Ludwig von Mises on Milton Friedman

Friedman is not an economist.  He’s a statistician.

~ Ludwig von Mises

Lord Canning on statistics

I can prove anything with statistics but the truth. 

~ Lord Canning, Governor General of India, 1856-1862

Jorge Luis Borges on democracy and statistics

Democracy is an abuse of statistics.

~ Jorge Luis Borges

Kevin Duffy on the value of Covid-19 death statistics

Q: Why aren't the media and state stressing contextual data for individuals to make informed decisions?

A: Because they want to make those decisions for them. To the media and state, data is simply a tool to scare the people into submission.

~ Kevin Duffy, tweet, April 26, 2020

Ron Paul questions the coronavirus death statistics

On March 24th, the CDC issued an alert stating that doctors should classify “probable COVID-19” or “likely COVID-19” as Covid-19 deaths. Perhaps that explains the seeming drop-off of pneumonia deaths this year and the simultaneous spike in Covid-19 deaths as some researchers have reported.

The BBC reported last week that, “At present in the US, any death of a Covid-19 patient, no matter what the physician believes to be the direct cause, is counted for public reporting as a Covid-19 death.”

Does that sound like a scientifically sound way of determining how deadly Covid-19 really is?

~ Ron Paul, "End the Shutdown; It's Time for Resurrection!," LewRockwell.com, April 7, 2020

Kevin Duffy on the coronavirus, experts, simple narratives and statistics

Beware the following:

1. Self-appointed "experts" provide a simple explanation to a complex problem.

2. Their message gets promoted by non-objective authorities (more "experts") like politicians and the mainstream media who have their own biases and agendas.

3. The crowd swallows this simple explanation whole and repeats over and over until it becomes accepted truth.

This explains the reaction to the coronavirus warnings to a "t."

"Experts" like CDC and WHO said Covid-19 could infect 40-70% of the population and that the average mortality rate is 3.4%.  True, but not true...

The average case mortality rate is 3.4% (U.S. so far is 1.5%).  This is not the overall mortality rate because the denominator only counts confirmed cases.  (This does not include everyone who caught the virus, but was asymptomatic or never got tested and reported it to the authorities.)

People are freaked out because 3.4% sounds a lot scarier than the 0.1% mortality rate from the seasonal flu. However, the flu rate is based on estimated cases.  If we look at confirmed cases, the case mortality rate from the seasonal flu is more like 10%.

Now I'm not suggesting the seasonal flu is 3x as deadly as Covid-19.  I'm only suggesting that Covid-19 is nowhere near 34x as deadly as the flu.  To multiply 40-70% by a 3.4% mortality rate is to make an obvious and gross statistical error.  This would imply between 4.5 mil and 7.8 mil deaths in the U.S.  No wonder people freaked out!

How could everyone miss something this obvious?  That is the nature of crowds... and blindly following "experts."

Does anyone remember the Beardstown Ladies who wrote three bestselling investment books during the mid- to late-'90s?  They became minor celebrities for beating the stock market for an 11 year period, doubling the S&P 500's annualized return.  As it turned out, they miscalculated their performance (honest mistake). In fact, they underperformed the market by 3% per year.  This gross error wasn't caught for three years!

~ Kevin Duffy, Facebook post, March 26, 2020

Jeremy Grantham on bubbles as outlier events

Just as all bubbles have broken, these bubbles did. Far from being a surprise, the bubbles breaking were absolutely not outlier events, contrary to protestations. The bubbles forming in 1998 and 1999 and in 2003 through 2007 were the outlier events. The U.S. housing market, which was a clear bubble with prices at least 30% above a previous very stable trend, is well on its way back to normal, and equities and risktaking may well have made it all the way back.

~ Jeremy Grantham, "Reaping the Whirlwind," GMO Quarterly Letter, October, 2008

Doug French on a Bill Bonner speech: "Mathematical modeling is based upon conceit and pretension"

Bill Bonner provided a clear analysis of how the current crisis was engendered in his speech played for the [Doug] Casey faithful during the Wednesday night banquet. When Richard Nixon closed the gold window, the US dollar was then "based upon a fraud," and with central bankers being human, from that point the dollar would be made worthless. The next villain in Bonner’s story is Eugene Fama, who formulated the "Efficient Market Hypothesis," or in other words, the market knows everything, prices just move randomly. Since Professor Fama’s work was published, securities prices became natural phenomena that are supposedly not influenced by human behavior. Thus, stock and bond price movements could be mathematically modeled, and that risk isn’t risk anymore, but volatility.

From this thinking came the derivatives industry that is based upon models devised on historical market statistics during time frames that didn’t include a fiat currency regime, let alone the presence of $500 trillion in derivatives. This mathematical modeling is based upon conceit and pretension, according to Bonner, and the turning of Level 3 assets into AAA-rated paper were "miracles that would stagger Jesus Christ."

~ Doug French, "V.I. Bernanke," LewRockwell.com, April 1, 2008