DO NOT COMPLY!

This is a message I've heard from a good number of my like-minded friends, including a social media group to which I belong that is oriented toward preserving - or should I say re-gaining? - our freedoms.

Do not comply!

They're referring in general to the myriad restrictions that have been forced on us all, by unelected health officials and executive-branch leaders at the local, state and national levels, without legislative due process. But they seem to be specifically addressing the wearing of masks.

Don't get me wrong: I'm with them. I do not believe masks are effective in mitigating the spread of viruses. I find them uncomfortable, inconvenient, unsafe in terms of restricting peripheral vision, de-personalizing, and, well, silly-looking. I believe that there are adverse health effects that would be associated with wearing a mask for long periods at a time, especially over a long period of time. And I recognize that there are people with legitimate medical or psychological afflictions that make wearing a mask at all more than just a nuisance.

However, I've been thinking about what it means to comply, or not comply. What is the CDC's end game when it comes to masks? What are they really trying to accomplish: supposedly mitigate the spread of this virus by getting everyone to wear a mask when shopping, dining out, going to movies or other entertainment, and traveling? Or, knowing that nobody really wants to wear one, discourage people from shopping, dining out, going to movies or traveling?

I have my own opinion, but I wanted to see what other like-minded folks think. So I posted the following survey to the social media group page mentioned above:

"Is the CDC's real purpose in requiring mask-wearing:

A. To allow people to live their lives as normally as possible, but to try to prevent the spread of the virus (right or wrong) by requiring that they wear masks while doing so? Or -

B. To use masks as an inconvenience/symbol of authority/discomfort/etc. to try to discourage people from living their lives as normally as possible?

In other words, is the end game to let you do pretty much everything you'd normally do, but with a mask on; or is it to use the mask to try to get you to change/refrain from doing what you'd normally do? (e.g., dining out, shopping, air travel, etc.)"

The group overwhelmingly responded "B," 67-2, so more than 97% of the respondents selected "B."

That served to validate my own view: the CDC and government officials want to restrict our activity by making it inconvenient to engage in the things we want to do, hoping that we'll resist the inconvenience as if that were the real act of non-compliance. But in so doing, we're accepting the restricted activity, which is what they really want. We're complying with their desire to change our lives, our activities.

In this sense, the mask is but a subterfuge, and the idea is to get us so focused on the mask that we don't do the things we'd normally do, because we'd have to don a mask in order to do them, and by God, we're just not going to wear one of those things.

What got me thinking about this in the first place was an upcoming trip to Los Cabos, Mexico, to celebrate my wife's and my 25th anniversary. We had the trip booked, and were getting excited to go. Then, in mid-January, I got an email from our carrier, Southwest Airlines, notifying us of a new CDC requirement that we get tested in Mexico before we could board our return flight. Both my wife and I immediately resisted, and said we weren't going. She was especially concerned that we would be subjected to the PCR test, which she calls "the brain-scraper." Turns out the CDC will accept the less invasive (and expensive) antigen test. My primary objection was simply that I wasn't going to let the CDC force me to get tested.

In other words, I would not comply.

However, that's a hard stop. Refuse to get tested, and you can't fly home. (It's not the airlines' fault; the CDC has authority over them in matters of what it deems "health emergencies.") And if you can't fly home - well, as tempting as an expat move to Cabo is, you're probably just staying home.

Then I began thinking about what the CDC was really after in implementing this new requirement. I looked at the history of their travel warnings, specifically related to Mexico. They've been urging people to not fly throughout the pandemic. However, the CDC has no authority to prevent an individual from flying (unless that individual has an active case of a communicable disease). They could ground the airlines, as they have cruise ships, but that would be impractical, as some air travel is necessary.

Most countries (and some states) have imposed their own inconveniences that resulted in people not flying. Primary among these is the 14-day mandatory quarantine. If I have family in, say, Italy, that requirement might not dissuade me from an extended visit. However, if I want to take a two-week vacation in Italy, having to take a month off to meet the quarantine requirement there, then spend my two weeks enjoying the country, is probably a non-starter.

Not so with Mexico, however. Los Cabos has been open to tourists since July 10. And U.S. tourists have been going to Cabo. Over 80% of Cabo's economy is driven by tourism, and 90% of its visitors are Americans, with 70% of visitors being repeat guests.

Now - do you think the CDC likes this? Apparently, they do not: with the December holiday season approaching, and many Americans pining for warmer climes, the CDC decided to try and nip travel to Mexico in the bud. It raised its designation for travel to Mexico to 4, or "very high," and said that all travel to the country should be avoided. It based this, supposedly, on "the numbers." The head of the WHO, in lockstep with the CDC, said, "Mexico is in bad shape."

This piqued my curiosity, given our travel plans, so I looked into "the numbers." The US ranks 7th among all countries in cases/1M population with over 83,000; Mexico ranks 93rd, with less than 15,000. The US ranks 9th in deaths/1M population with 1,430; Mexico ranks 18th, with a little under 1,300.

So the CDC really doesn't want people traveling to Mexico, supposedly based on "the numbers," in spite of the fact that Mexico's numbers - especially in the winter tourist zones like Los Cabos and Cancun - are much better than those in the US. They can't force Mexico to restrict travel or require a self-quarantine period. But they can make it a nuisance for Americans to return to the US if they do go, in hopes of dissuading them from travel.

This is consistent with the conclusion of the informal mask poll that I posted: it's not that the CDC really wants more people to get tested; if they did, they could easily mandate testing in the US. No, they want to suppress behavior. They're hoping you won't get tested in Mexico, because the prospect of having to arrange for a test, the potential discomfort, the cost, leads you to change your travel plans. That's the real endgame, not testing.

And that changed my thinking. By canceling our trip, I'd actually be playing into the CDC's hands. Refusing to comply in this instance didn't mean giving up our trip because we refuse to get tested, it would mean taking the trip anyway, in spite of the CDC's wishes. Besides, the cancellation deadline for the villa we'd rented had passed, and Mexico is well-prepared to administer the tests - better prepared than the US, in fact. Every hotel and timeshare in Los Cabos has tests, medical personnel, and the necessary forms to present to the airlines. The airport will have last-minute antigen testing, with results available within an hour or less. Kiosks are being set up in the tourist areas for testing. The Los Cabos tourism website lists hospitals and clinics that offer testing, which types of tests are offered, the turnaround time for results, and the facility's contact information.

Besides, we're only going to have one 25th anniversary. And the place we're renting is well worth the trip, even if defying the CDC's wishes weren't:

So take that, CDC. I'll send you a postcard.

Back to masks. I see a corollary relationship with mask requirements. See, the CDC/governments can't make me wear a mask. But they can fine or shut down a restaurant or store that doesn't either require me to wear one, or refuse me service.

Some of my friends address that by seeking out establishments that don't require patrons to wear masks. All well and good. My wife and I enjoy Mexican food, so I googled "Mexican restaurant that doesn't require masks near me." I found one place in the Kansas City metro. I could go there, and not wear a mask, and be happy that I'm refusing to comply with the county mask mandate.

Or could I? What am I really complying with? The county's desire to change the way I live my life, by keeping me from going to whatever Mexican (or other) restaurant I want to patronize. I applaud what this place is doing. But it's not among my KC Mexican faves. It's 22 minutes from my house. That's not an insurmountable obstacle. However, there are five Mexican restaurants that we love, all within 10 minutes. They're places we've frequented for more than 20 years, and places that we tried to help survive through the shutdown, by frequently ordering takeout food from them. We continue to support them by dining in. They're not to blame for the requirements; they're forced into it by the city, county or state. Blame government.

The place that doesn't require masks also doesn't get very good reviews (admittedly, some of the recent bad reviews are from Karen-ish mask nazis who walk out appalled that they're not requiring masks), and it's counter-serve, vs. a true sit-down restaurant.

See, I don't want to be forced to change my favorite restaurants, stores, or other businesses. I'm not going to change doctors. And I'm sure as hell not giving up travel. Air travel is necessary for my job, and travel is too big a part of our lives to give it up. I traveled on business four times last year after March, and my wife accompanied me on two of those trips, to Florida's Atlantic coast. We also went to Taos on a driving trip (in spite of a 14-day quarantine requirement in New Mexico, which we somehow forgot to comply with), and to northwest Arkansas on another road trip. Every one of those trips was memorable, and I wouldn't have given them up - especially last year - for anything.

I have other friends who address these requirements by simply defying them. They'll go shopping, or walk to their table in a restaurant, without a mask. And that's perfectly fine. If they are approached by someone who tells them they should wear a mask, I'm assuming they'll have an appropriate response at the ready.

What's more likely to happen, however, is that some passive-aggressive mask nazi will become upset, and not confront them, but turn in the store or the restaurant. (Most jurisdictions and states have complaint hotlines established so that citizens can turn in their fellow citizens and local businesses to the authorities, just like in Stalinist Russia.) Then, the business may get fined or even shut down.

As noted earlier, I like my favorite stores and restaurants. I want them to stay in business, to stay open. I wouldn't want them to have to pay a fine, or close, because of me.

So I will occasionally don a mask, for the minimum amount of time I can get away with, in order to continue to live my life as freely as possible. I know, it sounds oxymoronic. (It certainly is moronic.) But in the grand scheme of things I'm willing to give up, I am absolutely not willing to give up flying, eating in the restaurants I want to eat in, or shopping at the stores where I want to shop. To preserve those rights, I am willing to give up being bare-faced for very short periods of time.

How short? Only once have I had to wear a mask for more than 30 minutes, and usually much less than that. (The lone exception was the visitation for my brother-in-law, who lost his battle with depression last year. I was there for two hours. And I wasn't about to dishonor my sister and her kids by refusing to be there, for any reason.) Here's my routine. You probably do the same things, but if you don't, maybe this will help.

I frequently shop at Target, because I can get groceries, alcohol (in Missouri, where the liquor laws are sane), and household goods in one trip. The mask doesn't go on until I'm in the vestibule between the inner and outer doors. Like most men, I organize my shopping trips with the precision of a military operation. Rather than just wander the aisles, my list is prepared in aisle order. It's on my iPhone, which has Face ID. So when it goes into sleep mode, the mask comes down to wake it up and get the list back, rather than messing with a passcode. I'm in and out of the store in less than 20 minutes, every time. And as soon as I hit the exit vestibule, off comes the mask.

Restaurants, of course, are easy. The mask goes on just inside the front door, and comes off when I reach the table, before I sit down. Sometimes I put it back on after I get up to leave, and then take it off just outside the door. But sometimes, depending on the place, I just carry it out. I figure if anyone squawks, the restaurant can just say they kicked me out.

When I fly, I have a system (pre-pandemic, I traveled over 110 days a year on business, so I'm pretty travel-savvy). The mask stays off until I'm in the security line. Immediately after clearing security (I have TSA pre-check, so that always goes fast), I either buy a bottle of water or fill one that I brought. I also always have a bag of almonds with me. I sit down, well away from anyone else, and the mask comes off to eat and drink.

Except I don't really eat and drink. I do some, but I also frequently just raise the bottle to my lips and pretend to drink, or pretend to grab an almond from the bag, and chew on ... nothing. The mask is required for boarding, so when I get up to board, on it goes. Boarding generally takes about 20 minutes, and it might take another ten to get up to about 10,000 feet. Then the tray table comes down, the mask comes off, and the eating and drinking (or pretend eating and drinking) resume. I usually put the tray table back up at around 10,000 feet, and don the mask again until I leave the jetway. Then the water bottle comes back out. Depending on my proximity to other passengers and what they're doing, I may start and finish the eating and drinking charade before and after 10,000 feet. I've never been hassled by flight attendants or passengers, on either airline that I fly.

Hotels are easy. I nearly always stay at Hilton properties, and I get the digital key, which lets me use my phone to enter the room. I select a room on the app in advance. So when I arrive, I bypass the front desk, so they have no opportunity to ask me to wear a mask. Once I've checked in, I figure they're not going to kick me out (they desperately need to fill rooms), so I just enter and leave without a mask. Same on the elevators (I usually wait for an empty one), and in the hallways. I see most other guests doing the same thing.

Look, I want it both ways. I want to have my cake and eat it, too. But it's impossible (without a bona fide medical condition) to fly without a mask. Not wearing one in stores or restaurants in jurisdictions where they're required puts the business at risk, which I won't do, because I selfishly want them to stay open so I can continue to patronize the businesses I choose to patronize, rather than have to change my favorites. (The owner of the Mexican restaurant that doesn't require them said he'd gladly pay a fine, and that's perfectly okay. It's the place that doesn't want to - or maybe can't, because of being shut down for months and then having to operate at limited capacity - that I'm concerned about.)

I'm a firm believer in free choice. You do you, and I'll do me. So I have no issue with someone who wants to change their preferences to only shop in stores that don't require masks. Nor with people who go to their favorite stores and restaurants without wearing one. Nor with people who refuse to fly due to the requirement. And I certainly have no issue with anyone who legitimately can't wear a mask due to a medical disorder.

I'll probably get lit up in the comments, so let me reiterate: I believe that masks are ineffective. I disagree with the jurisdictional requirements to wear them, and with the health "experts'" opinions. I believe there are ulterior motives underlying the mandates. Masks are uncomfortable. They're hot. They're hard to breathe through. They fog my glasses.

However, this isn't a both/and situation. It is binary. You're not refusing to comply when refusing to wear a mask. You are choosing what to comply with, and complying with one thing while refusing to do another. Maybe that means not flying. Maybe it means not eating out, or doing curbside grocery pickup or grocery delivery (we've had mixed results with other people picking out our groceries, especially meat and veggies). Or maybe it means not eating at your favorite restaurants, instead choosing one that is willing to defy jurisdictional requirements. And that's fine. You do you.

My own preference is to determine what the CDC, et al are really trying to force me to do, or not do, or change ... and then refusing to comply with that. I just happen to believe that they're really after making me change my life, not making me wear a mask or get a test. I'm going to keep living my life to the full.

And if the CDC thinks they can use a two-inch by four-inch strip of cloth to imprison me in my own home, they need to think again.

The Big Short Squeeze

Several people have asked me on Facebook to explain the whole dust-up with GameStop, Robinhood, Reddit, and the effect on the market overall. Herewith is that undertaking. I thought it would be useful to lay it out in a Q&A format, somewhat along the lines of the questions I'd expect people to ask me about it.

But first, some introductions are in order. As a friend of mine always said, "You can't tell the players without a program," so here you go.

The Players

GameStop. GameStop is a seller of video games and related merchandise, through more than 5,500 retail outlets across the U.S. and in several other countries. As video games were increasingly downloaded and played online, the brick-and-mortar business model began to falter. In addition, management made some questionable moves to try to counter the decline, including a failed venture into selling mobile phones.

GameStop's stock traded between about $4 and $58 a share from the company's initial public offering in 2002, to its zenith in late 2007. The stock then fell victim to the broader '08-09 market crash and recession, falling below $18 a share. It finally began climbing out of that range in 2012, peaking above $55 a share in 2013 and trading in the $30s and $40s until late 2015, when the fundamental factors and bad business decisions noted above began to drag it down. It declined steadily from 2016 to early 2020, even as the rest of the market soared, and traded as low as $3.32 a share in 2019. GameStop is essentially the Blockbuster Video of the gaming world.

This stock is a dog, and for easily understandable reasons. As a primarily brick-and-mortar retailer, its woes were exacerbated by the pandemic shutdown and supply chain disruptions. It has recently re-structured its board, suspended its dividend, and its earnings per share are $(4.18) - in other words, it was trading around $4 a share, and at the same time it was losing about $4 a share.

Robinhood. Robinhood is a commission-free stock trading app. It was founded in 2013 by two finance entrepreneurs who previously built trading platforms for (drum roll, please) hedge funds. It competes with the big boys, like Schwab, TD Ameritrade (which is being acquired by Schwab), and E*Trade, which all stopped charging commissions in 2019. Robinhood's assets under management (AUM) total about $20 billion, vs. more than $3 trillion for Schwab, more than $1 trillion for TD Ameritrade, about a half-trillion for E*Trade. All that means is that Robinhood has fewer users with smaller balances. And any of its users could open an account with any of the big boys just as easily as with Robinhood.

However, Robinhood differentiates itself by claiming to be the platform for the "little guy." Its interface is designed to appeal to millennials and investment rookies. Its stated mission is to "democratize finance for all." Its founders abandoned hedge funds, which pay next to nothing to trade stocks (more on that to come), believing they could bring that same low- or no-cost trading ability to small investors. Its website throws out tidbits like, "we believe the financial system should be built to work for everyone," and "a more human way to learn ... education resources that are built for today." And its educational materials are, indeed, targeted toward the newbie, with topics like, "What is an investment?" and "What is a stock?" By contrast, TD Ameritrade's education offerings focus on trading strategies, including options trading. (Full disclosure: TD Ameritrade is the platform I use.)

But other than those differences, there is nothing revolutionary about Robinhood at all. It's just another trading platform, and in terms of the way trades are entered and executed, market prices, settlement, etc., it is no different than any other online broker. It is also a FINRA-registered broker/dealer, is registered with the SEC, and is a member of the Securities Investor Protection Corporation, just like any other broker (including the one that I led as CEO).

Reddit. Reddit is described by Wikipedia as "a social news aggregation, web content rating, and discussion website." Reddit is described by Reddit as "the front page of the internet." Feel free to read the full Wikipedia entry. Reddit was acquired by Conde Nast, the magazine publisher, in 2006, and it was subsequently acquired by Conde Nast's parent firm. Other investors include the rapper Snoop Dogg and the Chinese holding conglomerate Tencent (let that sink in).

Reddit holds quirky events for its users. Its user groups, called communities, regularly engage in pranks such as skewing polls on various websites; the pranks are often encouraged by Reddit. Reddit has been marked with numerous controversies, many involving censorship similar to what we've recently seen from Twitter and Facebook. It appears to be the social media platform for people with too much time on their hands.

Some of my own google searches seeking information about various topics have landed me on Reddit pages, and I have generally found the posts there to be less than informative. Their posters seem to me to be uninformed, and mostly juvenile delinquents. Your mileage may vary, however.

The GameStop stock trading action that is the subject of this post was organized on a Reddit topic forum, which are known as subreddits, called r/wallstreetbets. (That's right - bets.) This subreddit is known for aggressive and highly speculative (read: risky) trading strategies. Its members are generally amateur investors who are basically gambling in the markets, rather than investing for some goal, such as retirement, and they ignore (or don't understand) investment fundamentals. As such, they are a perfect subset of the Robinhood target market: generally young investors that don't have a lot of capital, that don't really know what they're doing. Wikipedia says, "The subreddit is also known for its profane and juvenile nature ..." Hardly serious investors looking to improve their lot in life.

Keith Gill. Gill is a member of the r/wallstreetbets subreddit. He is 34 years old and works as an investment rep, at least for now. He is registered as a broker and investment advisor, as well as a Registered Principal (manager). He also holds the Chartered Financial Analyst (CFA) designation, which I also hold, and can personally attest is very difficult to attain. He has a sum total of five years' experience in the industry, with three different firms, over a span of nine years. In other words, there is some question as to whether he can hold a job in the business. I would not have hired a rep with such gaps on his resume, and such short tenure with any one firm.

The normally clean-cut Gill spends his spare time creating youtube videos under a profane username, in which he pushes certain investment trades while wearing a long wig, a wide headband, and sunglasses. One trade he pushed on youtube - and on Reddit - was buying GameStop shares. He claimed that GameStop was worth $50 a share when it was trading at $5 and had negative earnings. He held a significant long position in GameStop, meaning that he stood to profit handsomely if enough of the Reddit crowd - again, inexperienced and unknowledgeable investors - bought the stock and drove its price up.

If Gill were just another Redditer (my own term), this might not be a problem. However, as a FINRA registered rep, he is likely to lose his job, his licenses and his CFA charter, as well as having to disgorge his profits. He may wind up in jail. I certainly hope so, at least. And shame on his employer, Mass Mutual, for not better monitoring his youtube antics. They're probably in for some hefty fines as well.

Hedge funds. Hedge funds are not evil, nor are their managers, generally. (Bernie Madoff was a bad guy, but he was running a Ponzi scheme and calling it a hedge fund.) Hedge funds are generally structured as limited partnerships, and are only open to very high net worth investors. This is because of the risk involved in what they do, which usually involves using leverage (borrowing money) to increase returns for their investors. Unlike the Redditers, who also assume a large amount of risk, hedge fund managers know what they're doing, and so do their investors. Hedge fund investors are often themselves institutions that manage other people's money.

Yes, hedge fund managers make a lot of money. If you handed a million dollars over to someone and they turned it into $1.5 million in one year, wouldn't you be willing to pay them 2% of that $1.5 million, or $30,000? You're still up $470,000. Multiply that by more than 2,000 to reflect a fund whose AUM is over $3 billion, and the hedge fund manager can make $40 million a year, after paying other employees. Too much? Considering the manager added a billion dollars worth of value to his clients' investments, it's not.

In fact, this is the story of a guy I used to work with, who went on to start a hedge fund focused on the mortgage derivatives market, which was the focus of our former employer. (At least two of my former colleagues went on to manage hedge funds. Where did I go wrong?) This guy was a logic professor at KU before joining our firm, and was one of the smartest - and funniest - people I ever knew. (He also went to high school with Paul Simon and Art Garfunkel.) In 2010, his fund returned 50% to its investors, and he was named Hedge Fund Manager of the Year for funds managing $1 billion or more.

Hedge funds often bet against the market, hence the name. Hedging is using one investment with a low correlation to your other investments to protect your profits when those other investments fall in value. It's used to limit your losses. It's basically how I started my career in the capital markets, 33 years ago: trading futures contracts to hedge the value of mortgage derivatives. Remember the example above, in which my former colleague's hedge fund returned 50% in 2010? Remember what was going on with the rest of the market - especially mortgage securities - in 2010? By being uncorrelated with the market, his fund made a lot of money while most investors were losing money.

Oh, and why do hedge funds pay next to nothing to trade stocks? Buying power. They - and other institutional investors - are trading billions of dollars at a time in some cases, and they're using multiple brokers. Every broker is competing for a piece of that billion-dollar trade, no matter how small in percentage terms. Because even a fraction of a percent of a billion dollars is a lot of money.

Now, on to the questions.

What went down with this whole thing?

Gill was pushing his fellow Redditers to buy GameStop. But the motivation wasn't just to drive GameStop to $50 a share. The Redditers wanted to hurt the hedge funds by driving the stock price higher. You see, hedge fund managers, recognizing that GameStop was a dog, were short-selling the stock en masse. More than 100% of the company's stock is held by institutional investors. The short interest in the stock, meaning the number of shares sold short as a percent of the total number of shares outstanding, is over 120%. I'll continue answering this question momentarily, but first - .

How is that possible? And what is short-selling?

The answer to those questions is pretty much one and the same. Selling a stock short is a bet that its value will fall, as opposed to a long position, which is a bet that the value will rise. (That's what most of us do - we buy stocks that we think will increase in value.)

So a short sale involves selling a stock you don't own. To effect that trade, you borrow the shares from your broker and sell them. When the price falls, you buy them back for less than you sold them for, and the difference in price is your profit. Of course, if the price goes up, you have to buy the shares for more than you sold them for, and you lose money. Buying the shares back and delivering them to the broker is known as covering the short position.

When a short seller's position suddenly rises in value significantly, it's known as a short squeeze, hence the title of this post, which combines that term with the excellent film, "The Big Short," which was about the '08-09 crash.

Why would a broker let you borrow those shares, and what if you're unable to pay for the shares you have to buy to cover the short position?

Great question. First, the broker requires you to put up cash, known as margin, to cover potential losses. Generally, the margin requirement for a short sale is 150%. So if you short 100 shares of GameStop when it's trading at $5, you have to put $250 cash in your margin account in addition to the shares you borrowed, which are worth $500 initially. (100 shares at $5 per share equals $500 worth of stock, and the additional 50% cash margin requirement is $250.)

If the stock price goes up, the broker can access the margin account to cover the short position. It can also issue you a margin call, which is a requirement that you put up more margin if you want to maintain the position.

The other reason a broker will do this is that it gets paid to do it. It charges you interest on the borrowed shares, and it earns interest on your cash margin. It also charges you a commission when you short the stock, and another when you cover.

Back to what went down?

Since hedge funds bet against other investments, they make extensive use of short-selling. And since they're using leverage and borrowing stocks, they can drive the short interest in a particularly doggy stock above 100%. Also, since they are institutional investors - not individuals - they can drive the percent held by institutions above 100%, also through leverage. (By contrast, less than 70% of Home Depot stock is held by institutions; I am one of the individual investors that owns Home Depot directly. And the short interest in Home Depot is less than 1%, meaning the vast majority of investors expect the stock to increase in value. At over 120% short interest in GameStop, virtually everybody expected its stock price to fall.)

But the Redditers didn't, right?

Wrong - probably. Some of them may have thought GameStop was legitimately worth more than $5 a share, maybe even the $50 that Gill claimed. If they did, they don't understand the fundamentals of investing. Nobody in their right mind would have thought it was worth the $469 a share it traded at briefly on Jan. 28, nor the $325 a share it closed at on Friday, Jan. 29. Imagine: a stock with negative earnings and no dividends going from less than $20 a share to nearly $500 in a matter of days. (The Redditers were actually already bidding up the stock's value gradually as far back as September, but the huge surge in buying came in recent days.) If a pharmaceutical company announced a definitive and immediate cure for the virus with 100% efficacy, its stock price wouldn't increase that much.

The Redditers are gamblers. So what they did was akin to mortgaging their houses, buying roulette chips, and putting them all on one number. Except the stock market doesn't work that way. A massive number of buyers, in a concerted effort, can actually cause a stock's price to go up, in this case by a large amount by using leverage and stock options. You can't cause the roulette wheel to stop on your number - legally, at least.

They also wanted to hurt the hedge funds, which they saw as the evil Goliaths, and they saw themselves as David. But what goes up must come down, and the fundamental value of GameStop is far nearer $5 a share than it is $325. Most of the Redditers will wind up living under overpasses when GameStop normalizes, if they don't wind up in jail.

What happened to the hedge funds?

When GameStop shot up on January 27, the hedge funds had to cover their shorts at big losses. One false report circulating was that one fund lost over $13 billion and declared bankruptcy. The actual losses sustained by all hedge funds that were short GameStop were about $5 billion, at least for now.

What did Robinhood do that upset everyone from the Redditers to Tucker Carlson?

To cover their losses, hedge funds had to sell large amounts of their long positions, which resulted in the Dow Jones Industrial Average (DJIA) falling by more than 600 points under heavy selling pressure on Jan. 27, even as GameStop rose by 136%. The next day, Robinhood suspended trading in GameStop, meaning the Redditers couldn't keep trying to manipulate the share price.

The Redditers, of course, were furious. They accused Robinhood of acting to protect the hedge funds and limiting the small investor's access to the markets. Carlson and other media pundits - none of whom have the first clue as to what went down, how the markets work, why Robinhood did what it did, or what a hedge fund is - sided with the Redditers and went after Robinhood.

Why did Robinhood suspend trading?

A 150% margin requirement will only protect a broker up to that extent, and in the face of a 135% one-day gain in a heavily-shorted stock, the broker is going to begin to suffer losses. Fortunately, the hedge funds were able to access capital to cover their shorts. But some small speculators who were short GameStop weren't able to, and in some cases Robinhood had to eat their losses. (Brokerage firms take risks, too.)

As a registered entity, Robinhood has to meet a minimum capital requirement, and they have to meet it every day. If a bank's capital falls below its minimum regulatory requirement, it has to file a capital restoration plan with its regulator. If a brokerage firm falls below its requirement, for even one day, FINRA will close its doors.

So Robinhood was protecting itself, but also protecting its investors - including the Redditers - by ensuring that it remained in business. It also has an obligation to attempt to maintain orderly markets. And it's not the only platform that instituted restrictions on trading in GameStop. Schwab, TD Ameritrade, E*Trade, and all the other brokers did, too.

Robinhood did nothing wrong, and everything right. Only people who don't understand the markets would be upset with them.

But hedge funds are just for the rich, right? Didn't Robinhood effectively favor them over the "little guys?"

Remember when I said that hedge fund investors were largely other institutional investors? These are professional money managers who, again, are investing in hedge funds to hedge, or protect the value of, their primary investments. As noted earlier, the hedge funds' investments are largely uncorrelated with those investors' primary investments.

And who do those professional money managers manage money for? Pension funds for companies, government agencies, and labor unions. Sovereign funds for foreign countries. Insurance companies.

So if you're a teacher, or a nurse, or a government employee, or an autoworker, or have a life insurance policy, you can be sure that your pension fund manager is prudently using hedge funds to protect your retirement savings and the insurance benefits for your family against market downturns. In other words: you own hedge funds.

But isn't that incredibly risky?

No. First, those pros know what they're doing. Second, the hedge fund investment is a relatively small percentage of their total holdings. Third, by investing in uncorrelated assets, they're actually reducing their overall risk through diversification. And finally, the hedge funds require them to leave the money in the fund for three months to three years. That adds stability by avoiding the kind of volatility that can result from large amounts of money jumping into and out of an asset in a short amount of time - like what the Redditers did with GameStop.

Weren't there some other stocks involved?

Yes, there were a number of other heavily-shorted stocks, including AMC Entertainment, the Kansas City-based theatre chain. AMC's stock shot up from about $5 a share to over $20 at the opening bell on Jan. 27, and it closed the week above $13. The brokerage firms restricted trading in AMC and a number of other stocks that the Redditers were trying to manipulate.

AMC is another dog of a stock. (As a dog-lover, I should really stop insulting dogs.) When the pandemic shutdown hammered stocks in the entertainment, leisure and travel industries back in March, I calmly looked at a number of affected stocks, and began buying them. I bought airlines, cruise lines, restaurants, and hotels. I sold many of those positions later in the year at more than 100% gains. And I looked closely at AMC, which was trading at about $3. I thought this might be another opportunity to double my money in a stock. However, the company was already heavily in debt, and thanks to competition from streaming, its stock price had already been falling since late 2018. So I passed, and I'm glad I did: by the end of last year, the price had actually fallen further, despite theatres re-opening, to less than $2 a share. So no way should AMC be trading at $13, if not for market manipulation by the Redditers.

What happened with the overall market last week? If this was just related to a handful of stocks, why did the market move so much, and over several days?

As noted above, the hedge funds had to sell long positions in other stocks to cover their shorts in GameStop and other stocks they'd shorted, which drove the Dow down by 600 points on Jan. 27. When the brokerage firms suspended trading in those names the following day, the Dow rebounded, and was up nearly 600 points by mid-day Jan. 28, having almost fully recovered the previous day's loss. After all, the stocks the hedge funds had to sell to cover still had their fundamental value. Effectively, they were just "on sale" after the previous day's decline. So a lot of investors bought back in.

Then, the media and the politicians got involved. There was talk of action against Robinhood. Elizabeth Warren wanted tighter regulations on the stock market overall, which spooked all investors. The media started spreading false rumors about a stock market bubble. By the closing bell on Jan. 28, the Dow had fallen 300 points from its mid-day peak, and the net gain on the day was less than 300 points, roughly half the previous day's drop.

Those concerns fueled by politicians and the media resulted in a nearly 200-point drop in the Dow at the opening bell on Friday, Jan. 29. The selling continued throughout the day, in part as a result of Robinhood and other brokers resuming simple trading in the shorted stocks, including GameStop. They still prohibited some of the riskier options strategies that led to the extreme volatility two days earlier, but the Redditers resumed buying them, and more short positions were closed. The Dow closed out the week below 30,000 for the first time since December, losing another 600 points on the day.

Is there a bubble in stocks?

No. The stocks of airlines, cruise lines, hotels, restaurants, and entertainment venues are still closer to their 52-week lows than their 52-week highs - meaning a large segment of the market is more oversold than overbought. And those stocks still have room to run, as travel continues to pick up, states and countries increasingly re-open, and life after the pandemic emerges. There's probably another round of fiscal stimulus coming, too, which will result in more spending. Mortgage rates remain low and homebuying is still brisk, so housing stocks will continue to show strength. Supply chain disruptions will ease, so manufacturers will be able to satisfy pent-up demand, improving their stocks' performance.

So the Redditers are the bad guys here?

Yes. They're the stock market equivalent of the Capitol rioters or Antifa. They were trying to disrupt legitimate businesses from going about their business in an orderly way. They put a lot of truly small investors - pensioners and retirees - at risk.

Do you think there will be a movie about this?

I have no doubt about that. I only hope that it's a fair and accurate presentation, like The Big Short or Too Big to Fail, and not the usual slanted Hollywood treatment that blames the wrong party, and glorifies the guilty.

********************

So there you have it. If you're still with me, thank you for reading all of this. I hope it's been informative. If you have additional questions, feel free to message me.

Also, for those of you who initially asked the questions that sparked this post, thank you as well. I had a good general understanding of what went down, but I learned even more through the additional research that went into this post.

**Disclaimer: none of what is written above should be construed as advice to purchase any stock, engage in any trading strategy, invest in any sector, or use any specific trading platform.

Musings From a Press Conference

 I doubt I'll be watching or listening to many of Obiden's pressers, because ... well, I don't like watching paint dry, either. (And I don't beieve calling him "Obiden" is disrespectful, because his own Press Secretary called him that the day he was inaugurated. And the former White House correspondent for Fox News took it a step further and called him President Obama. That, boys and girls, is what we call a Freudian slip.)

However, I did catch part of the presser from today, the day after the inauguration, while I was driving around with my dogs, so I thought I'd share my impressions with you.

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Either Anthony Fauci was lying today, or he was lying to us throughout last year. Today, he responded to a reporter's very leading question that he was never comfortable disagreeing with President Trump, out of concern for "repercussions." The reporter went on to say something about Fauci being "managed" (again, leading the witness, not reporting the news).

Well, remember another presser from last year, when a liberal reporter challenged Fauci, and asked him if he was doing that very thing, saying what he was told to say? Fauci looked at the reporter with absolute disgust on his face, and said, "Please ..." He went on to say that he always speaks his mind, and isn't controlled by anyone.

So which is it gonna be, Tony? If you were managed by Trump and afraid of repercussions, then your "Please..." reply last year was just theatrics, and you were lying at every presser. If you weren't, you were lying today, throwing your old boss under the bus to kiss up to your new boss. Either way, we can no longer believe a word that comes out of your mouth. Like my Daddy used to say, if a man will lie about one thing, he'll lie about another.

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After the first presser, I commented to my lovely wife that I thought the new Press Secretary was actually pretty good. After today, I changed my mind. When faced with a challenging question, she just dodges it (I'll close this post with an example), whereas Sarah Sanders or Kayleigh McEnany would take it on head-on. McEnany in particular would usually open her book and throw the reporter's argument back in their face with their own words.

But you see, she doesn't have to be good. She doesn't even have to be competent. Because when she does dodge a question, all but one reporter in the room will let it slide. So she just has to be able to read. (Also, it bugs me when people pronounce "both" as if it had an L in it: "bolth.")

**************************************************

Speaking of McEnany, the Obiden administration should actually bring her back, since every question is about Trump, either directly or indirectly, and McEnany is used to handling those. At some point poor Joe's going to get a complex, realizing that nobody wants to talk about him, they only want to talk about his predecessor. Even from Mar a Lago, President Trump dominates the White House briefing room. To the media, he's like your ex-wife whom you can't stop talking about, even in front of your new wife.

**************************************************

Okay, so not quite every question was about Trump. There was this gem (I'm paraphrasing, but it's close): "Most Presidents get to enjoy events with large crowds, like the inauguration. But with covid, that's impossible now. Does the President feel a little wistful, not being able to enjoy those kinds of events?"

Really?? That's the weightiest question you can come up with to ask about the guy who's supposed to be the leader of the free world? The Secretary again basically dodged the question, saying that he enjoyed the event with his family and that means the world to him. A better answer would have been this: "Joe Biden, wistful about not being able to have large crowds at his events? Are you kidding me? Did you not see his campaign events? He never had more than six people in the audience! He couldn't draw a large crowd if he paid people to come to an event!"

**************************************************

I'll leave you with this. Fox News brilliantly named Peter Doocy their White House correspondent as soon as Biden was elected. Brilliant, because Doocy is the reporter who dogged Biden along the campaign trail, asking pointed questions about Hunter's shady business dealings, and always getting under Joe's skin. (You may recall that Biden recently shot back at Doocy: "You're a one-horse pony."

Doocy brought up the fact that, after Biden issued his executive order requiring that masks be worn on Federal property, he was televised standing on Federal property with his family, none of them wearing masks. (More of the "okay for me, not for thee" that we've seen from Democrats for months now, from the mayor of Austin recording an admonition against Thanksgiving travel from his timeshare in Cabo, to Democrat mayors and representatives attending out-of-state Biden rallies after issuing stay-at-home orders, to Dr. Birx having Thanksgiving in Delaware with her family after warning against such gatherings.)

The Secretary dodged, responding that Biden was "celebrating with his family," and went on to say that we have more important things to worry about than asking that question.

So what did we learn today, boys and girls?

There's no need to wear a mask if you're celebrating with your family, and really, don't we have more important things to worry about than wearing a mask?

That's good to know. Thanks, Joe.

A Tale of Two Countries

Please bear with me, as it will take a few short paragraphs for me to get to the point of the post's title. It's important to know the backstory, to understand the importance of the trip that I'm going to describe. The trip itself is not the point - it's what will be required to complete it, and a contrast between the two countries that represent its terminal points.

March 1, 2021 will mark the 25th anniversary of the day I married the most amazing woman in the world. It will be a momentous occasion - all the more so for me. You see, I'm 62 years old. It's unlikely that I'll see my 50th anniversary with this incredible person, and if I do, I probably won't be able to do much to celebrate it. (Don't get me wrong; we've packed 50 years of living in these past 25 years. And I hope I'm wrong.) So as we approached this milestone, we wanted to make it memorable.

We've been blessed to travel the world, and travel is a central part of our life together. Italy had always been on our bucket list, so we planned a trip there. We booked three amazing vacation rentals, each for a few days: an apartment directly on Lake Como, an villa in Tuscany, and a house perched on a mountainside overlooking the Amalfi Coast.

Unfortunately, the viru$ reared its ugly head. Last fall, we assumed that travel to Europe would continue to be nigh impossible through May and June of 2021, when we had planned our trip. We also didn't want the owners of the rentals to have to try and re-book their properties at the last minute. So we canceled, knowing that Italy will be there for the rest of our lives, and we'll always have the opportunity to go there and stay in those amazing places.

Still, we wanted to take a trip for our 25th, as travel has been such an important part of our time together.

Mexico has been among the most welcoming places to U.S. visitors over the past year, and we've been to Los Cabos on two previous occasions. It's a beautiful place, where the mountains meet the desert on the way to the ocean. The people are warm and friendly, it's safe, and the weather - at least in the U.S. winter and spring months - is amazing. Bonus: thar be whales.

Our previous Cabo trips have been to the Hilton resort there. It's a fantastic location. However, for our 25th anniversary, we wanted to stay someplace even more special. We found a rental property that fit the bill - a private villa in a gated community near San Jose del Cabo. A private pool, a hot tub, and amazing ocean views. Without hesitation, we booked it.

On January 15, I received an email from Southwest Airlines, the carrier that will take us to Cabo, and back home. The email notified me that the CDC had issued new rules, effective January 26, requiring anyone flying into the U.S. to provide proof of a negative covid test at boarding. The test has to be administered no more than three days prior to the flight.

Our first instinct was to cancel the trip. The villa will still be there after all this nonsense ends. Just like the three properties in Italy. Heck, the whole world will still be there later. Neither of us is crazy about having a swab shoved up our nose - "the brain-scraper test," as my wife calls it. And I really want to resist this latest overreach from the CDC, even though we're past our deadline to cancel, and our trip insurance doesn't cover this contingency.

And yet, at the same time, I don't want to let the CDC do what it wants to do: prevent us from having any semblance of a life until it tells us we can. We didn't let the CDC stop us from going to Florida in June, and again in November, despite their ominous warnings of impending death. We didn't let the CDC - nor the state of New Mexico - stop us from going to Taos in July. So I didn't want this special occasion trip disrupted a second time by a bunch of unelected health officials, who should have no jurisdiction over any of us without legislative action by those that we did elect. Yes, Mexico and Italy and the rest of the world will still be there after this is over. But we're only going to have one 25th anniversary.

So, I did what I do best: I began to research. First, I went to the link provided by Southwest Airlines to see if I could get more detail. It indicated that we would have to be tested prior to our flight to Mexico, and our return flight home. I did a google search for "rapid covid test near me." All of the hits were erroneous; when I went to the linked sites (for the CVS near my home, for example), those locations only offered the PCR test, which takes up to 72 hours to get a result. That won't cut it when the test has to be performed within 72 hours of the flight, but you need documentation of the results prior to boarding.

My wife then told me that she had found out from a friend who had been tested that there's a location that offers the rapid antigen test within about 20 minutes of our home. More on that later.

Next, I went to Mexico's tourism page, and found the information on the Southwest site to be incorrect: Mexico does not require a negative test to enter the country. I don't blame Southwest for the error; they were simply parroting what the CDC recommends. However, the CDC's overreach doesn't extend to Mexico, fortunately, so they can't impose requirements to travel there. But this just shows that a multi-billion dollar US company struggles to provide clear communication regarding covid testing and travel, in what is supposed to be the most advanced country in the world. Although when they get their information from the CDC, we should hardly be surprised.

A quick word on the CDC's position on travel to Mexico in general: a few months ago, they put Mexico on their list of countries that Americans shouldn't travel to. Why? Because "Mexico's numbers are bad!!" Well, guess what, folks? If you look at total cases, cases per capita, total deaths, and deaths per capita, the US numbers are worse. By some measures, far, far worse. Example: the US is #7 in cases per 1M population at over 75,000; Mexico is 96th, at less than 13,000. Canada's number is higher than Mexico's. So why isn't the CDC screaming warnings about travel to Canada?

The reason is simple, and twofold: first, Canada imposes travel restrictions on foreign visitors, including a 14-day quarantine requirement. The CDC likes that, because it will discourage US citizens from travel to Canada.

Second, compared to Mexico - especially in the winter - nobody wants to go to Canada anyway.

So the CDC sees Americans traveling to Mexico, enjoying themselves, and coming home perfectly healthy - and they don't like that. Not one bit. Thus, they impose a restriction that they hope will keep people cowering in their houses.

And they probably thought, "Let's see Mexico come up with an answer to this! Mexico, which has administered only 4 million tests, vs. our nearly 300 million!"

And Mexico said: "Hold my cerveza."

I googled "covid testing cabo," and found a website that would put any US resource to shame (especially that of the Kansas Department of Health and Environment). The information was clear, and the response was impressive. Every hotel and timeshare will have both PCR and rapid antigen tests, medical personnel to administer them, and all forms required by the CDC. Testing kiosks are being set up in the tourist areas. They're implementing antigen testing at the airport for last-minute tests. (The antigen test results are back in an hour or less.)

The website also has a link to a printable pdf with a list of area hospitals and clinics, the type(s) of tests they offer, the turnaround time for results, and the website and phone number of each facility.

But don't take my word for it; here's the link: https://www.visitloscabos.travel/covid-test/us/

Mind you, this information was up the evening of January 15, just three days after the CDC issued its edict, which doesn't take effect until January 26. (Apparently the CDC didn't care how many travelers die or infect other people between January 12 and 26. Or maybe travelers can't spread covid until January 26. Who knows?)

So off to Cabo we go! Given the numbers relative to the US, we're actually safer there. Since we're renting a private villa, and the hotels are only testing their own guests, we'll probably have to go to a hospital or clinic to get tested for our flight back to the US. (Some clinics will actually come to your rental villa to administer the test.) Or maybe a kiosk in the tourist zone. Or maybe even the airport. (We did get a tip that one timeshare might test non-guests. As long as I don't have to sit through a sales presentation, I'm good with that.)

If it weren't for family here in the US, we might consider just staying in Mexico. I even jokingly suggested to my wife that we slip over to the Mexican mainland and join the caravan. I'm sure they'll get into the country without a covid test.

Back to my wife's anecdotal tip on where to get a rapid antigen test near us. She commented that apparently word-of-mouth communication was a better way to get information in the US than trying to find it online. My reply? "Yes, that's the way primitive societies used to have to communicate."

Isn't it ironic, that covid testing and information has been such a poop-show from the CDC and in so many US states, and yet Los Cabos - in a matter of days - has this thing down cold. Of course, as a friend of mine said, they don't want to see the goose that lays the golden eggs harmed.

In that vein, I'll leave you with these words from the website of a Cabo vacation villa rental company (emphasis added):

"Los Cabos is On Your Side: All the tourist related businesses in Los Cabos are working on a plan to provide cost and time efficient ways to administer the new CDC testing requirement.

Per Rodrigo Esponda, President of FITURCA, (Fideicomiso de Turismo de Los Cabos), the US will now accept the fast antigen test. Kiosks will be put up around all the tourist areas and also there will be one at the airport for last minute tests. They only take about an hour. Documents will be in English, and the cost will be somewhere between $30 and $50 US. This is preliminary info – Press release coming soon and more info in next couple of days. FITURCA is comprised of the hotel association, timeshare association, local government and financing. They aren’t going to lose millions and millions of dollars of tourist income. Trust private enterprise.”

Indeed. Trust private enterprise, not governments and their agencies. And thank God Los Cabos is on our side.

'Twas the Night Before New Year's

‘Twas the Night Before New Year’s, Twenty-Twenty-One,

And all of us hoped the New Year would be one

That would help us leave Two-Thousand-Twenty behind,

And not be a year that would feel so unkind.

 

But we would not soon forget Twenty-Twenty –

You want a year full of events? We had plenty.

The year started off in the usual way,

With most of us living our lives day-to-day.

 

While in Washington, in a show of overreach,

House Democrats had cast a vote to impeach.

Never mind that they hadn’t the grounds or the cause,

That didn’t dissuade them, did not give them pause

 

No, they had determined they must make a stand

Against their arch-enemy, Bad Orange Man.

Predictably, when all the votes had been tallied,

They called to impeach. But the Senate then rallied,

 

And, finding Schiff’s arguments lacking a bit,

Rendered their votes on the case to acquit.

Congress thus spent the first month of the year

Wasting their time (which they’re best at, I fear).

 

Then came a new month, and the Super Bowl,

Would the Chiefs fin’lly achieve their loftiest goal?

It had been 50 long years since Len Dawson’s team

Had helped Kansas Citians realize their dream

 

Of winning the Big One, of wearing the crown;

Would this team repeat, or would they let us down?

The Niners appeared impossible to beat –

Could Andy Reid’s team really pull off this feat?

 

The path had been arduous, testing our mettle,

We came from behind time and again to settle

The score in the playoffs, so we felt prepared

Our confidence high, and our faith unimpaired.

 

In the Big Game, we were trailing once more,

But saved the fourth quarter to rally and score

Three more touchdowns. And so, from down 20 to 10,

The Chiefs emerged victorious in the end.

 

The town, how it rallied! We held a parade,

So happy our Champions all of us made!

The euphoria felt it would last the whole year –

But March Twenty-Twenty would dash our good cheer.

 

For out of Wuhan, a Chinese province,

Would come a new virus, one that would evince

Reactions of fear, reactions of dread,

Reactions of “Don’t believe what the news said.”

 

Did it start in a lab? Or in a meat stall?

Did a guy eat a raw bat, and unleash it all?

However it started, it began to spread

As the media helped to fill people with dread.

 

A nationwide shutdown was soon in the works,

Championed by Drs. Fauci and Birx.

“Flatten the curve!” was the cry of the day,

But, once accomplished, that goal soon gave way

 

To making sure no one, the young or the old,

Would become infected (with even a cold).

So, locked in our houses, with masks on our faces,

We had to stay home from our favorite places.

 

The rules were confusing; the guidance, it varied –

“Why the inconsistency?” many queried.

While others were happy to follow along;

If the CDC says it, it just can’t be wrong.

 

Mask or no mask? Three feet distant, or six?

Should I fear surface contact? The signals were mixed.

Is it safe to eat indoors? Safer outside?

Safe to go for a walk? In an airplane to ride?

 

Should restaurants open at half-full, or less?

Can we go to the gym? It was anyone’s guess.

Does it spread more in churches? In bars or salons?

There were myriad answers for how this thing spawns.

 

We soon learned the safest place; really, the best

Place to be – in a large crowd, a “peaceful” protest.

For the virus can’t spread when you fight for a cause,

Especially if it means getting your paws

 

On a new pair of Nikes, a big-screen TV,

An X-box, and maybe a new game or three.

And maybe the virus is killed by the smoke

Of businesses set on fire by the woke.

 

Amid all the madness, the lack of all reason,

We found ourselves in a strange election season.

One candidate campaigned, the other was hidin’,

As President Trump faced off against Joe Biden.

 

The polls, they misled us, the media suppressed,

While Facebook and Twitter did their very best

To make sure the messaging all remained skewed,

Giving their side the edge in the media feud.

 

Then the rules were all changed for the way people vote

(The virus was blamed – oh, we must stay remote!)

And the votes, they kept coming, in every swing state,

‘Til they put VP Biden on top of the slate.

 

The courts washed their hands like old Pilate of yore,

And it looked like Bad Orange Man would lead no more.

But you didn’t see protests, you didn’t see looting,

The lighting of fires, the litter, polluting,

 

No, life would go on for those opposed to Joe,

Resolved to make the best of where the winds blow.

(The woke say our “privilege” makes us feel this way;

But we’re just grown-ups, at the end of the day.)

 

And as the year closes, a “miracle’s” come true:

A vaccine is out! And not just one, but two!

As the President promised, the end is at hand,

And the grip of the ‘rona will soon leave our land.

 

(We’re now also testing, so the ratios will fall,

As state governments keep misleading us all

Into thinking those rates were as dire as they told us,

Believing we’d buy the BS that they sold us.)

 

So be not discouraged, and be of good cheer,

And let’s focus on making the coming year

Our best ever. For, through it all, we are blessed,

So yes, Twenty-Twenty-One can be our best.

 

Just remember: it matters not what job you hold,

You are essential. So be brave and bold.

Live your life freely in this coming year,

Lest you lose a year of it living in fear.

 

My sincere wish for all, young or old, near or far,

Is a prosperous New Year, whomever you are,

For prosperity, see, isn’t measured in gold,

Nor is it measured in what you can hold.

 

It’s measured in memories, measured in love,

So my wish for all is you have plenty of

The things that make life joyful, full of good cheer,

The things that can make for a wonderful year!

What's In a Name?

 In my last post, I noted that anyone who's 85 years old with multiple co-morbidities (morbid obesity, untreated hypertension, diabetes, COPD, etc.) ought not to buy unripe bananas. A friend of mine shared the post, and one of his friends commented that what I said was "cavalier."

Actually, I believe the use of that word, in that context, was cavalier, so let's unpack it.

Webster's definition of the word includes, "lacking proper concern." When it comes to mortality - from the virus or anything else - nothing could be further from the truth, as it applies to me. Anyone who knows me well would confirm that. I care deeply for those susceptible to any illness, to those with any frailty. I care for the least of these, in any regard.

This was my point, and I use it as it relates to me. I'm 62 years old. I'm overweight. I have hypertension, controlled by medication. My diet is less than optimal. My exercise regimen is regular, but not as consistent as I'd like.

I'm a football fan. In the game of life, I'm in the fourth quarter. I'd like to think that it just started, but the reality is that the difference between money and time is that we always know how much money we have, but we never know how much time we have. I could be past the two-minute warning, for all I know.

When I'm 85 - in other words, when I've spent another roughly 37% of the time I've already spent on this earth - I expect to be counting every day God gives me as a blessing to be richly savored. I won't have high confidence that I'll see 86, or 87, or 90, or 98 (as my Grandma did), or 100 (as one of my great uncles did). Each birthday celebration will be a "phew - thank you, God!" moment.

And I care deeply about that. So no one should believe that my comment was in any way related to lacking proper concern. I'm concerned deeply, and I will continue to be, for my own and others' mortality, long after this virus is but a faded memory, which it will be, sooner than you think (unless you allow the media to keep it front and center in your life, in which case, I can only feel sorry for you).

Here's the thing: when it comes to "covid," I have a choice. I can risk losing the 62nd year of my life, or I can risk losing the 85th year of my life. If this thing is still around - or if it, or something like it, comes back - when I'm 85, I'd rather lose that year to it than this year. This year, I'm still relatively young. I'm still relatively vital. I can still work out at the gym, I can still take my dogs on a brisk walk, I can still enjoy my grandkids. At 85, my grandkids will be out of college, maybe married. I doubt I'll belong to a gym. I may be in a care facility.

So I'm not going to stay home this year, and I haven't. My wife has taken six trips with me, more than she has any other year in quite a long while. I've lived life. I've dined out, gone to church, met with friends and family, taken my dogs to the park, flown, gone to the store, and traveled; all since the virus scared everybody into their basements.

And when I am 85, if this or another virus comes along - if I am in a care facility, I hope my family will respect my wishes, and force the facility to allow me out to be with them. I'd rather risk infection, from any disease, no matter its consequences, in order to be in community with those I love, however briefly, than risk dying after many months of not being able to see them, hug them, hold them.

So do I lack proper concern? On the contrary; I am very concerned. When I say that, at 85 and with multiple co-morbidities, I would not buy unripe bananas, it is not a trite statement. It is a testament to how I wish to live my life: as if every day is precious. As if, whatever my age, I won't take an expiration date for granted. That I won't buy a package of meat that expires in ten days taking for granted that I'll be around to enjoy it.

If I can manage to live my life like that - well, I'll have lived a life well-lived.

The Day We Turned the Corner

I wanted to post this so that, when things are completely back to normal (and yes, Dr. Fauci, they will be), and covid is but a fading memory, we’ll all remember the day we turned the corner and began to put it behind us.

But first, a few inconvenient facts.

I know of a person whose relative was dying. While in the hospital, the relative was tested for the viru$, and the test result was negative. When the relative entered the phase of actively dying, hospital officials informed the family that they were going to move her into the covid wing. The family asked why, since her test was negative, and were told, “We move everyone who’s dying into the covid wing.”

Fortunately, this family pushed back. Another relative was traveling to be with her in her final days, and he wouldn’t have been able to see her if she was in isolation in the covid wing. So they insisted she not be moved, and she wasn’t. How many families would not push back, would just follow the direction of the hospital authorities?

This is an actual story, from a reliable source who has no motivation to make it up. It happened. “Ah,” you say, “but it’s just one person.” Pay attention: “We move everyone who’s dying into the covid wing.” Everyone. You know how many people die every day, in any given hospital in the U.S.? You know how many hospitals are doing this?

And why move them into the covid wing? So that it can be classified as a covid death. And that puts the $ in viru$, because the CARES Act provides a 20% premium for Medicare payments to hospitals for covid patients.

Now, numerous online “fact-checking” sources (all with a liberal bias) have asserted that there is no evidence that covid numbers are being inflated for the purposes of hospitals cashing in on that premium. But they admit the premium is there, and that is undeniably an incentive. So if those numbers aren’t being inflated …

Why is a hospital moving every dying patient into the covid wing, even if they have a negative test result?

This points to an overstatement of mortality due to the viru$. Lest you doubt that, recall that the state of Colorado had to adjust their death count downward several months ago, as attending physicians’ diagnoses of cause of death (COD) differed from what state officials recorded. How big was the adjustment?

Twenty-five percent. And Colorado is just one state.

Even the CDC has acknowledged that in only 6% of cases, covid was the only COD factor listed. Six. Percent. In other words, only about 15,000 deaths.

Now, the CDC is clear that this doesn’t mean that the viru$ wasn’t a contributing factor in all those other deaths, and I’m not suggesting that, either. It may have accelerated death in someone that was teetering on the brink anyway, due to age, co-morbidities, or some combination thereof. We do know that the vast majority of deaths in Italy last spring, for example, were patients age 85 or older with multiple co-morbidities. The kind of people who shouldn’t be buying unripe bananas anyway. Whose death could be accelerated by the flu or a sinus infection.

I’m just very suspicious of the actual, covid-caused death count, based on this and other information.

Enough about mortality. On to reported cases, and positivity rates.

I now know of three instances – having occurred in two different places, hours apart – where the people involved signed up to get a PCR test for the virus, provided their contact information, and went to the test site. Once there, they found the line was more than an hour long, so they left. Went home or back to work. Didn’t get tested. And –

Were later notified that they had tested positive.

I have relayed this to other people that I know, and they have also heard of some such instances from people they know. Trustworthy sources who have no incentive to make up such things. (I’m tempted myself to sign up to get tested and not show up, just to see how prevalent this is. If I do, I’ll record the whole thing.)

Isn’t it interesting that there are no anecdotal stories of someone signing up for a test, showing up, and going home because the line is too long, then receiving notification of a negative test result?

Elon Musk, of Tesla fame (the car, not the rock band), recently tweeted that he received four of the rapid covid tests (not the PCR). Same day. Same nurse. Same facility. Same machine producing the results. And –

Two positive. Two negative.

The point of these stories is that the tests are woefully unreliable. And the process is apparently skewed to report more positive results. Even for people who never got tested, but provided their contact information so that they could be notified of a positive result.

The testing problems don’t end there. The most widely-used test, the PCR test, amplifies genetic matter from the virus in cycles. The fewer cycles required, the greater the amount of virus, or the viral load, in the subject. The greater the viral load, the more likely the subject is contagious. But –

By running a larger number of cycles, the test results in finding more genetic matter. Why is this significant? Because, over a larger number of cycles, the test may find dead fragments of the virus in people that were previously infected and didn’t know they had it, but still remain in their body. These dead fragments are incapable of infecting anyone else – in other words …

Run enough cycles, and you’ll get more positive results, but the people testing positive are not at all contagious.

According to the NY Times: “In three sets of testing data that include cycle thresholds, compiled by officials in Massachusetts, New York and Nevada, up to 90 percent of people testing positive carried barely any virus.”

That’s three different locations. Three studies. And this was published in the very left-leaning NY Times.

A Harvard epidemiologist said it’s like finding a hair from a serial killer’s head in a room weeks after that person was there, and concluding that the killer must still be in the room, and is thus a threat.

How many cycles are enough, and what constitutes too many? A University of California-Riverside virologist has said that any test with a cycle threshold above 35 is too sensitive – in other words, run more than 35 cycles, and you’ll get too many false positives; positive readings from people who can’t infect anyone. She went on: “I’m shocked that people would think that 40 could represent a positive.” She suggests a cycle threshold of 30-35. The Harvard epidemiologist would set it at 30 or less.

So how many cycles are typically used? North Carolina uses 37. New York uses 40. In my home state of Kansas, neither the Governor’s office nor the health department will disclose the threshold, but it’s said to be 42. (And why won’t they disclose it? This is the same state that suppresses other key viru$-related data, and whose health director has used data mining and graphic sleight-of-hand to mislead people regarding the efficacy of mask use in preventing viral spread.)

At a threshold of 35 vs. 40, these experts estimate that 63-90% of positives would be negative. So if we apply that to the recent nationwide one-day record of 185,000 cases reported, that means the actual positive case count would be just 18,000-68,000.

Another problem that the Harvard epidemiologist noted is the CDC’s recommendation that only symptomatic people be tested. He noted that this really tells us nothing about the infection rate, because someone with symptoms is already more likely to test positive. Why, you may ask, is this a problem, since they’re testing positive with symptoms?

It’s a problem because it drives the positivity rate, which is the rate of positive test results divided by the number of tests administered. And the positivity rate is being used as a key gating criterion for opening or keeping open schools and colleges, in places like my home state of Kansas. Why use this metric? It wasn’t used early on. It’s another example of moving the goalposts to manipulate the score.

Think about the factors that influence the positivity rate higher, that we’ve just discussed:

·        You only test people who are likely positive anyway

·        You use a cycle threshold that produces an estimated 63-90% false positives

·        You report positive results from people whose information you have, but whom you’ve never tested

Combining these factors, can we conclude anything other than that the positivity rate is vastly overstated?

Finally, I’m a data guy, so let’s look at some data. Below is a graph using CDC data on total deaths per million population, monthly, going back to 1900. This captures the 1918, 1957-58, and 1968 influenza pandemics. Note that the data shows total deaths, including those illnesses, as well as the viru$ through August of this year.

Now, the current pandemic has been compared to the 1918 flu outbreak. We’ve frequently heard, “There’s been nothing like this for 100 years.” Well, the graph puts the lie to that notion. This year looks a lot like the 1968 flu outbreak, and is an order of magnitude lower than 1918. I’ll circle back to 1968 momentarily, but first, let’s look at those three previous 20^th-century flu pandemics compared to the current one. We’ll go in reverse chronological order, citing U.S. data only. The sources are the CDC and the U.S. census.

·        2020: 251,000 deaths, 331 million population = 758 deaths/million (we know that about half the deaths have been people 75 and older; 75% had co-morbidities; and 86% were 75 or older and had co-morbidities)

·        1968: 100,000 deaths (most over the age of 65, according to CDC), 200 million population = 500 deaths/million

·        1957-58: 116,000 deaths, 172 million population = 674 deaths/million

·        1918: 675,000 deaths, 103 million population = 6,553 deaths/million

From those numbers, this pandemic looks a lot more like the ones in the ‘50s and ‘60s than 1918. This year’s numbers are only 12% higher than ’57-58, compared with 1918’s, which were nearly nine times higher than 2020.

Back to 1968. I can speak to this, because I was alive then, unlike those earlier flu outbreaks (I was born in November of ’58, but that outbreak was over by then, and I don’t remember much about the first two months of my life anyway).

I clearly remember the day JFK was assassinated, in 1963. I was five years old. I came home from school and my Mom was crying. I asked her why, and she told me that President Kennedy had been killed. I remember wondering how she knew him, since she was crying over his death. Hey, come on, I was only five.

I remember the Civil Rights movement, from Dr. King’s “I Have a Dream” speech in 1963, through the tumultuous times leading up to the 1965 Act.

I remember Dr. King’s assassination in 1968 – the same year of the flu outbreak. I remember where I was when I heard about it. Same with Bobby Kennedy’s assassination later that year.

I remember all of these significant events that occurred when I was between the ages of five and ten years old. They received heavy news coverage. (I remember other things from my own life that occurred during those years, let you think my memories are biased by recorded history.) But, you know what?

I don’t remember one single thing about the 1968 flu pandemic. Maybe I had it. Maybe someone else in my family did. Heck, maybe we all had it. But I don’t remember it. It wasn’t prominent in the news. (Of course, back then we just had the three non-cable networks, the news cycle wasn’t 24/7, and the news was merely reported, not opined upon. The facts were reported, not distorted, and the opining was left to us.)

You think there’s one 10-year-old kid today who won’t remember 2020 like I remember JFK’s assassination? If you believe that, look at the ceiling – someone painted “gullible” on it.

The numbers from that year look a lot like the numbers from this year. Yet it was a non-story. No shutdowns. No isolation. No masks.

So that was a fairly lengthy critique of COD reporting, testing, positivity rates, and covid data relative to other pandemics. The point of this post was supposed to be related to the date we turned the corner. If you’re still with me, I’ll present my prognostication.

January 20, 2021.

Sometime thereafter, states like Kansas and North Carolina and New York and Massachusetts and Nevada will quietly, and without transparency, reduce their cycle thresholds to a realistic level, and the number of positive test results will immediately fall.

The CDC will begin recommending that everyone be tested, including the asymptomatic, and that plus the reduced cycle threshold will result in a plummeting positivity rate.

Nobody who signs up for a test, but doesn’t get one, will be notified of a test result.

The 20% Medicare premium for covid cases will be eliminated, and COD reporting will become more accurate. Covid wards will empty. The mortality rate will drop.

The news media will cover nothing but how cases, positivity, and the death rate are dropping like stones.

The Pelosis and DeBlasios of the world will resume encouraging people to get out and live their lives.

The economy will be allowed to fully re-open in every state, and unemployment will return to February 2020 levels. The stock market will hit record highs.

Schools will fully re-open for in-person learning, and failure rates will decline.

And everyone who believed all the fear-mongering, will also believe the success attribution.

You see, all of the things I noted above can be easily manipulated to make a situation appear worse than it is, to make people fearful, to justify finger-pointing and blame-laying.

And all of those things can be just as easily manipulated to make a situation appear to have rapidly and dramatically improved, to allay the fears of the fearful, and to justify grand-standing and credit-taking.