Hell is Coming and We Sold Out Our National Security For A Few Dollars

Executive Summary:

Two weeks ago we predicted that the U.S. death toll from COVID-19 would reach 20,000 by April 15th. The following article explains why.



I am furious and frustrated. Once the greatest country on the face of this planet, the United States is going hat in hand to China, begging for a few respirators and masks. Anthony Fauci and the CDC know that nearly half of the infected people show no symptoms and stealthily spread the new coronavirus, yet their hands are tied trying to tell the American people to wear masks because the few that we do have rightfully belong to our healthcare workers. We are absolutely helpless.

Let’s start from the beginning. On December 31, China notified the World Health Organization about an unknown virus causing a SARS like disease. By January 2nd, there were 44 confirmed cases in Wuhan, obviously all of which were symptomatic cases. At least 6 of these patients died.

On January 3rd, Singapore started temperature screening all passengers arriving from Wuhan. That same day, Hong Kong reported two cases, both of whom travelled to Wuhan and displayed fever and pneumonia like symptoms.

On January 7th, the World Health Organization reported that Chinese experts isolated a novel coronavirus causing a new outbreak.

The first known COVID-19 death, a 61 year old male, occurred on January 9th, but China revealed this on January 11th.

Two new cases outside of China were reported on January 13th and 16th in Thailand and Japan; both patients had traveled to Wuhan.

The CDC announced that passengers from Wuhan would be screened at JFK starting on January 17th, and in San Francisco and Los Angeles on January 18th. At the time, the CDC didn’t know whether the virus could spread from person to person.

We discovered the first case of COVID-19 in the U.S. on January 21st. “A man from Washington state returned home after a trip to Wuhan, China, on Jan. 15, sought medical attention on Jan. 19 and now is in isolation at Providence Regional Medical Center in Everett, Wash.,” according to NPR.

America is a great country, but it seems like Singapore is greater when it comes to acting fast and detecting COVID-19 infections. We started screening passengers from Wuhan on the west coast 15 days after Singapore did.

China reported its second and third COVID-19 deaths on January 17th and January 20th. “Zhong Nanshan, who heads up China’s National Health Commission, told Xinhua News Agency, China’s official state-run news organization, that two cases of human-to-human transmission had been confirmed in China, one in Wuhan and one in Guangdong,” reported ABC news.

Three days later, on January 23rd, the World Health Organization’s director-general Dr. Tedros Adhanom Ghebreyesus calmed our nerves, saying “At this time, there is no evidence of human-to-human transmission outside China”, and decided not to declare the coronavirus outbreak a “global emergency”.

“On January 23, 2020, the Department of State ordered the departure of all non-emergency U.S. personnel and their family members from Wuhan” the State Department said. That’s the same day China cancelled its New Year celebrations and imposed extensive travel restrictions to Wuhan and surrounding municipalities.

On January 24th “A woman from Chicago who traveled to Wuhan, China, at the end of December and returned on Jan 13 represents the second travel-related case of novel coronavirus (2019-nCoV) infection diagnosed in the United States, according to officials from the Illinois Department of Public Health” University of Minnesota’s CIDRAP reported.

Also on January 24th the Chinese COVID-19 death toll stood at 26 (assuming that they weren’t lying about it or undercounting it).

On January 25th, China expanded travel restrictions to five other Chinese cities in Hubei, covering 56 million people. The Chinese death toll reached 56 the next day (kind of fishy, right? Just 56 people died but China is imposing unheard of lockdowns).

Also on January 25th the third case of a coronavirus infection was confirmed in Southern California, a traveler from Wuhan.

On January 26th, two more cases of the new coronavirus infection were detected in Arizona and Los Angeles, both with travel histories to Wuhan.

The death toll in China reached 106 on January 27th if you can believe it.

On January 29th, we evacuated 195 “Deep State Department” (as Trump calls it) employees from China to California. Wouldn’t it be more beneficial for us if they stayed isolated in China and provided human intelligence in terms of the extent of the COVID-19 outbreak within China?

On January 30th, the CDC confirmed the 6th coronavirus infection, also the first “known” human-to-human transmission within the U.S. Thankfully, the CDC Director Dr. Robert Redfield let us know that “the immediate risk to the American public is low.” Nevertheless, on that same day the World Health Organization declared the outbreak a public health emergency because their “greatest concern is the potential for the virus to spread to countries with weaker health systems, and which are ill-prepared to deal with it.” Thank God we have a strong health system and are well-prepared to deal with this kind of outbreaks.

The clowns at the World Health Organization urged countries not to restrict travel or trade in response to COVID-19 on January 30th as well.

On January 31st, the CDC confirmed the seventh coronavirus infection, a male who traveled to Wuhan. “We are preparing as if this were the next pandemic, but we are hopeful still that this is not and will not be the case,” the director of the National Center for Immunization and Respiratory Diseases, Dr. Nancy Messonnier said after this news came out. Very comforting!!

On January 31st, Trump also announced that all foreign nationals who had traveled to China except the immediate family members of US citizens or permanent residents won’t be allowed into the U.S.  effective February 2nd, 5 pm (EST). Better late than never, though why just China? The virus had spread to around two dozen countries by the end of January.

The next day Joe Biden sent the following tweet: “We are in the midst of a crisis with the coronavirus. We need to lead the way with science — not Donald Trump’s record of hysteria, xenophobia, and fear-mongering. He is the worst possible person to lead our country through a global health emergency.” So, if Biden were the POTUS, would he have listed to the clowns at the WHO, CDD, and NCIRD and have done nothing?

On February 1st, a Boston student who recently traveled to Wuhan became the 8th confirmed coronavirus case in the U.S.

On February 2nd, a Santa Clara woman became the ninth confirmed case. She also traveled to Wuhan. The 10th and 11th cases, a husband and wife from California, were also confirmed later that day. The husband traveled to Wuhan and the wife was infected by the husband.

On February 5th the twelfth known coronavirus case in the U.S. was confirmed, a Wisconsin man who traveled to Beijing and was exposed to known cases while there. In the meantime, 350 Americans from Wuhan arrived into the country and were quarantined.

On February 10th, the thirteenth known case of COVID-19 was identified, one of the evacuees from Wuhan.

On February 12, another evacuee from Wuhan was confirmed as the 14th case. The 13# and the 14# patients arrived in different flights from Wuhan and had no contact with each other in the U.S.

On February 13th, the CDC “confirmed another infection with Coronavirus Disease (COVID-19) in the United States. The patient is among a group of people under a federal quarantine order at JBSA-Lackland in Texas because of their recent return to the U.S. on a State Department-chartered flight that arrived on February 7, 2020,” from Wuhan.

On February 19th Iran confirmed its first coronavirus case and hours later reported two deaths from COVID-19. More importantly, “state news agency IRNA reported that they had not travelled abroad or even outside of Qom province prior to their deaths,” according to BBC. These two were the first two known community transmission of the new coronavirus outside of China. On that day, Trump was busy granting clemency to Blagojevich, Milken and Kerik, and the S&P 500 Index closed at 3386.

On February 21st, Italy reported the first local transmission of the new coronavirus, a 38-year male was believed to have contracted the virus after coming in contact with someone who had been to China.

On February 22nd Italy reported its first two deaths from COVID-19, two patients at two different locations.

That’s when I realized the gravity of the situation. I spent the next few days reading and researching the subject. On February 25th I came to the conclusion that it was just a matter of time that the new coronavirus will spread from Italy to other European countries and then to the United States.

One viable option for us to slow down the spread of this virus was to impose a complete travel ban (meaning no foreigners at all would be allowed to enter, and Americans arriving from other countries would be tested and put in a 14-day quarantine). Sure, this would have had a small economic impact on our economy as our GDP would take a 2.9% annualized hit, but we would save hundreds of thousands of jobs (and lives???).

The other alternative was burying our heads in the sand and pretending that everything was going to be magically ok. In this scenario I expected the recession to be deeper because this is the route initially taken by China and they were quickly forced to change course. So, I sent an email alert to our premium subscribers on February 26th.

That night, the CDC confirmed the first community transmission of the new coronavirus in California.

On February 27th, I also published a free article on our site and on Yahoo Finance with the title Recession is Imminent: We Need A Travel Ban NOW. I predicted that a US recession is imminent and that US stocks would go down by at least 20% in the next 3-6 months (you will notice a pattern of too conservative predictions by the end of this article). I also told you to short the market ETFs and buy long-term bonds.

One of the commenters said “Author needs to be sited for trying to cause hysteria”. Another said “Media fearmongering as usual.” A third one said “Where this person get his PhD from? Trump university? And in the end, seems he is more interested in protecting his stock.” A fourth one said “Wouldn’t a travel ban push the economy into an even bigger recession? The nonsense about bioterrorists (which, BTW, is not even a word according to Spell Check) is obviously just fear-mongering. I call fake news.”

That same day I went to Costco, bought a ton of food and ordered a freezer from Walmart. It didn’t occur to me to buy water or toilet paper that day. Costco was slightly more crowded than usual, so a few of our fellow Americans also saw this coming.

On February 28th, the second and third cases of unknown origin of the novel coronavirus were reported on the west coast.

On February 29th, the first death from COVID-19 was reported in Washington. It is now crystal clear to us that the new coronavirus is spreading uncontrollably within the United States.

On March 1st, New York confirmed its first case of COVID-19, a woman who recently traveled to Iran. Can you believe that New Yorkers were able to identify only a single case just a month ago?

On March 8th, I published another article with the title “Plunge Protection Team Gives You Another Opportunity To Short The Market”. S&P 500 Index closed at 2972 on Friday despite all the indications of a COVID-19 pandemic. As expected, we told our readers once again to short the market to protect their nest eggs. I said the following:

“I usually don’t publish my stock recommendations publicly before things happen. I put bread on the table by selling newsletter subscriptions. Once a year or so I make an exception. Make a note of this prediction. Better yet, do yourself a favor and hedge your market exposure. You will thank me later.

I have yet to receive a thank you email. But that same day I received an email from a hedge fund honcho (though not the head honcho) from Manikay Partners who said “Why don’t you think this risk is already priced in?  And in fact this is a buying opportunity?  If the cases stabilize, interest rates are already lowered, and earnings will accelerate.  Just my 2 cents -it’s quite easy to recommend shorting the market given all the fear, but the opposite might in fact be the correct trade. I don’t believe we will enter a recession.”

That article that he disagreed with also made the following prediction:

“Remember, Italy reported its 3rd coronavirus case on February 7th and its first death from coronavirus within 15 days. Fifteen days after that death, Italy has 7375 infections and 366 deaths. United States is roughly 3 weeks behind Italy in terms of the spread of the coronavirus. By the end of March, we will probably be in the same position as Italy is in now.”

As always, my predictions proved to be too conservative. At the end of March we reported 3,900 COVID-19 deaths.

Two weeks ago, on March 20th, I published my last article: “Hell is Coming: Here is the Mathematical Proof”. At the time, our death toll stood at 205.

I shared a very simple model that predicts the number of deaths and the actual number of infections through April 15th. I have an engineering undergrad and a PhD in financial economics. Trust me when I say I can develop very complicated models. You have to be really skilled to develop complicated models. However, it is extremely difficult to develop a simple model that can make accurate predictions and can also be understood by ordinary people.

I don’t want to take your time with sharing the details of the model (please click the link and read the article if you are curious). The model predicted that the U.S. death would reach 800 by March 26th (the actual death toll was 1042 on the morning of March 26th).

The model also predicts a U.S. death toll of 6400 for April 3rd. That’s today. We have about 12 hours to find out the actual death toll which currently sits at 6068.

Here is the first sentence of that article: “Right now 2 million Americans are infected with the coronavirus. The total U.S. death toll by April 15th will be more than 20,000.”

The 2 million U.S. coronavirus infections was an estimate for March 20th.

I also republished the same article on Yahoo Finance and it received more than 700 comments. Most readers couldn’t understand at all how my simple model worked. “After 5 months, there are only 250,000 infected globally. How is it that the US will magically have 2,000,000 infected when the rest of the world (including the originating country with 1.4 billion individuals vs the US’s 350 million people) combined had 250,000?” asked one reader.

“Kinda sounds like a weather man to me. We could get up to 15 inches of snow and wind up with 2 inches. We don’t know what’s gonna happen and can’t predict the future. This is exactly what put people into absolute panic mode,” another reader opined.

“I’m all for freedom of the press but this is out of control. All they do is fear monger anymore and someone needs to put a stop to it somehow,” a third reader said.

“The author is clearly pulling made up numbers out of thin air,” a fourth reader commented.

“Why do you scare people with your theory. These numbers haven’t been seen anywhere else, and likely won’t be here either,” another reader said.

The best feedback I received was the following email message:

“My name is Shawn xxxx (redacted) and I am a Certified Registered Nurse Anesthetist sending a message to Inan Dogan, PhD. I happened across his article Hell is Coming… on Yahoo and wanted to pass along the tremendous good it has done. I live in the XXX area (redacted) and using his Covid-19 model for the US, extroplated a model informing the XXX (redacted) 13 county community containing 7 million people. Back in early March upon completing this work was so alarmed I organized a 13 county healthcare communication channel via FB groups and now have over 1000 members. We are organizing in advance, taking care of each other, moving resources and responding proactively rather than reactively. This is all come about because of Inan’s work and I wanted to pass along my immense thanks from all the physicians, nurses, and other healthcare workers that are benefiting from his foresight and wisdom. Thanks so much.”

I am not the hero here. Shawn and his colleagues are the true heroes. To hear him take the time out of his day to send goodwill my way warmed my heart. It is a shame that our first responders and frontline healthcare workers don’t even have the stupid $1 masks and PPEs, and are forced to put their lives on the line to help the sick.

A week after my article was published, another reader left the following comment: “And here we are in the future. On March 26, the United States was up to 1300 deaths. The predictions in this article were not fear mongering. They were math. Sadly the predicted numbers were on the low side. I am genuinely curious if any of the commenters from a week ago (SO many negative comments) have changed their opinions on this matter. I wish very much that this all was wrong, but here we sit in the reality of what is happening.”

Yesterday another reader summarized the general mood right now:

“So I read this article the day after it was published. I truly wanted it to be wrong or flawed in some manner. Unfortunately, if anything as the author stated, he was being overly conservative. I have continued to reread the article and the comments every couple of days. I am continually shocked at people who want to try to bash basic math as somehow partisan. I truly hope that the inability to accept basic facts and truths has not doomed our country to worse than otherwise predicted. I hope over the next few days that we will seem some positive effects of social distancing on this initial model. Btw I have noticed the nasty replies start to silent. Crickets.”

I want to provide some updated estimates for the next 3 weeks, but we are already at 3200 words. We need to use a more detailed model this time around because we need to take into account the effects of the reactionary policies (social distancing, stay at home orders, etc.) implemented over the last 2.5 weeks to slow down the spread of this virus.

We know that the number of infections doubles approximately every 3 days when we don’t take any actions. Since every metropolitan area started taking actions at different points in time, we now have to develop separate models for each metropolitan area and aggregate the predictions of each model to arrive at a national figure for the number of infections and projected death count.

There isn’t a pressing need now to estimate these figures anymore because Donald Trump pivoted a few days ago and shared more reasonable projections of 100K-240K deaths from COVID-19. I will publish my estimates in a few days.

This crisis showed us that we need to make fundamental changes to our “heads I win tails you lose” capitalist system. US corporations started to migrate their manufacturing operations into China 20 years ago. They wanted to save a buck and increase profits at the expense of our national security. Today, China is the undisputed leader in manufacturing, probably even better than Germany.

This coronavirus pandemic started in China. Did you read a single story about China needing ventilators and masks over the last 3 months? There are 1.4 billion people in China and every single one of them is wearing a mask in public. Yet here, our healthcare workers can’t find any to wear.

Now, we have to go hat in hand to China and ask for ventilators, masks, and other PPEs. How can we be this helpless? Aren’t you disgusted by this? I am furious. The republican politicians failed us. The democrats failed us. We need a completely new mindset.

You understand that we have to spend $2.2 trillion on a bailout package because we couldn’t take action on January 3rd the same way Singapore took action, or we couldn’t impose a total travel ban because our hospitality industry might get hurt. Well, now we practically imposed a similar travel ban after the horse bolted out of the barn. The new coronavirus is still spreading like a wildfire in several of our states, and their governors can’t put their states under a lockdown because it isn’t “practical”.

You know what? They will have to do it sooner or later. If Chinese dictators can’t turn a blind eye to this COVID-19 menace, democratically elected governors can’t do it either. By delaying the response, they are giving the new coronavirus more time to spread.

There will be more time to talk about what needs to be done. Here is what I know. This isn’t going to be a shallow recession and our economy won’t snap back at the end of Q2 or in Q3. The system has to change fundamentally.

Disclosure: Long position in market ETFs as well as bigger put positions in market ETFs. This article is originally published at Insider Monkey.