Wisdom of the West: March 2020

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.

Arrived Thursday afternoon in Deer Valley, Utah—just up the hill from Park City, a short drive from Salt Lake City. Woke up at 4:15 am; out the door at 4:45. Drove 4+ hours to Moab. Entered Arches National Park at 9:00 am. Hiked until 1:30. Lunch at the Moab Brewery; coffee at Moab Roastery. Entered Canyonlands National Park at 3:30. Hiked until sunset, ~6:30. Drove back to Deer Valley, arriving 11:15 after all the skiers in the party had gone to bed. The day was nearly perfect: 60-65 degrees, mostly sunny. All told: 500+ miles driving; ~20,000 steps. These are some snapshots I took.

[Click pics to embiggen slideshow]