Well, it’s official — coronavirus is proliferating at an “unacceptable” rate in Texas.
For at least two weeks, critics of the reopening push have described the situation in “hot spots” across the US using a variety of adjectives, almost all of which could be found in the thesaurus under the entry for “unacceptable”.
On Monday, Governor Greg Abbott used the term to describe the rate of infection in his state after hospitalizations surged by 302 in 24 hours, the largest single-day jump in weeks. If it seems as though I update the figure below daily, it’s because I do — it just keeps getting steeper. Monday marked the 11th consecutive day of rising hospitalizations.
If it’s not obvious to you that this is bad, just know that you see things differently than Abbott. “To state the obvious, COVID-19 is now spreading at an unacceptable rate in Texas and it must be corralled”, the governor said, at a press briefing Monday.
For now, he isn’t prepared to impose “stronger” containment measures, but he delivered a warning. If the rate of positives and hospitalizations doubles in the next two weeks, that would count as “urgent” in his estimation, and would likely prompt him to reconsider. “Closing down Texas again will always be the last option”, he added, in an effort to calm a nervous citizenry.
But Abbott urged Texans to wear masks. “Wearing a mask will help us to keep Texas open because not taking action to slow the spread will risk people’s lives, and ultimately lead to the closure of businesses”, he cautioned, effectively pleading with the public. The Houston Health Department was in no mood to mince words.
RAPIDLY WORSENING | #HarrisCounty hospitals:
– 177% increase in #COVID positive patients in gen/ISO beds since 5/31
– 64% increase in COVID positive patients in ICU beds since 5/31
— Houston Health Dept (@HoustonHealth) June 22, 2020
Meanwhile, Mike Pence is worried about the nation’s youth, apparently. The vice told governors Monday that experts are concerned about rising infections in younger Americans.
“We are seeing more people test positive under the age of 35, particularly in our discussions with the leadership in Florida and in Texas”, Pence said, during a call, according to audio obtained by ABC News. “The better part of half of the people that are testing positive in the new cases are people under the age of 35… so we’re working with those states and supporting measures that are being taken to address those issues in an appropriate way”.
Florida’s Ron DeSantis chimed in. The trend is “significant” and “unmistakable”, he said on the same call, noting that younger people are “definitely transmitting it more than other segments of the population”.
As discussed here at length on Monday morning, the market’s base case is most assuredly not for the reinstatement of statewide lockdowns, and I wouldn’t want to give the impression that’s particularly likely — it isn’t. Or at least not as far as anyone is willing to admit.
But it is now readily apparent that “this is a real spike”, to quote Miami Beach Mayor Dan Gelber. “Nobody can argue with the fact that more people are being hospitalized”, he added, during comments at a press briefing. As of Monday, masks are mandatory in public in the Miami area under penalty of fine.
Clearly, some manner of renewed limits on mobility and economic activity are possible in some locales. There’s just no getting around that. Intelligent people can, of course, debate whether any such new measures would be counterproductive, or “do more harm than good”, but the door is open to the reimposition of containment protocols. That was communicated in explicit terms by local officials.
As for markets, this won’t matter until it does. Even if lockdowns are reimposed in some areas, that seems unlikely to be cause for anything other than a fleeting swoon unless a number of states were to all hunker back down at once.
Liquidity tsunamis and explicit pledges of unlimited central bank support notwithstanding, it’s difficult to view the juxtaposition between record low corporate borrowing costs and the situation described above as anything other than bizarre.
“Long-term effects of the pandemic on aggregate demand have not been sorted out yet, especially their influence on the corporate sector and credit”, Deutsche Bank’s Aleksandar Kocic said Monday, in a note to clients.
The real blow for sentiment would be if fatality rates were to start rising again, or if hospitalizations reached levels where local health care systems were seen in jeopardy.
Thankfully, it doesn’t appear we’re anywhere near that kind of breaking point, although the tweet embedded above reveals the extent to which some areas are on the verge of experiencing an acute situation.
“Questions like which businesses would survive the crisis, how many people will lose their jobs permanently, how will they pay their rent, how much will they be willing to travel, consume, what services will they use, or how the banking sector will respond to all of that, still remain largely out of grasp”, Deutsche’s Kocic added.