A thread on the German data on the efficiency of the AstraZeneca vaccine because I’m reading a lot of VERY bad takes. Is there any kind of statistical significance on the 6.9% efficiency? Is it total crap? It’s not that simple as I’ll try to show.
First of all, forget the absurd “Confidence interval” – it’s useless and based on assumptions that are almost by definition false. So let’s look at this problem differently.
The basic data is this 5829 ppl in the control group, 5807 in the vaccine group, of which 319 and 341 above 65. But the major problem is this: the control group had only case over 65 (101 in total). What is the implication of this surprising number?
The tricky thing here is indeed the very low number of cases in the 65+ control group. The incidence rate is 0.31% vs 1.73% in the entire group. Is this realistic? I don’t know where to find German data but here is it what it looks like, over time, in France.
What do you see here? Early in the pandemic, we were only testing severe cases, i.e. old people, so the incidence rate was artificially higher. If you remove noise in the data and smooth it out it appears the ratio is NOW slightly above 1 – certainly not way below one.
If you are consistent with this (and conservative), you can assume that the incidence rates are the same. Here’s an histogram of the expected number of cases in the 65+ control group. Let’s be honest, having only one case was really bad luck. (100k draws)
If that is incidence assumption is correct and we just got an unlucky draw on the number of cases (unlucky for the trial, lucky for the people!), can we say anything about the efficiency of the vaccine? This is absolutely key, so bear with me.
That’s what the histogram looks like with a 10% efficiency – having just one case sounds very unlikely. Combined with one case in the control group, i.e. two very unlucky draws in a row, is really odd and I’m not buying it.
However, what does it look like if the vaccine has the same efficiency as under 65, i.e. around 70% ? Here’s the histogram for the number of cases in the vaccined group: it totally makes sense that there is only one case, it’s even the most likely scenario!
But of course, we could be very wrong and for some reason the incidence is really different for old people in Germany. What if the 0.31% incidence is a correct incidence rate? Then the whole story changes.
Unsurprisingly, 1 case in the 65+ group is totally possible.
Staying with that incidence assumption,, the data is totally consistent with a very low efficiency vaccine, as the histogram below shows
But - and this is absolutely key - it is also consistent with a 50% or even high efficacy vaccine. In other words, if the low 65+ incidence rate is correct, there is simply no way to know if the vaccine works.
BUT, if, as I suspect, the real 65+ incidence rate is the same one as for the general population, or even higher (as other datasets show), then the efficiency of the vaccine is probably as high as 70%.
So what the German authorities should do know is simply investigate the incidence rate on 65+ in Germany – or even better, in a setting similar to the control group - They could also investigate the behavior of the 65+ control group.
This would give us all the info we need to assess the efficiency of the vaccine.
Follow up: I've been told that the people in the trial were from Brazil and the UK - change the text accordingly; the calculations are the same !

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More from @jeuasommenulle

27 Jan
Paul has a funny question, so let's look at the epic short squeezes and artificial market cap created. You're in for a few surprises. 1st, we're all talking about GameStop.

Chart is for Frankfurt trading. Mkt Cap 15bn€, so +14.7bn€ since the meteoric rise.

BUT there's better!
Some of you probably remember the epic Volskwagen short squeeze created by Porsche. Full story there
ft.com/content/0a58b6…

Nice chart, hey ! Price at 714€, that's 269bn€ created ! WOW.

But there is BETTER
And now we turn to my favorite babies, EU banks. Meet Bankia: it was put into "resolution" and hybrids converted 2 equity b4 the IPO. For some reason there was a massive short squeeze before hybrids could sell.
From 140 to 1.3 that's 428bn€ of paper money!
But there's BETTER
Read 5 tweets
26 Jan
*BREAKING:

"BREAK THIS SELL WALL AND COME FOR THE BROTHERS LOST IN THE 150TH AUTISMO BATTALLION. ONWARDS WE MARCH, IN THE NAME OF MUSK AND TENDIES WE MARCH"
BREAKING:

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BREAKING

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4 Dec 20
Cyprus is truly a fascinating country. Have you heard of the ESTIA scheme? What is happening there is extraordinary. A quick thread.
The general idea of the scheme is great! The purpose is "to deliver a socially acceptable and financially sustainable restructuring solution to vulnerable borrowers who have mortgaged their primary residence".

Indeed, that sounds like a great idea. But how ?
Very straightforward.

"The government subsidizes part of the repayment instalments by 1/3 of the restructured loan."

WOW. FREE MONEY ! THAT'S GREAT! TAKE THE MONEY !
Read 7 tweets
2 Dec 20
It took me a while to write this thread about the ECB’s Financial Stability Review, but that is because (thanks to @michaelsteen and his great team), I got clarifications on some important points.
A lot has been said already, so I’ll try to focus on items which are not obvious.
On the macro front, I will just mention this chart, which looks at the phase-out of measures I believe are the most important for GDP/Banks: in the periphery Spain looks better than Italy, in Core, Germany is stronger.
But there are dozens of other interesting charts in the report, there is just no point reproducing them here. Let’s look at banks, now.
Read 34 tweets
23 Nov 20
As promised!

We all know one reason banks are doing well since the beginning of the Covid crisis is that so much has been swept under the rug with guarantees and moratoriums.

So it’s great to actually have a look at what is hidden under that carpet! Thanks, EBA.
Let’s start with the basics: the numbers, in % of loan book. And the differences in the EU are huge.

THE GOLDEN CARPET AWARD GOES TO CYPRUS

(And it's not even close even if Portugal, Hungary or a few others are really worrying.)
But one should be careful: EBA moratorium are not the only measures, some banks took measures that were not “EBA compliant”. Is this significant? Well, in some countries it’s up to 40% of all Covid measures.
Read 40 tweets
21 Nov 20
DIFFRACTION!

Feynman once said that if you understand the diffraction of a single electron, you understand the whole of quantum mechanics (”QM”).

Who knows, maybe this is the day you’ll understand diffraction & QM?
Indeed, this strange phenomenon turned out to be the key to unlock one of the biggest mysteries of the universe: the wave-particle duality!

But it took a while to get there, because, unlike reflection or refraction, diffraction is hard to observe.
Let’s start with the basics: a shadow. Surely, that’s how you think a shadow works. The shape of the shadow is exactly the shape of the object because light travels in straight lines.
Read 48 tweets

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