an ICU, you will die. So it's not good.

I'm not celebrating death, but again, it's safer for young people. It makes a case because young people you could make an argument we wonder, is Trump crazy when he starts saying we're demanding schools to open. Matt, you've got kids, but this is a thing that really to me, says it all.

There really have only been what, you know, under 30, 30 children under the age of 15 in the US. Whereas typical year we see six times that amount die from the flu. What do you make of this? What do you make of this?

Matt: Yes, I've looked a lot into the effects on children. And there's a, especially young children. So 15 is kind of an important number here. They don't get bad cases. They also don't seem to catch it as easily and they don't seem to transfer it as easily. So when they do these cluster studies, especially there is a big one out of China, when a whole family got it, it was almost never the child who brought it in and gave it to other people. Because they just you know, if you're not coughing, if they don't have the symptoms, they don't spread it as much.

On the same… and so but that's young children. I think when you're talking high school, when you're talking that it's not as not necessarily as safe and not as asymptomatic.

So I mean, as far as opening schools goes, I mean children will be okay but you don't want them to be a source of spreading. I think with the prevalence with the case numbers we're seeing now, the prevalence is so high that when kids go to school, someone in school is going to have it right? If we were if we had kept things down to the 10,000 cases a day, you can send everybody to school chances are no one man would have it. But now you know if kids are going to get it even at lower rates, are going to bring it home to parents and grandparents and teachers, older teachers. So it's a… it's not as clear that we can do that with the outbreak at still at this fast growth rate. So it's, it's worrisome to me. The kids will be fine, but there's other problems there to deal with.

Doc: But I would suggest to you, I've seen it. I can't pull it off the top of my head here, that even though kids get it, they're much more asymptomatic. And they're much less of a spreader than somebody in their 40s and 50s. And partly because of their immune system. So I hear what you're saying. But I'm less concerned, knowing that the kids won't get harmed. And there's a real good chance that if you give it to all kids, now, you really got herd immunity, and you're not… like you could we could stop it fairly quickly.

And this, this is just a thing in Sweden, where, again, showing that it really doesn't do much harm, except for the one child that did die had COVID-19. So that's not that, you know, one again, going back to that, you know, we're looking at 190 children die in the US every year from the flu and only 30 from COVID.


So I feel good about that. But older age, folks, what do you think…

Matt: Yeah, yes. So one of the things we were watching was if that death rate was going to creep up was that in the early days, especially in New York, there was a disaster in nursing homes and a huge number of the deaths. I think when we were around 80,000 deaths, I think 40,000 of them were out in nursing homes. So New York made bad decisions about how they move people around. And it was real problem.

So if you wanted to say, hey, we've got cases growing, but maybe deaths won't get that bad you could, one of the things we may have learned, would have been not to let it spread in nursing homes the same way. But some of the numbers out of you know, Phoenix and San Antonio, these trouble areas look like things are getting bad in nursing homes there. So not a good sign. For those places, not a good sign for the future of those death numbers. But we'll again…

We'll have to see. It's one way things could… those death counts could turn up would be those nursing home numbers. And we know you know, we know it's not good for older people but ideally, we could have kept it out of there a little better.

Doc: Yeah, and just this connects to the nursing home a little bit, the idea that droplets and these virus particles on large particles and small particles. Large particles, gravity pulls them down sooner. Small particles stay and float in the air. And these are water droplets. These are virus particles that are connected to water and not connected. And they float in the air just like dust. They're light enough that air currents keep them supported. If you're in a room where you got these things circulating over and over and over again, it doesn't matter if someone sneezed on this end of the hallway, they drop down, this stuff will eventually circulate. So if you're hanging out in a nursing home, where one person or two people get it, the whole nursing home is going to get it and then many people are going to die and that is what happened in New York. And that is something to consider and it is one of the advantages of masks. So…

Matt: Yeah, masks. Outside. Should be good.

All right, yeah, here we go, masks.

So this is from Goldman Sachs and some other sources just backing up some of the things we've said, Look, if you… As the prevalence of using masks goes up, the number of case… the case growth goes down, right? As the amount. As the decline in restaurant attendance goes down, the case count goes down. So, if you're looking for where there's going to be trouble, if you're looking for how to avoid trouble, don't go to restaurants or do wear a mask. Those things are clearly having effects across states and across different locations.

Doc: And this is just a fun shot to show you. You know, the parents and young kid's got it, but the youngest doesn't have a mask. I would point out in the back, Mickey Mouse doesn't have a mask on nor does Walt Disney statue have one.

Matt: So we're really working. We're moving into the economy stuff now and reopening. And this is a very interesting visualization. The red is the percentage of the population where restrictions were increasing, right. So we went from kind of nothing and then everything got worse. And at this point, you know, about 95% of the population was seeing increasing restrictions, and then it is now blue is the reopening This is when the percent of the population was seeing easing restrictions. But late June here, you know, we're seeing, let's see, let's say 40 to 80. So about 40% are now under increasing restrictions. California's shutting, not doing a full shutdown, but they're shutting down more restaurants and bars. I think Texas doing some of the same things. So now the reopening is turning into the re-closing for 40% of the population.

Matt: This I don't know how many listeners, readers I don't know are familiar with Philip Tetlock, he's got a book and he's done research called Superforecasting. And he tries to figure out what makes some people good at predicting things and other people are not. And he identifies these certain people as Superforecasters and sees why they work but, but the superforecasters predict things on the website. It's really an academic product… project. But if you see now, most of them are predicting that we'll have 25 million doses of a vaccine between April 1 and September 30 of 2021. That's the line coming here. That's where they're sort of converging.

So we'll see if they get it right. I don't know. I'm more interested just to see if they get it right rather than if… to use this to find that one. We'll have a vaccine but that's also a pretty wide, a pretty wide window. And there's been good data this week for Moderna and those things are progressing, but I think end of July they'll start their phase, go straight to phase three. But still a long way to go from there. We'll see if they beat the herd immunity race.

All right, so let's get into some economic stuff.

This is a chart that was pointed out by Bullard from the from the Fed. And, you know, the markets have been on this great run. And this Economic Surprise Index shows how the economic data came out in relation to expectations, right? So yeah, you know, after the shutdown here, when things reopened up these economic surprises were huge, right? So news was bad, but compared to what you would have expected, they were really good. And this is, you know, this is well beyond the normal variation in the news as the annotation says. So that sort of supports why the market has been doing so well. But is this going to continue is kind of our next question, and we'll start to look at.

This is small business revenue relative to the baseline in trouble states: Arizona, Texas, Florida. And we see this huge drop when everything shut down. We see them coming up during the reopening and now sharp turned down, they're off 25%, 23%, 60%.

But if we look at safe states, they came way down, didn't really come back up and they're still way down. So New York stood out 35%. Washington State 23%. New Jersey 21%. So none of these things look good for small businesses across the board.

Doc: Hey, Matt, go back wants to the troubled states. I'm just curious and actually it shows up on the other side, too. But what… Do you recall what was going on in the first sort of maybe February 5 or February 16. Why that the big hump in there where it jumps up 10% to 12%. Any idea what was happening?

Matt: I don't know, Doc. February seems like a lifetime ago.

Doc: Seems like a whole couple years ago. Yeah. Same hump there. I never noticed that.

Matt: Yeah. Interesting. Yeah, I don't know. But um –

Doc: So go back, I just want to I want to highlight what you were saying with the trouble states. Sorry. Next slide where. So these are states that are in trouble now and then go to the better, safer states. just point out they're still down 20%, 25%, 30%, 35% from baseline of zero, in spite of now being safe for a month, if not longer. So yeah.

Matt: So you either reopened and reclosed or you never reopened and you didn't get much recovery there. So the V shape is not it's not happening in small business revenue. Right?

And as far as people, you know, what are we on for months now of mortgage payments or rent payments depending on in you know, for people who may or may not have had a job. So, I think we add these up you get 16% of people are worried about making their mortgage payment. I'm sure the numbers on rent have to be worse because of who's been affected by these unemployment numbers.

Doc: Matt, what's interesting on the mortgage stuff, I have two friends who have restaurants who don't own the buildings they're in, but I also happen to know the landlord who is the same landlord for both of them. And he's a multi business landlord guy.

He has given them reprieves on their business payments, their rents, and he still has mortgages and he still has payments to make. He's now becoming cash poor and going broke, certainly liquid liquidity problems, but he's actually convinced these restauranteurs to stay longer. They're ready just to throw in the towel and go bankrupt because all they can do is have some people outside, they're barely covering half the amount of revenue they had with half the staff, and they're gonna throw in the towel. But they're gonna stay on and kind of stick around till the fall to see if things do change up with the hopes that could turn around. But again, both parties are like, alright, well, I'll stay if you have to pay less rent. And they're like, well, please stay because I need some rent. And no one's really, you know, they're all going negative on their cash flows, everyone.

Matt: So there's a chart… I think that's encouraging news to me, in a sense. There's a chart I saw about forbearances on mortgages is off the charts and you think I mean, you know, everybody's losing out.

And if their restaurants losing out, but if they go out of business, the landlord's not in any better shape, they're still not collecting anything. So they can, they can give a little forgiveness and, and share some of that burden. And then they can go to the bank and say, look, if you're gonna default on me, that's not any better for you either. So there is some play in the system and hopefully, you know, we don't have a lot of shuttered up businesses that we don't that we don't need to have.

So it's resilient. You know, that's what's good about a capitalist economy, right? People find a way to muddle through.

Doc: Both all parties win.

Matt: Yeah, well, all parties lose a little maybe.

Doc: Lose left.

Matt: Yeah in this case.

So this was interesting survey. So you know, we talked about what's going to happen in the long term with people working from home. Are we going to need less office space? Is the end of commercial real estate? And so this is a survey of businesses.

And what they expect to have their square footage look like in the future. And really the big thing here is that 80% say they're going to have no change, right? Because either they expect people to come back, or people are going to need more square footage to accommodate social distancing and things like that. Maybe we're not going to pack people in these big open offices anymore. So in the end, businesses are expecting no change, expectations may change. But you know, the office REITs and things like that are trading pretty cheaply. So maybe there's an opportunity there that we'll be looking into if you've got the guts to jump in.

But we are seeing bank earnings. What are the banks doing? They're setting aside $28 billion for loan losses, which is a big, big number. I'm not necessarily talking about bank stocks as an investment, but I've been very impressed with the health of the banks, you know, post financial crisis reforms.

They look really solid, really stable. Probably most of them except Wells Fargo are going to continue their dividends. I really like the de-risking of some of these things that we've seen both thanks to regulation and thanks to I think the banks were on board to do it. I don't think they want it to be so risky anymore. But they're setting aside $20 billion, which is a big number. So, so some losses coming.

And if you look at analysts estimates for earnings, you know, going all the way back to the financial crisis, the spread, you know, so from the most optimistic analysts and the most pessimistic has never been this large. They're, you know, operating in the dark. Who knows what's going to happen. A lot of confusion about what will come up. Now to me, that means if you can, if you can come up with a better idea, there's lots of opportunities out there. But it is hard to do, but they're fun to find.

And job openings rolling over. So you know, we've had some good job numbers, people coming back to work from places that had shut down and now reopening, but job openings are now on the decline by 30%. Not an encouraging thing. One of the things we're looking at is there's all this noise in the job data of the places that shut down into people that come back. But what's going on really, you know, with job growth with what you would normally see an economy there's not a lot of positive numbers there.

So there's kind of like these two tracks on the economy of the virus shutdown and the reopen. And then there's, you know, the slow burn towards a recession and how bad that's going to be sort of when you get this this noise taken care of. So it doesn't look too positive right now, but we'll see how far things go.

Let's see what's this? This is just some federal deficit and debt projection. So this was the projection here before things got bad. And now here's what it looks like as a percent of GDP. Deficit for the year of 15% of GDP, which is just huge.

Tack that on as so deficit is, you know, the whole year in each year on your spending and the debt is how it adds up over time. So we're looking at a jump from 98% of GDP deficit to 124%, which is a big this chart doesn't look that scary, but wow, that is a that's a big number. So that's not encouraging.

And now, so we did virus. We did the economy. Now let's talk a little bit more specifically about markets. This is really interesting. So you can trade dividend futures separate from the indices, and by looking at those prices, you can see what the market expects dividends to be. So the dividends on the S&P 500 before all this trouble look like they would be here in the $60 to $70 per share at the worst in April, it looked like they were going to drop precipitously.

Now if you look at them, they look a little bit healthier. But still, we're gonna see some dividend cuts, you know, interesting stuff for income investors like we are and Income Intelligence and some of our other advisories. But okay, so take these dividends, though, and look at the net present value for the next 10 years. Oops, wrong way.

So over time, that's been a pretty good predictor of the S&P 500. Right. Dividends are certainly part of the value of stocks. But now that's diverged, right? So the S&P has shot up net present value back –

Doc: So go back and explain this chart again. So the light blue line, no, sorry the one you were on.

Matt: Oh, sorry. Okay. So this is the S&P 500 the light blue line. If you take the net present value of 10 years of dividends, right? So in effect, you're saying what are the dividends worth? They've been worth a consistent share of the S&P 500. They track together not all the time, but pretty closely. And if anything, the dividends have been worth well, they haven't been worth more because they're on this different axis here. But now the value of those dividends, net present value of those dividends has increased as things have looked a little bit better. But the market has increased at a higher rate. So it looks like there's a divergence there. You know, the current value of the S&P 500 has diverged from the value of expected dividends. And that could mean the S&P is too high. I could mean dividends don't matter so much anymore. Or could mean you know they'll do just a little bit of a you know, we've seen some divergence before and they'll come back together or maybe dividends will rise.

You know, we've talked a lot about how the market is really richly valued especially given the economy so I would think this is this is too high here the S&P, but we'll have to see.

And to close, Doc, go ahead.

Doc: Yeah, yeah. So Matt, I know you risk your wrath, your attempted wrath by talking about this.

But I wanted to point out, these are two different countries – the UK and Sweden – where at around the similar time, one of them locked down the other has not, and both have not been that great, but relative. I find it interesting that superimposed upon each other, the number of deaths per million in the population is out the same over the same period of time.

I just want to throw it out there with this idea that... Matt can take a swing at me with his bat and make a different case about it. But really my point is, I find it fascinating that there is a natural sort of shape and slope of decline.

And these are countries that did two different things even though I don't want to steal your thunder, but you're gonna say these things, but just go ahead.

Matt: I don't think this is a fair comparison because you, not you but just because this chart has the UK on there. So this is saying, oh look Sweden's a success story because it's about as bad as the UK and they didn't have to lock down but Sweden is the seventh worst in the world on deaths per million and UK is the fourth. Okay, so you can put almost any other country on there and you would say, look, Sweden's decision to not lock down looks actually really bad.

If you put Europe on there, they're deaths per million is about 220 so Sweden's about twice as bad. If you put the other Nordic countries on there, they're at about 50 per million. So Sweden's 10 times as bad. Also Sweden's economy as retracted just about on par with everywhere else in the world because we've pointed out in a few instances that people are afraid of the virus. They're not going out and spending not because they're told not to, but because they are afraid to. And the Swedish disease health minister whatever his title is Tegnell who is – and I might be pronouncing that wrong – who has been in charge of this has essentially said no, we didn't do the right thing. We should have done stuff more like the rest of Europe. So the UK on here is a false comparison. Lockdowns do work to reduce deaths and slow virus spread. I mean, there's no way that they don't. Is the cost worth it is another question. But if you have a communicable virus and you have people stay at home, they don't communicate the virus. It's pretty simple.

Doc: But how can you make a claim that in different countries, the ultimate accurate, recorded based on what someone truly died from COVID-19 would be different from country to country?

Matt: I'm not claiming that there's a different method of counting. I'm saying, Sweden's not a success story, and their lock down because you're comparing a poor a poorly performing country against another poorly performing country here. I am not going to… I wasn't intending to get –

Doc: So what's the different between these poor performing number four and seven and somebody who's performing at 100 per million or 50 deaths per million? You think that the genetics in those groups are different? And that's why less are dying? Or why do you think?

Matt: Well, the worst performing countries in the world are, aside from some very small ones that are kind of outliers, are the U.S., Brazil, Sweden, UK, and those are the countries that denied it was a problem. Said this isn't anything to worry about. It's not going to come here. We don't have to do anything about it. They acted late. They didn't get their testing up. And the countries that performed well, were the ones that did have early lock downs. Now again, with the benefit of hindsight, I don't think if as long as your case numbers are low, I don't think you need lockdowns. I think you need masks and social distancing. And that's enough.

Now, at the time when we thought the fatality rates were higher, and we didn't know a lot about it, you know, lockdowns weren't a terrible decision. They were a fair decision for the time, but I don't think we need them. But the countries that had you know, South Korea, New Zealand, a lot of Europe, you know, Europe x, Italy, I guess you can say and the UK, who admitted this was a problem got their testing up, got their tracing up, encouraged mask use instead of denying it. Those countries have a curve that is now down and they can reopen carefully, like in a way that we cannot.

So that's the difference between the successful countries, admitting it's a problem is the difference between the successful countries now, which doesn't seem to be that surprising.

Doc: Yeah. So forget about this graph for a minute. Let me ask this question this way. And it's kind of related to this. But do you think that in the countries that are restricted in with masks that ultimately at the end of the day, let's say there's no vaccine that's produced, go through three years of this and eventually covers all countries and all people in the world. Do you think that the death rates would end up being the same?

Matt: Oh, yeah. So okay, so again. So if there's no that you're saying if there's no vaccine, and the only way out of this is herd immunity, are gonna all end up with 500 per million or something. Whatever the number is.

Doc: Yeah.

Matt: So that's going to be non linear, right? Because if you look at what happened in China and Italy, where their health systems were overrun, they did have 5% fatality rates, right.

And if your health system gets overrun, you're going to see the fatality rate increase substantially. And we're at risk of that now in Texas, and some parts of Florida. And you know, this 9% to 15% that is hospitalized, they're not going to be able to be hospitalized. And there's going to be more deaths that did not need to happen. So we're back to flattening the curve. And that's important, but if the countries that are problems now cooperated and did some of the same things, we could have choked, we could have essentially extinguished this. And now New Zealand can do whatever they want. They don't let in people with the virus. They're totally in the clear. We could have done that sort of on a global basis by just choking it off. Get the R under 1 and it goes away.

Doc: Interesting questions. Alright, so we threw this in there. This was a question from a reader that came in there – that slide there at the end. They wanted us talk about these issues a little bit. So thanks for that.

So Matt, you and I were talking earlier. I think we're going to wait and do the next one two weeks from now. We're going to take a break from focusing on the weekly stuff so we can dive in deeper on a few other issues.

Matt: Yeah. You know, we used to just, what's the news of the week? What's the news of the week? And I think the way the flow, the way things come out now, has changed. So instead of just checking in and seeing what happened this week, we're going to try to dive in deeper. I've got a bunch of topics I'd like to think about whether there's news now. Well, we won't get into them now because we'll probably just keep talking about them then. But yeah, so we'll do two weeks from now and maybe every two weeks after that. And hopefully we can just get deeper and better. And help people understand things instead of just blasting you with forty different topics at once.

Doc: Yeah. And so if you do have feedback for us on things you think would be useful for us to dive into, please let us know that as well, if you have questions. And just us know at

That stands for, by the way, Retirement Millionaire. That's our internal three-letter code for our newsletter, Retirement Millionaire. Updates – you can get them at It's a daily piece, five days a week and then on weekends. Share that. Spread that around. It's a free letter that we try to get people to taste our content and taste what we're doing. And then pay us for our work so we can eat takeout during the COVID thing.

What else? Anything else, Matt?

Matt: That's all I can think of.

Doc: Alright. Thanks for being easy on me this week.

Matt: No. Thanks for letting me say my peace.

Doc: Take care.

Matt: Bye.