In 2009, the economy collapsed because of bad loans. In 2020, the economy is shutting down because we shut it down.
That’s said, our shutdown could certainly snowball into serious issues with the economy where the pre-existing economic activity doesn’t come back.
Wait a few months then let's see how bike sales go.
We’re at serious risk for community starvation not seen since the Great Depression.
0: https://www.motherjones.com/food/2020/04/these-photos-show-t...
We still don’t have scalable testing in the US, which is absolutely vital to reopening the economy safely. Without that, we risk losing all of the progress we’ve made flattening the curve.
Then all of these businesses have to open back up and hope they’re able to generate income quickly enough to stay afloat, which isn’t a guarantee.
There are also a growing number of experts saying that we’ll be in flux for the rest of 2020 unless we establish that survivors can’t be reinfected, which hasn’t been confirmed yet. Even if some areas are able to open up early, the economy will continue to suffer to its global nature. We’re just in no way able to say it’s going to be normal in 2 months.
I personally believe that the worst could be done in many places.
New York was too slow to institute controls and stopped just short of catastrophe. But, it's likely (based on extrapolation from serological data elsewhere), that 15% of people in NYC are immune and 20% will be soon. A disease with an Rt of, say, 1.8 is still scary and still requires controls and distancing, but it's a whole different ballgames from one with an Rt of 2.5. (-0.5 Rt for reduced susceptibility, -0.2 Rt for seasonal effects, say).
> There are also a growing number of experts saying that we’ll be in flux for the rest of 2020 unless we establish that survivors can’t be reinfected, which hasn’t been confirmed yet.
The case reports we have and clinical experience suggest reinfection is very rare. The bigger question is lasting immunity. Will most people be totally protected for 3 years like with a typical cold coronavirus? Or can we expect more like the 5+ years seen with SARS-CoV-1? And even if people become susceptible again, will the disease be less severe?
I also believe that in the long run, 2019-nCoV will become "just another" endemic common cold virus, and will kill small numbers of people every year just like the other endemic respiratory coronaviruses (229E, OC43 etc) do. I bet those would be pretty fearsome introduced into an immunologically naive population. Which really sucks-- say, 10% more severe respiratory illness forever is not good. But I think it's the path we're on unless we get a truly terrific vaccine, and I don't think we can bet on that.
In any case, I think the interesting things are: A) the share of infected people who will never have symptoms, and B) the share of infected people that have minor symptoms and will not be diagnosed. There's reason to believe that both A and B are significant. If they reach 90%-- which there's reason to believe they likely do-- it means that with a 1.5% cumulative case count you have more like 15% of the population having been exposed.
Serological data from a random sample of the German town of Gangelt shows that even a robust testing regime missed about 90% of the cases. The known per-capita case count at the time of the study was similar to New York City's, but 14% of the sample carried antibodies to COVID-19.
The German testing regime is and has been considerably better than what's been in NYC. I'm inclined to think that an even bigger multiple of the known case count may have been exposed in NYC than in Gangelt.
Separately, Iceland keeps their test data in two bins; one for people with a known exposure history and any (even minor) symptoms, and one for members of the general population without a known exposure history or symptoms. Analysis of this data suggests about 50% of people never develop symptoms and don't have any known exposure history, in an area with a much more robust testing regime.
The results are disputed to say the least. A random sampling study in Austria found that the true number of infected is likely to be only three times higher.
> Analysis of this data suggests about 50% of people never develop symptoms
At the time of the test asymptotic. They did not say never develop symptoms.
Seems Iceland is testing a lot more than NYC and that their focused testing (which is still broader than NYC's overall testing) misses ~90% of cases.
Note that the Austrian study I've read shows that current infection as detected by RT-PCR is about 3x higher than present case count, which isn't quite the same thing I'm talking about with the antibody tests in Germany. If you're referring to something else, please share. In particular, no one knows the sensitivity for RT-PCR of asymptomatic people and it might be rather low--- it's not exactly wonderful in people who are quite sick and presumably shedding more virus.
I'm hoping in the next week or so we have antibody data from a couple of US jurisdictions, including the SF Bay Area. It can really inform policy.
The reason Austria wasn't doing antibody tests yet is because the quality of these is not anywhere close enough to be reliable.
Just today, new data from Santa Clara County:
https://www.medrxiv.org/content/10.1101/2020.04.14.20062463v...
Stanford estimates 2.49% to 4.16% seropositivity, versus approximately 1000 reported cases as of that date-- so about 75x the actual reported cases. Of course, the way that Stanford recruited their sample means that people who were previously exposed might be more likely to report, so I think this overstates things a little, but...
29214 reported cases / 17280000 population = 0.17%. But apparently about 3% of blood donors in the Netherlands have antibodies. https://nltimes.nl/2020/04/16/3-dutch-blood-donors-covid-19-...
If blood donors are representative of the population as a whole, that means about 94% of cases have been missed. Again-- with better testing than the US.
On aggregate, food banks may be stressed, just like on aggregate the measure we use to determine economic fortune may be down only 3%. In reality, this means there are lots of individuals literally starving and making $0.
Those people are going to struggle to hold out for however long it takes.
A month or two may be true in aggregate. For many, simultaneously, their jobs will never return.
I see one Dodge Charger in the bottom picture, which is a little sportier, and I’m sure I missed a few others, but otherwise I completely disagree with your observation. I’m not sure what you expect poor people to drive if not GM/Ford/Toyota, etc.
There might also be a gap between what people realistically prepared for and what happened. I'm not entirely sure, for example, if a family with both parents employed in (what used to be considered) stable jobs should have foreseen the possibility of losing both jobs at the exact same time?
In the end, this is a numbers game: you can blame the individual up to a point. But when some double-digit percentage fails to abide by your standards of personal responsibility, you have to accept the sometimes flawed nature of humanity and try to work with it instead of insisting on futile efforts to change individual people.
Most people have an average of 3-4 years worth of car. Ownership runs 7-8 years, or a mean of 3.5 - 4 years remaining ownership.
People run out of food long before they run out of car.
I dont think people are desperate to spend money.
Your dad likely had a upturn in customers due to mass demand for personal fitness devices.
Due to social distancing, gym closures, anything fitness related for home/personal use is selling out.
When covid-19 lockdowns loosened, I expect downturns in these areas.
The market will be flooded with people trying to do returns and reselling the equipment.
This will likely change if people start losing sources of income.
Do you happen to have recent reports showing either problem?
There are many seasonal coronaviruses that cause colds. We’ve never been able to create a vaccine. There was a NYTimes article in last few days, I’ll post it when I find it.
EDIT: https://blogs.scientificamerican.com/observations/can-we-rea...
Finding lots of sources that there has never been a successful coronavirus vaccine and that reinfection is common. So, thinking there will be a vaccine anytime soon is happy thinking. If it happens, it won’t happen fast enough to stave off a deep recession. I know I won’t be going out like I was.
Here is some further reading: https://blogs.sciencemag.org/pipeline/archives/2020/04/15/co...
Edit: That being said, efforts to develop a SARS vaccine were quite horrifying on whole, so there's certainly no natural law that says a vaccine must exist to be invented/discovered.
Nobody has tried very hard because the common cold is unpleasant but bearable. This vaccine is now a global priority, there may even be a few variants discovered.
Reinfection is neither common nor proven. Given the number of cases globally and the long incubation period plus unreliable tests such stories are not unexpected.
I agree a recession and layoffs are coming to every sector, but war is a greater fear. This could cause more unrest and wars than 2008 did if it lasts longer than a few months.
I'd love a world with less cold viruses running rampant. When I started working from home full-time (years and years ago) I immediately noticed that the number of colds per year I had went from something like 10-12 to 1 or less. And the colds I get now are usually correlated with a visit to my grandkids...
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7136867/
It is way premature to declare right now that none of them will work out.
People will spend $500-$1000 on a bike while also forgoing $2500-$5000 of travel, entertainment and restaurants (over a year)
1. A good way to keep fit and maintain social distance
2. An alternative to public transport which people who are still working (and can't drive for whatever reason) want to avoid if at all possible
Both are particularly high priority at the moment
My city isn't at all bike friendly, but at the current traffic levels I'd feel safe enough to take a ride - the bikes themselves are just so absurdly marked up that I can't justify the expense, so I'm running instead.
What are the rules in Russia?
You need to have a permit to use your car or walk more than a few blocks from home (for essential workers, like security, health workers, grocery store workers, transportation, etc). If you are stopped driving without a permit, the car is seized, and you lose it forever. You also end up with a criminal record.
This severity has kept the numbers much lower than originally predicted, flattening the curve, but at the same time, it's draining the economy.
So, as you can see, different countries have different strategies. In some places the lockdown is severe, in others, not so much.
How do you fake a dog? Do you dress a cat up in a dog costume, hire someone to dress up in a dog costume, or something else?
I've found it super interesting how some people are willing to bend the rules, and how far they're willing to go, and other's aren't. I don't know if the ones most railing about the 'panic and fear' being spread online are the ones that are also underestimating the risks themselves and so feel justified in bending the (unreasonable-to-them) rules.
I'm pro-mask, but masks are but a small part of what it will take for the economy to rebound. Far more important are tests (short-term), treatments (mid-term), and vaccines (longer-term). For now, tests are the most important goal. We should have reliable diagnostic testing available in every doctors office, and reliable serological tests in every home.
For example rents are still due. So money is flowing out of business and individuals stock and for those affected by layoffs or paycuts there isn't any flowing back in to replace it. This is the really problematic part that creates trouble for people. That creates it's own knock-on effects.
You still accumulate it of course, and at some point after the emergency ends, everyone is supposed to pay up the back months of rents and mortgages they owe, or face reopened eviction/foreclosure processes. That's where it gets dicey, to see who is left holding which bags. Non-zero chance of at least some cascade: if a bunch of your tenants never pay 3 months of back rent (b/c they have no jobs), and you were already a very leveraged landlord without much of a cash cushion, you're not going to be making your 3 months of back mortgage payments either, etc. Less leveraged landlords will just eat some losses. If the economy recovers quickly, maybe some of this will be papered over by repayment plans (you can pay your 3 months of back rent/mortgage over the next 12 months or something, and nobody has to admit any official losses). How big all of these categories are will make a pretty big difference to whether it cascades into foreclosure waves, banks with junk loan problems, etc.
I jest, but the logic is based entirely off the way we do daylight savings time: change the clock. In the fall, a TV program might start at the first 1am or the second 1am on the day DST ends. Same exact thing. Pacific Standard Time, Pacific Daylight Time, Pacific CoVID Time. @todo Figure out how to switch back.
Now it's also due to bad loans but not for housing like in 2009 but corporate debt(stock buybacks anyone?) but it's just easier for the economists and politicians to point fingers at a new enemy without a face than to accept that the economy boon was a bubble.
The Coronavirus shutdown was bad timing but it's not the main culprit, it just accelerated the inevitable bubble burst.
There are a lot of credit defaults coming if quarantine doesn't end very soon. The crunch could make 08 look mild.
There were signs of problems in 2019 (yield curve inversion, failed IPOs, US QE restart), and this will take years to work out. The US stock market is currently priced as if this will be over in 1 month and everyone/everything will bounce back. Unfortunately if it goes on a few weeks more (which looks likely) the economic impacts are going to last years and no sector of the economy will be untouched.
I'm curious how this will influence economic research on the matter, possibly providing greater insight into 'force majeure' scenarios instead of merely propping companies and executives who helped cause the crisis in an effort to offset even worse consequences.
People and Companies have no savings, they live paycheck to paycheck, loan to loan. This crisis is way worse because the loans are way worse and involve everybody.
“We” didn’t shut the economy down. Governments used (threats of) violence to shut it down.
I think this is comparable with economies with a lockdown. The economy was going to be shut one way or another.
That might be true. But there is an ethical difference between choosing to sleep at 9pm and an 8.30pm government enforced Ambien.