Covid-19 cases are rising, especially in the south. Three weeks ago, my wife and I headed to South Carolina and beyond, where restrictions were limited and nobody we met knew anyone who had gotten sick (see Having a Better Pandemic in Charleston, SC). Masks were scarce, inside dining was permitted and it seemed like the old days. It was a glorious break from New Jersey with its opaque lockdown process and intermittent minor relaxations. However, rising infections in the south are causing some to suggest that people have been too relaxed in their efforts to avoid infection.
Covid-19 has become a political issue, so voting affiliation tends to color people’s attitudes. The New York Times recently posted two graphs that can be harnessed by each end of the political spectrum. The Liberal narrative focuses on the early under-counting of deaths because of insufficient testing (noted below the charts) and the uptick in infections. Covid-19 has killed even more people than we thought, and is spreading.
The Conservative perspective looks at the earlier understated number of deaths, which are now being more accurately counted because of more widespread testing, and sees an even faster decline in fatalities. Moreover, the increase in infections doesn’t seem to be arresting the decline. This suggests that we’re simply finding more infected people, because we’re testing more, and not that it’s getting worse. Treatments are improving too, leading to better outcomes.
Since it’s become a political issue, both sides can use the data to argue their case.
The median age of those testing positive is trending younger. In some counties in Texas, the majority of the positive tests are now people below thirty. Dr. David Persse, public health authority for the Houston Health Department, said, “It is my current theory that elder persons have become more vigilant in taking precautions,”
This sounds plausible, since older people are far more vulnerable to suffering serious illness or death from the virus. And the rising rate of infections among young people could reflect their confidence that, even if they contract the virus, their symptoms will most likely be mild or even non-existent (asymptomatic). We’re all growing weary of social distancing with its myriad restrictions on life as we knew it. Younger people seem to be increasingly willing to risk infection, since any negative consequences are likely to be mild.
This highlights the problem with requiring low-risk people to follow behavioral rules that protect others that are more vulnerable. It doesn’t seem much to ask in theory, but drinks at a bar with friends can easily seem a long overdue and justified proposition.
San Antonio mayor Ron Nirenberg also believes social distancing is being harmfully ignored, “While they may survive an illness, younger people are going to be stuck with a pretty hefty medical bill at the end of it.” That doesn’t sound like a compelling incentive – hence states like Texas are forced to reconsider how they impose social distancing.
But there’s a problem with this interpretation that age groups are adopting risk-based behavior. For Dr. Persse to be right about older people more successfully protecting themselves, you’d expect to see young people represent a bigger proportion of deaths and older people less. But this data is fairly stable. It looks to us that we are simply identifying more infected people because we’re testing more. Some may argue that deaths are a lagging indicator, but CDC data shows the same stable pattern for hospitalizations too. Although more young people are being counted as infected, the proportion of young people getting seriously ill or dying is not rising.
Early estimates of the Infection Fatality Rate (IFR) from Covid-19 were in the 3-4% range, based on data from China that assumed no asymptomatic spread. The New York Times article opens with 2.3 million+ cases and 120,345 deaths, implying an IFR as high as 5.2%. Projecting these IFRs across wide swathes of the U.S. population imply many millions of deaths, so it’s easy to see why governments took aggressive steps to protect people. But now we know that asymptomatic spread is high, which has greatly increased the infection rate. The fatality rate has correspondingly fallen as a result.
A recent paper from Stanford University (The infection fatality rate of COVID-19 inferred from seroprevalence data) has not yet been peer-reviewed, following recent practice to publish first with that caveat, in the interests of sharing analysis quickly. Serology tests estimate the infection rate across a population by looking for antibodies in blood tests. The Stanford paper uses data from 23 such studies, and arrives at an IFR of 0.04% for people under 70. This is why young Texans are drinking in bars and failing to follow social distancing. They probably take more risk getting home from the bar than when they’re inside.
The information provided is for informational purposes only and investors should determine for themselves whether a particular service, security or product is suitable for their investment needs. The information contained herein is not complete, may not be current, is subject to change, and is subject to, and qualified in its entirety by, the more complete disclosures, risk factors and other terms that are contained in the disclosure, prospectus, and offering. Certain information herein has been obtained from third party sources and, although believed to be reliable, has not been independently verified and its accuracy or completeness cannot be guaranteed. No representation is made with respect to the accuracy, completeness or timeliness of this information. Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.
References to indexes and benchmarks are hypothetical illustrations of aggregate returns and do not reflect the performance of any actual investment. Investors cannot invest in an index and do not reflect the deduction of the advisor’s fees or other trading expenses. There can be no assurance that current investments will be profitable. Actual realized returns will depend on, among other factors, the value of assets and market conditions at the time of disposition, any related transaction costs, and the timing of the purchase. Indexes and benchmarks may not directly correlate or only partially relate to portfolios managed by SL Advisors as they have different underlying investments and may use different strategies or have different objectives than portfolios managed by SL Advisors (e.g. The Alerian index is a group MLP securities in the oil and gas industries. Portfolios may not include the same investments that are included in the Alerian Index. The S & P Index does not directly relate to investment strategies managed by SL Advisers.)
This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involves a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of SL Advisors LLC or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made. r
Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with SL Advisors LLC with respect to any linked site or its sponsor, unless expressly stated by SL Advisors LLC. Any such information, products or sites have not necessarily been reviewed by SL Advisors LLC and are provided or maintained by third parties over whom SL Advisors LLC exercise no control. SL Advisors LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.
All investment strategies have the potential for profit or loss. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable or profitable for a client’s investment portfolio.
Past performance of the American Energy Independence Index is not indicative of future returns.