29/5/20: COVID19 Data: One Hell of a Mess

I haver compiled a summary of all COVID19 data for top 50 countries (all countries with more than 10,000 recorded cases as of May 29, 2020). Here are thee tables. Alphabetically, in 2 tables:

So, here are interesting observations:

• Out of 50 countries only 11 countries are statistically 'average' or statistically 'normal'. All other 39 countries are statistically distinct from the average. Note: I am using 95 percent confidence level, adjusting for non-normal distribution.
• Of these 39 countries, 21 countries are performing significantly better than average in terms of pandemic severity (in official numbers terms), and 9 are performing significantly worse.
• 9 countries present an ambiguous case, when compared to the average.

Key takeaway from this: there is, basically, no point of talking about 'normal' experience with  COVID19 numbers. The system of this pandemic is extremely VUCA - high volatility, uncertainty, complexity and ambiguity of data and data dynamics imply that countries comparatives are at best handled with extreme care and on a case-by-case basis, as opposed to by referencing global averages.

Non-normality of data is severe and should steer analysis toward the median as a more valid (but still poor) central tendency measure, rather than the average.

Incidentally, as an aside, this calls into question all and any linear models that are being fitted to the COVID19 data, as, for example, in the case of the infamously bizarre research from JP Morgan claiming no changes in R0 rates during- and post-lockdowns.

Here is an illustrative case: Russia. Russian stats on COVID19 have been throughly washed through the Western media with usual scepticism and allegations that Kremlin is manipulating the data. Statistically, however, Russia is an outlier that is close to some semblance of a norm (especially considering the median).

Here is a summary:

In other words, Russia is somewhat 'normal' in the number of cases detected per 1 million population, and in death rates per 1 million of population, but 'abnormal' in having low reported death rates per case identified. There are 7 countries amongst top 50 case countries that have lower death rates per 1,000 cases, but statistically, there are 20 countries that are indistinguishable from Russia in terms of deaths per 1,000 cases reported. 

Go figure... the data is a fine mess.


Update: for the sake of explanation, the above 'exercise' using Russia is not to imply that all is 'normal' in Russian stats in some ethical or policy-based sense. It is simply to show that even outliers cases of data, like Russia, can be understood to be 'normal' based on simplistic use of statistics. COVID19 pandemic data across a range of countries is of deeply questionable value due to the lack of standardised methodologies in collecting, identifying and reporting data, due to endogeneity problem in terms of reported cases and tests deployed as well as the quality of tests deployed, due to weaker reporting systems across a wide range of economies, and potentially due to political manipulation of methodologies and reported statistics in a number of countries and sub-national jurisdictions. 

28/5/20: America's Scariest Charts Updated

It is Thursday, so time to update U.S. initial unemployment claims counts and labor markets charts for the data through the end of last week:

A summary table first:

Per latest, initial unemployment claims increased in the week through May 23rd by 1,914,958, marking a major slowdown on the previous weeks' increase, but still running new unemployment claims additions at a rate in excess of 1 million per week, for the 10th consecutive week.

This means that from the start of March 2020 through the week ending May 23rd, total number of initial unemployment claims filed in the U.S. stands at 37,198,539. For comparison, cumulative jobs losses in all recessions since 1945 and through the recession of 2009-2010 amount to 31,664,000.

Adjusting for timings of new unemployment claims and for the most current data on actual non-farm employment, the chart below provides an estimate for current non-farm employment in the U.S.:

Current estimated non-farm employment is at 121,021,000, down from 152,442,000 in February 2020. Current employment, therefore is estimated at around the levels last seen in October 1997.

The chart below plots the history of the initial unemployment claims, using 26 weeks (half-year) cumulative:

In the entire history of the data series for initial unemployment claims, prior to COVID19, there is only one week in which total claims exceeded 1 million mark, the second week of January 1982, when the new claims hit 1,073,500. During the Great Recession, the worst week for initial unemployment claims saw claims rising 956,791. Over the last 10 weeks, the average weekly initial claims filings stood at 3,719,854, which is roughly equivalent to five worst weeks of the Great Recession combined (weeks of 27/12/2008 - 24/01/2009).

Here is a chart showing U.S. employment index across past recessions and post-recession recoveries:

27/5/20: Falling Velocity of Money

Despite massive money printing by the Fed in the years post-GFC and again since the start of the COVID19 pandemic, velocity of money in the U.S. is actually shrinking.

The latest bout of falling velocity of money started with what appears to be a new wave of precautionary savings by the households:

However, as the chart above also indicates, propensity to trade financial and real assets has been declining in recent years, from the start of the Global Financial Crisis on.

You can see a massive spike in precautionary savings in March 2020 in the following graph:

These charts indicate that the Fed's ability to support demand side of the economy is declining, as consumers have been drastically reducing their willingness to spend. They also suggest that investment markets liquidity has declined over time. All together, the above charts show the declining effectiveness of monetary policy in the age of ultra low interest rates.

27/5/20: Germany: Employment and Business Activity Show Gentle Uptick in May

Germany employment conditions improved slightly in May, based on ifo Institute survey:

The gains are in line with the Business Activity survey results:

However, both business expectations (major driver of improvement) and current conditions (remaining deeply under water and actually still deteriorating in May) are well below 2009 crisis reading:

26/5/20: Franco-German Eurobonds: A First Step on the Road to Federalism

My recent article on the Franco-German proposal for Euro bonds for The Currency: https://www.thecurrency.news/articles/17392/france-and-germany-have-proposed-a-e500m-fund-to-shield-european-economy-what-does-it-mean-for-ireland.

26/5/20: COVID19 Impact on Travel and Consumer Demand

Some dire numbers from Factset on changes in consumer preferences / sentiment through March-April 2020:

• "According to The Conference Board, consumer confidence has weakened significantly with the overall index falling from 118.8 in March to 86.9 in April, the lowest reading since June 2014." 
• "... older Americans (aged 55 and over) are much less optimistic than survey respondents under 55. This poses a problem as we look to economic recovery... [as] households in which the head of household is 65 years old or older represent 22% of total household expenditures in the U.S. In addition, this age group dominates spending at full-service restaurants and travel and lodging."

Things are getting worse in travel and transport sectors:

• "According to the International Air Transport Association, global air travel was down 52.9% in March compared to a year earlier, hitting its lowest level since the Global Financial Crisis."
• "In the U.S., jobs in air transportation fell by 27.4% in April."
• "The four major U.S. airlines—American, Delta, United, and Southwest—are prohibited from laying off or furloughing workers until after September 30 as a condition of receiving billions in payroll assistance as part of the CARES Act. But these carriers have been asking employees to take voluntary unpaid or lower-paying leaves, reduced hours, and early retirement."

On travel sector:

• "The April consumer confidence survey shows that just 31.9% of respondents intend to take a vacation within the next six months. This down from 54.9% in February and is the lowest reading ever in the 42-year history of this survey question."
• "We only have monthly personal consumption data through March... In March, consumption on accommodations was down 43.3% compared to February while air transportation had dipped by 53.5%." 

26/5/20: BRICS Growth Forecasts

BRICS and other major emerging economies: growth impact of COVID19

Note: Arrows indicate the change in Bloomberg consensus forecasts for growth and inflation from 2019 to 2020

Source: Bloomberg, Macrobond Financial, Danske Bank

25/5/20: Russia COVID Data Update

Updating Russia COVID19 charts:

Key takeaways:

1. Death rates remain very low by comparatives with other countries, but rising, albeit slowly.
2. Even with one day ahead for Russian data compared to Brazil data, Brazil has now overtaken Russia in total number of cases (363,211 in Brazil vs 353,427 in Russia, and that does not account for higher rates of testing in Russia) and deaths (22,103 in Brazil against 3,633 in Russia). Even adjusting Russian cases for alleged under-reporting, Russian deaths stand at around 5.450, well below those in Brazil. 

There have been numerous theories advanced by different sources as to the Russian deaths being so low. Some are conspiracy-based, e.g. 'Putin is forcing suppression of real numbers', some are methodological, e.g. Russia is reportedly using much higher rates of autopsies in the case of suspected COVID-linked deaths, allowing them to detect better primary causes of deaths. I do not have any information to confirm or deny any specific source, so no speculating from my end. Hence, I report both adjusted and unadjusted/reported numbers in the second chart above.

Here are the BRIICS comparatives:

And for those interested, comparatives to G7+:

For political reasons - re: lack of civilised discourse being feasible on the topic - I do not run comparatives between Russia and other ex-USSR states. 

25/5/20: U.S. vs EU27 COVID Data Update

Updating key charts comparing case counts and deaths relating to COVID19 in Europe vs U.S. Comments in the charts:

Key takeaways:

1. U.S. is leading EU27 in deaths per capita
2. U.S. new cases continue to grow faster than those in the EU27
3. U.S. new cases continue to run at above 20,000 per day for 5 days in a row through May 24th
4. Local peak of 25,434 new cases was registered on 21/05/2020 which marked the highest number of new cases since 14/05/2020.

25/5/20: World COVID Data Update

Here are the key charts - with comments in the charts - reflecting the latest world-wide data on COVID19 cases and deaths:

There are two key takeaways from the above:

1. There is no peaking of new cases arrivals in daily case counts terms. There is an ongoing shift in new cases from advanced economies to the emerging economies.
2. Earlier and more effective detection on new cases, coupled with time lags between deaths and cases recorded means that we cannot, for now, conclude that the death rate from COVID19 has peaked worldwide.

24/5/2020: Trumpassery of Coronavirus

Nero, Rome, burning, all the sort of historical stuff... so, behold the Trumpassery amidst Covid19... (click on the cart to read details):

25/5/20: Irish Employment: COVID19 Effects

Irish data on employment and labour force reported by CSO now comes in two streams: one is COVID pandemic-ignoring, and one accounting for potential effects of the pandemic. Here is the latest release snapshot, covering 1Q 2020:

Not to challenge CSO on their methodology that is based on a cautious interpretation of the COVID19-related new unemployment assistance claims as not being fully reflective of traditional unemployment. However, it is worth doing a simple exercise: taking data reported in the labour force survey for the period of January-March (1Q) 2020, and combining this with April 2020 monthly unemployment claims data. Here is what we get:

• Officially, per 1Q data, there were 2,353,500 people in employment in Ireland at the of March 2020. 
• COVID-19 adjusted, the above number was down to 2,070,371.
• In April 2020, Number of persons out of work, estimated to include COVID-19 claim was 694,683, up 312,372 on March figure.
• Adding April unemployment estimate to 1Q 2020 COVID-19 adjusted estimate of those in employment, estimated April 2020 employment levels in Ireland should be at around 1,758,000.

As illustrated in the chart: