There was nervous chatter Wednesday about the prospect of a wider selloff amid a rise in global virus cases primarily tied to the rapidly deteriorating situation in India, profiled in “To Go Out Is To Get Infected.”
Unfortunately, Narendra Modi seems keen to adopt the Jair Bolsonaro playbook this time around. “I urge states that they should consider lockdowns as the last option,” Modi told the nation, in a televised address. “They should earnestly try to avoid lockdowns and focus on micro-containment zones.”
The daily death toll in India hit a new record Wednesday above 2,000 (figure below).
“Like Modi, Brazilian President Bolsonaro opposes lockdowns and has clashed with local authorities after they imposed restrictions on commerce,” Bloomberg wrote. “Both are betting that voters will support them for keeping the economy open and people in work.”
As I put it Tuesday, we live in a world where growth is a religion. All world leaders worship at the same altar in that regard. Paradoxically, the same humanist worldview that insists on the sanctity of human life also informs the view that economic growth must be prized above all other considerations — even individual human lives.
Of course, growth on a global scale is what helped lift countless millions out of abject poverty in India and China. And lockdowns threaten economic despair that, depending on the circumstances, can itself be deadly. There are no easy answers.
Emerging market FX was poised to snap a five-day win streak and Asian shares are underperforming (figure below).
Former Lehman trader Mark Cudmore is concerned, calling the situation “very bad.”
“We’re at the peak of the pandemic, according to the seven-day average global case numbers, and it’s rapidly getting worse,” he said, calling India “the primary problem,” and adding that,
As lockdowns do get belatedly imposed in major cities, when hospitals can’t cope, the urban population in the midst of the virus migrate en masse back to their villages, maximizing the spread to those who might otherwise hope to be isolated. While it’s hard to express how upsetting all this is on a human level, there seems to be a remarkable denial about the implications for markets in the coming weeks. The Sensex, which is extraordinarily expensive on almost any metric, will get crushed.
How’s that for a dire prediction?
Deutsche Bank delivered a similarly cautious assessment. “The risk is that this latest increase in cases starts to undermine the narrative that the global economy is on an inexorable path back to normality as the world gets vaccinated, with multiple economies facing the threat of fresh restrictions on mobility,” the bank cautioned.
And I could go on. “A worsening health crisis in India pushes out the return of pre-COVID travel even further in the APAC region,” AxiCorp’s Stephen Innes said Wednesday. “Sticky travel restrictions leave economies with greater dependence on tourism (e.g., Thailand) and domestic demand (e.g., India) at risk of further disappointing growth expectations in 2021, which is severely clouding the oil market’s viewfinder and pushing back on the jet fuel recovery.”
You can draw your own conclusions about whether and to what extent this has the potential to alter the overarching recovery narrative, but do take a moment to count yourself lucky if your personal circumstances are such that the above doesn’t apply to you.
Remember: If you’re a sentient being privileged to live a life largely devoid of suffering in an advanced economy, you’re an anomaly. Re-run history a billion times and the chances you’ll end up similarly situated are infinitesimal.
2,000 deaths in a day is tragic but it seems a bit hyperbolic to make comparisons with Bolsonaro at this stage. When measured by deaths per million of population, India’s death rate has been very low against many advanced economies (and is a small fraction of Brazil’s). Its actual number of deaths is around 1/3rd of the USA despite having a population more than 4 times larger. We in the UK performed badly in managing Covid too so I am not trying to criticise the USA in saying that. My key point being having advanced economy status was of no great help in protecting from Covid initially but vaccine development and roll-out has become our get out of jail card.
India’s death total is almost surely understated right now. Possibly by a large margin. Read this: https://heisenbergreport.com/2021/04/20/to-go-out-is-to-get-infected-in-india-a-nightmare/
There is no chance (none) that India is reporting COVID deaths with any semblance of precision at this juncture. People are dying too fast for them to keep up. Brazil has no idea what the actual total is. And Bolsonaro doesn’t care.
It’s definitely irrelevant how precisely bad numerically it is vs Brazil as both are very bad and even if you are a soulless calculating husk you should be able to see that an uncontrolled surges in cases anywhere on planet earth means much higher chances for yet another vaccine resistant or immune strain with higher infectiousness, more modes of infection and higher mortality rates. Even worse is that the more places it is out of control the more animal populations it is likely to inhabit. The scenario where it is akin to a globally distributed ebola able to outbreak at any time from one of thousands of locations in a new novel strain should chill us to the bone.
“even if you are a soulless calculating husk” – investors need to be exactly that, to a substantial degree.
As evidenced by the price target increases today on cruise line stocks.
That may be true, but the point still stands. As contagious and dangerous as COVID-19 is, especially for the elderly, it has been comparatively less lethal, measured as deaths per 100 cases, than other coronavirus strains we’ve seen, like SARS and MERS. As bad as this pandemic has been, it could’ve been worse. The possibility of mutations into new novel strains is, imho, still very much a clear and present danger, one that gets worse the longer this scourge runs unchecked across much of the globe.
Wait, isn’t that whole mutation evolution thing just a theory? Shouldn’t we just let all the poor get sick so they can get “natural immunity?”
Sorry, I’m just so tired of all the BS. I finally got my second shot and I can say I haven’t felt this relaxed for months. I’m 76 and I have been on death’s door, seriously, three time since I was 11. That first time, my father’s brother told my mom not to worry because I was “too old to die.” In those days child mortality was high and making it to 11 was a milestone. I was lucky I missed the polio epidemic in the 1950s because my home town was gutted with iron lungs in the hallways and lobbies of the hospitals. For my third escape the doctors not only saved my life but took great pains through several hours of tedious surgery to leave me with a stable quality of life. As to that result my daughter tells me often how lucky I am because they could have skipped all that work and left me no insides and a fate worse than death. We in the US keep objecting to COVID as if it is some sort of unfair inconvenience and theft of our freedom foisted on us by people we don’t like. Ask those folks in India and they will tell you what it really is; it’s the grim reaper and the only reason the outcome isn’t worse is because, like the rest of the system, the GR is short-staffed.