Human Nature

Risk sentiment was firm for a third session Thursday, as global stocks aimed for their best three-day advance in months.

The “peak rate of change” narrative still has merit, though. Or at least I think it does. If growth and earnings have peaked just as the Delta variant forces the wrong kind of inflections in virus curves, markets may struggle to reconcile the perception that the macro picture is gloomier at the margins with elevated valuations.

And yet, of the S&P 500 companies who’ve reported earnings, 85% have posted beats. Between that, still abundant liquidity and the loosest monetary policy on record, it can be difficult (on some days, anyway) to get behind any full-on bearish narratives.

On the COVID front, a piece in The New York Times suggested nations with “zero-infection ambitions” are now prone to abandoning the idea as mostly unattainable. “Increasingly, the mantra is the same: We have to learn to live with the virus,” Sui-Lee Wee wrote, adding that, “people are being encouraged to shift their pandemic perspective and focus on avoiding severe illness and death instead of infections, which are harder to avoid.”

The linked article quoted the head of the National Infection Prevention and Control Committee at the Health Ministry in Singapore, where “even the most diligent measures were not enough to prevent infection.” “You need to tell people: We’re going to get a lot of cases,” he said. “And that’s part of the plan — we have to let it go.”

The Times made it clear that not all officials are prepared to adopt a fatalistic approach — especially given how little scientists know about so-called “long COVID” and the possibility that giving up on containment measures could create more favorable conditions for new variants to emerge. But at least in wealthy nations where vaccination rates are reasonably high (and where effective vaccines are readily available to anyone who’s unvaccinated and decides to get inoculated), efforts to reduce the spread may ultimately be abandoned in favor of monitoring trends in hospitalizations and fatalities. That will be especially true if Pfizer and Moderna are able to develop booster shots targeted at the variants.

To be clear, I’m not qualified to express an “opinion” on the situation. Conventional wisdom has it that everyone is “entitled to their opinion.” But that simply isn’t true. If you don’t know what you’re talking about, you can’t properly have an “opinion.” Rand Paul learned that the hard way this week, when he was embarrassed by Anthony Fauci during a congressional hearing. The exchange went viral. No pun intended.

Although we seldom acknowledge it, the word “opinion” implies some bare minimum level of competence in the subject under discussion. The phrase “You’re entitled to your own opinion but not your own facts” is just a circuitous way of saying the same thing. I have no competence in medicine, so I can’t have an “opinion.” But, by virtue of being human, I do know something about human nature. And by virtue of being American, I know something about the misplaced sense of entitlement that goes along with being born into the middle-class in a rich country. Armed with that knowledge, I can confidently say that in my opinion, even the staunchest advocates of containment and the loudest champions of the science will eventually just say, “F–k it” in wealthy nations where medical care is readily available in the event of symptomatic illness.

Someone who was fully vaccinated with the mRNA shots this year and receives booster shots (assuming they’re developed and approved) for the variants later, won’t avoid crowds and human contact forever, no matter how bad the daily infection curve looks. I still think the virus has permanently altered consumption patterns to the extent it accelerated shifts that were already afoot (e.g., online shopping and streaming feature films). But modern humans in advanced nations are simply too accustomed to convenience to tolerate being put out forever, unless the chance of death is very high — even then, there’s no guarantee that everyone will be prudent.

For example, it’s already annoying when those notoriously unreliable card readers at the gas pump malfunction, forcing you to go inside to pay before you fill up your tank. The idea that someone whose card is declined at the pump but who doesn’t have a mask handy is going to get back in their vehicle, drive on fumes to a drug store, buy a package of masks, then drive back to the gas station so they can safely pay inside, is laughable. I suppose you could just pull your shirt collar up over your mouth and nose, but you get the point. And you can conjure any number of similar scenarios. I stopped wiping down my groceries with rubbing alcohol months ago, for instance.

That abandonment of caution will be all the more tempting if case curves continue to diverge from hospitalizations and deaths. Those divergences will also tempt market participants to adopt a flippant approach.

“One thing that may continue to lift the mood is the continued divergence between rising COVID cases and hospitalization or death rates, in countries where vaccination levels are high,” SocGen’s Kit Juckes wrote Thursday, presenting the charts (below), which use a 20-day lag between cases and deaths, and a 10-day lag between hospitalization and death.

One would generally expect the divergences to be even wider in nations where the more effective vaccines are dominant.

And yet, all of the above leaves largely untouched the “horrifying injustice” described on Wednesday by the WHO’s Tedros Adhanom Ghebreyesus, who reminded the world that 75% of vaccines have been administered in just 10 countries.

“Much of the developing world is also still facing rising infections, giving the virus a greater opportunity to rapidly replicate, which then increases the risks of more mutations and spread,” the Times article cited above said, noting that “only 1% of people in low-income countries have received a vaccine dose.”

“This is a double-edged sword,” SocGen’s Juckes remarked, of the divergence between case rates and severe illness in the UK. “It screams at the developed economies to step up efforts to help get the developing world vaccinated.”


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15 thoughts on “Human Nature

  1. R. I.– for the original Wuhan virus to be 2.4-2.6, for Alpha 4-5, and for Delta 5-8; these can be compared to seasonal influenza (1.2-1.4), common cold (2-3), smallpox (3.5-6), and chickenpox (10-12).
    Gas pump handles, grocery shopping etc. not sanitized and being more casual about masks, myself included would make it appear that this will be our new normal having different strains of Covid the same way we have different strains of the flu.
    This is going to take years and many many deaths

  2. I like most content and some of it i really enjoy the hell out of, but this is why i subscribe. I do not know what to call it, well packaged simple enough beneficial “informed practical forward thinking” pieces.

    No wonder you now have over over 10k Heizenites on board. Chart please (subscriptions over time). A small Heisen nation.

  3. Great commentary on the qualification of having an opinion. Opinions, like guns, seem to be something you’re entitled to in America. Being loud and confident with your “opinions” can even get you elected president. The problem we have is too many shouty unqualified opinion inventors are being listened to by other unqualified people who parrot those made up unfactual opinions until you have a movement so stupid it sounds like MAGA, and means even less than it sounds like it should. These tens of millions of snowflakey sheeple listening to morons are why we’ll never be rid of Covid and why no matter how good the science is behind the vaccines, it’s absolutely going to continue mutating until it defeats them. I agree with you that at some point (myself included) people are just going to get tired of waiting for these assholes to grow some sense and say f*ck it and live their lives. Welcome to America, where your right to be an idiot is more important than everyone else’s right to want to live!

  4. It is open season to attack those who refused to get vaccines as ignorant of the risks. That appears to be the view of many articles that one reads. It strikes me that if a person decides not to take the vaccine, they have probably thought about this a great deal. There was a interesting piece in the National Review on this subject which has predictably been attacked by the usual suspects.

    1. I debated whether to allow this comment or not. Ultimately, it doesn’t cross the threshold for deletion.

      However, I would note that the commenter’s history suggests deeply ingrained biases.

      Additionally, two things:

        This part: “It strikes me that if a person decides not to take the vaccine, they have probably thought about this a great deal”…. is totally inconsistent with education levels in locales where vaccination rates are low and flies in the face of common sense.

        The National Review is propaganda. I don’t permit the promotion of propaganda in comments. Any links to propaganda will be removed. No link was provided here, but that’s just fair warning.

    2. This comment intones the typical rhetoric of the people who think it’s their right to decide whether or not they should have to wear a mask or get a vaccine to prevent a deadly pandemic from continuing to spread while simultaneously thinking it’s also their right to tell a woman what to do with her body regarding pregnancy. If you’re going to impose your opinions on others about what they should do with their body then you should at least be willing to try to prevent becoming a host for a deadly virus in return. A good citizen knows when they must do something because it’s for the greater good of their society even if they don’t necessarily WANT to do it.

  5. the comparison to UK is experience may not be the correct analog, the places in the US where there are Delta outbreaks are seeing a concurrent surge in hospitalizations unlike the UK , fwiw

  6. One of the biggest problems right now, with regard to the vaccine, is that the US is still operating under “emergency authorization” (vs. full FDA authorization) for the vaccines. Accordingly, it makes it almost impossible to require the vaccine in the military, public schools, government jobs and even by private companies.
    However, it sounds like the FDA is within months of giving full approval to the Pfizer double shot vaccine. Presumably, the FDA will also grant priority review status to Moderna, when they apply.
    This should ramp up the vaccine rates.

    1. I should have been more precise- the exact quote was “an FDA official said a decision is likely to come within two months”. The FDA accepted Pfizer’s application “under priority review”. So maybe by mid-September, the US will have at least one FDA fully-approved vaccine.
      Moderna has already applied for priority review to the FDA as well. They are still waiting for the FDA to approve their request.
      Edit option?

    2. This is only a problem because right wing media is making it a problem. The FDA has policies about how to approve new medicines and drugs and those policies are designed to ensure they are not approving untested solutions that they may later have to revoke. The science, the CDC, the WHO, and 95%+ of those who have been vaccinated say that this stuff works. The loudmouth idiot on Fox News serving up their daily dose of fear and anger don’t care about any of that. They just want viewers to continue tuning in so they can continue being millionaires funded by billionaires.

  7. Your point about the virus being endemic is well taken. We will have to adapt to it. That will require a 3 pronged approach. First is to try to contain the spread- not stop it but try to take measures with public health in mind when there is an outbreak. Second, obviously is to vaccinate as many as possible. In my view a passport to do certain things or hold certain jobs is justified. Third, we will (hopefully) develop increasingly effective and simpler treatment in the event someone comes down with Covid. Only when all 3 of these conditions are implemented or satisfied will we emerge from this event in some semblance of “normal”.

    1. The 3 pronged approach can only be successful if it becomes mandated. Expecting people who have acted like this pandemic isn’t real and then not a big deal to follow the containment and vaccination procedures will never happen. Then you run into the problem of a large majority of those who are against vaccination and containment are also armed and enraged because they believe a lie that the election was stolen from them. Again, I don’t see how, in the US anyway, we ever get to a place where we can get citizens to truly buy into the fact that we are all in this together and have to cooperate enough to truly eradicate Covid.

  8. I was very pleasantly surprised reading this article and all those comments !!! Being European for 1.5 year I’ve been following “public opinion” in the US with eyes wide open in astonishment and irritation. This article and its comments (except for one ;-)) are modest, intellectual, realistic, objective, …

    1. In case you misunderstood what I wanted to say: I’ve been European all my life, but I’ve been following public opinion in America since start of covid = 1.5 years 🙂 ! Sorry, English is not my native language.

      1. Comments are required to be “modest, intellectual, realistic and objective.” If they aren’t, I remove them. That’s why people find this site to be a generally pleasant experience. 🙂

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