Don’t Be A Hero.
US equity futures were some 10% higher for the week through Tuesday morning as markets continue to assess incoming information that suggests a turning point in the fight against the spread of coronavirus may be near, even as Boris Johnson's plight serves as a rather dramatic reminder of the situation's severity.
"There is really only one headline today — that UK PM Boris Johnson is in intensive care", Rabobank's Michael Every wrote Tuesday. "The sudden deterioration in his condition comes as
I’m still not sure why people think a virus that can be transmitted more easily than the flu for 48 hours prior to someone being symptomatic is going to be ‘snuffed out’. It won’t. I’m not a virologist but I spoke with my good friend who retired from many years at the CDC and he agreed that there is only a slight chance that international travel may be restored by fall. The virus will still be around and airports, subways, sport stadiums, restaurants, hotels, and disney world will still be prime locations to catch the virus and spread it back to your hometown. It requires an incredible amount of non-fact based hope to believe we will be getting back to ‘normal’ by the end of this quarter.
Yeah the physics of it lead me to suspect there is no normalizing of the economy possible, we may be able to allow temporary reprieves from stay at home policies. Maybe take the month of July and go out and live it up, but until a vaccine this is reality or the infection rates start going up. Even China isn’t seeing zero new cases after total in home lock downs and if it’s in Tigers at the zoo, it may well have found a new reservoir in domestic animals. Perhaps we develop some therapeutics in rapid order but that just mitigates the worst case scenario. I don’t like it, but I do not really see how it can not be the case. This is a long way from over.
Fact is they have never found a cure for the common cold. We do have better mouse traps.
Reminds me of that Jerry Jeff Walker song: “Desparados Waiting for a Train”.
The virus won’t go away but there are two points. First the subsequent waves will oscillate with lower magnitude. Second, what is probably the case is that there are 10x to 20x infections relative to what is reported. Many asymptomatic cases mean that the virulence is circa 0.5 or about 5x the flu. Once Amazon sends out antibody tests that will tell you whether you have had the disease one might expect to get some clarity on how widespread the infections really are. Count me an optimist.