Dear Subscriber,

Our hedge was very timely and profitable.  HOLD THE HEDGES!!!

What now? Again because we follow in-country Hong Kong and China reporting from commercial, not political sources, the state of play in China till the end of the NEW Chinese New Year (Now extended to Feb 3) is as follows: Because of extreme shortage of virus testing kits, and the normal Chinese undercounting of anything "bad" or loss of "face", the actual infection headcount should be assumed to be 10X the official headcount. More interesting to China watchers like me is the social media meltdown from angry citizens angry at the all-powerful State government for making things worse from very slow response. 

This message from an epidemic expert in China

Dr. Eric Feigl-Ding
@DrEricDing

3/ ... We estimate that only 5.1% (95%CI, 4.8-5.5) of infections in Wuhan are identified, and by 21 January a total of 11,341 people (prediction interval, 9,217-14,245) had been infected in Wuhan since the start of the year. Should the epidemic continue unabated in Wuhan....

4/ we predict the epidemic in Wuhan will be substantially larger by 4 February (191,529 infections; prediction interval, 132,751-273,649), the infection will be established in other Chinese cities, and importations to other countries will be more frequent. Our model suggests that travel restrictions from and to Wuhan city are unlikely to be effective in halting transmission across China; with a 99% effective reduction in travel, the size of the epidemic outside of Wuhan may only be reduced by 24.9% on 4 February.

Thanks to Robert Millman for these shares from Dr. Feigi-Ding. In short, the news is GOING TO GET A LOT WORSE out of China. The contagion WILL hit the peak infection rate in the next few weeks. Thousands of Chinese will perish--its terribly sad--but life WILL march on. 

So what to do next? Well the US looks like it is next.

Have you got your flu shot yet? 
GET IT!

Toby