Friday, March 27, 2020

Maybe it's not a pandemic after all

For about 4 weeks, beginning in late February, stock markets around the world faced the growing realization that the virus that originated late last year in China (AKA coronavirus, covid-19, Chinese virus, CCP virus, and Kung Flu) might prove to be a global pandemic that could kill tens of millions of people within the span of several months. Epidemiologists frantically revved up their models to calculate how fast it might spread and how many lives might be affected. Geometric growth, it was noted (e.g., a doubling of cases every 2 days, as many feared) gets you from 100 to a million cases in less than 2 weeks. Yikes!

The peak of the prediction frenzy probably occurred around the time I turned on the TV and saw California's governor, Gavin Newsom, declare (on March 10th) that in the absence of strong countermeasures, 25.5 million Californians could contract the covid-19 disease within the next 8 weeks, resulting possibly in a million deaths and many hundreds of thousands of seriously ill citizens flooding California's hospitals. Obviously, as he and many other governors, presidents, and prime ministers around the world concluded, something had to be done—and quickly—to "flatten the curve," to delay the spread of the infection in the hope that therapeutics and vaccines could be developed, and to avoid dangerously overcrowding hospitals in the meantime. The result was the rapid onset of shutdowns, lockdowns, closures, and quarantines that caused economic activity around the globe to plunge almost overnight. Meanwhile, the media's anti-Trump bias and love of all things terrifying combined to fan the panic.

Perspective: After at least one month on the job, this killer disease has resulted in the deaths of only 85 Californians out of a population of 40 million. Since the normal flu season began last October, the CDC estimates that as many as 45 million Americans have come down with one form or another of the flu, and roughly 45,000 have died from complications of the flu. That works out to about 250 deaths per day. In all of the US, and for the year to date, covid-19 has been tied to only 1700 deaths. Simply put, this is not a pandemic, and is very likely not going to become one, especially given the draconian measures that have been imposed across the country to date.

Nevertheless, pandemic panic sent interest rates into free-fall, stock markets entered bear market territory in a matter of days, corporate bonds (especially those issued by oil producers, who faced near-extinction as plunging demand caused oil prices to return to collapse) cratered, and fear and panic resulted in a sudden and unprecedented demand for money and safe assets. Fear and panic, as measured by the Vix index, reached a peak in the mid-80s on March 16th, a level last seen at the height of the 2008 global financial market meltdown, when investors feared the imminent collapse of global markets and an extended global depression.

And now here we are, just 11 days after max panic, and the stock market is up almost 14% from last Monday's low.

What is driving the sudden onset of optimism, at a time when global covid-19 cases are on their way to 600,000, global deaths are almost 27,000, and Italian and Spanish deaths are more than 4 times China's deaths? Ah, you might say, the answer is easy. It's the passage this week of a $2 trillion US virus rescue plan, coupled with central banks' massive injections of liquidity. Maximum fiscal stimulus and maximum monetary stimulus surely have saved the day! (No doubt markets are also looking forward to Spring weather in the Northern Hemisphere, since that will most likely render the virus less potent.)

But you might be wrong. Fiscal and monetary "stimulus" doesn't send consumers out en masse to work and spend as if nothing had happened; stimulus surely doesn't cure the flu. Fiscal stimulus of the sort cooked up in the Senate only works as a backstop for all those who have been laid off, locked up, and shut down. Monetary "stimulus" only ensures that all those who want the safety of cash can find it, and all those who fear the onset of a global credit collapse can worry less. The virus rescue package is like a strong pain reliever, but not a cure.

What is beginning to make a real difference is the growing realization that the covid-19 virus is not nearly as deadly as the early projections suggested. That, and the rapidly growing list of therapeutics—led by chloroquine—and the accelerated development of vaccines and the fact that covid-19 test kits are on the verge of being distributed by the millions. The private sector really is coming to the rescue, and the media hype is being eroded by the reality on the ground. Dr. Birx herself is coming to this conclusion.

The shutdowns have certainly helped "flatten the curve," but it's impossible to purge this virus from our shores. Sooner or later most people will be infected, as has happened with nearly every new virus.

What we really need right now is to recognize that this virus is not a pandemic or a mass killer. It's probably more like an unusually nasty flu. We need to lift the economic shutdown as soon as possible and get back to work. Trump is right.

Following is a collection of updated charts which track the financial progress of what I believe will become our national nightmare, from which we will most likely wake up soon.

Chart #1

As Chart #1 shows, we reached peak panic on March 16th, and stocks bottomed a few days later (March 23rd). Since then the S&P 500 is up almost 14%. The Vix index has backed off from its eye-popping highs, but remains very elevated as stocks see-saw daily. I'm guessing the market will remain very nervous for at least another week or so, but eventually we'll see prices moving higher and the Vix moving lower.

Chart #2 

Chart #2 shows a macro definition of money demand: the ratio of M2 to nominal GDP. I've estimated the GDP number for the first quarter, and it is a conservative estimate. What stands out is the incredible surge in the demand for money and money equivalents relative to income. It's a replay of what we saw in the wake of the 2008-2009 Great Recession. This is likely to persist for awhile and increase further as nominal GDP is likely to drop significantly in the second quarter. When the market wants tons of money, central banks are compelled to supply it, lest disaster ensue.

Chart #3

Chart #3 shows another measure of money demand: the 3-mo. annualized growth in the sum of bank savings and demand deposits. There's been a literal explosion in the demand for safe money in recent weeks.

Chart #4

 Chart #4 shows the spreads on 5-yr Credit Default Swaps, which are a highly liquid and timely indicator of the market's concerns about the health of corporate profits. Peak panic saw these spreads soar, but they fell sharply in the wake of the Fed's announcement of massively accommodative monetary policy and a 100 bps cut in short-term interest rates. The Fed is doing the right thing.

Chart #5

As Chart #5 shows, the demand for 3-mo. T-bills has been so intense that their yields have gone negative (i.e., they sell at a small premium to their face value). By cutting the rate it pays on excess reserves to near-zero, and by stepping up its purchases of notes and bonds massively, the Fed is effectively supplying massive amounts of T-bill equivalents to the market in the form of the bank reserves it uses to purchase securities from the banking system. This is the right thing to do in a panic.

Coronavirus cure: French researchers completed new additional study on 80 patients, results show a combination of Hydroxychloroquine and Azithromycin to be effective in treating COVID-19

We now have a very effective treatment protocol for covid-19. This renders obsolete all previous projections/forecasts of the disease's evolution. This is a very big deal. There is a bright light at the end of the tunnel.


niceguyeddy said...

I think you have a typo.....according to my dashboard, more like 1500 (1590 to be exact) deaths in the US, not 150....but the hydroxycloro/zpack treatment is effective, so I agree with your conclusion....

Scott Grannis said...

niceguyeddy: thanks for spotting that, it's now corrected. Try as I may, I can't catch all the typos.

Needelman said...

Appreciate you Scott - thank you for your work

A Clark said...

Scott, thank you for posting this. Do you have any thoughts on what could be the ramifications if we do get back to having a productive economy sooner rather than later coupled with all of this stimulus that is already loaded into the system? I haven’t seen much analysis of this scenario thus far and would greatly appreciate your thoughts!

Robert said...

Thank you for this rational, optimistic perspective.

However, fear is irrational. Majority of people will continue to feel -irrationally, illogically- threatened by something they can't understand and as a result, curtail their behavior impacting consumption. Whether it is a pandemic or not. Whether the death ratio is low or super low. Fear runs in another channel altogether and is being fed daily by the media. Can't stop that. Fear creates its own reality which in turn affects the real world.

Just learning that China has backed off from re-opening theaters can send tremors around the globe and reignite those fears. Irrationally.

amritsari said...

This is what happens when you leave 50 states to deal with the private sector to do their own procurement of critical medical supplies:

"Republicans have not been openly critical, but some governors have been explicit in describing their difficulty in depending on the private sector for medical supplies.

In a call held with Mr. Trump at the Federal Emergency Management Agency headquarters on Thursday, a group of governors stressed to him that they were struggling to address the staggering demand for equipment and supplies.

At one point, Gov. Kristi Noem, Republican of South Dakota, grew frustrated as she expressed to the president and members of the task force that state officials had been working unsuccessfully with private suppliers.

“I need to understand how you’re triaging supplies,” Ms. Noem said. “We, for two weeks, were requesting reagents for our public health lab from C.D.C., who pushed us to private suppliers who kept canceling orders on us. And we kept making requests, placing orders.”

nytimes from last week.

amritsari said...

This is essentially making the 50 states fight each other to get what ever they need. This administration has displayed criminal negligence in handling the crisis.

amritsari said...

China - a communist, authoritarian regime that is not supposed to care for lives, has killed their economy for the sake of saving lives. Over here in the US, conservatives are clamoring to let things go back to normal and have some people die just so that GDP keeps printing positive numbers. Who would have thunk.

Benjamin Cole said...

I agree with this posr, Sometimes you have to take the least-bad option.
So, let's go back to work.

Of the 1,700 deaths in the US attributed to COVID-19, most involved elderly with comorbidities.

Shutting down an economy is not the least-bad option.

BeatingAlpha said...

We had over 400 deaths just today and this number is growing at 20%-30% rate. So do the math over next few weeks. I usually find your blogs very insightful. On the pandemic, you are looking at a snapshot in time, not where it is headed. In a couple of weeks this pandemic is most likely going to overwhelm hospitals in several cities and the mortality rate will go up even more. Listen to all the medical professionals. This is far worse than the normal flu. I cannot believe we are still debating this point with people who can actually do the math.

Roy said...

"Since the normal flu season began last October, the CDC estimates that as many as 45 million Americans have come down with one form or another of the flu, and roughly 45,000 have died from complications of the flu. That works out to about 250 deaths per day. In all of the US, and for the year to date, covid-19 has been tied to only 1700 deaths."

So, at the time of writing this post, we're at 1700 known deaths.

If, after two weeks there are 10,000 deaths, would you consider it a pandemic then?
If, after two weeks there are 20,000 deaths, would you consider it a pandemic then?

If you then consider that these deaths *happened while there are extreme measures in place* would you consider it as a pandemic?

I mean, what numbers would you expect to see in order to consider something as a pandemic?

I actually agree with you that if there were efficient proactive government actions in place we would not need a lockdown and death rate is probably around 0.5% (five times the flu). Sadly, due to current administration incompetency, the death rate will be much higher. In addition considering the high prevalence of obesity and hypertension in the USA, younger people will die as well in large numbers, sadly.

Rick Jones said...

>Maybe it's not a pandemic after all

The word pandemic comes from the Greek: pan (all) + demos (people) = pandemos (all people)

English later added the -ic suffix.

The first definition I found when I Googled it was: "(of a disease) prevalent over a whole country or the world."

The classical definition of a pandemic in the Dictionary of Epidemiology defines it as: “an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people”. (Note: This definition includes nothing about population immunity, virology or disease severity.)

You can dig around the Internet and find variations that fiddle around at the margins, but given how many countries this has spread to over the whole world, and given it's spread across the whole of the U.S., it is absolutely ridiculous to say, "Maybe it's not a pandemic after all."

It is a pandemic.

Bryon said...

By the end of April, Social Security will have 20% fewer beneficiaries.

steve said...

This IS by definition a pandemic. Frankly, I'm startled to read this post. You are literally denying basic science. As I've written ad nauseam, the greatest concern with "going back to work" is that the virus will spread to probably 25-50% of the population and in very short order completely overwhelm our healthcare system.


At that point, what are we supposed to do? Turn away everyone who requires hospitalization? We are trying to buy time to get a vaccine and that's what shutdowns, slowdowns or whatever you want to call them does.

Christian S. Herzeca, Esq. said...


will this replay next flu season? if not as I hope, I wonder why not. is it the wet market Chinese origin of covid-19 that captured our "halloween scare movie" imaginations, so that if there is no similar narrative next season, there wont be such an overreaction? or can we expect the media/internet click bait business model to simply progress to a point where nothing is considered with common sense (and in the absence of common sense, "expert" models will seek to outdo each other with no rational limiting principle)?

these are the things I am thinking about.


Johnny Bee Dawg said...

Amen, Amen, Amen.

Best week for stocks since 1938.
The main thing the market saw this week was that the predicted deaths are just not materializing, and so far, there are no hospital or ventilator shortages...even in nyc.

The ny health dept has been a disaster in advice and response. Cuomo is demanding 30,000 ventilators as a Trump has ordered 100,000. Will donate the leftovers to other countries.
Trump noted that no country can mobilize like American free enterprise.
America will save the world, once again.

Might be the bottom. Might have to make a new low. Who knows?
Lets see if we get a follow thru day with volume this week.

But one thing is certain....nothing about this virus has been as bad as predicted. Nothing.
Imagine if Trump's hydrochloroquine pills start to work like in every single study so far. A big IF.
But if it works, Katy bar the door.

We will look back on closing down the entire nation as one of the greatest policy blunders in US history, rivaling FDR's disasters in the 1930s.
The good news is the monetary moves have been correct this time...if late.
We should never again allow a health problem to purposely cause a financial crisis.

Prayers for all those who contracted the virus, and all those wiped out by the government.

Johnny Bee Dawg said...

Might be more coming.
Some scientists think recent cosmic activity has brought several viruses to earth from outer space.


Ron Gruner said...

Understating the seriousness of the Coronavirus is a mistake. We've haven't seen anything like this in decades, perhaps since the 1918 Spanish Flu. The Swine Flu killed 12,469 Americans but took 159 days to reach the first 1,000 deaths. The Coronavirus did it in 24 days. Traffic fatalities average about 38,000 annually, a little more than 100 a day. Coronavirus surpassed that rate a week ago after less than a month after the first death. World War II averaged 304 combat deaths a day, we exceeded that figure March 27. In 1952, its peak year, 3,000 died of polio; U.S. deaths will exceed that within the next few days.

Through March, U.S. Coronavirus deaths have increased at an average 24 percent daily rate. Extrapolating, that projects 4,600 deaths by April 1 and nearly 11,000 by April 5. If these projections actually occur, and let's hope they don't, then hundreds of thousands of U.S. deaths by the end of April looks unavoidable.

Sean Sebold said...

The difficult question is really the one that is not being asked. What price for a life?

How many live are we expected to save with these extraordinary measures taking place? Suppose we save 100,000 lives. With just the "corona" package alone, we are spending $20 million per life saved. There are very few PI attorney's in the US that can get that price.

An that is only on what we are paying in hard dollars. The lose of businesses, revenue, balance sheets is devastating to the most vulnerable in society. The hospitality industry; servers, dish washers, maids, etc., are going to bear the brunt of this, if we do not get the country open again quickly.

How many lives are worth how many lives? This is not just about money.

I agree with Scott. This is so overdone. It's time someone started being rational, and leave the emotions in a trunk for a little bit.

Masa Ellis said...

I agree with Scott's conclusions altogether. This COVID 19 fear reminds of Y2K scare this nation experienced for a few years twenty years ago. I still remember vividly when I woke up the morning of January 1, 2001, the sun was smiling, birds were singing, electricity was on, and no airplane fell off from sky the night before. In a similar manner fear triggered this global pandemic panic reactions, and we will find out in a few months COVID 19 was a demon created in people's imagination.

Rick Jones said...

Sean Sebold said:

>The difficult question is really the one that is not being asked. What price for a life? It's time someone started being rational...

Good point, Sean. Let's start being rational and discuss how we might go about doing it...

Should we take everyone who tests positive for coronavirus and put them in isolation to die?

If not, what should we use criteria? How about if we start with age, since -- as Benjamin Cole says -- this mainly affects the old...

What age should we choose? Suppose we choose age 72. That is to say, anyone over age 72 who tests positive is put in isolation to die.

Now suppose Donald Trump, who is age 76, tests positive. Do we put him in isolation to die? How are we to decide who is exempt from the age limit?

And suppose someone who is working in, say, a restaurant tests positive. That is to say, someone who had had contact with dozens -- maybe hundreds -- of people. What do we do about that?

Please help me think rationally about how to arrive at the criteria for putting people in isolation to let them die, and how we go about implementing it.

Rick Jones said...

Masa Ellis said:

>This COVID 19 fear reminds of Y2K scare this nation experienced for a few years twenty years ago. I still remember vividly when I woke up the morning of January 1, 2001, the sun was smiling, birds were singing, electricity was on, and no airplane fell off from sky the night before.

Yes, Masa, I remember it, too. Because I was in the Navy and somewhat associated with the Navy Task Force responsible for mitigating it. The government, industry, etc., spent a lot of money over a period of years addressing it. A lot has been written since about it, and the question has been raised: was the money well spent?

It's an unanswerable question, in part because you cannot prove a negative. But the fact is, no, no airplanes fell from the sky...all of the airlines had long since fixed their Y2K problems. Same thing with the electricity. Competent managers throughout industry, government, and the military had looked at their systems and fixed what was deemed necessary to fix, and left the rest alone.

And you know what? The economy didn't collapse because people bothered to make the effort to solve a a problem that had a high degree of uncertainty.

As far as the sun still shining and the birds still singing...well, if you think that was related to Y2K should get together with Johnny Bee Dawg. You and he are cut from the same cloth.

Unknown said...

Your knowledge and insights are invaluable in times like these!
Your'e providing info for free that others would charge you thousands to have access to!!!!
I can't express enough gratitude, period.
Andy Jonasson

Smitty said...

Although I always appreciate Scott's optimistic wisdom, I don't see how anyone can say this episode does not meet the standard definition of a pandemic. The infection and death rates that are being broadcasted around the clock, as well as the forecasted growth rates, are typically generalized for the entire country, but the ultimate numbers will no doubt vary a great deal based on the policies, preparedness and responses of the different state and local governments.

I'm not a Trump backer, but the doctors I know are uniformly thankful for the travel bans he imposed for China and Europe. To a person, they all think their own hospitals would soon be facing a NYC-type calamity if not for the travel bans. If you talk with ER docs and intensivists, their main concern is being overrun and not be able to treat otherwise savable patients. There never was a government plan to deal with the levels of stresses being experienced by NYC and others. It would be too expensive in light of all the other challenges always facing hospital systems for our unhealthy population. Remember, we were facing a national healthcare crisis before this all happened.

In addition, I'm impressed with the work of the Pense team in trying to marshall and deploy the resources of the Federal government. The letter Scott posted from the AAPS seems to support the sentiments (above) I'm hearing from my doctor friends. Therefore, I would like to be led to documented examples of the "gross incompetence" criticisms I'm reading in the comments. The blanket claim that the Trump administration fired the "pandemic response team" is exaggerated and misleading. The actual facts are explained in a Reuters Fact Check published on March 25. Also, expecting politicians to take responsibility for their own misguided decisions (e.g., New Orleans and Mardi Gra) is pretty naive in my view.

Finally, while the extreme preventive measures taken so far to prevent the spread of the bug are no doubt justified, it won't be long before people are screaming to save the economy as opposed to protecting my own age group (73) and reasonably so. Let's hope and pray for the best.


Randy Johnson said...

This is literally the first time i have disagreed with what you have said Scott. This virus is WAY more serious that a bad flu outbreak and i don't know how you can even come to the conclusion that it isn't. 700-1000 people PER DAY are dying in Italy, significantly higher than the rate of influenza. 5% of all worldwide cases are considered serious/critical requiring hospitalization, a number significantly higher than influenza (I am sure this number will come down once we are able to test everyone, but it wont come close to the low number of influenza). 140 people died yesterday in NY alone...that's just one state. 401 people died nationally yesterday and we aren't even at the peak yet. a couple more days and we will have double the daily death rate of influenza. And we are still over a month away from peak deaths (deaths lag new cases by a week or two).

listen, i agree that the media has worked everyone up into a frenzy. Seeing Governors state that 56% of his states population will have this disease within a week (or whatever he said) is on the same level of dumb as people claiming that this is "an unusually nasty flu". Let the idiots look like idiots, don't make silly comments to contradict them that are just as ridiculous.

FWIW, as much as i hate to admit it, i actually agree with what some of our governors are doing by making crazy predictions about the spread of this. Sometimes the only thing that will get people to take this seriously is to make wild off the wall claims. imagine how serious people would treat this if the governor came out and said, "yeah, alot of people are going to get sick and only a few thousand will die, but we need you to stay inside". everyone would laugh and go about their normal business. Are they lying by telling people that millions will get sick? YEP. But sometimes you have to be a bit dramatic to get people to listen and take it seriously.

With that said, i appreciate you and what you do. you are a good read. Keep it up! be safe.

Grechster said...

I'm rather surprised that the comments are so focused on the virus itself and not the plausible outcomes once we put the virus in the rear view. And on that score I'm very worried. The S&P will have its dramatic moves - bear markets are famous for vicious rallies - but I am quite concerned about what our economy looks like on the other end. Unemployment is likely to be a horror show for a good long while. Debt, sovereign and especially corporate, looks to be a long-term negative for a good long while.

I'm afraid long term damage is being done to our entire legal/economic system. Why aren't we utilizing our well-established bankruptcy laws in the vast majority of cases where, instead, we're looking to the ad hoc system of bailouts... Does anybody know that bankruptcy is a tried and true system for keeping people employed? For punishing equity holders who made a poor investment? For punishing debt holders who made a poor investment? The airlines are a good case in point. Many deserve to go bankrupt. Of course, managers couldn't foresee corona. But so what? They're paid handsomely for foreseeing risk in general and having a capital structure that reflects that risk assessment. Since the GFC these idiot airline managers have failed spectacularly in their jobs. Whatever happened to the firm hand of capitalism? Carly Fiorina gave a great interview on CNBC on Friday afternoon. She presented an eloquent case for letting a lot of these companies proceed through the bankruptcy system.

I guess I just don't know what the business terrain looks like in America following this. Those who think we snap back and then carry on as we did before, I think, are fooling themselves.

Grechster said...

Here's the interview. She makes several excellent points.

steve said...

Back of the envelope calculation is by Easter the US will have probably on the order of 5,000 deaths per day-and growing. Inexorably.

Back to business, right?

randy said...

Widespread testing hasn't been available unfortunately. But now seems to be improving rapidly. It seems the answers we need regarding severity and the appropriate response could be quickly made much more clear with testing. Randomly test 50000 people, in NY that are not currently exhibiting symptoms, in various age brackets, that have not had the common flu vaccine. Test for common flu too. Determine who of those are infected and monitor their progress for 3 weeks. In 3 weeks we would have a much better idea regarding what the population infection rate currently is, what the outcome is, and how it compares to the common flu. Then we could make educated decisions.

As it stands, if the fatalities end up being (thankfully) lower than expected, arguments will certainly say, and with good reason, that the credit goes to the shutdown. It would be a serious mistake to still not know how it compares to the regular flu.

And Grechster makes sense "Those who think we snap back and then carry on as we did before, I think, are fooling themselves"

Ron Gruner said...

Steve, If U.S. deaths stay on trend (24% daily growth) on Easter, April 12,there will approximately 9,600 new Coronavirus deaths, unfortunately.

Johnny Bee Dawg said...

The last 10 days, the daily growth in deaths has been almost half of that growth number you cited, Ron.
Less than 14%

Scott is pointing out actual death data, and the informed analysis by Dr. Birx. Not the predictive models which have all been wrong so far. The people saying Scott has it wrong should watch her video that he linked. The new cases we are seeing now got infected before the massive shutdowns around the country, and even those just aren't increasing anywhere near as fast as predicted. The US data is starting to get huge, now, with massive amounts of testing. We will now a LOT more in another week.

This virus has not turned out to be as bad as predicted so far, and Trump has created literally thousands of new hospital beds in the past week in nyc with the Army Corp of Engineers. Converted the Javitz center in 3 days, and are converting several hotels this weekend. In the meantime, nyc has not run out of hospital space, or ICU beds or ventilators. Deaths are sad but nowhere near deaths from flu at this point.

Testing is going to point out which areas of the country should be locked down, and which could be opened for work.
Give it time, and be a long term investor.

IF, IF, IF things continue to turn out better than expectations, this may have been the shortest bear market in US history.
We just dont know yet, but it was certainly worth buying a week ago, given all the oversold conditions, and levels of fear.

Ron Gruner said...

Johnny, I'm drawing my data from which matches the CDC data. From March 15 through March 27, daily new U.S. deaths were...

12 | 18 | 23 | 40 | 56 | 49 | 46 | 113 | 141 | 225 | 247 | 268 | 401

This is a daily average increase of 30 percent, which is an increase over the earlier March average.

Am I missing something?

Jules said...

As of now, 30K people have died and there are now over 600,000 confirmed cases, in over 150 countries. Let’s think critically now.

1. How many people have had, or have the virus that are not included in the 600,000?
2. Of the 30,000 deaths, how can we confirm that the cause of death was COVID19 and not an existing health condition? 99% of the recorded Italian deaths had one or more existing health conditions.

How does this warrant a complete world panic and economic shutdown?

Johnny Bee Dawg said...


Mar 17 - 7979 +11%
Mar 18 - 8951 +12%
Mar 19 - 10030 +12%
Mar 20 - 11386 +14%
Mar 21 - 13011 +14%
Mar 22 - 14640 +13%
Mar 23 - 16513 +13%
Mar 24 - 18894 +14%
Mar 25 - 21282 +13%
MAr 26 -24073 +13%

Johnny Bee Dawg said...

Sorry Ron, I was doing total deaths, not US.
My bad.

But the US deaths wont keep growing exponentially. It will become a bell curve as all others have in history.

Ron Gruner said...

Johnny, yes, I was focused on U.S. deaths since Scott was talking about the American economy.

But worldwide, even if the daily rate drops in half to seven percent, in 90 days that results in 13.6 million worldwide deaths which is incomprehensible. The worldwide rate must drop below four percent for worldwide deaths not to be in the millions by July.

Roy said...

"confirmed U.S. coronavirus-related deaths doubled in two days, hitting 2,000 on Saturday evening, based on reporting from state health departments.

Also, the United States has gone over 20,000 officially announced new cases in one day for the first time."


Roy said...

"How does this warrant a complete world panic and economic shutdown?"

It doesn't warrant panic and economic shutdown when you have a functioning government that makes science-based decisions, like in South Korea and Czechoslovakia. Sadly, we don't have one. The USA is going to be like Italy.

is100 said...

So from what I take it, most of ya'll saying that this whole virus thing is bs, so should the Gov. do nothing and open up all biz and we all go on with our lives?? Back in Feb NY elected officials and the Prez were downplaying the issue by saying that it was all under control. Today, there are over 100K+ infected ppl in the US. So if the Gov. does nothing and lets the virus run its curse how many people will be infected until they find a vaccine?? AND How many will die?? One thing is some goofy nut guy typing away in the comfort of his living room giving out advice and all, and another is rolling up your selves to deal with the problem head-on. Maybe ya'll can lead by example, and go to the NY hospitals and help out clean up the mess...after all more people die from the flu.

steve said...

Scott, I've always liked your quantitative approach to the economy. I think we can all agree you're big on charts!

Scroll down on this on USA and then scroll down some more to NEW CASES and TOTAL DEATHS. Change chart to a log chart and Voila, a straight line. I only have a bachelor degree in chemistry but you don't need a PhD to understand the implications; a STRAIGHT line on a log chart of 30% of total deaths implies no end in site.

Ron was right, I was being TOO conservative about the implications come Easter.

You need to use the quantitative side of your brain and not the emotional side. NO ONE wants this thing to grow. EVERYONE wants the same thing.


But we have to accept reality. The Unites States is losing its fight against Covid 19 due to insouciance and it starts at the TOP. In SWFL the complacency is off the charts. We WILL become a hotbed, GUARANTEED.

Barring literally a miracle, there is ZERO chance of the US "going back to work" by Easter.


steve said...

The next time you meet a healthcare professional who is on the front lines please say "thank you". They are literally risking their lives to save others.

Rick Jones said...

Steve said:

>Scott, I've always liked your quantitative approach to the economy...But we have to accept reality...

My impression of Scott is that he is an ideologue. He is wedded to an ideology that has been more or less successful -- from certain points of view -- for the past 50-ish years. His identity is fully dependent on it, and he's not likely to change at this point no matter what. That's human nature and no fault of Scott's.

In following this blog I am reminded of a book I read years ago, "Night Thoughts of a Classical Physicist." It was about the difficulty a classical physicist -- someone whose identity was fully dependent on Newtonian Mechanics -- had when relativity and quantum mechanics burst on to the scene in the early-20th century.

In the same way that Newtonian Mechanics turned out to be just a subset of a larger paradigm -- and only applicable at certain scales -- I think what we're seeing now is the the Hayek paradigm is also showing its limitations, and people like Scott cannot really accept that without accepting some serious doubts about their life's work.

I think -- and hope -- that people can now see that economic efficiency as advertised by the "free market" is only one of several relevant, competing values in a society. It should be clear that resilience is as desirable (if not more so) than efficiency. Outsourcing your key pharmaceuticals and medical supplies to China because it's more profitable in normal times doesn't really mean much if you cannot get them when you need them.

A lot of people have made informal "bets" on what happens next...what happens over the next 3 - 6 months. It's going to be interesting to watch, and more interesting to see if ultimately the U.S. can somehow pull its collective head out of its ass and stop putting quarterly profits above all else. If not, then the book that needs to be written next will be "The New Road to Serfdom; Or, How the United States Went From Being a Democracy to Being a Financial Oligarchy."

K T Cat said...

I remain an optimist, but not for the reasons in this post. Untreated, I'd agree with the pessimists that this is indeed a pandemic and a nasty one at that.

However, the virus is fighting an unarmed population right now. Our pharma industry is working as hard as it can to give us weapons. The equation I use to predict the future is a childishly simple one.

P = the probability that any particular pharma group will fail to find a treatment in a given month

N = the number of pharma groups working on the problem

CoS = Chance of Success in any given month

CoS = 1 - P**N

If each pharma group has a 95% failure rate and there are 30 of them working the problem, then we still have a CoS of

1 - 0.95**30 = 1 - .21 = 79% chance of success in any given month.

In short, there is a wild instability built into the projects. Things will get worse until BLAM they get radically better because someone hits the jackpot.

I don't see any sense in betting against profit-motivated Big Pharma. In the meantime, stay safe so we can slow down the progression.

K T Cat said...

Should be "there is a wild instability built into the predictions." Sigh. Typo. SLOrry abot thet.


steve said...

K T, no worries on the the typos. My kids (KIDS aged 24-34) laugh their collective asses off when the see me "type" much less text.

Truly pathetic.

randy said...


Much of your post is interesting and poignant.

FWIW, I happen to agree that the most ardent believers in pure capitalism are making a mistake in not taking seriously enough the bad outcomes manifested currently. Those you note; unfair competition; the economic displacement because of automation and globalization, etc. IMO it's a mistake to dismiss these and the need for regulatory moderation. It will lead to more Sanders.

At the same time, it's simply wrong to question Scott's "identity". And tiresome. Especially in regard to the host of the blog. Like NYT or Fox article commenters, that tactic is better served to get more likes from the readers that already share your opinion than to persuade someone who doesn't. I don't think you or anyone else believes that anyone is valuing profits over lives, so why say it. Those who disagree with the lock-down do so because they believe the cost in shattered and lost lives may be worse with the lock-down than without it. They may be wrong... time will tell.

K T Cat said...

But is this really about capitalism? Isn't it about waiting for, as Earl Weaver used to say, someone to hit a 3-run homer so we can all go home?

I'm dating myself with that reference, but it's OK. I'm a cheap date.

I'm here all week, folks. Please don't forget to tip your waitress.

K T Cat said...

How about a horse racing analogy instead?

"And Remdesivir takes the lead coming around turn 3!"

Scott Grannis said...

steve, re worldometers: Suggest you look at Italy's logarithmic chart of total cases and daily new cases. The growth rate of new cases is clearly slowing down. Italy's "curve" is bending to the right, which is most likely what we will see here in a week or two.

steve said...

Scott, yes, you are right, the curve is bending and that is encouraging. We'll see where we are come Easter but without question we'll be seeing something close to 10,000 deaths a DAY although the curve may be starting to bend. I seriously doubt that given that set of data that we'll be "back to work".

There are no good answers here people, only tough choices.

Tom said...

Cases Cases/MM Deaths Deaths per
Popul. MM pop. Status

China 82,120 62 3243 2.5 Under control, about 100 cases/day
S. Korea 9,583 187 152 3.0 Under control, about 100 cases/day
United States 124,686 378 1891 5.7 Out of control, still growing
exponentially, about 20,000 cases
per day and growing.

The United States had 30 days advance warning vs. China and 15 days vs. S. Korea,
yet we will ultimately far exceed them in cases per capita and deaths per capita.
There is no doubt at all that our government has totally dropped the ball here. The only question is how many deaths there will be that were unecessary. As far as what is a death worth, everyone can judge that on their own. But make no mistake, our economy is suffering and we are going to experience far more deaths than we should have due to government
incompetance. The government is giving us the worst of both worlds.

Rick Jones said...

Here you go, Johnny Bee Dawg...this is why we are dependent on China for our critical medical supplies...

Swamp Creatures Attack Effort to Make Medicines American Again

Grechster said...

Tom: I submit to you that the government fails at everything. Every blessed thing. From the big stuff like foreign policy and warfare to the little things like nonsensical statutes. It's appalling how pathetic the govt's track record is.

I was hoping that we'd come out of this crisis with a renewed understanding of just how pathetic our government is. Instead, I think we'll do what we do every time we encounter a crisis: we'll run to government and hand over our civil liberties.

In global crises it wasn't that long ago when the world would look to the US to at least ameliorate the situation. Apparently, no longer. China and Russia are helping places like Italy and Iran. We don't even have enough masks and gowns. Oh, and that goon Pompeo ratchets up the bellicose rhetoric toward Iran in a crisis. What the hell have we become?

Rick Jones said...

Grechster said:

>Tom: I submit to you that the government fails at everything...

Oh, let's see...

* Conceived and led the Marshall Plan after WWII
* Built the Interstate Highway System
* Eradicated polio in the U.S.
* Reduced by 95% our chances of hepatitis B, measles,mumps, tetanus
* Cut smoking rate by more than half between 1964 and 2015
* Developed the Internet
* Put men on the moon
* Developed the Global Positioning System (GPS)

...and on and on and on...

It's a ridiculous statement, Grechster. You should be ashamed of yourself.

Djaja Ottenhof said...

A lot of commentary on what trajectory the epidemic will take, very little on the markets. Scott shows himself the informed optimist he's always been, and for which I, and I assume many others, regularly visit his blog. However given the severity of the panic (justified or not), the scale of the government's response, and the clear hit the economy and profits will take, is it very likely stocks have already seen the bottom? As I understand it, it took markets 3.5 months to go from peak to trough during the 1957 Asian flu pandemic. It's not even been 2 months since the Dow reached its last all time high.

David MacInnes said...

Scott, while it would be nice if the drugs work, this study still proves nothing. 80 in the study, and 1 died, and 1 still in ICU. That is a 1% mortality rate. What has changed here? There was also no control group. How is it reliable?

The original projections of the speed of spread and death rate were wrong. It is not Armageddon. The hospitals 'at the moment' may be coping. Will that be the same in 2 weeks with 100%+ more patients?

From confirmed test to death takes 2-8 weeks - so it is very wide. South Korea have a 1.8% mortality (if you divide today's total death by confirmed cases 14 days ago). From 1,000 tests 24 are positive (147 per 1,000 for the US). It is fair to say they are capturing the large majority of cases. If they are missing 50% of true cases, they still have a mortality of 0.9%. In South Korea 42.6% of cases are in the 50+ age group, in the US 50% are in the 55+ age group (I couldn't find exact comparatives). The US is having higher infections in the more at risk age group, so the mortality rate is likely to be higher, rather than lower.

Neil Ferguson is saying the UK can cope because of the strategy they have adopted (which includes increasing hospitals). They can only relax when they have the capability to do massive testing. He also said they have revised their R0 to over 3, from 2.5

You accept that "sooner or later most people will be infected". Is 10 x the flu mortality still "just a nasty flu?"

Grechster said...

Tom: You ought to be ashamed of yourself for not being able to see reality. You're still dining out on the Marshall Plan and the interstate highway system.

I noted in my last post that it wasn't long ago when the world looked to the US to fix a problem. I was referring to many of the things you noted (in case you didn't understand).

Since 9/11 we fought wars that wasted $7 trillion and destroyed multiple countries in the process. We created millions of refugees and took hundreds of thousands of civilian lives. We created an archipelago of torture. We started spying on every American. In short, we harmed the world greatly and in so doing we shat upon our own Constitution.

Now I watch Russia and China help the downtrodden Italians and Iranians (which is fine) but we can't even supply our own masks. That's what's shameful. That and the fact that you're too busy living in the past to see the reality in front of you.

Regina said...

Hi Scott, I am curious to get your thoughts on this take:


Johnny Bee Dawg said...

Donald says 30 more days in the hole.
Gonna hafta see how the markets take it. Bad at first, no doubt.
But we will have to see.

Johnny Bee Dawg said...

Rick Jones:

I thought you said there was nothing to investigate on why Swamp Creatures may have sold out US security to China manufacturing.
Good to see you digging in.

Benjamin Cole said...

Everyone cares when someone dies an untimely death, That is not the point.

We have a global pandemic of a new cold virus that places the elderly (particularly smokers) at risk. What are the least-bad options in the face of that reality?

Sequestering the elderly? Or shutting down the global economy?

In Thailand, after a national shutdown, many workers are saying, "We are not going to die of COVID-19. We are going to die of hunger."

Elites and academics on sinecures divine policy. Real people pay the price.

Christophe said...

Guys, please open your eyes without politics just focus on the data, the numbers for 10 minutes of your time. Study the charts and numbers concerning the Corona-virus worldwide:

The goal is to turn exponential growth into logistic growth (S-shaped curve).

Look particularly at Italy and Spain. Italy did full national quarantine with financial penalty (i.e. a ticket), if you go out without a valid reason since 02/08! They also started 2 weeks before with partial quarantine just for Lombardy region. We are so far behind in the US! Our numbers have a serious possibility of beating Italy or Spain, those countries have been united about this issue since the beginning and look at their results.

Doing nothing about the pandemic could create 4 million dead over 2 years or about an average of 150,000 per month. As the medical system would be at capacity the mortality rate for most conditions (cancers, accidents,....) would also seriously increase.


Rick Jones said...
This comment has been removed by the author.
Rick Jones said...

Johnny Bee Dawg,

Let me 'splain you...

The point I originally made was that the reason pharmaceuticals and such started being made in China in the first place was because it was less expensive. There was nothing at all swampy about it: in successive Democrat and Republican administrations that embraced globalization and government being out of the market, the manufacturing of all kinds of stuff migrated to China. In that era, the government and business essentially saw the benefits of offshoring through the same eyes.

What I am showing you now is why it's so hard to bring them back. Now that the government might be considering the negative implications of having so much stuff made offshore, there is an army of swamp creatures -- which I thought we were going to drain, by the way -- that are going to fight anything that interferes with profits.


Rick Jones said...

Scott wrote:


Coronavirus cure: French researchers completed new additional study on 80 patients, results show a combination of Hydroxychloroquine and Azithromycin to be effective in treating COVID-19

We now have a very effective treatment protocol for covid-19. This renders obsolete all previous projections/forecasts of the disease's evolution. This is a very big deal. There is a bright light at the end of the tunnel.

You might be right, but I just did a pretty exhaustive search of the web and all I could see is that this is promising. What I didn't see was anyone saying "we now have a very effective treatment." Perhaps because in the article the researcher even admits they did not have a control group. And without a control group...?

This article was published last Friday. One would think that if it were really credible it would have been picked up over the weekend. But again, all I saw were hints. Let's hope that Dr. Raoult is actually on to something and that the story proves to be credible soon.

Johnny Bee Dawg said...

Jim Cramer called the hdrochloroquine treatment an "urban legend" this morning.
DEM Governors have banned its use to treat the COVID.
Except the FDA approved its use last nite to treat the COVID.
Futures went from an implied opening of down 400+ Dow points, to positive.

Rick Jones
So you've come around to Trump's view of China.
That's a good start. Earlier, you fought it.
Might be time to dig in and find out who in govt agencies is selling out our national security for a "check".

Swamp dont want to be drained.
Recent events should make that clear to all.

randy said...

This article addresses the current research, risks, etc. Published yesterday.

An Update on the Coronavirus Treatment
Hydroxychloroquine and azithromycin continue to show results for patients.

Rick Jones said...

Johnny Bee Dawg said:

>Rick Jones...So you've come around to Trump's view of China....That's a good start. Earlier, you fought it.

Nope, I don't think I ever fought it, Dawg. I always thought it was crazy to outsource so many things related to our national security to China. I always thought it was crazy to let so many Chinese graduate students study here and then stay here and work at, say, Microsoft. China is playing a long game...a very long game. Our relentless focus on quarterly profits is killing us when it comes to trade policies with China. Once again, as Lenin allegedly said, "The capitalists will sell us the bullets we use to kill them."

In fact, one of the few good things I have to say about Trump is that he's willing to break some eggs in that area and insist on bringing certain things back to America. Now, whether he can overcome the lobbying of the U.S. Chamber of Commerce and whatnot is another thing entirely. My understanding is that he wavered on invoking the Defense Production Act as a result of U.S. CoC pressure. So we'll see if he can actually pull it off.

Johnny Bee Dawg said...

How about a little GOOD news??

Daily US deaths declined nearly 50% yesterday, the Lord's Day.
And despite the massive surge in testing, the number of new US cases also declined.

Its only one day, but it's interesting.
Remember....the current deaths are from cases that were likely contracted 2 months ago, before all the government shutdowns got rolling. And now that the massive shutdown is operational, one would have to think we could contain this even more from here.

SO FAR, the number of deaths are far, far below all estimates for this point.
Nobody has run out of ICU beds or ventilators. Even nyc.

Millions of masks per week are being manufactured.
Every demand from Governors has been met by Trump answering with twice as much.

Novartis is donating 130 million doses of Trump's anti-virus pills the media says wont work.
Bayer and Teva are following suit with their own donations of those pills.

Every single thing about this virus has been less bad than projected.
IF Trump's little pills start working, this thing is OVER. IF.

Friday was the first down day of this crisis with LOWER trading volume. A great sign.
That was "dumb money" dumping mutual funds, etc at end of day. I bought a little more.

Today, the indexes are all up over 2% with MORE trading volume. A follow thru day if it holds.
So many potential good things are playing out better than expectations.
Expectation is what matters in markets.

Good luck out there. Stay positive. Let Donald work!
Stay out of the COVID.

Frozen in the North said...

You guys are all like the Youtube video of the guys standing on the rocky shore watching the waves come in, and assuming (wrongly in all cases) that they are safe...invariably they end up washed away. The problem is two folds: (1) how many people are being tested and how many are tested and found positive, and (2) the R of this thing is still (all over the world BTW standing at a growth rate of 1.7x per day.

Look at all the log tables for all the countries that have proceeded America and they've had dips -- but again America was very slow in implementing measures to reduce this dangerous flu.

Also all you guys should consider that in America nearly 60% of those hospitalized are below 50. It's not Grandpa and grandma who are in trouble its YOU.

The markets right now are a terrible predictor of economic health, its wishful thinking by people (mostly the richest 5% who own must of the stocks) that are employing the well-tested method of "do nothing" since it has been such a winner (really) in the past.

this is a flu, but a very serious one with a 100x mortality rate of the garden variety every winter brings to our shores.

As for the Donald, I still cannot believe that he sent all these protective gear to China. Now first responders are short! way to go. Once again the firing believes that this is really nothing that "magic thinking" is the solution. Most models predict right now with the current systems in place the death of between 80,000 and 200,000 Americans -- and that doesn't take into account all those sick from other ailments that will be unable to get medical help.

But don't worry be happy

minnesota nice said...

Frozen - Are you equating "you guys" with people under 50? I wonder how many people under 50 even read this. Or are "you guys" Trump supporters? Or are "you guys" panglossian optimists?
I tend to agree with you, but I don't associate the "you" of your post with greedy, unethical, capitalists; and I don't associate you (Frozen) as a fear-mongering socialist.

Frozen in the North said...

Minnesota nice

(1) Definitively over 50
(2) Good point -- most readers of this are over 50
(3) No Trump supporter I guess -- aside from one or two commenters -- no so much an issue in my book anyway Trump changes his tune every other day. Got to say its hard to keep up. One day its not a problem the next it is...
(4) Panglossian optimists -- had to look that one up but no
(5) Not greedy stupid -- the wave guys (always thinking that they will be fine till its too late
(6) Not socialists although getting tired of seeing being bailed out of the screw up! One something happens every 10 years (1999, 2008 and now 2020) its no longer a once in a million year event. Its a 100% probability that "shit is going to go down every decade or so". but again American companies have become very good at not being prepared and not paying the price.

So much for capitalism!

Bryon said...

America will need 480 million doses of Hydroxychloroquin and Azithromycin, distributed to 6,146 hospitals and 67,000 pharmacies in less than two weeks. If it takes longer than four weeks, then it won't reduce the extrapolated 4.8 million deaths unless we all lockdown until the 480 million doses are distributed.
Doing this will take amazing logistics and effort.
Sadly, I was laid off from Novartis in 2013 and pharmaceutical companies don't want to invest in America.
So, I wish I could help save America, but all I can do is apply for jobs and hope America decides to hire a scientist like me.

Scott Grannis said...

There was another factor encouraging offshore production: taxes. Until Trump cut corporate taxes, the US had one of the highest corporate tax rates in the world. That’s no longer the case, and lo and behold we are seeing more and more companies decide to bring production back to the US. This virus crisis will only accelerate that. A cloud with a.silver lining....

Roy said...

" the media hype is being eroded by the reality on the ground. Dr. Birx herself is coming to this conclusion."


The White House coronavirus response coordinator said Monday that she is "very worried about every city in the United States" and projects 100,000 to 200,000 American deaths as a best case scenario.

In an interview on "TODAY," Dr. Deborah Birx painted a grim message about the expected fatalities, echoing that they could hit more than 2 million without any measures, as coronavirus cases continue to climb throughout the country.

Roy said...
This comment has been removed by the author.
Johnny Bee Dawg said...

Why do people keep saying the death toll will hit such-and-such number "without taking measures" to stop it?
I keep seeing this phrase added to the end of every dire prediction.

What planet are these people on?
These are the most extraordinary, Draconian measures ever taken in Man's history...worldwide.
How can anyone miss this? And how can anyone miss this dishonest language?

K T Cat said...

I'm an optimist, but ...

We keep talking about the curve of new cases in (Italy, NYC, Upper Slobolvia) bending or flattening, but this is with a massive shutdown of the economy. The real question is what happens when we release everyone again.

If I were king: I'd have national ID cards whose data included your Wuhan Flu antibody status. You'd get scanned at the door of your bar, store or worksite and those with the antibodies would be free to return to normal life. In the end, we're all going to get it. The job right now is to return to normal ASAP while protecting the at-risk until we have a treatment.

Roy said...

K T Cat,

Germany is starting to do something similar, checking antibodies and allow those that had the virus and overcame it get back to work.

For this, you need to have sufficient testing in place. Alas, in the USA, the land of anti-science where the government gets its data from Fox News, we're not ready.

But, yeah, that's a good way to go.

In addition, today I've read an interesting suggestion where people work for 4 days then quarantine for 10 causing the R0 to drop below 1, on average.

Johnny Bee Dawg,

For your sake, I hope you're just trolling and actually capable of basic reading comprehension and critical thinking. Good luck, may you have a long and healthy life.

K T Cat said...

Roy, thanks for that lesson. I'll try to remember that Orange Man Bad and Republicans are anti-science as I polish the plaques on my walls for my patents and then put on my LSU camo ball cap right before I sit down to watch Tucker.

Life is full of surprises, isn't it?

Roy said...

K T Cat,

You're welcome.

Is one of the plaques for the invention of Strawman Arguments? Because I got to tell you, that plaque is fake, it has been invented before, so don't overuse it.

Scholar87 said...
This comment has been removed by the author.
steve said...

912 deaths in the US alone yesterday. Italy's log curve flattening out but anyone who doesn't call this a PANDEMIC has their head in the sand. Even Trump admitted we could see 250,000 deaths as a result of covid 19. We'll be fighting this for months not weeks.

The good news is you know damn well red tape is being slashed in an attempt to get a vaccine ASAP because that's the only way to stop this thing but that will still be months away. Buckle up people.

Rick Jones said...

Steve said:

>a vaccine...will still be months away

I agree. The optimistics estimates I've heard are early-2021 at best.

I see this unwinding in three phases:

1. The prophylactic phase. Loosen up the lockdowns, but get masks and gloves out there and keep some kind of social distancing.

2. The treatment phase. At the very least, testing kits and ventilators are readily available, but hopefully some drug or combination of drugs will be found that actually work at scale for effective treatment.

3. The inoculation phase. An effective (enough) vaccine is approved.

Obviously there can and probably will be some overlap.

One of the things I am thinking a lot about is the aftermath. That is to say, what are the longer-term effects of all these Fed and central bank actions going to be? Hyper-inflation? Global devaluation of the dollar? Will MMT become the de facto standard (without anyone really saying so)? Will central banks create blockchain-based currencies, and if so, how will that affect us?

Lots to think about here...

honestcreditguy said...

its the flu but behind it is the pigmen of wall street, the banksters....
start researching GS comments starting in late Jan.....

the economic collapse will kill far more than the flu

so far latest death rate is .66% as of Mar. 30th....

Ron Gruner said...

A preliminary paper was released March 30 written by two members of the Federal Reserve and a finance professor at the MIT Sloan school. The paper analyzes the interrelated health and economic issues of the 1918 Spanish Flu. It concludes, "We find that cities that intervened earlier and more aggressively do not perform worse and, if anything, grow faster after the pandemic is over. Our findings thus indicate that NPIs (non-pharmaceutical interventions) not only lower mortality; they also mitigate the adverse economic consequences of a pandemic."

The cited newspaper articles suggest people were as conflicted by the quarantines as we are today. One from Seattle begins, "Don’t grumble because you can’t see a movie or play a game of billiards—or because the schools and churches closed. The health of the city is more important than all else. An ounce of prevention now is worth a thousand cures."

It's available at...

EHuang said...

I am a Doctor.

Yes, you see a higher mortality rate among those with preexisting conditions. But these people are going onto ventilators and the ICU due to severe respiratory failure and pneumonia, not primarily due to heart disease, diabetes or asthma. Yes, those hinder the patients’ ability to cope with the lung injury, but in general these patients are dying due to CoVid related morbidity, not the co-morbidity.

I get the need to be critical, skeptical, and not hysterical, but the highly biased media coverage, echo chamber news feeds, and politicizing is this health issue has prevented many intelligent people from seeing the facts.

Now that Trump, Fox, Lindsey Graham, Hannity have changed their views in the last week (despite having all the same information and reports for weeks) , it will be interesting to see how people’s views and comments will change. Brix and Trump today are saying nothing different from the “impeachment sore loser hysterical crazies” were saying 2-3 weeks ago. The difference is now it’s had a chance to multiple a few times over, so that whatever our final death count ends up being, it’s 2 or 4 times more than it would have been had we gotten serious as a nation a few weeks earlier.

You can blame Trump, you can blame the Chinese, the CDC, you can blame Democratic governors, there’s lots of blame to go around. I was late too. truth is it’s a nasty, deceptive virus with a huge lag time. By the time you wake up, it’s got you. Good thing is people are taking it seriously for the most part, at least here in southern CA.

I’ve seen it in neighbors, parents, and news casters.....there’s that aha moment where they drop their biases, wake up, and realize this isn’t a severe flu.

It happens to us all, some later than others. I was late too, we all were. But eventually you wake up and realize how serious it is and you take social distancing seriously. I’ve seen it gradually over the last three week.

When it comes to your city you will start washing hands and wearing masks too. This is not a hoax.

Thank you Scott for a great blog over the years.

steve said...

Virus news isn't as bad as media would lead you to believe. The GOOD news is that testing has ramped up big time. Abbot labs got approval for their quick Covid test and we know that S Korea has largely escaped massive infection by obsessive testing. The numbers of infection/death are going to look bad for the month of April. BUT looking beyond there is every reason to believe things will improve. So I'm moving towards the camp that says we need to think about how we can begin to SAFELY reopen this country in the May-June time frame and I'm telling you TESTING is the answer.

Jules said...

EHuang - do you have data to support this? Also, how would those with existing health conditions cope with the common flu (which kills hundreds of thousands a year per the CDC)

What makes CoVid much more deadly?


amritsari said...

Don't get your hopes up about the Abbot test. it does ONE TEST AT A TIME, while the other machines do THOUSANDS at a time. The throughput is much less.

amritsari said...

Gov Newsom here in california has been miles ahead of dipshits like DeSantis in Florida. And Gov Kemp in Georgia just said the stupidist possible thing yesterday - "nobody knew asymptomatic people can spread the virus". I swear most of the republican governors have some brain impairment.

EHuang said...


No hard data just what based on what's written up and reports from the frontlines, good ol' fashioned observation. You hear from ERs same story, over and over. It's not subtle. People are coming into the hospital short of breath, exhausted from breathing, 1 hour after arrival they need a breathing machine to stay alive because what they can do on their own is not enough. In my book, that's CoVid, not heart disease or diabetes. I'm believing my eyes. Maybe after 10 days their body recovers and they can come off the machine, or they die from lung infection, multiorgan failure from, or heart arrhythmia (possibly induced by the virus). Some one dying from diabetes looks different (maybe mental cloudiness from sugars out of control, or systemic infection from bad foot ulcer), someone dying from heart disease has chest pain, etc. These people are dying from severe lung dysfunction and failure due to injury there triggered by viral infection. You are right, the data may say something different later after we've had time to sit down and catchup, but for now if it looks like a zebra, walks like a zebra.....

RE: flu and preexisting comorbidities, yes, older people and sicker people are higher risk for dying from the flu as well. that's why there's a big push every year to get AARP's, pregnant, and immunocompromised (cancer, diabetes, dialysis, etc) their flu shots.

RE: CoVid19 Deadliness-- My opinion, it's not necessarily the higher mortality rate (people quote 5x deadly as flu), which is the danger. It's the fact that it's so much more contagious (R0=2.5-3 vs. R0 about 1.3 for flu). Unabated, one person infects 3, 3 infect 9, 9 infect 27, etc. So even if the mortality is like that of the flu, if you take small percentage of a big number, and they all go to the hospital at the same time, you have a big problem. Even if mortality is 0.1%, and 1/2 the US gets infected (say 150 mil), that's still 150,000 people. Keep in mind flu season is over 6 months, where as this is much shorter time--without social distancing this can blow up our system within a month, regardless of how many extra ventilators you make.

EHuang said...

Of course China and Italy are reporting higher mortality numbers than US. But even in US we can't get a true mortality rate because we have no idea what the prevalence, how many people are actually infected--we can't get the denominator to calculate. Testing is increased now, but still not enough. We just don't have the infrastructure and supplies to do better testing. Even today, at my hospital and per CDC recs (lookup online), we are telling people that even if you have a cough, fever, body aches, you DON'T need a test if you are well enough to stay at home! (the exceptions are those with travel history, those with a known positive contact, immunocompromised, elderly, pregnant, and NBA players/politicians (haha)). So for a lot of people, We are only testing the people sick enough to need to come to hospital! Of course we'd like to do better, but essentially the CDC is rationing our tests, acknowledging that it's too late to do aggressive testing as a means of controlling spread (we are relying blind social distancing; brute force).

This does tend to cause more fear, and it probably isn't but the actual mortality rate could be similar to the flu (although early evidence suggest more deadly, and also plenty of stories of young healthy people dying (unlike flu)).

We are flying blind here, working with a lot of lagging indicators (like death, ICU admission, hospitalization). Basically as a nation, we weren't prepared for a pandemic, then we had delays/mixed messages from the gov't, China minimizing, CDC missteps, local and state missteps, and indiviudals (including me) making poor choices as well. Plenty of blame to go around. We weren't prepared and we wasted time arguing. Now we can only respond with this draconian means at huge human and financial cost. Had we acted with exact same response, only 2 weeks earlier, if we end up losing 100,000 lives, with the aggressive doubling time, maybe we only lose 80,000 or 60,000 lives. Had we had a more compliant population or better testing and tracking, maybe less financial impact or need for widespread shutdowns (see South Korea & Taiwan, no school, work or bars shutdown) Taiwan got deceived by China as well, but they didn't have a hoax discussion/flu debate with misinformation, the country was primed and prepped in advance, and they had a swift, centralized response, and people complied.

rwjones said...


Good posts. Thanks.

Jules said...

@EHuang Thanks! Good read. I really appreciate this blog too, thanks Scott!

Rick Jones said...

One week later...Friday, 03 April...hard to believe that on Friday, 27 March the subject of this post was, "Maybe it's not a pandemic after all."

Johnny Bee Dawg said...

3 down days with declining volume.
2 up days with increasing volume.
VIX has fallen into the 40s.
All good signs. Minor. Moderate.

This pullback is orderly and less impulsive.

Lets see how the checks get sent out in the SBA program.
Every check relieves more stress in the system.

High investment grade bonds are trading as if 24% will default in the next 5 years.
A record spread in all of bond history.
Surely not.
Bond guys make money by buying spreads, and watching them come in. HOPING they come in!
Lordy, these are spreads!!

JPM 10 years have blown up to +250bp!
Surely those are a buy.

As bonds calm down, and VIX gets to the 30s, and oil re-flates, things improve in America.
Nobody GAS about the virus. Everything about this virus has turned out better than predicted.
The virus panic is a joke.

FED keeps the backstop until the baby calms down, and stops crying.
We will just have to see how it goes. So far, so good.

Rick Jones said...
This comment has been removed by the author.
Rick Jones said...

Johnny Bee Dawg said:

>The virus panic is a joke.

Hmmm...this time last week (Saturday 28 March) total deaths in the U.S. were 2,220.

Today, Saturday 04 April, total deaths are 8,347.

This time last week total cases in the U.S. were 123,578.

Today, total cases are 306,768.

Nope, nothing to see here, folks. Just move on...

Flying Robot said...

It's a little early to call it, much as I'd like there to be a better defined path forward.

The study referenced is unfortunately limited in scope and structure, and as such is difficult to draw conclusions from. Another study has shown that hydroxychloroquine and azithromycin had little to no effect on CV-19 patients. Other studies have shown little benefit from Chloroquine and hydroxychloroquine speparately. I'm not drawing any conclusions, just noting that this does not appear to be a slam dunk.

We can continue to hope that some combo of drugs does help, and that the vaccine trials underway fulfull their promising starts, but it seems likely that we're still a year away from effective responses, in line with the best case estimates noted over the past month or so.

... I'm no doctor, this is just what I've run across as I try to stay current.

Johnny Bee Dawg said...

45 million US flu cases this season.
45,000 US flu deaths this season.
80,000 flu deaths 2 years ago

10 million jobless claims

Johnny Bee Dawg said...

Ahhhhh. Here come the "COVID deaths"....
After all, we were supposed to have a million by April, but instead we have 8000. That's a problem.
Fauci sure doesnt like hydroxychloroquine.

CDC now tells Hospitals to List COVID-19 as Cause of Death, even if It's only "Assumed to Have Caused Or Contributed to Death" - Lab Tests Not Required. Wink, wink...your hospital gets Federal cash if we have an epidemic up in here. When in doubt...pick COVID. $$$

“Confirmed lab tests are not required” is something that should bother any level headed person.

CLICK THIS LINK: Tests Not Required

This explains why Italy deaths were inexplicably high vs the rest of planet Earth.
Lets not forget the advisor to Italy's Ministry of Health said true COVID deaths were only 12% of what was reported.
CLICK THIS LINK: 12% of deaths were COVID

Next time somebody tells you, "Because Science" please laugh.
This is starting to feel like Climate Change and the EU/UN ESG push. Ask Larry Fink about his payoff.

Johnny Bee Dawg said...

From former ny times reporter Alex Berenson:

The IHME_UW model vs. reality for New York State, April 4: more of the same, 65,400 beds projected, 15,905 actually used (new hospitalizations fell notably day-over-day); 12,000 ICU beds projected, 4,100 used.

Btw - if you haven’t realized - one reason the public health establishment is so desperate to force every state into lockdown is to avoid the possibility of having a control group; if no free states exist, we can’t test their outcomes against those that quarantined.

JBD: Cant have another Sweden or Japan running around with an open economy, serving as a control group.

Rick Jones said...

Yo Dawg,

Would you mind helping me out here. You said:

>...we were supposed to have a million (deaths) by April

I'm having a hard time find where that was projected. Could you please provide a reference?


steve said...

So according to my computational biologist son who has way more cred and anybody on this forum the real and frankly obvious problem with just saying F it and "going back to work" is that the real danger of Covid is not the mortality rate which is WAY overstated but rather the infection rate. Covid virus is extremely contagious-way more so than the common flu. He thinks if we tried business as usual we'd see OVER 50% of the US population become infected and with some 5% of those requiring hospital care-well you can do the math. We'd be SCREWED.

Quite simply we need more tests until we get a vaccine. And we need a LOT more tests. Like millions. Then we can test people as they go to workplace. Ain't gonna happen anytime soon so I just don't see business as usual in the foreseeable future.

This is one time when we need to listen to the experts and NOT the pols. The fact that we have a renegade as president does not help.

Rick Jones said...

Steve said:

>The fact that we have a renegade as president does not help.

Donald Trump more and more reminds me of something H.L. Mencken said:

"On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron.”

is100 said...

Maybe just maybe after all it is a pandemic with over 9K dead and 300K infected??... I say we should open up the country to ramp up the production of body bags...

Johnny Bee Dawg said...

Less than 10,000 dead in the whole world so far, and countries are starting to peak.
Vs 575,000 dead for the flu.
Zero shortages of hospital beds or ventilators this weekend in NYC.
Modle projections were way too negative...again.

Trump tonight made a VERY bullish comment that if people are still sitting around the house much longer, then all our efforts to stop this virus were a failure. BOOM.
The man is going to let us back to work! Merry Merry Month of May?

Wash hands. Wear a mask. Dont sit in close quarters in closed in spaces.
Quarantine the SICK, not the well. Kinda simple. There's your policy.
And get on with it. Just like with every other flu.

Lets check that VIX. Imagine if it could get in the 30s.
Imagine if the insane corporate spreads could come in a little.
We will just have to see.

Benjamin Cole said...

Hello to Johnny Bee Dawg, with a dose of much-needed optimism.

So we ban foreign travelers...and have a de facto open border with Mexico? (I love everyone, but is this a policy?)

Okay, so dogs in Hong Kong and tigers in the US are testing positive for COVID-19. Cats and dogs as COVID-19 vectors? Then what?

Sometimes life is not pretty. You have to go with the least-bad option.

We cannot destroy the economy in order to save it.

Please end the lockdowns, voluntarily sequester old people, and have fiscal-monetary authorities shoot for boom times. If inflation runs high for a few years, small price to pay. Lockdowns just delay the inevitable.

Go back to normal ASAP.

There are grim times for many. Destroying the economy won't make that better.

Johnny Bee Dawg said...

They wont let me edit.
70,000 dead worldwide, not 10,000

Johnny Bee Dawg said...

Market up 1100 on this Monday morning, with volume up 40% over previous day.
VIX down 6%
Precisely perfect behavior.

I have clients who got their SBA COVID loans in their business checking accounts last nite...a Sunday.
That just happened.

I know its just one day, but aren't the Doom & Gloomers bound to get tired, soon?
We will just have to see how it goes.

Adam said...

You mentioned:

"But with so much money being dumped into the economy—money which now is desperately needed and wanted—it might be difficult for the Fed to withdraw it when things improve and the demand for money returns to normal. There could be a significant excess supply of money at some point which would almost surely result in rising inflation."

But many times earlier you have been saying that this is no problem for the FED to act on this front.
What is the diffefence between past and now.


Scott Grannis said...

Keep in mind that in an average flu season the CDC says that roughly 45 million are infected and 45,000 die from the flu. And until the coronavirus showed up, no one panicked and no one thought to call the flu a pandemic.

Gary T said...

"Maybe it's not a pandemic after all"

are there any updates, Scott?

Mark said...

This take hasn't aged well.