Economic implications of a SARS/Coronavirus outbreak

[Dona Ferentes]

Commentators are trying to pin today's drop on Fed Reserve comments (chairman Jerome Powell noting it would be "a long road" to recovery despite the promising numbers on the US labour market recovery), but I reckon that was only the first hour.

At 11am, the news of a CV positive for a 'protester' brought on the slow burn of a sell-off as investors worked out the way forward will be slower took the gloss off. New news, not old news.

 

[wayneL]

We will have epidemiologists making expert statements on economics soon.

It wouldn't be beyond their own purview to notice that economic models suck as much as their own

 

[Sdajii]

Are you calling the country's medical officers irrational and unreasonable ?

Not exactly, but they only know what they know. It's the politicians who are incompetent which resulted in irrational and unreasonable action being taken...

The medical officers understand medicine. I'll give them that. But they're not economists, they're not analysts in a broad sense. They know their own field and when asked how to control a virus they'll say how to control the virus. They won't do this in the context of causing other problems, they'll just say what's best for that specific task.

Unfortunately, politicians aren't scientists and generally aren't particularly smart. They're politicians, they are talented at debating, having sharp tongues, and manipulating people's feelings. They're also talented liars.

When this situation came along, the politicians basically said "Crap, here's a virus problem, it's a priority #1 virus issue, let's consult the experts on viruses", which they did, and followed that advice without balancing it up properly against other priorities. If you followed the advice of economists they'd say don't shut down the economy. If you followed the advice of any particular professional they'd tell you whatever best suits their own area. It is the politicians' job to put everything in perspective and do what's best. They failed dismally. You are having blind faith in the system working (do I need to explain how insane that is???). Yes, the system has failed. Almost everyone, probably including you, understands that the system gets things wrong, repeatedly, often spectacularly, but somehow most people still have a high level of paradoxical faith in it, even in the face of the results and rational thinking clearly demonstrating how misplaced that faith is.

 

[Smurf1976]

The medical officers understand medicine. I'll give them that. But they're not economists, they're not analysts in a broad sense. They know their own field and when asked how to control a virus they'll say how to control the virus. They won't do this in the context of causing other problems, they'll just say what's best for that specific task.

Having been involved with fixing various problems with potential large impacts, the best solutions have always come about when everyone made sure they fully understood and respected what those from different areas of expertise were concerned about.

That means those in suits understanding precisely what the concerns of those wearing boots and overalls are and vice versa plus everyone in between. Only then, with all the issues clearly on the table, can the best path be found and it usually involves an element of compromise all round.

A siloed approach is rarely the best one.

 

[Sdajii]

Unfortunately @Sdajii you are falling in to the bias known as "who outside there?". I just made that one up but we will stick with it as it's good. You are only looking at humans, us, even that most miserable of ribbon of traffic along a rural highway, Grey Nomads in convoy.

You need to look at the virus. At the organism. A tiny protein. A sliver of RNA.

It is called Novel Coronavirus as it is new. Very new. Nobody has ever seen it since Adam and Eve munched on an apple and got down and dirty. The doctors know bugger all about it. The sicker the people the more virus it spews out, and on to the next human. It causes different immune responses in different people. It causes other things such as clots and brain changes ( look at Boris Johnson even more imbecilic since he had it ). Many people who have had it even severely do not get a good antibody response which means, I am told, they may get it again next year or the year after when those antibodies fade away as I am told they do with coronaviruses. This is why we get colds year in year out.

This is not your regular virus. A vaccine is far, far away my learned friends tell me. The effective vaccine exists atm in the minds of the bulls on Wall St. and The Tangerine Clown in the White House.

It may find it's way back in to a wet market and an animal. It is already in every lab between here and Wuhan going the long way around via Atlanta, except in NZ. Don't get me started on NZ. Thus this virus imo is not finished with us and for that reason I see a number of major faults with economic projections "once it is over" which I will list as follows. I don't use google, just dot points.

• The pandemic is not over. Where there are no cases e.g. Africa there has been no testing.
• Governments lie. Russia has very few deaths from an enormous number of cases.
• Before you know it we will be heading back in to winter in the Northern Hemisphere.
• Because it is live in labs it may be changed, will break out again, not intentionally.
• It may combine in an animal in a wet market and then we have Covid-20 or Covid-21.
• 20 and 21 may have different characteristics, may be more aggressive in people with herpes e.g.
• This will ensure that Grey Nomads won't get it as all they do is reminisce.
• Younger people may get 20 and 21.

I will get my Epidemiologist friend to examine your googling, but I'm of a mind it is out. Not very far out but then in a Chaotic System one needs only to be a teensy bit out to lose one's shirt being a bull.

gg

It's a new virus, but the concepts of evolution still apply. A more aggressive strain will not outcompete the existing strain. There's a reason that viruses tend to be mild. If you kill your host too quickly, you die too. A new virus is new, which is why sometimes new viruses are more aggressive than old viruses, but over time they disappear or become more mild. Some start out mild and stay mild, or they can start out very mild and become more aggressive until they're just mild. There's a goldilocks zone for viruses. There are different types of viruses and the goldilocks zone is different for different types, for example, something like HIV is permanently in the body, so it can be severe because it spends so many years dormant, before it becomes severe. Chinavirus is a respiratory virus though, a coronavirus, so it needs to follow the coronavirus rules if it wants to live, which means over time it will become more like the common cold. If evolution was going to make Chinavirus more nasty, it already would have made the coronaviruses which cause the common cold more nasty. A severe virus kills hosts too quickly to be as effective, and in the modern world it will be detected even more quickly than in the natural world and the individual isolated, so we would eliminate it very quickly, as with SARS and MERS (if either of those had been more mild they may still be with us, in which case by now they'd have become even more mild than when they started).

I totally agree that a vaccine is most likely a long way away. I started studying genetics at university in 2002 and microbiology in 2003 and it was then that I learned why we've never been able to make a vaccine for any of the coronaviruses, which is why I was immediately saying I was sceptical about it being a realistic hope when the idea became so prevalent a few months ago.

This virus didn't start in a wet market, the wet market origin story never made sense and isn't even the official story now. Talking about it getting into a wet market now and mixing with another virus just demonstrates your own scientific illiteracy and willingness to blindly and naively follow nonsensical mainstream media narratives and propaganda.

 

[Kremmen]

Appropriate would have been to carry on more or less with business as usual but with reasonable social distancing, personal hygiene promotion and common sense approach to high risk things (like crowds etc, sure, cancel large public gatherings etc). The extreme restrictions will kill and harm for more people than the virus would have if we had done literally nothing at all to mitigate it.

Your position is open to the same criticism that you are making though, that collateral damage may be immense. If the business-as-usual approach fills up the hospitals with Covid-19 cases, then many more people will be killed and harmed by other means because of lack of availability of hospital care.

Lockdowns/restrictions are not indefinitely sustainable, but they are sustainable for long enough to eradicate the virus, as New Zealand and much of Australia appear to have done.

 

[Sdajii]

Having been involved with fixing various problems with potential large impacts, the best solutions have always come about when everyone made sure they fully understood and respected what those from different areas of expertise were concerned about.

That means those in suits understanding precisely what the concerns of those wearing boots and overalls are and vice versa plus everyone in between. Only then, with all the issues clearly on the table, can the best path be found and it usually involves an element of compromise all round.

A siloed approach is rarely the best one.

Exactly, but in this case the guys in suits have gone to one of the silos and taken their advice almost exclusively from that silo.

 

[Sdajii]

Your position is open to the same criticism that you are making though, that collateral damage may be immense. If the business-as-usual approach fills up the hospitals with Covid-19 cases, then many more people will be killed and harmed by other means because of lack of availability of hospital care.

Lockdowns/restrictions are not indefinitely sustainable, but they are sustainable for long enough to eradicate the virus, as New Zealand and much of Australia appear to have done.

Of course a business as usual approach would have resulted in more Chinavirus fatalities (noting that the vast majority would have been not long for this world). Appropriate triage could have taken care of the other issue you raise.

Looking at the number of fatalities in 'business as usual' countries, it's really not that big a deal, not compared to the decades of problems we've set ourselves up for. Poverty is literally a killer. A crippled economy doesn't function as well. I don't care about CEOs being unable to afford a 10th Ferrari, but a strong economy is important for things like, oh, police, schools and, oh... things like *hospitals*. The insane situation has forced so many jobs to be lost, businesses to close, many permanently. This has necessitated absurdities like allowing people to sell their own superannuation. I've seen a boom in things like the sales of high end designer snakes in Australia, with people frivolously purchasing 10s of thousands of dollars worth of fancy snakes (to those who don't know me, I'm not joking, I have a lot to do with this industry and it has been amazing to see what people are spending their super on this year!). Whether people are spending their own undervalued super on fancy pet snakes or other unneeded nonsense, or using it as intended out of desperation, that's super which won't be available to them when they retire in 10, 20, 30+ years, which is going to be a continual drain on the economy for decades. Of course, this is just one of countless issues being caused. A poor economy literally kills people (just look at countries with strong economies vs. countries with poor economies and see the difference in life expectancy and lifetime morbidity - there's an extremely strong inverse correlation). Similarly, look at individual wealth vs. lifetime morbidity and life expectancy, there's a very strong inverse correlation, particularly in older people.

Compare the above to the mortality rates of business as usual countries. It's far, far below the damage we're setting ourselves up for, and likely it's even below the short term damage caused by the lockdowns!

And also, there was never any need for an either/or approach. We didn't need to choose between an absolute zero mitigation strategy or the insanity we have gone for. We could have used all mitigation strategies which didn't have a significant impact on the economy or mental health (social isolation causes depression which doesn't just ruin lives, it makes people literally end their own, and unlike the Chinavirus, this tends to affect young, healthy people rather than people who were soon to die anyway). Depression has already been a huge and growing issue in western countries over the last couple of decades, it's a problem which once caused by something often becomes recurrent, and we've just inflicted it on a huge number of people through loss of livelihood and ability to socialise.

No one is saying that the over the top measures haven't prevented deaths. The problem is that the cure is far worse than the disease, even if it actually does cure it.

And, even if we do manage to fully erradicate it from Australia, that situation only lasts for as long as the country remains isolated. It will not be at all possible to erradicate it from anywhere other than islands (Australia being by far the largest unless you want to obtusely include Antarctica). Do you want to keep Australia isolated indefinitely, waiting for a vaccine which will probably never come, only to say 'Oh, crap!' when new cases do inevitably slip into Australia, forcing ongoing or frequent periods of lockdown?

 

[Garpal Gumnut]

It's a new virus, but the concepts of evolution still apply. A more aggressive strain will not outcompete the existing strain. There's a reason that viruses tend to be mild. If you kill your host too quickly, you die too. A new virus is new, which is why sometimes new viruses are more aggressive than old viruses, but over time they disappear or become more mild. Some start out mild and stay mild, or they can start out very mild and become more aggressive until they're just mild. There's a goldilocks zone for viruses. There are different types of viruses and the goldilocks zone is different for different types, for example, something like HIV is permanently in the body, so it can be severe because it spends so many years dormant, before it becomes severe. Chinavirus is a respiratory virus though, a coronavirus, so it needs to follow the coronavirus rules if it wants to live, which means over time it will become more like the common cold. If evolution was going to make Chinavirus more nasty, it already would have made the coronaviruses which cause the common cold more nasty. A severe virus kills hosts too quickly to be as effective, and in the modern world it will be detected even more quickly than in the natural world and the individual isolated, so we would eliminate it very quickly, as with SARS and MERS (if either of those had been more mild they may still be with us, in which case by now they'd have become even more mild than when they started).

I totally agree that a vaccine is most likely a long way away. I started studying genetics at university in 2002 and microbiology in 2003 and it was then that I learned why we've never been able to make a vaccine for any of the coronaviruses, which is why I was immediately saying I was sceptical about it being a realistic hope when the idea became so prevalent a few months ago.

This virus didn't start in a wet market, the wet market origin story never made sense and isn't even the official story now. Talking about it getting into a wet market now and mixing with another virus just demonstrates your own scientific illiteracy and willingness to blindly and naively follow nonsensical mainstream media narratives and propaganda.

Sorry @Sdajii, this thread does not give me the time to argue these points.

My doctor mates tell me many of your points are wrong or partly wrong/nearly right which is sometimes worse.

I never said the virus "started" in a wet market, but then I naively assumed you read my posts.

Stay safe and well mate.

gg

 

[MrChow]

https://www.cnbc.com/2020/06/11/tre...says-we-cant-shut-down-the-economy-again.html

 

[Smurf1976]

Looking at the number of fatalities in 'business as usual' countries, it's really not that big a deal

For the USA, it's now about the same as US military deaths fighting World War 1 or twice that of the Vietnam War.

I wouldn't say that's insignificant.

 

[Smurf1976]

A crippled economy doesn't function as well. I don't care about CEOs being unable to afford a 10th Ferrari, but a strong economy is important for things like, oh, police, schools and, oh... things like *hospitals*. The insane situation has forced so many jobs to be lost, businesses to close, many permanently. This has necessitated absurdities like allowing people to sell their own superannuation.

That is true but it could equally be said that there is a fundamental flaw in an economy which can't be simply turned off, paused, and turned back on again without taking forever to recover.

We live in a society, the economy is only one part of it, and it needs to be fit for purpose. There will be natural disasters, there will be another pandemic and so on and the economy needs to be designed to cope with that without falling in a long term heap just because it was turned down for a few months.

After all, it's not as though financial markets themselves don't tend to blow up roughly once a decade and strangely that seems to be considered acceptable so a once a century pandemic should be something we can cope with surely.

 

[qldfrog]

Not exactly, but they only know what they know. It's the politicians who are incompetent which resulted in irrational and unreasonable action being taken...

The medical officers understand medicine. I'll give them that. But they're not economists, they're not analysts in a broad sense. They know their own field and when asked how to control a virus they'll say how to control the virus. They won't do this in the context of causing other problems, they'll just say what's best for that specific task.

Unfortunately, politicians aren't scientists and generally aren't particularly smart. They're politicians, they are talented at debating, having sharp tongues, and manipulating people's feelings. They're also talented liars.

When this situation came along, the politicians basically said "Crap, here's a virus problem, it's a priority #1 virus issue, let's consult the experts on viruses", which they did, and followed that advice without balancing it up properly against other priorities. If you followed the advice of economists they'd say don't shut down the economy. If you followed the advice of any particular professional they'd tell you whatever best suits their own area. It is the politicians' job to put everything in perspective and do what's best. They failed dismally. You are having blind faith in the system working (do I need to explain how insane that is???). Yes, the system has failed. Almost everyone, probably including you, understands that the system gets things wrong, repeatedly, often spectacularly, but somehow most people still have a high level of paradoxical faith in it, even in the face of the results and rational thinking clearly demonstrating how misplaced that faith is.

I believe the real problem is politician are so used to never admitting any mistake than they can not agree ever on saying we were wrong
The initial response was right as was the target: flatten the curve, in front of an unknown disease
Now that we understand it is basically a serious flu with just one order of magnitude worse, we could be more realistic . We should challenge IQ and Knowledge of our own Qld so called expert .
Remember that from the start Paluchet told us we would need extreme measures until vaccine arrives, vaccine which just last week got extra funding from state.
Anyone with even a passing interest in science had alarms ringing at the time:.we will have no vaccine
We have been very lucky with the virus, far less with our governments reactions which has translated into ego boasting and power greed..for the better good....they say
We have been conned but have to be thankful the virus was not worse.
Any pretence of democracy, freedom, population intelligence and propaganda resistances has been found naked with the virus tide going away.
It is actually a terrible verdict for our so called democracy.
I was afraid of the green Muslim wave for the west, we have our own red Taliban at work and more generally a pretty dumb population ready to swallow anything
Who are we to criticize China...?

 

[qldfrog]

That is true but it could equally be said that there is a fundamental flaw in an economy which can't be simply turned off, paused, and turned back on again without taking forever to recover.

We live in a society, the economy is only one part of it, and it needs to be fit for purpose. There will be natural disasters, there will be another pandemic and so on and the economy needs to be designed to cope with that without falling in a long term heap just because it was turned down for a few months.

After all, it's not as though financial markets themselves don't tend to blow up roughly once a decade and strangely that seems to be considered acceptable so a once a century pandemic should be something we can cope with surely.

True, but should we self inflict this test.. We could possibly wipe it out in Oz.and then?
Expect the same for the rest of the world?
Smooth the curve is a great and valid concept, it means controlling and offering best chances of survival.
We are adapting here the same mistake as in fire management in our forest
Instead of yearly controlled burns, we get massive catastrophic events: in this case either medical with
Cases explosion out of nowhere or a new lockdown so economic cataclysm..

 

[wayneL]

That is true but it could equally be said that there is a fundamental flaw in an economy which can't be simply turned off, paused, and turned back on again without taking forever to recover.

We live in a society, the economy is only one part of it, and it needs to be fit for purpose. There will be natural disasters, there will be another pandemic and so on and the economy needs to be designed to cope with that without falling in a long term heap just because it was turned down for a few months.

After all, it's not as though financial markets themselves don't tend to blow up roughly once a decade and strangely that seems to be considered acceptable so a once a century pandemic should be something we can cope with surely.

There is indeed a fundamental flaw and it lies in the nature of central banking. It is something almost none of we proles understand... The creation of money and credit is not what we think it is.

Off topic for this thread, but I recommend the "Princes of the Yen" doco I posted in another thread, for a start.

(PS I'm not really claiming to understand it fully either... I'm struggling to grasp it all, but I've gotten a peek through the keyhole and I am frankly alarmed)

 

[over9k]

I think we can be pretty confident there's going to be more news of virus spreading in the protests/riots. There's no shortage of people at them not wearing masks and they haven't even stopped protesting/rioting yet. There's several scheduled for this evening/weekend.

I made a big post in one of the other threads but I've nuked my positions on everything except the distance/stay at home stocks and export led stuff like mines until the rioting stops. Yesterday/last night was enough of a bloodbath as it is.

 

[basilio]

Sorry @Sdajii, this thread does not give me the time to argue these points.

My doctor mates tell me many of your points are wrong or partly wrong/nearly right which is sometimes worse.

I never said the virus "started" in a wet market, but then I naively assumed you read my posts.

Stay safe and well mate.

gg

Sdajii overwhelming confidence in the certainty of his assertions is inversely proportional to reality.

 

[basilio]

US stock market has turned down sharply.
The economic reality of a spluttering economy and re expanding COVID 19 outbreak is overtaking the $1.5trillion suger hit.

 

[over9k]

Which was always going to happen, it just wasn't due for several weeks. The george floyd stuff brought it forward.

 

[Sdajii]

Sorry @Sdajii, this thread does not give me the time to argue these points.

My doctor mates tell me many of your points are wrong or partly wrong/nearly right which is sometimes worse.

I never said the virus "started" in a wet market, but then I naively assumed you read my posts.

Stay safe and well mate.

gg

Oh yeah? Well, my expert super mega world leader friends tell me your doctor mates are wrong.

Provide details or don't bother saying anything; I'm more than happy to check up specific points and if I'm wrong I'll thank you for bringing it to my attention. When it comes to the average ages of fatalities and respective country life expectancies, the figures are quite clear. When it comes to evolutionary tendencies of viruses, obviously biology comes with all sorts of exceptions and any crazy thing is technically possible, but it makes no sense to focus on extraordinarily unlikely events. You could probably take something I've said out of context, or nit pick a trivial detail (I might have unintentionally stated a strong generalisation as an absolute, for example), but if I have something meaningfully wrong, please point it out. It's technically possible that some random person in the world may have a mutation or recombinant event producing a virus which will wipe out the entire human race within a month. Sure, it's technically possible, so but unlikely it's not worth thinking about. What I said was definitely a broad brush view of the picture, not designed to look at smaller details if they are not relevant.

I never said you said the virus started in a market. You did bring up a concern about the virus getting "back into a wet market", as if this is somehow important in some way. Wet markets are little more than open air supermarkets. They are found all across not only Asia but the whole world, including Australia. It's entirely possible, even fairly likely, that there's someone infected by Chinavirus at a wet market in Australia right as I type this. It's certain that many infected people are at wet markets right now. As a qualified biologist who has spent years routinely shopping at wet markets in Asia, including buying bats (and unlike you in your colourful posts I'm saying this in a real, literal sense) I am not worried about this.