A collection of key developments in the fight against COVID-19 (the actual virus is SARS-COV-2), posted throughout the week for those who just want the signal and not the noise. If there’s something you think we should include, sound off in the comments thread attached to the post.
Visit our Wuhan coronavirus status page and learn how to prepare for possible spread to your area. Scenarios, shopping lists, background info, and everything else you need, all in one place.
Previously: The previous day’s key developments post is here.
Some Friday night thoughts on the week’s news, in a slightly different format than the previous updates:
This week was up-and-down, as we saw the Chinese numbers going in the right direction at the start of the week. As much as I don’t trust the actual numbers, I think it’s entirely possible — probably even likely — that the direction is correct, and that direction is a slowing in the growth of new cases that suggests the government’s extraordinary containment measures are working.
Further evidence this week that China is improving, at least outside of the epicenter in Hubei, is that workers are heading back to work, and the government is pushing factories to go ahead and re-open in an effort to get the economy going again. Restrictions are being relaxed in many cities, including Beijing, and anecdotal reports from social media indicate that Beijing is perking backup — shops re-opening, traffic starting back up, and the like.
So this back-to-work push and the relaxing of restrictions tell me two things:
- The Chinese Communist Party believes its measures are working
- The CCP also believes that if the virus starts to flare back up in a city due to the relaxed measures, they’ll spot it in time (they’re leaning heavily on local officials for surveillance) and can flex the lockdown measures again to quickly choke it off.
This seems a huge gamble, and I worry that the margin for error is too small. I fear we’ll see a number of mini-Wuhans, at maybe one or two cities bigger than Wuhan fall into dire straits. But it’s possible that the party has looked at the alternative, which is a massive hit to GDP and likely permanent damage to the country’s status as the world’s factory (i.e. customers around the globe will being to diversify their supply chains to avoid getting burned again), and decided it’s worth the risk to human life.
But along with the Chinese good news is bad news everywhere else. The outbreak is gaining steam in Korea and in Japan, and appears to have gained a real foothold in Iran.
Like China, Korea and Japan are major industrial centers and critical links in the global supply chain, but unlike China, what happens in these countries won’t stay hidden behind a veil of massive electronic censorship and fake statistics. If one of or both of these countries see severe disruption, on the order what has happened in Wuhan, or even significantly milder, the world will be watching.
Furthermore, neither of these countries will be at liberty to take the kind of risks with human life that China is now taking in sending people back to work. Factories and markets will stay closed for longer, and disruptions will be more severe.
As for Iran, this is supremely worrying, because if the virus is spreading there, then it will soon end up in Iraq, Syria, and the rest of the Middle East and North Africa (MENA). And when it spreads in MENA, the fantasy of containment in Europe in the US will no longer be able to be sustained. We may be able to cut off flights and travel with China, but we won’t be able to do that with MENA. And the EU certainly will not be able to stop a fresh wave of migration, as everyone who can flees to countries with less overloaded healthcare systems.
So I end the week a lot more worried than I began the week, both about the world and, frankly, the markets. Right now, equity markets seem to be expecting things to go back to normal by April at the latest, and whatever happens they (correctly) expect that governments will use every tool at their disposal to keep them propped up. I don’t know what it would take to convince markets that COVID-19 is more than a blip on the radar, and possibly more than Uncle Fed can handle with low rates and money printing, but I fear that if we’re going to find out it’ll happen in the next few weeks.
[10:36 pm] Remember in yesterday’s update how the China’s state-run Global Times reported that half the beds in one of the two hastily constructed hospitals in Wuhan are empty? Well, today that same outlet is saying they’ll build 19 more hospitals in Wuhan. This makes no sense. No idea what’s going on, there, but if anyone has thoughts please leave the in the comments.
[10:36 pm] The faulty test kit problem strikes again: No one in Hawaii has been tested for coronavirus as health officials wait for kits from CDC
[10:33 pm] MRC Centre for Global Infectious Disease Analysis: “Two thirds of cases exported from mainland China are undetected”. Here’s the full report.
[10:30 pm] On the topic of the way our ability to respond to a pandemic here in the US has been kneecapped, it looks Bolton was part of that. From May 2018: Connolly-Bera Urge Bolton to Reverse White House Retreat on Global Health Security.
“We urge you to reconsider the demotion of the global health security portfolio and reject the proposal to rescind Ebola contingency funds,” they added. “Saving lives from the next global pandemic starts with investing in preparedness before it strikes.”
“We fear these recent decisions will leave the United States vulnerable to pandemics and commit us to a strategy of triage should one occur.”
In effect, stock investors seem to be betting that the Fed will bail them out of any damage that the virus might to do to corporate profits and the world economy. A Fed rate cut or two would make money cheaper, and therefore support high stock valuations even in an environment in which major companies that do business in China or other affected countries had to shutter production or absorb lost sales.
So stock investors who remain bullish despite the coronavirus risks are in effect making two big bets rather than one.
First, they are betting that the Fed can and will act if necessary should the virus start to do real damage to the economy. Second, if that were to happen, they are betting that the Fed’s diminished capacity to deal with future shocks won’t be a problem.
Negative rates are probably coming here if this worsens.
[10:26 pm] What a Party in Japan May Tell Us About the Coronavirus’s Spread. “Will the virus spiral beyond China? Public health experts are closely studying cluster cases in other Asian countries.”
[10:25 pm] I think this finance Twitter account probably has it right:
An update on the comparison that I made 4 weeks ago (Jan 26)
China is improving.
US looks incompetent.
— Barton (@Barton_options) February 21, 2020
[10:23 pm] Two veteran public health experts ask the burning question: Why Does the U.S. Have So Few Confirmed Coronavirus Cases?. Their answer is, unsurprisingly, that it’s because we’re not testing more and catching more of them.
[10:22 pm] Coronavirus outbreak edges closer to pandemic. “There are outbreaks. There are epidemics. And there are pandemics, where epidemics become rampant in multiple countries and continents simultaneously. The novel coronavirus that causes the disease named covid-19 appears to be on the verge of that third, globe-shaking stage.”
[10:21 pm] This is a significant escalation of warning rhetoric from the CDC: Coronavirus Now a ‘Tremendous Public Health Threat’: CDC
[10:20 pm] A massive thread on Iran, with video. I’m not familiar with this account, and it styles itself as truth-telling alternative media, which is often a red flag. So use caution. But still, worth a look, I think:
Footage of Qom – Farghani Hospital being evacuated & readied for coronavirus patients. pic.twitter.com/mM89zfLhzq
— Heshmat Alavi (@HeshmatAlavi) February 20, 2020
[10:18 pm] The latest numbers:
— CEDR Digital Corps (@CEDRdigital) February 22, 2020