- COVID-19, the Novel Coronavirus is NOT the Zombie Apocalypse.
- But it's like nothing any of us alive have ever experienced.
- The Spanish Flu pandemic of 1918 is our only global model precedent.
- Though we have the experiences of China, S. Korea, and Italy to go by.
- And these are so recent, their findings are hard to digest.
- That flu was more deadly but not nearly as contagious.
- One of the truly pernicious features of COVID-19 is the way it's spread:
- If someone sneezes on me at the grocery story on a normal Tuesday...
- I know I will come down with cold symptoms by the weekend.
- With this virus, I might not show any symptoms for up to TWO WEEKS!
- And all that time, I am infectious to everyone I come into contact with.
- Unbeknownst to me or them!
- The economic consequences of this current pandemic are going to be dire:
- Q1 earnings/unemployment will only tell part of the story: ~three weeks of devastation.
- Q2 will be devastating globally because the economic stoppage will be for the entire period.
- GLOBAL RECESSION!!!
- Depression. Economic Armageddon.
- The death of Neo-liberalism and Global Capitalism.
- The rise of Socialism.
- The implementation of Nationalist Isolationism and Military Dictatorships.
- The suspension of democratic elections and even Constitutions.
- None of the above. All of the above.
- Who knows?
- I certainly don't. And neither do you.
- And that's the point: we are all dealing in uncertainties and unknowns.
- One question to ponder though: Are the stock markets pricing these potential risks in now? (We'll come back to that.)
- Still, there are some things we can speculate about reasonably.
- China, e.g., is already starting to see the first signs of economic recovery—even in Wuhan.
- Due primarily to early efforts at containment and isolation.
- AND MASS TESTING.
- Only with broad testing are we able to determine how widespread the contagion is.
- Frankly, the U.S. has no idea how bad it is here because we have so little testing...
- Even for our front-line medical personnel.
- China's economy is, however, manufacturing based.
- Ours is more a service economy.
- China, thus, may not be a good model.
- Because you can isolate people on a factory floor but not, say, in a restaurant or at a show.
- There may be some validity to the notion that the virus will dwindle by summer.
- Summer colds suck but are not nearly as prevalent as winter colds.
- Social distancing, isolation, and quarantining are key factors in stopping the spread now.
- And we should all be observing them assiduously.
- Probably at least through May or June.
- But these measures also bring certain risks:
- Chief among the risks: Fewer people are exposed to the virus.
- Thus fewer develop immunities to it and remain vulnerable to exposure and infection.
- If—IF—we see a dwindling of the virus and hints of an economic recovery by summer...
- Many feel the economy and global equity markets will start to recover.
- And social distancing, etc. (sports, concerts, bars, restaurants, etc.) may dwindle as well.
- Folks will likely relax their precautions.
- But there will not be a vaccination ready by that time.
- And this is the problem.
- Now, back to the Spanish Flu precedent (remember that?):
- It, too, dwindled over the warmer months of 1918.
- But came back with an even more virulent vengeance the next October.
- And most of the deaths occurred over THAT winter stretching into 1919.
- Yet, CDC is on the case.
- People we know personally here in Atlanta who normally work on things like HIV/AIDS, cholera, ebola, flu, etc., have been reassigned.
- It's all hands on deck for COVID-19.
- This is a good thing. A very good thing.
- But no matter how hard they work, a vaccine will not be ready for at least another year, if not longer.
- This is a fact of life about vaccine trials: THEY TAKE TIME!
- Both to check their effectiveness against the virus, and
- Their dangers.
- Next fall, if the Spanish Flu is any guide, could see a disastrous SECOND WAVE of the outbreak!
- Unless, of course, some sort of therapy is developed.
- There is some happy talk now from Trump about hydroxychloroquine, a malarial drug.
- There is some evidence it can be repurposed to ease the effects of the coronavirus.
- This evidence, however, is inconclusive...
- And must likewise be investigated. Again, THIS TAKES TIME!
- Again, CDC does not have any evidence at the present time that Chloroquine can mitigate the symptoms of COVID-19, say like Tamiflu does for the flu.
- The point being: if we see a relaxing of the distancing precautions in the summer due to a belief that the virus is defeated, we may see a dramatic increase in cases next fall.
- Remember, it is VERY contagious.
- And, there being no vaccine, this could devastate the global economy even further.
- And that includes the stock markets as well—IN A BIG WAY!
- Meaning: a second major dip in the stock markets, another devastating hit to a recovering economy.
- Bottom line: Don't sleep on this thing!
- Don't get over-confident.
- We are in this for the long haul.
- At least until an effective vaccine is developed...
- Or a proven therapy or even a cure is developed.
- Then, and only then, will we have to deal with the idiot anti-vaxxers.
- But at least they will have seen what a vaccine-less world looks like.
