All posts by John C. Menzies

Was This the Smartest Investment in 2020?

Kawamoto Corporation is a Japanese company, listed on the Toronto Stock Exchange. It is a company that since its listing in 2004 nobody took much notice of, with very little trading activity and a market capitalisation of US$21.2 million, until early January of 2020.

Kawamoto Corproation Daily chart showing a huge increase in both volume and price following the outbreak of COVID19

Since 2004 few shares traded with a big day being 25,000 shares.  Frequently less than 1,000 shares traded each day and this was the case until, January 6, 2020 when volumes started to increase dramatically.  

Within the space of a calendar month the stock had peaked at US$37 with 11 million shares trading in a single day. Market capitalization moved from a modest US$21.2 million to peak at US$ 212 million, all in the space of 20 trading sessions.

Kawamoto produces medical equipment, but most importantly for this market dynamic, Kawamoto is a major producer of surgical masks.

Kawamoto Corporation, showing massive price appreciation since January 4, 2020

COVID19 Virus Continues to Spread but not at the Same Rate as Initially Reported 15/02/2020

With the aggregation of clinically diagnosed infections now included in the case total there was a significant 48% jump in cases over the last few days. Most of the difference was with the inclusion of the large number of cases tentatively diagnosed as “Unconfirmed” based on symptoms and CT scans (i.e. clinically diagnosed as against a lab RT-PCR test). These Unconfirmed cases were previously being reported as such on the Chinese Government website.

The total of reported cases now stands at 67,000 with 1,523 deaths for an aggregate death rate of 2.3%. While the WHO/John Hopkins data reported herein does not include a breakdown of demographics of the victims, limited reporting in the medical literature suggests that few children have been severely impacted by COVID19, however a high proportion of pregnant patients suffered negative impacts on their pregnancies including death. In addition there are reports that patients with hypertension or diabetes and smokers suffer more severe illness.

COVID19 Cases by Chinese Province and teh Rest of the World

The chart above shows the distribution of cases for each of the Chinese provinces and for the Rest of the World. While the totals differ the slope of the individual data on this semi-log plot are all very similar.

While the aggregate mortality has changed very little over the last 20 days of the epidemic as the charts below show, a number of provinces are seeing their death rates converge on that of the epicentre of the disease, Hubei Province, at around 2.5%. While this trend would appear reasonable it may also reflect the relatively low number of cases in those provinces.

Mortality progression by Chinese Province and the Rest of the World
Case and Mortality by Chinese Province and the Rest of the World

The waterfall chart below clearly shows that the vast number of cases are within Hubei Province.

Distribution of reported cases by Chinese Province and the Rest of the World

While it is reasonable to conclude that the medical facilities in Hubei were initially overwhelmed by the outbreak and the initial high reported mortality may reflect that, there would appear to be no relationship between the number of cases or the mortality rate based upon the provincial medical capacity, measured by physicians per 100,000 of population.

Physicians/100,000 population as a measure of provincial medical capacity vs reported cases
Physicians/100,000 of population vs. Mortality

The Chinese based on the reported data have performed heroically to contain the COVID19 outbreak, significantly out-performing our “optimistic” model of disease progression. The next 10 days will determine if the infection can be contained following the return to work after the extended Chinese New Year holiday. The model assumed improving case identification and treatment and increasingly the effective use of anti-virals. Community health initiatives have been far more effective than we had modelled.

COVID19 Case and mortality models and reported data

While there has been much criticism of and suspicion that the number of cases and deaths were under-reported the data would appear to be internally consistent and death rates sufficiently variable to suggest that in large part the Chinese are reporting reasonably accurate numbers.

Third Highest Arctic Sea Ice Extent on 09/02 in the Last 15 Years

February 9, 2020

The Arctic sea ice extent is a mere 1.8% less than the 1979-2019 mean and the third highest in the last 15 years.

Mapped Arctic sea ice extent (SIE) on 09/02/2020 was 14.69 million km2 which is 270,000 km2 or 1.8% less than the 1979-2019 average.  This is largest sea ice extent on this day since 2009 and is within 1 standard deviation of the 1979-2019 mean ice extent.

The average sea ice accumulation rate in the last 5 days is 50,000 km2/day. The January 2020 rate of sea ice accumulation is the eight highest in the last 40 years and sea ice extent, volume and thickness are not expected to peak until mid-March 2020.

Sea Ice Extent

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MASIE Arctic Sea Ice Extent and SIE Median for the period 1981-2010
Arctic Sea Ice Extent (MASIE Database – see above image) for the month of February for the period 1979-2020 with the 1979-2019 average.

Annual Arctic sea ice extent 2017-2020 and average and +/- 1SD for the 1917 to 2019

The daily sea ice extent data for February for the period of available data from 1979 to 2020 is shown above. The current sea ice extent is well within the 1 SD of the 1979-2019 average and is the highest since 2009. Arctic sea ice extent shows little trend since 2010.

Arctic sea ice extent is not expected to peak until mid-March 2020.

Daily sea ice extent plot for the period 2006 through 2020. Spot the trend!

The extent of Arctic sea ice varies from summer to winter. The sea ice extent shown here relies on data from the Multisensor Snow and Ice Mapping System (IMS) that runs at the National Ice Centre. The IMS product uses several satellite data sources including passive microwave, but it is also based on visual analysis and other data sources and undergoes a form of manual data fusion. The data reported here has a 1 km resolution and was sourced from the National Snow and Ice Data Centre

Novel Corona Virus Progression, Reported Rate of Transmission Continues to Slow 09/02/2020

Novel Corona Virus. Corona viruses take their name from their crown-like halo.Credit: EYE OF SCIENCE/SPL

While the Novel Corona Virus (nCOV2019) remains a serious global infection, the media continues to report on nCOV2019 with remarkable ignorance. The common journalistic refrain is now citing increasing numbers of cases with alarm claiming that the infection is accelerating. Based on the reported number of cases, for the moment, little could be further from reality. The reported rate of increase in cases has dropped significantly. With the extended Chinese New Year (CNY) holiday now coming to an end, transmission rates may well now increase as travel resumes. The progression of the disease both inside and outside of China looks remarkably similar excepting in Hubei where it had likely spread well before a new highly infectious virus was recognized. In Hubei the initial reported death rate was high, likely reflecting poor early reporting and a medical system inundated with a large number of cases requiring intensive care.

Progression of nCOV2019 symptomatic cases by Chinese province plus Rest of the World

The disease progression for the reported data for all the Chinese provinces and the Rest of the World is shown in the graphic above. The similarity in the slope of disease progression suggests that the data is internally consistent and that commonly discussed under-reporting may not be occurring. The straight-line trends on the log scale simply reflects the logarithmic nature of disease progression for a disease with Ro>1. The chaotic trends at the beginning of the record likely reflects delayed reporting and possibly increased presentation of cases as the public became more aware of the severity of the disease after the 21st January.

The chart below of the distribution of nCOV2019 cases shows that the majority of cases are reporting in Hebei and supports the decision by the Chinese Government to lockdown not only Wuhan but the entire province.

Distribution of nCOV2019 cases by location

As would be expected the distribution of mortalities is predominantly in Hubei province.

Distribution of reported nCOV2019 deaths by location

The aggregate mortality rate is shown in the chart below (note the inverted Y-axis). After an initial surge in deaths (which may reflect delayed reporting) in Hubei province the mortality rate has stabilised at 2%, however this average hides some interesting details.

Average calculated rate of mortality for all reported cases.

The Mortality Rate varies significantly by region. Mortality in Hubei province was the highest at nearly 3%. This likely reflects the rapid progression of the disease before the appearance of nCOV2019 was recognized and before enough resources could be mobilized. The data also suggests that provinces with better resourced medical facilities were better able to manage patient care. An example of this would be Guangdong compared with Gansu. Guangdong reported more than 10 times the cases of Gansu, however Guangdong reported a mortality rate of 0.9% compared with that of Gansu at 2.4%. There are a number of other comparable comparisons in the data all reflecting likely difference in medical infrastructure.

The mortality data for the rest of the world indicates a death rate of less than 1%. While this data still reflects the earliest days in the disease progression, a number of conclusions can be drawn. nCOV2019 is highly contagious resulting in both viral pneumonia and secondary bacterial pneumonia. A high proportion of patients require hospitalization and oxygen therapy at least for several days. This places considerable strain on these facilities and available oxygen supplies. Were a pandemic to evolve outside China and medical facilities were overwhelmed then comparable mortality to Hubei could be anticipated.

nCOV2019 cases and mortality for China and the Rest of the World

With the end of the CNY and the resumption of travel in china it would seem likely that case numbers may well increase significantly. It is however also likely that many people will stay away from the workplace and remain in the provinces and many businesses many simply close for some time, moderating the impact.

Controlling nCOV2019 both within China and outside will be very challenging, particulalry in countries with poor medical infrastructure. It would seem reasonable that in parts of SE Asia and in Africa nCOV2019 there is a high probability that nCOV2019 will reach pandemic levels. It is also possible that nCOV2019 may be with us for some time, presenting as an annual epidemic until there is sufficient immunity with the global community.

While various experts have commented that surgical masks offer no protection, I would suggest that they are highly effective in keeping hands away from faces, which is likely the main form of transmission. In addition, prudent and regular hand washing should be encouraged and governments should prepare for nCOV2019 by adequately resourcing medical services. It should be remembered that SARS and MERS are both more contagious and more deadly but were successfully contained.

Highest Arctic Sea Ice Extent on 02/02, Since 2009

February 4, 2020

The Arctic sea ice extent is within 1 SD of the 1979-2019 mean and the highest since 2009 on this day. It is no surprise that this remains unreported in media. A plot of the sea extent time series from 2007 to 2020 shows no significant trend and lacks any evidence for a crisis in the Arctic.

Mapped Arctic sea ice extent (SIE) on 02/02/2020 was 14.42 million km2 which is 370,000 km2 or 2.5% less than the 1979-2019 average.  This is largest sea ice extent on this day since 2009 and is within 1 SD of the 1979-2019 mean ice extent.

The average sea ice accumulation rate in the last 5 days is 55,000 km2/day. The 2019-2020 winter rate of sea ice accumulation is amongst the highest on record and sea ice extent, volume and thickness are not expected to peak until March, 2020.

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MASIE Arctic Sea Ice Extent and SIE Median for the period 1981-2010

Arctic Sea Ice Extent (MASIE Database – see above image) for the month of February for the period 1979-2020 with the 1979-2019 average.

The daily sea ice extent data for February for the period of available data from 1979 to 2020 is shown above. The current sea ice extent is well within the 1 SD of the 1979-2019 average and is the highest since 2009. Arctic sea ice extent shows little trend since 2010.

Arctic sea ice extent is not expected to peak until March 2020.

Annual Arctic sea ice extent 2017-2020 and average and +/- 1SD for the 1917 to 2019

What can be concluded is that the Arctic is not disappearing and that there is little evidence to support the endless claims over the decades that the Arctic sea ice will vanish during a coming summer. While CO2 has increased during this period sea ice extent has failed to decline as predicted. Where is the crisis in the Arctic as there seems to be no relationship between atmospheric CO2 and Arctic ice extent, volume or thickness (see earlier posts)?

The extent of Arctic sea ice varies from summer to winter. The sea ice extent shown here relies on data from the Multisensor Snow and Ice Mapping System (IMS) that runs at the National Ice Centre. The IMS product uses several satellite data sources including passive microwave, but it is also based on visual analysis and other data sources and undergoes a form of manual data fusion. The data reported here has a 1 km resolution and was sourced from the National Snow and Ice Data Centre

1984 the Maldives is Disappearing

Over the last 20 years at least there have been near continuous press reports of the near-term disappearance of the Maldives, a series of coral atolls in the Indian Ocean. The chain of 26 atolls stretches from Ihavandhippolhu Atoll in the north to Addu Atoll in the south with an aggregate landmass of about 298 square kilometres (115 sq mi). It is one of the world’s most geographically dispersed sovereign states as well as the smallest Asian country by land area and population, with around 520,000 inhabitants. Malé is the capital and the most populated city, traditionally called the “King’s Island” for its central location.

The alarmist media claims that human induced global warming, resulting from carbon dioxide emissions is to blame for the imminent inundation.

If there is a crisis in the Maldives with the 500,000 about to soon become climate refugees, then it should be evident in the Google Earth imagery. We have compiled the satellite imagery for the Kin Island for every year from 1984 to 2016. You can determine if the Maldives is disappearing.

It can readily be seen in the tide gauge data for Mumbai in India and Fremantle in Western Australia that Indian Ocean sea levels have been rising steadily since record keeping began in the 1800s. There is no evidence in this data (the longest records in the Indian Ocean) that sea levels of recent times are rising catastrophically or have any relationship with atmospheric carbon dioxide concentrations.

Tide Gauge data from the port of Mumbai in India. (Data: NOAA, Center for Operational Oceanographic Products and Service)
Tide Gauge data from the port of Fremantle in Western Australia. (Data: NOAA, Center for Operational Oceanographic Products and Service)

There is a risk of inundation in the Maldives however it is due to the natural rise of sea level and has nothing to do with human activity and no amount of expenditure will halt this rise in sea level.  The Maldives should build to accommodate future sea level rise, rather than blame carbon dioxide emissions and seek rent from western countries.

Media reports would indicate that investors remain keen to invest with numerous new airports and resorts under construction.

Novel Corona Virus Progression, Reported Rate of Transmission is Slowing in China

Novel Corona Virus Progression, Some Observations

Coronaviruses take their name from their crown-like halo.Credit: EYE OF SCIENCE/SPL

We started to track the Novel Corona Virus (nCOV2019) back in mid-January and based on the reported statistics developed a model for disease transmission and mortality. The training period for the model is shown in blue below and the underlying parameters have not been changed. Assumptions included a reduction in transmission rates as a consequence of public health measures in the near term plus a reduction in mortality rates as treatment methodologies improved and ultimately the recognition that some of the more exotic anti-virals had some impact. At the time we considered the model to be optimistic.

nCOV2019 reported cases by Chinese province. Data: John Hopkins

The disease progression for the reported data for all the Chinese provinces is shown in the graphic above. What is obvious is the similar slope to all the case trends (at the same axis scale, Hubei has the same slope as other province). The straight line trends on the log scale simply reflects the logarithmic nature of disease progression for a disease with Ro>1. The chaotic trends at the beginning of the record likely reflects delayed reporting. While there has been some comment that epidemiological models predict, based on an Ro of 2.2, 10 times the number of cases, the Chinese reported data would appear to be internally consistent and we are inclined to believe the data, until proven otherwise.

nCOV2019 reported cases and deaths (Data: John Hopkins) and model progression.

Comparison of the reported cases and deaths to the model is revealing. While the mortality rate shows very modest decline the rate of transmission appears to be declining significantly likely in response to the remarkable Chinese public health measures. Progression of the disease in countries outside of China is as would be anticipated. It is surprising that there are no reported cases in Africa. Considering the state of African medical services if nCOV2019 were to become established, the impacts on the continent could be more significant than in China and elsewhere in terms of totals cases and mortality.

The nCOV2019 outbreak is far from over but there are some positive developments in China as is evident in the data. We should not underestimate, that while the disease likely originated from the consumption of bats, the Chinese public and medical profession have behaved heroically.

China will now likely reflect on its public health investment and importantly on the interaction between the public and wild animals. The risk of new novel viruses will not be reduced until the consumption of exotic animals, particulalry wild mammals, is better controlled.

Heatwave, snow records being broken in Australia! The data record begs to differ.

With the usual breathless hysteria that has become the mainstay of journalism, the above article goes on to claim that temperatures will plummet to 16C after Hobart saw a record 40.9C – “its hottest day ever”. More of the usual journalistic alarmism playing to the narrative that 21st century temperatures are the highest on record.

The meteorological station in Hobart is located in a built-up area on Ellerslie road and has a nearly continuous temperature record dating from 1882.

Ellerslie Road highest and lowest monthly temperatures (Data: Bureau of Meteorology data for station, 94029)

The graph of the maximum and minimum temperatures for Ellerslie Road shows that 2013 was in fact the highest temperature in the record with a warm 41.8C, but temperatures were comparable in the late 1800s as can be seen. While the maximum temperature is expected to see 16C, this is nothing unusual.

On 30th December 1897 the thermometer recorded 40.6C but fell to 17.4C two days later and was 14.6C a few days before on the 20th December 1897. This is the period of the worst drought in Australia, the Centennial Drought and this high temperature was followed by another record on 1st January 1900 with a peak of 40.6C when only days before, on the 27th December 1899, the maximum was a mere 14.6C.

In Tasmania these temperature fluctuations are nothing uncommon.

Mount Wellington covered in snow after 40C day. (Supplied/Adrian Van Beek)

More interestingly there is a long-term upward trend in both the maximum and minimum temperature data for Ellerslie Road, which is evident in the Mean Maximum Temperature Anomaly map (using a mean of 1882-2020). However, the overall temperature trend seen in other Australian data of high temperatures around 1900 and comparable temperatures today is evident in the data.

Ellerslie Road mean maximum temperature anomaly (Data: Bureau of Meteorology data for station, 94029)

While this might reflect a long-term temperature change for the Hobart region it might also be related to the location of the meteorological station which is now surrounded by roads, houses, car-parks and multistorey buildings.

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Ellerslie meteorological station location in a heavily built-up region of central Hobart, Tasmania.

Highest Arctic Sea Ice Extent Since 2009, 30/1

February 1, 2020

The Arctic sea ice extent is within 1 SD of the 1979-2019 mean and the highest since 2009 on this day. It is no surprise that this remains unreported in media. A plot of the sea extent time series from 2007 to 2020 shows no significant trend and lacks any evidence for a crisis in the Arctic.

Mapped Arctic sea ice extent (SIE) on 30/01/2020 was 14.30 million km2 which is 400,000 km2 or 2.4% less than the 1979-2019 average, Figure 1.  This is largest sea ice extent on this day since 2009 and is within 1 SD of the 1979-2019 mean ice extent.

The average sea ice accumulation rate in the last 5 days is 60,000 km2/day. The 2019-2020 winter rate of sea ice accumulation is amongst the highest on record and sea ice extent, volume and thickness are not expected to peak until March, 2020.

Sea Ice Extent

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Figure 1,  MASIE Arctic Sea Ice Extent and SIE Median for the period 1981-2010
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Figure 2, Arctic Sea Ice Extent (MASIE Database – see above image) for the month of January for the period 1979-2020 with the 1979-2019 average.

Figure 2, shows the daily sea ice extent data for January for the period of available data from 1979 to 2020. The current sea ice extent is well within the 1 SD of the 1979-2019 average and is the highest since 2009. Arctic sea ice extent shows little trend since 2010, Figure 3.

Arctic sea ice extent is not expected to peak until March 2020, Figure 4.

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Figure 3, Daily sea ice extent plot for the period 2006 through 2020.
Figure 4 Annual Arctic sea ice extent 2017-2020 and average and +/- 1SD for the 1917 to 2019

Sea Ice Volume

The minimum and maximum sea ice volume declined from 1994 to 2010, Figure 5 but since 2010, Figure 6, has shown little change.

Figure 5, Sea Ice Volume 1979 to 2019 shows decline from 1994 to 2010 but little change in the last decade.
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Figure 6, Sea Ice Volume for the period from 2006 to 31/12/201. Credit Polar Science Centre, University of Washington

Sea Ice Thickness

Sea ice thickness is calculated from the sea ice volume and sea ice extent, Figure 7, and as would be expected shows a similar trend with decline from 1996 through 2010 and very little change in the last decade, Figure 8.

What can be concluded is that the Arctic is not disappearing and that there is little evidence to support the endless claims over the decades that the Arctic sea ice will vanish during a coming summer. While CO2 has increased during this period sea ice extent has failed to decline as predicted. Where is the crisis in the Arctic as there seems to be no relationship between atmospheric CO2 and Arctic ice extent, volume or thickness?

Figure 7, Arctic Sea Ice Thickness calculated using the NSIDC and PIOMAS data for the period from 1989-2019 (latest data)

Figure 8, Arctic Sea Ice Thickness calculated using the NSIDC and PIOMAS data for the period from 2007-2019 (latest data)

The extent of Arctic sea ice varies from summer to winter. The sea ice extent shown here relies on data from the Multisensor Snow and Ice Mapping System (IMS) that runs at the National Ice Centre. The IMS product uses several satellite data sources including passive microwave, but it is also based on visual analysis and other data sources and undergoes a form of manual data fusion. The data reported here has a 1 km resolution and was sourced from the National Snow and Ice Data Centre

Sea Ice Volume is calculated using the Pan-Arctic Ice Ocean Modelling and Assimilation System (PIOMAS Zhang and Rothrock, 2003) developed at APL/PSC. Sea ice volume depends on areal extent and thickness and while extent can be readily measured, thickness cannot and the estimate used here relies on assimilation of observations into numerical models as a way to estimate volume on a continuous basis.

Sol Gets a numbered sunspot

Near-Live image of the sun in 304 angstrom as seen by NASA’s SDO.

It has been a surprise in the last 12 months to see a numbered sunspot on the face of Sol, but we have one today in NOAA Active Region 2575 (Catania sunspot group 28). The sunspot is stable but inactive. This image is for that part of teh spectrum centred on 304 Angstroms where photons are emitted by Helium 2 at around 50,000C, in the chromosphere and the transition region. Solar activity is expected to remain low with a low probability of flares or mass ejections.

In the past 24 hours the solar wind speed remained slightly enhanced under the influence of a negative polarity coronal hole and increased from around 400 to 520 km/s. The total interplanetary magnetic field strength was in the range of within 5-8nT in the beginning of the period and has decreased to below 3nT at 12 UTC today. The Bz component was mostly negative with a minimum value of -7 nT. The solar wind conditions are expected to remain enhanced over the next 24 hours.

Sunspots on the face of our star remain few in number as we are in the middle of the solar minimum. Solar Cycle 25 will be the 25th Solar Cycle since 1755. Solar cycles are marked by a reversal in magnetic polarity, with the first convincingly reversed sunspots of SC 25 occuring in November 2019. SC 25 solar maximum should occur between 2023 and 2026 with 2031 seeing the end of the cycle. The strength of SC 25 is debated with predictions of 30-50% of SC24 to somewhat stronger than SC24.