Media is reporting a 2-3% death rate for the coronavirus. They arrive at this number by naively dividing total deaths by the current case count. This is wrong. People don’t get sick and immediately die. It takes days. We don’t know how long it takes with coronavirus, but it certainly is not immediate. (Using the media’s methodology, the death rate for cancer would be zero!) A more meaningful way to calculate the death rate would be by understanding how many of those who get sick end up dying. This information is currently unavailable. I’ve calculated the next best thing below. The chart below divides the current (Jan 31, 2020) total cumulative deaths due to coronavirus by the number of cases going back in time. Presumably, someone who dies today might have initially become sick and added to the case count a few days ago. Based on my back of the napkin calculations, the true death rate for coronavirus could be much higher than reported. Based on cases reported January 25th, the death rate is 11%. Of course, only time (and proper tracking) will tell what the true death rate is. Because of the limited data, my numbers are based on population averages. If you were to slice the population into age segments the death rate for those over age 50 might be much higher than 11%. This is because the concentration of deaths so far is in the middle-aged and older. Of course, all if these numbers reflect the early stages of what could be a global pandemic. During this stage the health care system is able to adequately care for the sick. If the coronavirus reaches pandemic levels, global healthcare systems will be completely overwhelmed and a huge segment of the sick will only receive the most basic care at best. So as the virus spreads, it is likely the death rate rises as the resources to fight the virus are expended. Will the virus become a pandemic? I’m not a scientist. I’m just using available data and common sense. Using common sense, I do think the chance this becomes a global pandemic is high for 3 reasons:- The virus can be spread when patients are asymptomatic. This means people are spreading it before they even realize they are sick.- The Chinese reaction is dramatic indicating they are observing something very dangerous. They have totally quarantined 50 million people and are building thousands of hospital beds in record time. They are clearly worried.- The reaction by the rest of the world is quite underwhelming. People are dramatically underestimating how virulent and deadly this virus is. The coronavirus will capitalize on this weakness to spread into other populations outside if China. I hope I am wrong. Please tell me I am wrong because I really don’t want to be right when it comes to human suffering. Unfortunately, all the objective signals indicate this is going to get really bad before it’s over.