Hello Pandemic, Welcome to the Bear Market
We were warned. We didn’t prepare. And now it is upon us. How bad might it get? This is a sober note, but there is also some good news to share.
This is also the first time in a year that I am writing to you. I’ve been having a lot of thoughts, but hesitant to publish unrefined ideas.
Sometimes though an idea is so urgent, a thought so pressing, that you simply must share it. These are some such thoughts.
Yes, they are unpolished. I don’t have a medical background, and I’m missing a lot of nuance in this short post in this complicated and rapidly evolving crisis. Nevertheless, there are some things I feel the urge to share. Most of all I wish to share hope.
Where are we now?
The World Health Organization said this week that COV-19 has reached pandemic classification, spreading within countries across multiple continents.
The stock markets have taken a dive into bear market territory, meaning a dip of more than 20%.
Schools, stadiums, factories, and events are shutting down to reduce human contact and limit the spread of the coronavirus.
We had our warning. The first case of the novel coronavirus was detected in late December in Wuhan, China. For weeks Chinese officials covered up such a scary reality, refusing to acknowledge the new virus and punishing doctors who spoke up. By January of this year doctors had identified 42 cases of patients displaying pneumonia and flu like symptoms, raising the alarm that this was a possible new virus and demanded immediate action. And China did nothing.
Then the virus spread. It infected tens of thousands. The sick went to hospitals to seek care, but the hospitals were not prepared for a sudden spike in patients needing urgent treatment. Without sufficient equipment, isolation wards, and full quarantine procedures in place, 30% of Wuhan’s nurses and doctors got infected with the virus, including Doctor Li Wenliang who had tried to raise the alarm early about the lack of a response to the virus, and later died of the infection.
And then, in late January, China got serious. Finally admitting that there was, in fact, a new virus rapidly spreading, they declared war. China sent in thousands of military doctors to Wuhan to support the struggling hospitals, and they famously shut down the city, quarantining over 10 million people. Already, factories were shut down for the annual lunar new years holiday. China extended that holiday to keep factories and schools closed, and canceled most public celebrations. All this is to limit human contact, and slow the spread of the virus.
Though slowing the spread of the virus doesn't stop it, it has a huge impact on mortality rates. If left unchecked, a virus will spread exponentially. The Wuhan virus has a doubling period of 6 days, which means the number of cases will double in less than a week, then double again. In this case, hospitals are quickly overwhelmed as there is a surge in cases, and the medical establishment is unable to provide care to everyone who needs it. This is a worst case scenario where deaths will be unnecessarily high. Unprepared, the death rate in Wuhan has been about 5%. The goal of social distancing is to slow the spread of the virus. By slowing the spread, even if the same number of people are infected, they are more spread out, so hospitals can care for fewer people at a time and give patients more intensive care. This also buys time to allow the medical establishment to prepare, train, and stock up on supplies. If a country acts quickly, they can blunt the worst of the virus. In Singapore the death rate is only 1%.
After their dramatic (if chronically delayed) action, China was quick to declare victory. A wave of propaganda has been launched to paper over the slow response. People's Daily, a major Chinese government mouthpiece, published this quote from President Xi on February 21st:
"Since the start of the outbreak, China has taken the strictest prevention and control measures, Xi said, adding that positive signs have developed thanks to these efforts."
What positive signs? "China's measures have effectively prevented the global spread of the virus, so the whole world should thank China and appreciate the country's efforts"
'Prevented the global spread', ya nice job with that. I'm certainly very grateful that there are not currently tens of thousands of cases across the worlds. Thank goodness for China's swift and decisive action that has saved us all!
Of course, China did not stop the spread of the virus.
The chart at the start of this note is a from John's Hopkins, orange is China's virus cases, green is recovered patients in China, yellow is cases in the rest of the world.
China's numbers are a complete lie. The yellow line, the cases for the rest of the world, shows an exponential shape. This is reflective of the fact that contagious diseases spread exponentially, in the case of this coronavirus doubling every 6 days. Epidemics always grow exponentially until contained. China's numbers follow a quadratic curve.
This chart is showing numbers from the World Health Organization. The WHO does not have observers in every hospital of every country. Instead they gather data from countries to publish, so the numbers from China are actually the numbers China itself is reporting. On January 25th China claimed to have only about 2,000 cases. A study published in Lancet, a major medical journal, on February 29th confirmed what many had long suspected. They estimate that on January 25th, China had over 75,000 cases, and that the virus was rapidly spreading globally.
The kicker from that study: "Large cities overseas with close transport links to China could also become outbreak epicentres, unless substantial public health interventions at both the population and personal levels are implemented immediately."
Doctors throughout the world had been saying as much for weeks, not least Doctor Li Wenliang. This report was meant to be an even bigger wake up call. Some countries headed it. South Korea, Singapore, and many others have taken drastic efforts.
What does drastic effort look like?
It looks like closing schools and events, yes. Social distancing can slow the spread. It also looks like taking advantage of that bought time to build up our hospitals' defenses, expanding isolation wards, manufacturing more respiratory machines, stocking up on supplies, training doctors in quarantine procedures. And it looks like rigorous testing to detect the virus early.
The US was not among those who took the opportunity to prepare early.
“A lot of people will have this, and it’s very mild,” Mr. Trump said. That's our president, downplaying the virus, on March 6th! And how do we know that this will be very mild?
"The White House promised capacity of 1 million tests by March 6th. The CDC has stopped publishing data on the number of tests performed. But the latest cobbled-together estimates, as of March 11th, are of 7,000 tests in total, well behind almost every developed country with an outbreak."
Officially, 1,300 people in the US are infected with covid-19. However we don't know the true number because we are simply not testing rigorously. It is likely in the tens of thousands. So the only reason the outbreak in the US is mild is that we’re not testing rigorously enough to know the true number of infections. Just like China did.
More concerning, the CDC stopped reporting the number of tests conducted! In a pandemic, public education and rapid information are what we need to keep people informed and equipped to help stop the spread.
I’m irate. I’m irate because politicians have tried to downplay the threat of the virus in order to project calm and stop a blow to the economy. I’m angry that governments didn’t test enough to know the true extent of the spread, and then for lack of data declared the threat small. I’m infuriated that governments like ours knew for weeks that the virus was coming, and did next to nothing. I’m mad because that inaction will cost lives.
I’m also worried. Not for my own sake, I am healthy and as a software developer fortunately can work remote if (or when) it comes to that. No, I’m worried for people like my uncle, who had lung surgery two months ago. I’m worried for people who work in the service industry and can’t afford not to work.
We have not prepared. But the hammering in the stock market has perhaps driven home a point, denial is not an effective way to preserve the economy. It appears we are finally waking up to the fact that this pandemic is kind of a big deal. Now we need to translate that urgency into productive action.
That does not look like stocking up on hand sanitizer and face masks. Facemasks are good for trapping droplets from your cough, and so if you are sick it can stop you from spreading it to others. Masks are not very effective at preventing you from contracting the virus. Soap and water work just as well as hand sanitizer.
Preparation looks like avoiding large gatherings to slow the spread of the virus. And it looks like preparing our health system to deal with the influx of cases.
Unfortunately we're already strained. The flu this year faded quickly, and then a second strain emerged in mid winter which was mutated and thus rendered the vaccine irrelevant. Because of that many of the supplies we need to fight covid-19 have already been spent on the flu. And since factories and supply chains are disrupted from lock downs new supplies is proving slow to come by. That's were we need to be spending our emergency funding. On expanding capacity and producing more medical equipment.
The bad news is that the virus is with us now. It is spreading, and will continue to spread. The fear about the virus, and the rational steps to shut down events and gatherings to slow its spread, will weigh down on the economy. The virus will hit the elderly and at risk groups hardest. The economic slowdown will hit hardest those working in the service industry, who cannot work remote and can't afford to stop working. Those who also need to take care of children now not in school because of closures will be doubly hurt.
The good news is that we can control how bad it gets. In Wuhan the death rate is 5%, in Singapore only 1%. The actions we take can drastically effect how bad we suffer. Take steps to stay clean and avoid crowds.
And most of all, don't forget to support each other. Make a plan now with elderly parents for how they will receive help in the event of a protracted quarantine or if they get infected. And offer help to the vulnerable people you know who may not be able to work at all if the entertainment industry shuts down.
I just went out to dinner this evening. My dinner cost me $9, tax included. I tipped my waitress $20. Not because the service was outstanding, but because I know, as a software developer, I'll be able to work remote. As a service worker, she might not have an income stream if people stop eating out and her restaurant cuts hours. And I did it because I still can. If large areas, like New Rochelle in New York, face quarantine, we may not be able to do such things for much longer.
Disclaimers about Nuance
I said at the start of this note that I’m leaving details out. This is a complex situation, and some might say I’m not being fair to our leaders. Maybe. I don’t think my critiques are unfair but they may be.
Certainly I’m leaving out many details. I have my own bias, I can’t repeat every detail I’ve read ever, much less the many stories I don’t hear. There’s a point to be made here about the spin we put on stories, natural biases, and news consumption in general. But I’ll save that point for my book.
I'll write about it in my book. No really.
For the same reason I wrote this note, I started writing a book this past November.
I’ve been frustrated about the lack of response to this virus for weeks, and finally decided I needed to say something.
Similarly, I’ve been frustrated for years with centralization and several structural problems I see with society. So I finally decided to say something. Yes, to point out the problems I see like I have here with the virus. But also to highlight actions that we as individuals can take to improve the world.
I hope I’ve driven that point home here. Yes, I’m upset about the virus. I’m angry and worried. But I’m also hopeful, because I know we as individuals can come together and take steps to keep each other safe.
Stay Clean, Stay Healthy, Pray for Competent Government Response.
I’m irate at our government’s slow response. But I’m also beyond it. Mistakes have been made, we need to take action going forwards. We as individuals can be conscientious to limit the spread with social distancing and hygiene. And we can extend help and support to those most at risk, whether medically or financially.
We can’t completely stop the spread of this pandemic, but together we can limit its harm.
The stock market tanked today even further, worse than any day since 1987. The shadow of a recession is looming. The virus threatens to claim millions of lives globally. We’re faced with a great trial. And we have the ability to face it.
I don’t consider it hyperbole to say that this is a historic moment. The scale of the crisis and how we respond will be recorded. Let’s make our actions heroic.
I forget what song this is from, but it’s stuck with me:
Hold onto hope, my forward bound
In the darkness of night, there’s light to be found
From the spark we’ll ignite the fire
Shine through the shadows of dawn