COVID-19 notes
Johns Hopkins COVID-19 DATA VISUALIZATION CENTER. Daily confirmed new cases and cumulative cases; US.
Data as of 8:12pm Friday Apr 10
To End the
Pandemic, Give Universal Testing the Green Light.
In sum, to be able to categorize all Americans as either red, yellow, or
green, we’d need to follow three steps:
1.
Continue with current social distancing
guidance to buy time.
2.
Provide self-administered, self-reported
antibody testing to every American. Those who test positive can re-enter daily
public life with standard precautions.
3.
Continue to improve access and speed of
antigen testing so we can quickly and strictly quarantine those that have
active disease and are contagious.
Doctors In
Training Are Dying, And We Are Letting Them Down.
Coronavirus
infection may cause lasting damage throughout the body, doctors fear
Martin Wolf and
wishful thinking on ending coronavirus lockdowns.
Many commentators have observed that the economic damage of the
coronavirus will likely kill more people than the pathogen itself. Too many
people then move to arguments like “So let’s isolate only the elderly” or “We
must therefore minimize damage to the economy.” We’ll turn to Martin Wolf of
the Financial Times’ urgings on that front in due course. The problem is that
there are times you can’t have what you want and this is one of them, big time.
Our old way of living will never fully come back. And too much fixation on “We
need to relax the lockdowns because economy” is bypassing the hard thinking and
work that still hasn’t been done enough to help more of us function
better before we have either effective treatments that greatly reduce the
number of serious cases or a vaccine.
While China has loosened up on its restrictions, it’s not back to normal
due to a combination of some workers reportedly not having returned for duty
plus factories not being able to go into full schedules due to lack of new
orders thanks to lockdowns in Europe and the US. But there are also rumors that
infections have come back. Some countries like Austria, the Czech Republic and
Denmark are planning to relax their restrictions in the next few weeks; we’ll
have a much better picture a month after that happens of how much reversion
takes place.
But the big problem for most countries, particularly the US with its
hollowed-out health care system and the UK with its starving of the NHS, is
that doctors and nurses are already at the breaking point
even in locations where the disease has not peaked. Medical professionals are
at even greater risk of bad outcomes than the public at large due to potential
exposure to large viral loads when exhausted. The lack of adequate PPE is a
disgrace and the failure of the Feds to step in, even more so.
There are plenty of clips on Twitter showing the sorry state of hospitals….
The big point is that a group obviously and seriously exposed to the
coronavirus is medical workers. I’ve argued that the big motivation for
flattening the curve isn’t just to reduce deaths overall by not exceeding
hospital capacity but in particular not to decimate hospital staff.
The Asian
Countries That Beat Covid-19 Have to Do It Again
Singapore, Hong Kong, South Korea, and Taiwan had flattened the curve.
Then travelers from the US and Europe began reimporting the virus.
Here Comes The
Second Wave: Wuhan Lockdown Ends And Tens Of Thousands Are About To Flee The
City
Jennifer Nuzzo:
“We’re Definitely Not Overreacting” to COVID-19
Johns Hopkins epidemiologist and infectious disease expert Jennifer Nuzzo
on why vaccines aren’t the answer, how COVID-19 is unique, and how to stay
safe.
Respiratory
virus shedding in exhaled breath and efficacy of face masks
We identified seasonal human coronaviruses, influenza viruses and
rhinoviruses in exhaled breath and coughs of children and adults with acute
respiratory illness. Surgical face masks significantly reduced detection of
influenza virus RNA in respiratory droplets and coronavirus RNA in aerosols,
with a trend toward reduced detection of coronavirus RNA in respiratory
droplets. Our results indicate that surgical face masks could prevent
transmission of human coronaviruses and influenza viruses from symptomatic
individuals.
The COVID-19 vaccine development landscape
Outlook: The global vaccine R&D effort in response
to the COVID-19 pandemic is unprecedented in terms of scale and speed. Given
the imperative for speed, there is an indication that vaccine could be available under emergency use or similar
protocols by early 2021. This would represent a fundamental step change from
the traditional vaccine development pathway, which takes on average over 10
years, even compared with the accelerated 5-year timescale for development of the first
Ebola vaccine, and will necessitate novel vaccine development
paradigms involving parallel and adaptive development
phases, innovative regulatory processes and scaling manufacturing capacity. …
Can a Battery of
New COVID Tests Stem the US Debacle?
Susceptibility
of ferrets, cats, dogs, and other domesticated animals to SARS–coronavirus 2.
We found that SARS-CoV-2 replicates poorly in dogs, pigs, chickens, and ducks,
but ferrets and cats are permissive to infection. We found experimentally that
cats are susceptible to airborne infection
Regular Related
Fare
GREAT RECESSION OR GREATER DEPRESSION? The Interview ·
Featuring Dr. Nouriel Roubini. RealVision.
The 2020 Hmmminar Series. Interviewees include Stephanie Pomboy, John Hussman,
Hugh Hendry, Pippa Malmgren. (Hat-tip: MK)
"The Whole World's F**ked!" - Raoul Pal Pulls No Punches In Latest Interview
Pal continues to
think (even after [last] Monday's manic short-squeeze meltup), that
COVID-19 will cause "the largest insolvency event in all history."
And, as Business Insider notes, given his track record as of late, that's not
reassuring.
"I think
the balance of probabilities are that this is a much longer event - in terms of
economic impacts - than anybody is pricing in," he said.
"I think it's
a huge societal change that's coming from all of this."
…
The biggest
event of all of our lifetimes has now begun to come clear, and Raoul
believes we are still only in the first phase – the panic. It will most likely
play out in three acts over several years:
First, the
panic, which is the liquidity phase.
Then the hope,
which is the correction phase.
And finally, the
insolvency, the brutal phase that changes everything, including the system
itself.
America is Committing Economic Suicide.
Meanwhile, the
media is touting a $1200 check to every American. The truth is very different.
That $1200 has all kinds of tests attached to it. If you make this much as a
single person, that much as a married couple, and so on. It’s true that 90% of
people will see something — but most people won’t see nearly enough.
Let’s do the
same calculation we did for businesses for people. The economy is $20 trillion.
The US has 127 million households, give or take. Divided equally, that produces
income per household of about $150k. But of course, Americans aren’t nearly
that rich. Median income is only about $60K — because the rich skim a full half
the economy right off the top. 60K is about $1100 a week. That means the much-vaunted
stimulus check equals about just a week’s worth of the average person’s income.
Do you see the
weird parallel here? The stimulus is so small it supports businesses for just
one week. And exactly the same is true for people — it supports the average
person for just one week, too.
…
But that was
needless. Because money at this scale is just a social fiction. The government
can and should support the economy for as long as it takes, guaranteeing both
business and personal incomes
…
No, there won’t
be “inflation.” What there will be is massive deflation if none of the above
happens.
…
Money in an
event like this is a social fiction. It is a public good, whose use we must
immediately and radically and dramatically expand and maximize, so that
massive, life-saving, social-scale investment can happen, immediately.
Steve Keen: Coronavirus: Inflation or Deflation? Why we need a
Modern Debt Jubilee Now
my expectations
are that, in the absence of the sort of government rescues that are now being
tried around the world, the likely outcome of this crisis is serious deflation.
This will be caused by a mechanism that I call "Fisher's Paradox", in
honour of Irving Fisher, who first identified it as the primary cause of the
Great Depression. Fisher argued that the Great Depression was caused by the
twin coincidence of too high a level of private debt, and too low a level of
inflation. In this situation, debtors resorted to distress selling, cutting
their prices in order to attract a cash flow to themselves rather than their
competitors. But because everyone was doing it, prices fell across the board,
taking GDP down with it. Debts therefore fell less than GDP, and the private
debt ratio actually rose. In his words:
if the over-indebtedness with which we started was great enough, the
liquidation of debts cannot keep up with the fall of prices which it causes. In
that case, the liquidation defeats itself. While it diminishes the number of
dollars owed, it may not do so as fast as it increases the value of each dollar
owed. Then, the very effort of individuals to lessen their burden of debts
increases it, because of the mass effect of the stampede to liquidate in
swelling each dollar owed. Then we have the great paradox which, I submit, is
the chief secret of most, if not all, great depressions: The more the debtors
pay, the more they owe. The more the economic boat tips, the more it tends to
tip. It is not tending to right itself, but is capsizing. " The Debt-Deflation Theory of Great Depressions"
(Fisher 1933, p. 344)
Nathan Tankus: How to Pay for the Pandemic War.
… “How to Pay
For the War” was a pamphlet written in 1940 by John Maynard Keynes which is a
classic for seriously thinking through the economic effects of a large spending
and resource reallocation program. The problem with the mainstream media
framing of the question is it was never about the practical economic problem of
provisioning a spending program with physical resources without disrupting the
functioning of the rest of the economy. Instead, it was about the easiest thing
for the Federal Government to find- money.
As Yves Smith says, “Nathan is correct that making up for income lost to
the pandemic would not be inflationary, no matter how big and scary the numbers
look. However, as readers no doubt keenly appreciate, the US seems to lack the
ability to get there, even if it had the political will. The delays, shortfalls
and gaps are already leading to business failures, which destroy jobs, wealth,
and leads those who are comparatively well situated to save to make up for
anticipated collateral damage, which creates another leg down to the
deflationary shock. And too many officials are fixated with bailout math and
mechanisms, and not the vastly more important, “How to alleviate bottlenecks
and shortages” problem.”
Tuomas Malinen: The worst economic collapse ever?
Into the Abyss
These
fragilities, combined with the massive economic impact of the coronavirus,
leads us to our most pessimistic scenario. In it we assume that
·
Many governments will not be prudent enough in suppression measures,
which will lead to severe global pandemic peaking in summer.
·
Due to the worsening outbreak and delays in containment, suppression
measures will eventually be prolonged and they become draconian (“Wuhan
style”).
·
The massive stimulus measures enacted by governments and central banks
will be ineffective in providing support for the economy, as the tardy
application of draconian suppression measures lock people at home in several
key countries of the global economy for a prolonged period of time.
·
Global economic activity plunges to never-before-seen lows.
·
European banking sector breaks.
·
Eurozone unravels violently.
·
China ‘lands hard’.
·
Global financial system collapses.
·
A systemic crisis engulfs the world.
Fragilities laid
bare
The Covid-19
pandemic will reveal all the fragilities of the world economy. The near
collapse of the U.S. capital markets in mid-March was averted only through
unprecedented socialization of the financial markets. However, when the Flood
of corporate bankruptcies begins, central banks will not be able to withstand
the onslaught. Then we will face only extreme economic options.
The global
collapse scenario, presented above, would bring in its wake massive
unemployment, poverty, misery and the eventual re-structuring of our whole
social and economic order. The world would be utterly and permanently changed
as a result.
This is
something we absolutely need to be prepared for, even though its likelihood
is still relatively low.
But it is
increasing fast, and that should worry us all.
An American Horror Story: Rabobank On The Recession Of
2020
Conclusion
It will take
until Q4 before we can assess how much damage has been done to the US economy.
At this point in time, we expect the economy to continue to struggle well after
the lockdown has been lifted. If a vaccine against the coronavirus arrives in
early 2021, economic growth could pick up and we might end up with 4% GDP
growth in 2021. However, a range of more negative scenarios is also possible.
Delays in getting the coronavirus under control could be one reason. But the
indirect economic impact of the lockdown and subsequent social distancing
measures should also not be underestimated. Many businesses won’t survive or
accumulate huge debt burdens and many households will face loss of income and
employment. While the supply effects are prevailing at the moment, the
demand effects may last for years.
Thinking Outside of the “V” Shaped Recovery Box (RIA)
It seems the
entirety of the financial media and many on Wall Street believe a “V” shaped
economic recovery is in our future. While we hope they are right, we would be
foolish to take such analysis and, quite frankly, unwarranted optimism, at face
value. If history teaches us one thing, it is that significant, life-altering
events are rarely if ever followed by a quick return to normality. In this
article, we raise a few considerations that may make you reconsider popular
economic narratives. Today, the importance for investors to think outside of
the box cannot be overstated.
Or to put it
another way, the parameters of “the box” have likely changed and, if so, we
should be cognizant of those changes in our decision making. If the future
economic recovery does not resemble the “V” shape that the financial markets
are depending on, the stock market may be even more over-valued than we think…
The COVID-19
Crisis may be short-lived or not. Although it seems as though progress is being
made, there is nary a sign that a full-fledged cure or vaccine is at hand.
Social distancing and mass closures of commercial enterprise appear to slow the
exponential spreading of the virus considerably. While very effective in saving lives, these
measures come with immense economic costs. The productive output of the global
economy has ground to a near-total halt.
As the virus
appears to have peaked in Asia and is starting to show signs of peaking in
Europe, we are hopeful the U.S. will also peak shortly. Then what? From a
health standpoint, the answer depends on whether a cure or vaccine is
discovered.
If a cure or
vaccine is found and can be produced, distributed, and administered quickly,
then mandatory and self-regulated social distancing will end, and people will
hopefully resume normal activities. This may be the rationale backing a “V”
shaped recovery, but as we discuss later in the article, normal may not be the
same normal we knew before February 2020. …
Just How "Cheap" Is The Market? Here Is The
Shocking Answer
Two weeks ago,
when stocks had plunged as lows as 2,250 and staged a modest rebound after the
Fed went all in with its "nuclear" intervention, one emerging
narrative used by the bulls to justify buying stocks was that equities had
dropped to a much cheaper level from a valuation perspective.
However, as
Gerry Minack from Minack Advisors wrote at the time, that was hardly the case,
and while equities were indeed cheaper, they were hardly
"cheap." As Minack wrote in a
daily note from March 25, "while US equities are cheaper now than they
were, they are not cheap relative to long-run averages. That is true for all
the absolute valuation measures I follow"
Scott Minerd: The Emerging Emerging-Markets Crisis
Global
capital markets are not pricing in the growing likelihood of rising EM
corporate defaults
…
The emerging
markets soon will be hit very hard by the global pandemic. The pandemic will be
followed by goods and food shortages, and social unrest. Before the virus hit
them directly, EM countries had already been adversely affected by falling
commodity prices and the economic impact of the shutdown in China and other
parts of the developed world. Most EM countries have very weak healthcare
systems, nowhere near enough hospital beds and respirators, crowded cities and
slums, and large numbers of workers in the economy who are paid daily wages or
work in the informal economy and can’t work remotely. For many EM countries,
this pandemic will quickly escalate from a health crisis to a humanitarian
crisis, and ultimately to a solvency crisis. Political stability will be
the last domino to fall.
Aaand It’s Gone…The Biggest Support For Asset Prices
Market Completes A 50% "Bear Market"
Retracement
However, if
earnings ONLY decline to just $100/share, which is optimistic, then valuations
are 28x earnings.
No “bear
market,” in history, for any reason, ever ended with valuations between 20-28x
earnings.
On the other
hand: Goldman Calls The Bottom, No Longer Sees S&P
Dropping To 2,000 On "Unprecedented Policy Support"
Jim Bianco: The Fed And The Treasury Have Now Merged
Breaking Down the Coronavirus Unemployment Benefit in
Each State.
Economic Policy Responses to a Pandemic: Developing the COVID-19
Economic Stimulus Index. PDF.
SCMP: Coronavirus has lit the fuse on a time bomb in China’s
economy: debt
China factory gate deflation deepens as coronavirus
paralyses global economy
Mafia distributes food to Italy's struggling residents
Hundreds of U.S. Meat Workers Have Now Tested Positive
for Virus
Regular Fare:
Mish: Median Mortgage
Debt for those Over 65 Has Quadrupled
Could the recession prick the housing bubble?
(not just) for the ESG crowd:
The world was a
mess before anyone ever uttered the word coronavirus
Fwiw, I unfortunately completely agree with Ikonoklast’s first paragraph
in the Comments section; it is not just hyperbole
Satellite spots
new ozone layer hole opening up over the Arctic.
Snowden Warns
Governments Are Using Coronavirus to Build ‘the Architecture of Oppression’
Other Fare:
American schools
are banning Zoom and switching to Microsoft Teams
400-year-old
Greenland shark ‘longest-living vertebrate’
Big Thoughts:
Michael Hudson, with Dirk Bezemer, Steve Keen and
T.Sabri Öncü: The Use and
Abuse of MMT.
Fun Fare:
More Than 30 Million
Years Ago, Monkeys Rafted Across the Atlantic to South America
In other news Stanford has made a toilet that identifies you based on
your … analprint scan?
A mountable toilet system for personalized health
monitoring via the analysis of excreta
Darwin Award of the Week:
French pensioner
ejected from fighter jet after accidentally grabbing bang seat* handle.
Quotes of the Week:
For now, the populace is absorbed in the drama of the
viral outbreak, and I don’t think economic concerns have quite struck the
majority yet. They will soon, though, as people begin to realize this event
is going to last a lot longer than they have been told. Even if the
infection numbers diminish over the course of this month, as many assume, the
greater threat at hand is that governments will assert that this is because the
“lockdowns work”. If the lockdowns “work”, then the lockdowns will continue.
Using the wave model of conditioning, governments will
allow the public brief moments of breathing room in which lockdowns are lifted
for a short time; maybe a month or less, followed by a resurgence of infections
and then hard lockdowns return for another couple of months. This process is
not going away anytime soon. Understand that there are over seven billion
people on the planet, and we have a long way to go before the majority of the
population has either recovered from the virus or died from it.
This means endless cycles of suppressed business
activity, supply chain breakdowns, business closures and job losses. The central banks and governments have created an environment in which
the ONLY source of relief is monetary policy and Universal Basic Income (UBI).
Ultimately, nationalization of most “essential businesses” will have to occur
under this model. Eventually the Defense Production Act will be fully
implemented. This means that dollar devaluation will accelerate beyond anything
we saw during the credit crisis ten years ago, as governments bond completely
with corporations to form a megalith of socialist production control.
To summarize: The Fed will have to finance
corporations directly through stock purchases, or the government will have to
take control of them outright, and the Fed will have to finance government
to an unprecedented level of debt creation
This turbulence didn’t just come out of nowhere, however. The seeds were set in an environment excessively permissive of debt that
provided a remarkably fragile foundation for market advances. Investors who appreciate
this will have a much greater chance of successfully navigating the bumpy road
ahead. Investors who don’t will struggle to preserve what they have.
To be sure, the proximate cause of the turmoil in the first quarter was
the spread of the coronavirus and the public policy measures implemented to
contain it. To focus on this, however, is to miss the more important structural
condition of excess leverage. Jim Grant assessed plainly in his
April 3, 2020 letter: “the volume of credit came
to exceed the country’s legitimate demand for credit.”
My generation was the dominant voice for sixty years. A voice that
worried about the next 24 hours, not the next 24 years. That’s about to shift,
regardless of what year you were born.
Tweet of the Week:
After 2 weeks of not going
out, the animals came to check if everything is ok.
Pics of the Week: 1 - America’s New Bread Lines are Growing – and more at: 2
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