Market Madness in the Pandemic
Why are investors rushing to buy junk?
By Paul Krugman
After all these years, Hertz is No. 1 again. Not in market share: The car-rental company is a distant second to Enterprise. But Hertz has become Exhibit #1 of the madness that has been sweeping the stock market in these times of Covid-19 — a madness that may do considerable harm, not because stock prices themselves matter all that much, but because Donald Trump and his minions treat the stock market as a measure of their success.
About Hertz: Last month the company, which is deeply in debt and has seen its business plunge amid the pandemic, filed for Chapter 11 protection. This is a form of bankruptcy that keeps a company operating by restructuring its debts.
But while companies that enter Chapter 11 often survive, their stockholders are normally wiped out. So Hertz stock should have become more or less worthless.
Sure enough, Hertz’s stock price fell from more than $20 in February to less than $1 in early June. But then a funny thing happened: Investors suddenly piled into the stock, driving it up by more than 500 percent. And Hertz — in bankruptcy! — announced plans to raise money by selling more stock.
The Hertz story was just one example of a broader phenomenon. The run-up in stock prices that took place between mid-May and Thursday’s sudden plummet was driven, to an important extent, by investors rushing into very dubious companies — what one observer called a “flight to crap.”
Stock markets never bear much relationship to the real economy, but these days they don’t seem to have much to do with reality in general.
So what is going on in the market? Think of it as a play in three acts (so far).
The first act was the huge decline that markets experienced as the threat from Covid-19 became clear. This decline reflected justified concerns about future profits, but it also reflected a developing financial crisis: For a few weeks credit markets were seizing up pretty much the same way they did in 2008.
The Federal Reserve, however, has been there and done that. It moved quickly, buying bonds, establishing special lending facilities, and essentially doing whatever it took to lubricate markets and keep money flowing freely.
The result was the second act of the play, a stock rebound that made up about half of the losses from the initial plunge.
Up to that point the behavior of stock prices generally made sense. But then came the third act, a surge in prices that eliminated most of the previous losses and drove the Nasdaq to a new high. And this surge bore all the usual signs of a bubble.
Robert Shiller, the world’s leading expert on such things, has pointed out that asset bubbles are, in effect, naturally occurring Ponzi schemes. Early investors see big gains because later investors drive prices up, inducing more people to buy in, and so on; the party continues until something cuts off the flow of new money, and suddenly everything crashes.
So it was with the recent stock surge. Encouraged by the Fed-induced recovery of stocks from their March lows, some investors began buying. Their optimism became a self-fulfilling prophecy, as initial gains led more cautious investors to join in, driven by FOMO — fear of missing out. It looked a lot like the dot-com bubble of the 1990s, except on a vastly accelerated timetable.
Although there is some dispute about how important they were, most of the evidence suggests that a major role in this apparent bubble was played by small investors — “retail bros” — pursuing get-rich-quick dreams. Some of these exuberant investors were people who normally bet on sports and were looking for an alternative source of excitement. And as the Hertz example shows, they didn’t care much about quality.
Why didn’t large investors offset this apparent irrational exuberance by selling stocks? As John Maynard Keynes argued long ago, staid investors who usually stabilize the market tend to abdicate judgment in “abnormal times.” We are, you might say, in a time when the smart money lacks all conviction, while the dumb money is filled with a passionate intensity.
And now the bubble may — may — be bursting. But does any of this matter?
In a direct sense, not much. Stock prices surely have some impact on business investment and consumer spending, but these effects are probably small.
But the Trump team sees stock prices as the ultimate measure of policy success. Back in 2007 — on the eve of the Great Recession — Larry Kudlow, who is now Trump’s top economist, declared that things were going great, because the market was up, and stock prices are “the best barometer of the health, wealth and security of a nation.”
So the Trumpists took the rising market as validation for everything they were doing — their push for early reopening even though the coronavirus was by no means contained, their opposition to further relief for unemployed workers. In other words, the irrational exuberance of the retail bros may have enabled the irresponsibility of an administration that didn’t want to deal with reality in the first place.
And while falling stocks may provoke a reconsideration, a lot of damage has already been done.
An inexpensive drug reduces virus deaths, scientists say.
Scientists at the University of Oxford said on Tuesday that they have identified what they called the first drug proven to reduce coronavirus-related deaths, after a 6,000-patient trial of the drug in Britain showed that a low-cost steroid could reduce deaths significantly for hospitalized patients.
The steroid, dexamethasone, reduced deaths by a third in patients receiving ventilation, and by a fifth in patients receiving only oxygen treatment, the scientists said. They found no benefit from the drug in patients who did not need respiratory support.
Matt Hancock, Britain’s health secretary, said National Health Service doctors would begin treating patients with the drug on Tuesday afternoon.
The government started stockpiling dexamethasone several months ago because it was hopeful about the potential of the drug, Mr. Hancock said, and now has 200,000 doses on hand.
“Dexamethasone is the first drug to be shown to improve survival in Covid-19,” said Peter Horby, professor of emerging infectious diseases at the University of Oxford, and one of the chief investigators for the trial, said in a statement. “The survival benefit is clear and large in those patients who are sick enough to require oxygen treatment.”
Professor Horby said that dexamethasone should now become the “standard of care in these patients,” noting that it is inexpensive, widely available and can be used immediately.
Low-Cost Drug Reduces Coronavirus Deaths, Scientists Say
A steroid, dexamethasone, is the first drug proven to reduce coronavirus-related deaths, according to scientists at the University of Oxford in Britain.
By Benjamin Mueller
LONDON — Scientists at the University of Oxford said on Tuesday that they had identified what they called the first drug proven to reduce coronavirus-related deaths, after a 6,000-patient trial in Britain showed that a low-cost steroid prevented the deaths of some hospitalized patients.
The steroid, dexamethasone, a well-known anti-inflammatory drug, appeared to help patients with severe cases of the virus: It reduced deaths by a third in patients receiving ventilation, and by a fifth in patients receiving standard oxygen treatment, the scientists said. They found no benefit from the drug for patients who did not need respiratory support….
Most Coronavirus Tests Cost About $100. Why Did One Cost $2,315?
U.S. health care prices are unregulated, opaque and unpredictable. When Congress required insurers to cover Covid-19 testing, a few providers decided to take advantage.
By Sarah Kliff
In a one-story brick building in suburban Dallas, between a dentist office and a family medicine clinic, is a medical laboratory that has run some of the most expensive coronavirus tests in America.
Insurers have paid Gibson Diagnostic Labs as much as $2,315 for individual coronavirus tests. In a couple of cases, the price rose as high as $6,946 when the lab said it mistakenly charged patients three times the base rate.
The company has no special or different technology from, say, major diagnostic labs that charge $100. It is one of a small number of medical labs, hospitals and emergency rooms taking advantage of the way Congress has designed compensation for coronavirus tests and treatment.
“We’ve seen a small number of laboratories that are charging egregious prices for Covid-19 tests,” said Angie Meoli, a senior vice president at Aetna, one of the insurers required to cover testing costs.
How can a simple coronavirus test cost $100 in one lab and 2,200 percent more in another? It comes back to a fundamental fact about the American health care system: The government does not regulate health care prices.
This tends to have two major outcomes that health policy experts have seen before, and are seeing again with coronavirus testing.
The first is high prices over all. Most medical care in the United States costs double or triple what it would in a peer country. An appendectomy, for example, costs $3,050 in Britain and $6,710 in New Zealand, two countries that regulate health prices. In the United States, the average price is $13,020.
The second outcome is huge price variation, as each doctor’s office and hospital sets its own charges for care. One 2012 study found that hospitals in California charge between $1,529 and $182,955 for uncomplicated appendectomies.
“It’s not unheard-of that one hospital can charge 100 times the price of another for the same thing,” said Dr. Renee Hsia, a professor at the University of California, San Francisco, and an author of the appendectomy study. “There is no other market I can think of where that happens except health care.”
There is little evidence that higher prices correlate with better care. What’s different about the more expensive providers is that they’ve set higher prices for their services.
Patients are, in the short run, somewhat protected from big coronavirus testing bills. The federal government set aside $1 billion to pick up the tab for uninsured Americans who get tested. For the insured, federal laws require that health plans cover the full costs of coronavirus testing without applying a deductible or co-payment.
But American patients will eventually bear the costs of these expensive tests in the form of higher insurance premiums. In some cases, they are paying for additional tests, for flu and other respiratory diseases, that doctors tack onto coronavirus orders. Those charges are not exempt from co-payments and can fall into a patient’s deductible.
Those kinds of bills could make patients wary of seeking care or testing in the future, which could enable the further spread of coronavirus. In an April poll, the Kaiser Family Foundation found that most Americans were worried they wouldn’t be able to afford coronavirus testing or treatment if they needed it….
Thinking to the column by Paul Krugman, * I have 2 questions. First, the stock market is moved primarily by institutional investors rather than small speculators and a movement of current magnitude must show institutional buying. Second, the stock and bond market rebound has meant that institutional and pension oriented investors have in general recovered all losses from the sudden decline, so why not credit the Federal Reserve for necessarily stabilizing values?
The understanding I have is that the Federal Reserve has stabilized bond and stock markets for institutional investors, and this is important in providing for general economic recovery. That there is no doubt speculation in the stock market is of little importance given the protection of pensions and non-speculative institutional portfolios.
Stabilizing markets undermines the entire purpose of price discovery and encourages even riskier behavior. Irrational behavior is encouraged as there is a positive outcome ie. Junk Bond ETFS are speculative and irrational but with a hefty Fed backstop very profitable.
CDS, MBS and other speculatve SPEs enriched all manner of speculators who were then bailed out in 2008. Speculative behavior is extremely important as not checked by incurred losses it leads to more of the same and even greater bailouts. Plus it raises the question of state sponsored capitalism where the gains are captured by the upper levels with losses transferred to taxpayers.
Here is the link for the comment I made: Coronavirus: Dexamethasone proves first life-saving drug. This is a artificial steroid like Prednisone and 6 times stronger than Prednisone. After a while (I was on it for 3 weeks) Prednisone made me a bit whacky.
Thinking through the proposed use of dexamethasone to reduce coronavirus deaths, several countries in Western Europe have experienced remarkably high death rates from confirmed coronavirus cases and I have found no explanation offered.
France, for instance, has had 29,547 deaths from 157,716 cases or 18.7%. Why might this be?
Chinese-developed inactivated COVID19 vaccine becomes first worldwide to report positive immune response
________________________________
A Chinese-developed inactivated vaccine for COVID-19 has presented positive preliminary results in phase one and two clinical trials, becoming the first vaccine candidate in the world to show favorable immunogenicity and safety.
The Wuhan Institute of Biological Products, affiliated to China National Pharmaceutical Group (Sinopharm), announced on Tuesday that the company’s COVID-19 inactivated vaccine candidate has not shown any cases of severe adverse effects in the first two phases of clinical trials.
The results show that the vaccine induced neutralizing antibodies for all 1,120 injected volunteers, aged from 18 to 59 years old. The neutralizing antibody seroconversion rate reached 100 percent, which shows the vaccine candidate can induce a positive immune response, according to a statement Sinopharm sent to the Global Times.
“It is the most comprehensive and effective clinical study of a COVID-19 vaccine so far, providing scientific data for epidemic prevention and control and emergency use in China, said the statement.
The clinical trials were designed as randomized, double-blind and placebo-controlled studies.
On April 12, the inactivated vaccine gained approval to enter the phase one and two clinical trials in Wuzhi county, Central China’s Henan Province.
Meanwhile, Sinopharm has actively promoted phase three clinical trials for overseas cooperation and is currently contacting a number of vaccine producers and research teams regarding co-developing the vaccine.
Sinopharm has also established a high-level biosafety laboratory for the production of the COVID-19 vaccine to meet the needs of emergency use.
England’s ‘World Beating’ System to Track the Virus Is Anything But
Like a lot of the country’s pandemic response, contact tracing has been hampered by inconsistency, with much promised but little delivered.
By Benjamin Mueller and Jane Bradley
LONDON — Prime Minister Boris Johnson of Britain unveiled last month a “world beating” operation to track down people who had been exposed to the coronavirus, giving the country a chance to climb out of lockdown without losing sight of where infections were spreading.
As with much of the government’s response to the pandemic, however, the results have fallen short of the promises, jeopardizing the reopening of Britain’s hobbled economy and risking a second wave of death in one of the countries most debilitated by the virus.
In almost three weeks since the start of the system in England, called N.H.S. Test and Trace, some contact tracers have failed to reach a single person, filling their days instead with internet exercise classes and bookshelf organizing.
Some call handlers, scattered in offices and homes far from the people they speak with, have mistakenly tried to send patients in England to testing sites across the sea in Northern Ireland.
And a government minister threatened on a conference call to stop coordinating with local leaders on the virus-tracking system if they spoke publicly about its failings, according to three officials briefed on the call, who spoke on the condition of anonymity for fear of retribution.
Contact tracing was supposed to be the bridge between lockdown and a vaccine, enabling the government to pinpoint clusters of infections as they emerged and to stop infected people from passing on the virus. Without it, a World Health Organization official said recently, England would be remiss in reopening its economy….
The repeatedly evident disdain of British Conservatives for public health from the beginning of the coronavirus outbreak has been scarcely criticized by Labour or the British media. I have no proper explanation of the absence of criticism, though the unfortunate absence of Jeremy Corbyn from Labour leadership has to be part of the problem.
It's truly amazing, and horrifying, that face masks — a cheap, minimal precaution in a pandemic — have become a front in the culture wars 1/ https://t.co/4Ez50URdNj
Nebraska governor: Counties that require masks in government buildings won’t get virus relief
Ricketts “does not believe that failure to wear a mask should be the basis for denying taxpayers’ services,” a spokesperson said.
axios.com
1:30 PM · Jun 18, 2020
But it fits a pattern. There’s a peculiar rage that afflicts some right-wingers when asked to bear even minor inconveniences to protect the public good. I remember Erick Erickson threatening violence over … phosphates in dishwasher detergent 2/
The rage over “cancel culture” is also, I think, part of this syndrome; some people can’t stand the idea that they should be asked to, say, avoid insulting women or minorities, as if that were a terrible imposition 3/
I’m not fully sure I understand what’s going on, but I suspect that what enrages these people isn’t the cost, but the benefit — they aren’t so much against wearing masks as against doing so *to help others*. And a lot of people die because of their pettiness 4/
Michael C. Bender @MichaelCBender
Trump to @WSJ: Covid testing is “overrated” and some Americans may be wearing masks to signal disapproval of him—not as a preventative measure. “I personally think testing is overrated, even though I created the greatest testing machine in history.”
Coronavirus cases in Germany increased by 1,122 on June 17; an unfortunate upturn stemming importantly from a factory cluster after the infection spread had appeared increasingly limited through the country:
Careless seems the great Avenger;
History’s lessons but record
One death-grapple in the darkness
‘Twixt old systems and the Word;
Truth forever on the scaffold,
Wrong forever on the throne;
Yet that scaffold sways the future,
And behind the dim unknown
Standeth God within the shadow
Keeping watch above His own.
— Lowell
The problem of the twentieth century is the problem of the color-line,—the relation of the darker to the lighter races of men in Asia and Africa, in America and the islands of the sea. It was a phase of this problem that caused the Civil War; and however much they who marched South and North in 1861 may have fixed on the technical points, of union and local autonomy as a shibboleth, all nevertheless knew, as we know, that the question of Negro slavery was the real cause of the conflict. Curious it was, too, how this deeper question ever forced itself to the surface despite effort and disclaimer. No sooner had Northern armies touched Southern soil than this old question, newly guised, sprang from the earth,—What shall be done with Negroes? Peremptory military commands this way and that, could not answer the query; the Emancipation Proclamation seemed but to broaden and intensify the difficulties; and the War Amendments made the Negro problems of to-day.
It is the aim of this essay to study the period of history from 1861 to 1872 so far as it relates to the American Negro. In effect, this tale of the dawn of Freedom is an account of that government of men called the Freedmen’s Bureau,—one of the most singular and interesting of the attempts made by a great nation to grapple with vast problems of race and social condition.
The war has naught to do with slaves, cried Congress, the President, and the Nation; and yet no sooner had the armies, East and West, penetrated Virginia and Tennessee than fugitive slaves appeared within their lines. They came at night, when the flickering camp-fires shone like vast unsteady stars along the black horizon: old men and thin, with gray and tufted hair; women with frightened eyes, dragging whimpering hungry children; men and girls, stalwart and gaunt,—a horde of starving vagabonds, homeless, helpless, and pitiable, in their dark distress. Two methods of treating these newcomers seemed equally logical to opposite sorts of minds. Ben Butler, in Virginia, quickly declared slave property contraband of war, and put the fugitives to work; while Fremont, in Missouri, declared the slaves free under martial law. Butler’s action was approved, but Fremont’s was hastily countermanded, and his successor, Halleck, saw things differently. “Hereafter,” he commanded, “no slaves should be allowed to come into your lines at all; if any come without your knowledge, when owners call for them deliver them.” Such a policy was difficult to enforce; some of the black refugees declared themselves freemen, others showed that their masters had deserted them, and still others were captured with forts and plantations. Evidently, too, slaves were a source of strength to the Confederacy, and were being used as laborers and producers. “They constitute a military resource,” wrote Secretary Cameron, late in 1861; “and being such, that they should not be turned over to the enemy is too plain to discuss.” So gradually the tone of the army chiefs changed; Congress forbade the rendition of fugitives, and Butler’s “contrabands” were welcomed as military laborers. This complicated rather than solved the problem, for now the scattering fugitives became a steady stream, which flowed faster as the armies marched.
Then the long-headed man with care-chiselled face who sat in the White House saw the inevitable, and emancipated the slaves of rebels on New Year’s, 1863….
https://www.nytimes.com/2020/06/15/opinion/coronavirus-stock-market.html
June 15, 2020
Market Madness in the Pandemic
Why are investors rushing to buy junk?
By Paul Krugman
After all these years, Hertz is No. 1 again. Not in market share: The car-rental company is a distant second to Enterprise. But Hertz has become Exhibit #1 of the madness that has been sweeping the stock market in these times of Covid-19 — a madness that may do considerable harm, not because stock prices themselves matter all that much, but because Donald Trump and his minions treat the stock market as a measure of their success.
About Hertz: Last month the company, which is deeply in debt and has seen its business plunge amid the pandemic, filed for Chapter 11 protection. This is a form of bankruptcy that keeps a company operating by restructuring its debts.
But while companies that enter Chapter 11 often survive, their stockholders are normally wiped out. So Hertz stock should have become more or less worthless.
Sure enough, Hertz’s stock price fell from more than $20 in February to less than $1 in early June. But then a funny thing happened: Investors suddenly piled into the stock, driving it up by more than 500 percent. And Hertz — in bankruptcy! — announced plans to raise money by selling more stock.
The Hertz story was just one example of a broader phenomenon. The run-up in stock prices that took place between mid-May and Thursday’s sudden plummet was driven, to an important extent, by investors rushing into very dubious companies — what one observer called a “flight to crap.”
Stock markets never bear much relationship to the real economy, but these days they don’t seem to have much to do with reality in general.
So what is going on in the market? Think of it as a play in three acts (so far).
The first act was the huge decline that markets experienced as the threat from Covid-19 became clear. This decline reflected justified concerns about future profits, but it also reflected a developing financial crisis: For a few weeks credit markets were seizing up pretty much the same way they did in 2008.
The Federal Reserve, however, has been there and done that. It moved quickly, buying bonds, establishing special lending facilities, and essentially doing whatever it took to lubricate markets and keep money flowing freely.
The result was the second act of the play, a stock rebound that made up about half of the losses from the initial plunge.
Up to that point the behavior of stock prices generally made sense. But then came the third act, a surge in prices that eliminated most of the previous losses and drove the Nasdaq to a new high. And this surge bore all the usual signs of a bubble.
Robert Shiller, the world’s leading expert on such things, has pointed out that asset bubbles are, in effect, naturally occurring Ponzi schemes. Early investors see big gains because later investors drive prices up, inducing more people to buy in, and so on; the party continues until something cuts off the flow of new money, and suddenly everything crashes.
So it was with the recent stock surge. Encouraged by the Fed-induced recovery of stocks from their March lows, some investors began buying. Their optimism became a self-fulfilling prophecy, as initial gains led more cautious investors to join in, driven by FOMO — fear of missing out. It looked a lot like the dot-com bubble of the 1990s, except on a vastly accelerated timetable.
Although there is some dispute about how important they were, most of the evidence suggests that a major role in this apparent bubble was played by small investors — “retail bros” — pursuing get-rich-quick dreams. Some of these exuberant investors were people who normally bet on sports and were looking for an alternative source of excitement. And as the Hertz example shows, they didn’t care much about quality.
Why didn’t large investors offset this apparent irrational exuberance by selling stocks? As John Maynard Keynes argued long ago, staid investors who usually stabilize the market tend to abdicate judgment in “abnormal times.” We are, you might say, in a time when the smart money lacks all conviction, while the dumb money is filled with a passionate intensity.
And now the bubble may — may — be bursting. But does any of this matter?
In a direct sense, not much. Stock prices surely have some impact on business investment and consumer spending, but these effects are probably small.
But the Trump team sees stock prices as the ultimate measure of policy success. Back in 2007 — on the eve of the Great Recession — Larry Kudlow, who is now Trump’s top economist, declared that things were going great, because the market was up, and stock prices are “the best barometer of the health, wealth and security of a nation.”
So the Trumpists took the rising market as validation for everything they were doing — their push for early reopening even though the coronavirus was by no means contained, their opposition to further relief for unemployed workers. In other words, the irrational exuberance of the retail bros may have enabled the irresponsibility of an administration that didn’t want to deal with reality in the first place.
And while falling stocks may provoke a reconsideration, a lot of damage has already been done.
https://www.nytimes.com/2020/06/16/world/coronavirus-live-updates.html
June 16, 2020
An inexpensive drug reduces virus deaths, scientists say.
Scientists at the University of Oxford said on Tuesday that they have identified what they called the first drug proven to reduce coronavirus-related deaths, after a 6,000-patient trial of the drug in Britain showed that a low-cost steroid could reduce deaths significantly for hospitalized patients.
The steroid, dexamethasone, reduced deaths by a third in patients receiving ventilation, and by a fifth in patients receiving only oxygen treatment, the scientists said. They found no benefit from the drug in patients who did not need respiratory support.
Matt Hancock, Britain’s health secretary, said National Health Service doctors would begin treating patients with the drug on Tuesday afternoon.
The government started stockpiling dexamethasone several months ago because it was hopeful about the potential of the drug, Mr. Hancock said, and now has 200,000 doses on hand.
“Dexamethasone is the first drug to be shown to improve survival in Covid-19,” said Peter Horby, professor of emerging infectious diseases at the University of Oxford, and one of the chief investigators for the trial, said in a statement. “The survival benefit is clear and large in those patients who are sick enough to require oxygen treatment.”
Professor Horby said that dexamethasone should now become the “standard of care in these patients,” noting that it is inexpensive, widely available and can be used immediately.
Hi Anne:
Perhaps “a” standard of care in these patients? 1 in 8 saved who are ventilators and 1 in 25 who are on oxygen.
https://www.nytimes.com/2020/06/16/world/europe/dexamethasone-coronavirus-covid.html
June 16, 2020
Low-Cost Drug Reduces Coronavirus Deaths, Scientists Say
A steroid, dexamethasone, is the first drug proven to reduce coronavirus-related deaths, according to scientists at the University of Oxford in Britain.
By Benjamin Mueller
LONDON — Scientists at the University of Oxford said on Tuesday that they had identified what they called the first drug proven to reduce coronavirus-related deaths, after a 6,000-patient trial in Britain showed that a low-cost steroid prevented the deaths of some hospitalized patients.
The steroid, dexamethasone, a well-known anti-inflammatory drug, appeared to help patients with severe cases of the virus: It reduced deaths by a third in patients receiving ventilation, and by a fifth in patients receiving standard oxygen treatment, the scientists said. They found no benefit from the drug for patients who did not need respiratory support….
June 16, 2020
Coronavirus
US
Cases ( 2,186,923)
Deaths ( 118,431)
UK
Cases ( 298,136)
Deaths ( 41,969)
Notice the death to confirmed coronavirus cases in the United Kingdom is a startling and distressing 14.1%.
https://www.nytimes.com/2020/06/16/upshot/coronavirus-test-cost-varies-widely.html
June 16, 2020
Most Coronavirus Tests Cost About $100. Why Did One Cost $2,315?
U.S. health care prices are unregulated, opaque and unpredictable. When Congress required insurers to cover Covid-19 testing, a few providers decided to take advantage.
By Sarah Kliff
In a one-story brick building in suburban Dallas, between a dentist office and a family medicine clinic, is a medical laboratory that has run some of the most expensive coronavirus tests in America.
Insurers have paid Gibson Diagnostic Labs as much as $2,315 for individual coronavirus tests. In a couple of cases, the price rose as high as $6,946 when the lab said it mistakenly charged patients three times the base rate.
The company has no special or different technology from, say, major diagnostic labs that charge $100. It is one of a small number of medical labs, hospitals and emergency rooms taking advantage of the way Congress has designed compensation for coronavirus tests and treatment.
“We’ve seen a small number of laboratories that are charging egregious prices for Covid-19 tests,” said Angie Meoli, a senior vice president at Aetna, one of the insurers required to cover testing costs.
How can a simple coronavirus test cost $100 in one lab and 2,200 percent more in another? It comes back to a fundamental fact about the American health care system: The government does not regulate health care prices.
This tends to have two major outcomes that health policy experts have seen before, and are seeing again with coronavirus testing.
The first is high prices over all. Most medical care in the United States costs double or triple what it would in a peer country. An appendectomy, for example, costs $3,050 in Britain and $6,710 in New Zealand, two countries that regulate health prices. In the United States, the average price is $13,020.
The second outcome is huge price variation, as each doctor’s office and hospital sets its own charges for care. One 2012 study found that hospitals in California charge between $1,529 and $182,955 for uncomplicated appendectomies.
“It’s not unheard-of that one hospital can charge 100 times the price of another for the same thing,” said Dr. Renee Hsia, a professor at the University of California, San Francisco, and an author of the appendectomy study. “There is no other market I can think of where that happens except health care.”
There is little evidence that higher prices correlate with better care. What’s different about the more expensive providers is that they’ve set higher prices for their services.
Patients are, in the short run, somewhat protected from big coronavirus testing bills. The federal government set aside $1 billion to pick up the tab for uninsured Americans who get tested. For the insured, federal laws require that health plans cover the full costs of coronavirus testing without applying a deductible or co-payment.
But American patients will eventually bear the costs of these expensive tests in the form of higher insurance premiums. In some cases, they are paying for additional tests, for flu and other respiratory diseases, that doctors tack onto coronavirus orders. Those charges are not exempt from co-payments and can fall into a patient’s deductible.
Those kinds of bills could make patients wary of seeking care or testing in the future, which could enable the further spread of coronavirus. In an April poll, the Kaiser Family Foundation found that most Americans were worried they wouldn’t be able to afford coronavirus testing or treatment if they needed it….
Thinking to the column by Paul Krugman, * I have 2 questions. First, the stock market is moved primarily by institutional investors rather than small speculators and a movement of current magnitude must show institutional buying. Second, the stock and bond market rebound has meant that institutional and pension oriented investors have in general recovered all losses from the sudden decline, so why not credit the Federal Reserve for necessarily stabilizing values?
* https://www.nytimes.com/2020/06/15/opinion/coronavirus-stock-market.html
June 15, 2020
Market Madness in the Pandemic
Why are investors rushing to buy junk?
The understanding I have is that the Federal Reserve has stabilized bond and stock markets for institutional investors, and this is important in providing for general economic recovery. That there is no doubt speculation in the stock market is of little importance given the protection of pensions and non-speculative institutional portfolios.
Stabilizing markets undermines the entire purpose of price discovery and encourages even riskier behavior. Irrational behavior is encouraged as there is a positive outcome ie. Junk Bond ETFS are speculative and irrational but with a hefty Fed backstop very profitable.
CDS, MBS and other speculatve SPEs enriched all manner of speculators who were then bailed out in 2008. Speculative behavior is extremely important as not checked by incurred losses it leads to more of the same and even greater bailouts. Plus it raises the question of state sponsored capitalism where the gains are captured by the upper levels with losses transferred to taxpayers.
I doubt they stabilized much. Shutdowns ended in late April. They are just Euphoric. Then comes the real recession.
Run:
June 16, 2020
Perhaps “a” standard of care in these patients? 1 in 8 saved who are on ventilators and 1 in 25 who are on oxygen. *
* https://www.nytimes.com/2020/06/16/world/europe/dexamethasone-coronavirus-covid.html
Low-Cost Drug Reduces Coronavirus Deaths, Scientists Say
[ An important caution: “a standard of care.” ]
Anne:
Here is the link for the comment I made: Coronavirus: Dexamethasone proves first life-saving drug. This is a artificial steroid like Prednisone and 6 times stronger than Prednisone. After a while (I was on it for 3 weeks) Prednisone made me a bit whacky.
Thinking through the proposed use of dexamethasone to reduce coronavirus deaths, several countries in Western Europe have experienced remarkably high death rates from confirmed coronavirus cases and I have found no explanation offered.
France, for instance, has had 29,547 deaths from 157,716 cases or 18.7%. Why might this be?
June 16, 2020
Coronavirus
US
Cases ( 2,208,389)
Deaths ( 119,132)
UK
Cases ( 298,136)
Deaths ( 41,969)
Canada
Cases ( 99,467)
Deaths ( 8,213)
Sweden
Cases ( 53,323)
Deaths ( 4,939)
China
Cases ( 83,221)
Deaths ( 4,634)
June 16, 2020
Coronavirus (Deaths per million)
Belgium ( 834)
UK ( 618)
Spain ( 580)
Italy ( 569)
Sweden ( 489)
France ( 453)
US ( 360)
Netherlands ( 354)
Ireland ( 346)
Switzerland ( 224)
Canada ( 218)
Luxembourg ( 176)
Portugal ( 149)
Germany ( 106)
Denmark ( 103)
Austria ( 76)
Finland ( 59)
Norway ( 45)
Greece ( 18)
https://www.globaltimes.cn/content/1191843.shtml
June 16, 2020
Chinese-developed inactivated COVID19 vaccine becomes first worldwide to report positive immune response
________________________________
A Chinese-developed inactivated vaccine for COVID-19 has presented positive preliminary results in phase one and two clinical trials, becoming the first vaccine candidate in the world to show favorable immunogenicity and safety.
The Wuhan Institute of Biological Products, affiliated to China National Pharmaceutical Group (Sinopharm), announced on Tuesday that the company’s COVID-19 inactivated vaccine candidate has not shown any cases of severe adverse effects in the first two phases of clinical trials.
The results show that the vaccine induced neutralizing antibodies for all 1,120 injected volunteers, aged from 18 to 59 years old. The neutralizing antibody seroconversion rate reached 100 percent, which shows the vaccine candidate can induce a positive immune response, according to a statement Sinopharm sent to the Global Times.
“It is the most comprehensive and effective clinical study of a COVID-19 vaccine so far, providing scientific data for epidemic prevention and control and emergency use in China, said the statement.
The clinical trials were designed as randomized, double-blind and placebo-controlled studies.
On April 12, the inactivated vaccine gained approval to enter the phase one and two clinical trials in Wuzhi county, Central China’s Henan Province.
Meanwhile, Sinopharm has actively promoted phase three clinical trials for overseas cooperation and is currently contacting a number of vaccine producers and research teams regarding co-developing the vaccine.
Sinopharm has also established a high-level biosafety laboratory for the production of the COVID-19 vaccine to meet the needs of emergency use.
June 17, 2020
Coronavirus
US
Cases ( 2,233,223)
Deaths ( 119,930)
UK
Cases ( 299,251)
Deaths ( 42,153)
Canada
Cases ( 99,853)
Deaths ( 8,254)
Sweden
Cases ( 54,562)
Deaths ( 5,041)
China
Cases ( 83,265)
Deaths ( 4,634)
June 17, 2020
Coronavirus (Deaths per million)
Belgium ( 835)
UK ( 621)
Spain ( 580)
Italy ( 570)
Sweden ( 499)
France ( 453)
US ( 362)
Netherlands ( 355)
Ireland ( 346)
Switzerland ( 226)
Canada ( 219)
Luxembourg ( 176)
Portugal ( 149)
Germany ( 107)
Denmark ( 103)
Austria ( 76)
Finland ( 59)
Norway ( 45)
Greece ( 18)
China ( 3)
Coronavirus cases in Germany were 1,797 today, an unfortunate turn:
Germany
Cases ( 190,179)
Deaths ( 8,927)
https://www.nytimes.com/2020/06/17/world/europe/uk-contact-tracing-coronavirus.html
June 17, 2020
England’s ‘World Beating’ System to Track the Virus Is Anything But
Like a lot of the country’s pandemic response, contact tracing has been hampered by inconsistency, with much promised but little delivered.
By Benjamin Mueller and Jane Bradley
LONDON — Prime Minister Boris Johnson of Britain unveiled last month a “world beating” operation to track down people who had been exposed to the coronavirus, giving the country a chance to climb out of lockdown without losing sight of where infections were spreading.
As with much of the government’s response to the pandemic, however, the results have fallen short of the promises, jeopardizing the reopening of Britain’s hobbled economy and risking a second wave of death in one of the countries most debilitated by the virus.
In almost three weeks since the start of the system in England, called N.H.S. Test and Trace, some contact tracers have failed to reach a single person, filling their days instead with internet exercise classes and bookshelf organizing.
Some call handlers, scattered in offices and homes far from the people they speak with, have mistakenly tried to send patients in England to testing sites across the sea in Northern Ireland.
And a government minister threatened on a conference call to stop coordinating with local leaders on the virus-tracking system if they spoke publicly about its failings, according to three officials briefed on the call, who spoke on the condition of anonymity for fear of retribution.
Contact tracing was supposed to be the bridge between lockdown and a vaccine, enabling the government to pinpoint clusters of infections as they emerged and to stop infected people from passing on the virus. Without it, a World Health Organization official said recently, England would be remiss in reopening its economy….
The repeatedly evident disdain of British Conservatives for public health from the beginning of the coronavirus outbreak has been scarcely criticized by Labour or the British media. I have no proper explanation of the absence of criticism, though the unfortunate absence of Jeremy Corbyn from Labour leadership has to be part of the problem.
Paul Krugman @paulkrugman
It’s truly amazing, and horrifying, that face masks — a cheap, minimal precaution in a pandemic — have become a front in the culture wars 1/
https://www.axios.com/nebraska-coronavirus-masks-f45cee42-628d-41c3-8c1f-21f8cbc383c8.html
Nebraska governor: Counties that require masks in government buildings won’t get virus relief
Ricketts “does not believe that failure to wear a mask should be the basis for denying taxpayers’ services,” a spokesperson said.
axios.com
1:30 PM · Jun 18, 2020
But it fits a pattern. There’s a peculiar rage that afflicts some right-wingers when asked to bear even minor inconveniences to protect the public good. I remember Erick Erickson threatening violence over … phosphates in dishwasher detergent 2/
https://krugman.blogs.nytimes.com/2014/08/05/phosphate-memories/
Phosphate Memories
Tyranny, or algae?
The rage over “cancel culture” is also, I think, part of this syndrome; some people can’t stand the idea that they should be asked to, say, avoid insulting women or minorities, as if that were a terrible imposition 3/
I’m not fully sure I understand what’s going on, but I suspect that what enrages these people isn’t the cost, but the benefit — they aren’t so much against wearing masks as against doing so *to help others*. And a lot of people die because of their pettiness 4/
Michael C. Bender @MichaelCBender
Trump to @WSJ: Covid testing is “overrated” and some Americans may be wearing masks to signal disapproval of him—not as a preventative measure. “I personally think testing is overrated, even though I created the greatest testing machine in history.”
https://wsj.com/articles/trump-talks-juneteenth-john-bolton-economy-in-wsj-interview-11592493771
Coronavirus cases in Germany increased by 1,122 on June 17; an unfortunate upturn stemming importantly from a factory cluster after the infection spread had appeared increasingly limited through the country:
June 17, 2020
Germany
Cases ( 189,504)
Deaths ( 8,927)
June 18, 2020
Germany
Cases ( 190,050)
Deaths ( 8,944)
June 18, 2020
Coronavirus
US
Cases ( 2,263,651)
Deaths ( 120,688)
UK
Cases ( 300,469)
Deaths ( 42,288)
Canada
Cases ( 100,220)
Deaths ( 8,300)
Sweden
Cases ( 56,043)
Deaths ( 5,053)
China
Cases ( 83,293)
Deaths ( 4,634)
June 18, 2020
Coronavirus (Deaths per million)
Belgium ( 836)
UK ( 623)
Spain ( 580)
Italy ( 571)
Sweden ( 500)
France ( 454)
US ( 365)
Netherlands ( 355)
Ireland ( 347)
Switzerland ( 226)
Canada ( 220)
Luxembourg ( 176)
Portugal ( 149)
Germany ( 107)
Denmark ( 104)
Austria ( 76)
Finland ( 59)
Norway ( 45)
Greece ( 18)
India ( 9)
Japan ( 7)
China ( 3)
http://www.gutenberg.org/files/408/408-h/408-h.htm#chap02
April 25, 1903
The Souls of Black Folk
By W.E.B. Du Bois
Of the Dawn of Freedom
Careless seems the great Avenger;
History’s lessons but record
One death-grapple in the darkness
‘Twixt old systems and the Word;
Truth forever on the scaffold,
Wrong forever on the throne;
Yet that scaffold sways the future,
And behind the dim unknown
Standeth God within the shadow
Keeping watch above His own.
— Lowell
The problem of the twentieth century is the problem of the color-line,—the relation of the darker to the lighter races of men in Asia and Africa, in America and the islands of the sea. It was a phase of this problem that caused the Civil War; and however much they who marched South and North in 1861 may have fixed on the technical points, of union and local autonomy as a shibboleth, all nevertheless knew, as we know, that the question of Negro slavery was the real cause of the conflict. Curious it was, too, how this deeper question ever forced itself to the surface despite effort and disclaimer. No sooner had Northern armies touched Southern soil than this old question, newly guised, sprang from the earth,—What shall be done with Negroes? Peremptory military commands this way and that, could not answer the query; the Emancipation Proclamation seemed but to broaden and intensify the difficulties; and the War Amendments made the Negro problems of to-day.
It is the aim of this essay to study the period of history from 1861 to 1872 so far as it relates to the American Negro. In effect, this tale of the dawn of Freedom is an account of that government of men called the Freedmen’s Bureau,—one of the most singular and interesting of the attempts made by a great nation to grapple with vast problems of race and social condition.
The war has naught to do with slaves, cried Congress, the President, and the Nation; and yet no sooner had the armies, East and West, penetrated Virginia and Tennessee than fugitive slaves appeared within their lines. They came at night, when the flickering camp-fires shone like vast unsteady stars along the black horizon: old men and thin, with gray and tufted hair; women with frightened eyes, dragging whimpering hungry children; men and girls, stalwart and gaunt,—a horde of starving vagabonds, homeless, helpless, and pitiable, in their dark distress. Two methods of treating these newcomers seemed equally logical to opposite sorts of minds. Ben Butler, in Virginia, quickly declared slave property contraband of war, and put the fugitives to work; while Fremont, in Missouri, declared the slaves free under martial law. Butler’s action was approved, but Fremont’s was hastily countermanded, and his successor, Halleck, saw things differently. “Hereafter,” he commanded, “no slaves should be allowed to come into your lines at all; if any come without your knowledge, when owners call for them deliver them.” Such a policy was difficult to enforce; some of the black refugees declared themselves freemen, others showed that their masters had deserted them, and still others were captured with forts and plantations. Evidently, too, slaves were a source of strength to the Confederacy, and were being used as laborers and producers. “They constitute a military resource,” wrote Secretary Cameron, late in 1861; “and being such, that they should not be turned over to the enemy is too plain to discuss.” So gradually the tone of the army chiefs changed; Congress forbade the rendition of fugitives, and Butler’s “contrabands” were welcomed as military laborers. This complicated rather than solved the problem, for now the scattering fugitives became a steady stream, which flowed faster as the armies marched.
Then the long-headed man with care-chiselled face who sat in the White House saw the inevitable, and emancipated the slaves of rebels on New Year’s, 1863….