Coronavirus 2019-nCoV

[ShockerPrez]

Ok, so to everyone that's freaking out about this.....

What is not being done? What would put you at ease?

[wufan]

I don’t think there is much more to be done. Hopefully continued research will help. The advice coming out of the medical community is sound. If an outbreak in the community occurs we should be quick to recommend working from home when possible. Have two weeks food supply on hand.

[wsushox1]

Ok, so to everyone that's freaking out about this.....

What is not being done? What would put you at ease?

I'll bite. I'm not freaking out about it per se. I will be on a plane every week for the next 4 weeks unless my company decides to cancel all travel.

However, it is clear that the manufacturing of the test, the overly rigid testing requirements early on (leading to probable cases being denied testing), and the denial of using the widely adopted WHO test has led to extremely late detection. The president himself has clearly intimated he is more worried about keeping numbers (artificially in some cases) lower than other countries - even to the detriment of better information which could lead to better public health decisions. You need to look no further than Dr. Carson's, who is on the COVID taskforce, horrendous interview on ABC this morning.

Trumps statement of "I'd rather sit back and wait" is the equivalent of the National Weather Service declining to issue a Tornado Warning because "You can just sit back and determine where the tornado is by waiting until the damage and fatality reports come in". It's the exact same logic and it goes against every time tested emergency management procedure.

There is no standardized way to handle crises - whether in your family, business, or community - but there are certainly widely adopted and accepted procedures for each scenario and it seems that administration focused too much on the wrong things early on.

So to start:

• Don't call a botched test as "perfect"
• Don't have surrogates (looking at you Kudlow) going on TV calling it contained and "airtight". It ruins the administrations credibility.
• Empower the professionals to do their job - clearly some feel they are not.
• Prepare fiscal stimulus - monetary policy will not be enough.

Fortunately, credit markets seem prepared to withstand this crisis - especially if the Fed begins to expand the balance sheet further (short term repo notwithstanding) - but if it continues into the summer and fall we could again be looking at credit markets coming to a halt within certain industries requiring large scale bankruptcies or bailouts. Travel and manufacturing are the obvious sectors, but with the Russia looking to increase output and drive down oil prices the energy industry is looking extremely fragile with large scale outstanding debt that would need to be refinanced and serviced.

[wufan]

Help me out.

Which professionals are unable to do their job in this country?

Why would credit markets come to a halt?

[wsushox1]

Help me out.

Why would credit markets come to a halt?

Short answer: interest rates have been so low for so long that corporate borrowing and debt has ballooned. Not trying to be patronizing with this oversimplification: but a lot of this debt is dependent on consumer activity (we are a consumer services economy now) to generate cash flow to service. IF (and I said if in the first post) there is a long term slow down in consumer services then all industries would likely feel an impact and the obvious industries - travel, hospitality, energy (all of which have a lot of debt) - could see an inability to refinance in the long-term and potentially in the short term. I'm not saying credit markets would freeze up for everyone or even be systemic, but there are some that that will have issues. Obviously those companies have options such as layoffs/furloughs to free up cash and it certainly wouldn't be the first time (and probably not the last) those three industries would run into financing issues lol. Some of their balance sheets are soooo debt ridden in a business that lives on the margins.

Not to mention the amount of subprime auto loans but again, that's likely not systemic.

[wufan]

Short answer: interest rates have been so low for so long that corporate borrowing and debt has ballooned. Not trying to be patronizing with this oversimplification: but a lot of this debt is dependent on consumer activity (we are a consumer services economy now) to generate cash flow to service. IF (and I said if in the first post) there is a long term slow down in consumer services then all industries would likely feel an impact and the obvious industries - travel, hospitality, energy (all of which have a lot of debt) - could see an inability to refinance in the long-term and potentially in the short term. I'm not saying credit markets would freeze up for everyone or even be systemic, but there are some that that will have issues. Obviously those companies have options such as layoffs/furloughs to free up cash and it certainly wouldn't be the first time (and probably not the last) those three industries would run into financing issues lol. Some of their balance sheets are soooo debt ridden in a business that lives on the margins.

Not to mention the amount of subprime auto loans but again, that's likely not systemic.

So I see the obvious travel related issues if people panic or there are actual quarantines, but why energy? I’m just not understanding the relationship to credit here really. Certainly if you are at risk financially, any little thing can topple you, but I don’t see what you are talking about with needing a financial stimulus.

I’m not actually refuting you’re claims, I’m just totally ignorant as to what you are saying.

[wsushox1]

So I see the obvious travel related issues if people panic or there are actual quarantines, but why energy? I’m just not understanding the relationship to credit here really. Certainly if you are at risk financially, any little thing can topple you, but I don’t see what you are talking about with needing a financial stimulus.

I’m not actually refuting you’re claims, I’m just totally ignorant as to what you are saying.

Oil & Energy is one of the most heavily indebted industries currently. And this is what we are going to wake up to tomorrow:
oil.jpg

Simultaneously a supply (Saudis and Russia) and demand (coronavirus) shock incoming. These price levels will make very, very few american companies profitable.

[SB Shock]

1% is 3.2 million dead.

We have a choice, either fight to mitigate the spread or face the consequences. There will be short term pain economically, but if we just throw up our hands and say this is too hard then that 1% will come true.

it not that hard to mitigate it. Be responsible. Conduct good personal hygiene. If u are sick stay home. If u are traveling or travel to a “hot” area then self-isolate yourself (that is what responsible companies are doing with their employees).

[Napoleon Dynamite]

1% is 3.2 million dead.

We have a choice, either fight to mitigate the spread or face the consequences. There will be short term pain economically, but if we just throw up our hands and say this is too hard then that 1% will come true.

it not that hard to mitigate it. Be responsible. Conduct good personal hygiene. If u are sick stay home. If u are traveling or travel to a “hot” area then self-isolate yourself (that is what responsible companies are doing with their employees).

So you're projecting every single person in the United States will be infected?

[MoValley John]

So you're projecting every single person in the United States will be infected?

I predict that we're all gonna die!

[Napoleon Dynamite]

The scholarly New England Journal of Medicine states that the case fatality rate might be considerably less than 1% closer to severe seasonal influenza.

On the basis of a case definition requiring a diagnosis of pneumonia, the currently reported case fatality rate is approximately 2%.⁴ In another article in the Journal, Guan et al.⁵ report mortality of 1.4% among 1099 patients with laboratory-confirmed Covid-19; these patients had a wide spectrum of disease severity. If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases, the case fatality rate may be considerably less than 1%. This suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.²

https://www.nejm.org/doi/full/10.1056/NEJMe2002387

[Napoleon Dynamite]

I predict that we're all gonna die!

That is absolutely correct. Guaranteed.

[Napoleon Dynamite]

So you're projecting every single person in the United States will be infected?

Approximately 28% of the US population was infected during the 1918 H1N1 Influenza (Spanish Flu) pandemic.

[DCShockerFan05]

The scholarly New England Journal of Medicine states that the case fatality rate might be considerably less than 1% closer to severe seasonal influenza.

On the basis of a case definition requiring a diagnosis of pneumonia, the currently reported case fatality rate is approximately 2%.⁴ In another article in the Journal, Guan et al.⁵ report mortality of 1.4% among 1099 patients with laboratory-confirmed Covid-19; these patients had a wide spectrum of disease severity. If one assumes that the number of asymptomatic or minimally symptomatic cases is several times as high as the number of reported cases, the case fatality rate may be considerably less than 1%. This suggests that the overall clinical consequences of Covid-19 may ultimately be more akin to those of a severe seasonal influenza (which has a case fatality rate of approximately 0.1%) or a pandemic influenza (similar to those in 1957 and 1968) rather than a disease similar to SARS or MERS, which have had case fatality rates of 9 to 10% and 36%, respectively.²

https://www.nejm.org/doi/full/10.1056/NEJMe2002387

I read that too, when it came out. Unfortunately, it predates the WHO's more recent CFR estimate by about a week, and the studies the article cites are older still. For example, the paper by Guan et al. cited there does indeed report a CFR of 1.4%, but if you read Guan itself, you'll see that of 1099 patients studied, 15 (1.4%) had died, 55 (5.0%) had been discharged, and 1029 (93.4%) were still in the hospital at the time the study was done. The data is from January 28th. It was a helpful early look at an early patient population, but the outcomes for the overwhelming majority of those patients weren't known then. It's not a relevant sample or time frame now.

It seems now, over a month later, that lots of those who die take weeks to expire. That's not good news for how the numbers will trend. On the other hand, as has been discussed above, there's also bias in the other direction from all the unreported cases (which we're assuming are disproportionately mild). We'll have to see where the final balance lies. For now, don't rely on old data, and be sure to check your underlying sources to be sure they're relevant for whatever you're trying to learn. Pay special attention to the population of interest, time frame, outcomes definitions, etc

[wufan]

It’s not SARS. That was much more deadly, but infected very few. It’s deadlier than flu thus far, but not as wide spread. We will see. Hopefully it peters out!