** 05-Mar-2020 World View: Latest Coronavirus updates
Several days ago I described the latest updates in the Wuhan
Coronavirus (Covid-19) emergency. The following repeats that list,
with some updates and further context. These are my personal
conclusions, based on the thousands of reports that I've heard or
read.
My main conclusion is that the base scenario is that economic growth
will remain essentially at zero, and there will be no recovery until a
vaccine is developed, which experts say will not happen until 2021.
This is the predicted scenario assumed by this article. The details
of the predicted recovery are at the end of this article.
- Wuhan Coronavirus (Covid-19) is spreading rapidly, and is
showing no signs of stopping.
- China claims that it's stopped in China, but no one knows what
will happen when the draconian restrictions are lifted that are
currently keeping tens of millions of people quarantined and isolated.
However, South Korea appears to be having success with strict but less
draconian restrictions.
- Many people are hoping that the warm summer weather will stop
spread of the virus, but Singapore, which is on the equator and has
warm summer weather, just had several new confirmed cases in the last
few days. And even if the summer weather slowed the spread of the
virus, history shows that it would return in full force in the
fall.
- Sooner or later, everyone in the world will be exposed to
Covid-19. 80% of the cases will be mild. Another 10% will be
serious, but curable. The other 10% will be extremely serious, and
will lead to some deaths. Most of the deaths will occur among the
elderly, or people with a history of smoking.
- On Tuesday (Mar 5), Tedros Adhanom Ghebreyesus, director of the
World Health Organization (WHO), shocked reporters by saying that
about 3.4% of confirmed coronavirus cases have died. This is
contrasted to the 0.1% death rate of the ordinary seasonal flu. At
the beginning of this crisis, I heard numbers like 2.1%. Then, after
a couple of weeks, the WHO announced that it was actually about 1%.
So Tueday's announcement by Tedros is actually quite shocking.
- Infection does not provide protection from reinfection.
Reinfected patients have a high death rate.
- When someone dies of coronavirus, it usually means that there is a
cluster of undiagnosed cases behind it.
- Coronavirus is an economic disaster for China. China is overdue
for a massive anti-government rebellion, the first since Mao's
Communist Revolution civil war, and coronavirus could be the
trigger.
- Businesses will be looking for ways to repair their broken supply
chains as quickly as possible, by seeking alternate suppliers.
- Most companies will be at least partially back in business by
summer, looking for ways -- robotics, working at home, hazmat suits,
etc. -- to get things going again. For example, medical services will
increasingly use a "Teledoc" model.
- Companies that depend on crowds of people will look for ways (such
as using separation booths in restaurants) to maintain a sufficient
social distance between people.
- Each country will use containment as its first strategy --
tracking and testing travelers and others who might be infected,
identifying others by means of contact tracing, and requiring those
who fail the test to be isolated and quarantined in the homes or hotel
rooms.
- When the containment strategy fails, each country will move to a
mitigation and risk reduction strategy -- close public gatherings,
encourage or force large populations of people to stay at home, shut
down all mass travel -- air, bus and train. In Japan, for example, a
closely scrutinized decision will be about the Tokyo Olympics which,
if canceled, would have devastating consequences for Japan's
economy.
- The objective of both the containment and mitigation strategies is
to buy as much time as possible until a vaccine can be deployed.
- Lots of companies are working on vaccines, and something may be
available for test purposes in a few weeks. However, it will be at
least a year before a vaccine can be widely deployed, according to
multiple experts.
- Wall Street stocks are in the biggest bubble in history, and the
same is true of stock exchanges in many other countries. It is 100%
certain that this bubble will burst at some point, leading to a global
panic and financial crisis. It's possible that the Coronavirus crisis
will be the trigger.
My base scenario for the unfolding of the coronavirus crisis is as
follows:
- Continued financial and business losses, with only marginal
recovery, for a year.
- No recovery until a vaccine can be widely deployed, which experts
say won't happen for a year.
- A strong V-shaped recovery as a vaccine becomes deployed in
2021.
The recovery could be sped up if a vaccine could be deployed more
quickly, but experts insist that this is impossible.
On the other hand, the recovery could be derailed for years if the
current stock market bubble bursts and there's a major international
financial crisis, which history tells us is overdue.
The recovery could also be derailed by war. China's economy is
extremely unstable, and Mideast ethnic rivalries are churning up, and
either of these situations could spiral into a larger war -- which
history tells us is also overdue.
All in all, it will take about a year for the world to return to
"normal," but that will be a "new normal," living side-by-side with
Coronavirus. However, WW III and a global financial crisis may well
begin within a year. By 2021, the world will be a very different
place.
General advice from the experts: Wash your hands, cough into your
sleeve, and don't touch your face.
