Worst economic crisis since 1930s depression, IMF says | Hacker News Reader

Worst economic crisis since 1930s depression, IMF says

bbc.co.uk

110 pointspmoriarty219 comments

At what point does fallout from trying to avoid covid-19 deaths cause more deaths than covid-19. We're talking domestic violence, starvation abroad (due to local hoarding, which has begun), and actual crop failure (due to a shortage of transient labor). There's also suicide, depression, etc.

I'm not even saying let up on all the social distancing measures. I think social distancing measures are good, but perhaps over the top. Nowhere have I seen a discussion of where to stop with the measures because of diminishing returns and increasingly negative economic (and indirect human life loss) impact.

I am sure a lot of politicians are struggling with this decision right now.

Not really.

Consensus from almost all countries is that you need to quarantine and shut down the economy in order to beat this. Those that believed that they could get around this with herd immunity are either paying a huge price (UK) or about to (Sweden).

And those politicians that took hard measures actually have been rewarded (Australia) and those that didn't punished (UK, US).

But when do you open up again? We can't keep the lockdown until there are no cases.

If you use China as a guide they were shut for ~8 weeks and then opened up slowly over the course of a month.

You conveniently ignore Korea and Taiwan, where the curve has been flattened without shutting down the economy or closing "non-essential" businesses.

Taiwan effectively stopped the virus at the border. They have only 380 cases and 5 deaths recorded total from the coronavirus.

It’s too late now for countries that have allowed the coronavirus to run wild for months and spread throughout their society to emulate that.

Vietnam is another success story as well I think - 255 cases, 0 deaths.

This is definitely the ideal model to follow which is to prevent the disease from rooting itself within your borders, allowing the economy and society to continue as normal.

Once you have wide-spread community transmission as Western countries do, emulating this approach becomes difficult... I believe the lockdowns are an attempt to effectively reset the state back to a lower number of active cases so that a South Korea style containment of the disease could be attempted.

We'll find out in a few weeks whether the herd immunity approach is effective by looking at what happens in the poorest countries. Some of them have minimal ability to lock down the economy or quarantine people due to lack of resources, dysfunctional healthcare systems, limited food reserves, and weak governments. So the virus is going to run its course regardless of what anyone wants. It's a tragic situation but there doesn't appear to be any alternative.

I think Iran was the first in this category.

Iran isn't particularly poor. Hardly anyone starves to death there. The real test will come when the virus hits places like refugee camps in Bangladesh.

If you assume a mortality rate of 1% (which is probably in the ballpark) then you can expect 75 million deaths without intervention. So far world-wide we've had about 95,000 deaths. So doing nothing would result in about 700 times as many deaths as have occurred so far. I'd say it's probably to soon to throw in the towel.

IMF says 500 million people worldwide who were out of poverty will or have returned to poverty because of the recession.

IMF poverty line is < $1.90 a day so surely many of them will die from malnutrition or preventable disease as well.

Edit: it was Oxfam that published the report to inform the IMF and World Bank at their meeting next week

IMF says 500 million people worldwide who were out of poverty will or have returned to poverty because of the recession.

It's a relevant perspective, but I can't seem to find any source for IMF claiming that. Do you have one or are you referring to research publicized by Oxfam[1]?

[1] https://www.bbc.com/news/business-52211206

You are correct, I apologize, it says that Oxfam published the report ahead of an upcoming IMF meeting.

This line of reasoning assumes that containment is feasible at this point. Is it? Or will everyone get the virus eventually?

One ironic downside of “flattening the curve” is that it makes it longer. So, barring a vaccine or effective therapeutic treatment, we will all get the virus eventually (but in an orderly fashion, which is good for the health system), and that 75 million deaths will become a reality. Note that’s also assuming a 1% death rate which may be a vast overestimate depending on asymptomatic percentages.

That said, I tend to agree with you that we should keep social distancing in place until we are able to contain new cases, or until we have a much better understanding of the virus itself. At this point there is just too much uncertainty, so it’s better to wait it out until we can establish some clarity and have a better idea of how to approach therapeutics.

I don't think this is true, is it? Most mathematical models I've seen definitely have a much lower number of total infected when the curve is flattened significantly.

You're right. Mortality for the virus would significantly increase if emergency rooms are overcrowded. No beds/ventilators = patients that would have survived dying. Last I've heard, around 15% of infected need to be hospitalized.

Availability of hospital beds is certainly important, but about 80% of COVID-19 patients placed on ventilators die. We should deploy more ventilators but even if hospitals run out that will have only a small impact on the total infection fatality rate.

>but about 80% of COVID-19 patients placed on ventilators die

Source for this? That sounds like a shockingly high number if true.

When you start selecting for patients who are the most vulnerable and suffer the most acute cases, it doesn't seem surprising that you can end with a high mortality rate.

There's more to it than that. Doctors actually treating COVID-19 patients in hospitals report that the disease progression is significantly different than the usual ARDS.

https://www.evms.edu/covid-19/medical_information_resources/...

Here's the source.

https://www.sfgate.com/news/medical/article/Some-doctors-mov...

Here in New Zealand we are hoping you are correct and seeing signs that you are. It seems odd to link to reddit graphs - but they are quite good and are up to date.

https://i.redd.it/a5gqmi5q5qr41.png

This doesn't factor in QALYs saved at all though.

The average COVID-19 death in Italy is 78 years old and sick.

The average hunger death is going to be young, otherwise healthy, and in the developing world (likely somewhere in sub-saharan Africa).

You can draw your own measures, but I would not personally weight these lives saved equally. I would personally throw several 78 year olds under the COVID-bus to save the life of one young child. I think most people would draw similar lines.

I think every life is worth saving. Your argument is a slippery slope. People of old age have contributed to society their entire life and the real perversion is that we should not be at a point where such thoughts make it into public discourse.

That's a reasonable sentiment, but it's not the world we are in, and we will be making economic and health decisions over the next 18 months which will force this tradeoff.

They need to be intentional choices, with an understanding of the costs, where the costs are often paid by people we don't see or frequently think about.

That comorbidity data might be a bit more complicated. https://twitter.com/ActuaryByDay/status/1246866119597621248

> The first thing that jumps out from the medical history section of Table 1 is that 93% of those critically ill with COVID-19 were “able to live without assistance in daily activities” prior to developing the disease. That typically suggests reasonable health. 3/8

> Secondly, just 7% of 2,124 intensive care admissions had “very severe comorbidities”. That’s significantly less than typical viral pneumonia patients (as illustrated in table 1)

> So 19 out of 20 were free of the most severe life-limiting conditions. 4/8

> Lastly, for now, the age distribution. Most critical cases are aged between 50 and 80.

> People of this age, without severe comorbidities, could reasonably have expected to have years of life ahead of them before they contracted this disease. 5/8

>> The first thing that jumps out from the medical history section of Table 1 is that 93% of those critically ill with COVID-19 were “able to live without assistance in daily activities” prior to developing the disease. That typically suggests reasonable health. 3/8

Not making any comments on the rest of your points, but I have to heavily disagree with this one. Sure, people who have cardiovascular and heart issues, diabetes, asthma, etc. are all "able to live without assistance in daily activities". That doesn't suggest reasonable health to me at all, it just tells me that they are able to live their lives without a caretaker by their side.

And data from Italy suggests that over 99% of the people who died from COVID had existing conditions like those[0].

0. https://www.bloomberg.com/news/articles/2020-03-18/99-of-tho...

No, because it's unlikely that 100% of the population will get infected. What disease has ever infected 100% of the population? None. Diseases hit an inflection point in spread, before they fall off. At any rate, how many people died in the wake of the Great Depression? World War 2 was indirectly caused by it. We lost 85 million people when the population was only 2 billion. And that's not even counting the people that died in the subsequent decades when communism took over China and Mao and Stalin had their reign of terror.

With the updated estimates of R0 it would take until around 80%+ to develop herd immunity.

> What disease has ever infected 100% of the population?

Most people are infected with some form of Herpes virus AIUI, from Chickenpox to Cold Sores, it's very common.

No one is seriously predicting a 100% infection rate. Due to herd immunity effects, epidemiologists expect the maximum to be about 70%.

It seems you’re presenting a False dilemma. Doing nothing isn’t the only alternative. Sweden is one example of a different approach.

Good luck. Sweden is a country which in large has an overwhelming trust in it's government and its intents. There is no part or cultural aspect of Sweden, which inherently believes it needs to arm itself to protect itself from its own government, and even less so as part of its constitution (grundlag)[1]. When told to behave in a certain way, Swedes will follow suit.

Separately Sweden is also a country with an extensive social safety net, where every citizen has the right to free healthcare and every employee will receive 80% of their salary for two weeks without a doctor's note at no cost for the employer[2].

Time will tell if the Swedish approach was the right one and even if so the Swedish case will end up being dependant on rather unique constraints that simply will not map to the US, at least not on a national level.

[1] https://en.wikipedia.org/wiki/Second_Amendment_to_the_United... [2] https://ec.europa.eu/social/main.jsp?catId=1130&langId=en&in...

What is the “certain way” I’m supposed to behave? Sorry, I’ll listen to the governments perspective and weigh it like everything else. I don’t have a gun to defend against the government - I have it in case an individual who thinks they are entitled to my money and my resources get carried away and take it a step too far and try and take it by force.

Sweden has by far the worst outbreak in northern Europe, despite a later start than its neighbors. It's also has not apparently peaked yet, where the outbreaks in the rest of Europe have been flat for over a week now (and Italy has started shrinking). At the end of this, it's not at all clear that Sweden will have accomplished much of anything.

The visualization at https://91-divoc.com/pages/covid-visualization/ is IMHO the clearest to explore this stuff. It's based on the Johns Hopkins data set, which is relatively well curated.

A 1% mortality rate is much higher than the ballpark. A recent study which was featured on Hacker News estimated the infection fatality rate at 0.66%. [1]

The IFR represents how many of those who got it and ended up dead (regardless of whether their case was tested, diagnosed or confirmed). It doesn't represent the whole population.

The same study estimated 60-80% of people could eventually contract the disease. 70% * 0.66% = 0.46% mortality rate from the disease. This would equate to about 35 million people globally. (70% infection rate is not going to happen overnight and I would hope that one way or another fewer people get infected than this - on the Diamond Princess where they tested nearly everyone, only about 25% of passengers got infected - but we will see.)

It's important to understand the definitions of all the terms involved. A misunderstanding of the statistics has resulted in panic -- people see a 5% death rate from a specific group of confirmed cases and assume that translates to their demographic, or overall population etc. when it does not.

The mortality rate is the percentage of the total population that dies. The infection fatality rate is the percentage of all cases, diagnosed or undiagnosed. The case fatality rate is the percentage of diagnosed cases. [2]

Not saying it's not a serious disease, 35 million deaths is many many times more than the flu. But we aren't going to lose 1% of humanity to this disease. And personally I would advocate for a smart and measured response like we've seen in South Korea or Taiwan over a panicked and destructive response like we are seeing in the US and UK.

[1] https://www.thelancet.com/journals/laninf/article/PIIS1473-3...

[2] https://en.wikipedia.org/wiki/Case_fatality_rate

Losing 1% of humanity and losing 0.5% of humanity are in the same neighborhood of terrible.

Actually I would argue they are not the same when your solution will force some number of people into poverty (plus in the US cause them to lose their health care).

No one wants to have to think about these numbers, but if you're responsible for making policy, it's very important to have good estimates of how many lives your policy will save and how many it will ruin. If you don't you're just reacting to the latest panic in the news cycle as sadly far too many politicians do.

Data matters, facts matter.

> Data matters, facts matter.

You're talking about a difference between a massive number of people dying, and a massive number divided by two dying, and then arguing that a massive number divided by two is not nearly as serious.

Nobody knows what the true numbers will be, but only the rough range they'll be in, so arguing over a factor of two is meaningless. These are terrifying numbers either way.

> If you don't you're just reacting to the latest panic in the news cycle as sadly far too many politicians do.

The "panic" is caused by people finally listening to what epidemiologists have been saying for months. False calm has been far more damaging on this pandemic than panic. If politicians had listened to the panic mongers earlier, the world wouldn't be in this situation.

Poverty kills people, too. That has to be considered when deciding on the appropriate response.

And lying in bed all day kills people too. I'm concerned about elderly people I know who aren't getting enough activity during the lockdown.

If there's a rigorous nationwide shutdown for 6 weeks, then the economy can partially open up again and people can go out more (people can still go outside now, as long as they stay away from people they don't live with - I know plenty of old people who are in self-imposed quarantine but still go on walks). This also requires the US to build up its testing and contact-tracing capabilities, so that it can keep the virus from getting out of control again.

Unfortunately, the short-sighted rush to reopen everything too quickly, or not to shut it down in the first place, is undermining these efforts. The shutdown worked in China, where it was strictly observed and enforced for several weeks. I hope the US can do the same.

I don't know why you were downvoted. Frailty is an epidemic among the elderly. Once they lose muscle tone and mobility they tend to die quickly. It does little good to avoid virus infection if you end up breaking your hip because of muscle atrophy.

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4098658/

The OP specifically said he's not advocating for stopping all measures, but for easing them up a bit.

It already happened. The West will be litigating unpaid rent, etc. for the next decade since there aren't enough court rooms.

What we fundamentally got wrong is that ventilators don't work in 66% - 90% of cases, so "flattening the curve" was largely pointless and distracted leaders from low-tech solutions like quarantine centers and palliative care.

We should have learned that in 2002 from SARS-1, but nobody even seems to remember it.

do you have sources for this

>What we fundamentally got wrong is that ventilators don't work in 66% - 90% of cases

"The largest study so far to look at mortality among coronavirus patients on ventilators was done by the Intensive Care National Audit & Research Centre in London. It found that among 98 ventilated patients in the U.K., just 33 were discharged alive. The numbers from a study of Wuhan, China, are even grimmer. Only 3 of 22 ventilated patients survived" [0].

[0]: https://www.npr.org/sections/health-shots/2020/04/02/8261052...

Cuomo has already said this iirc; most people who go on a ventilator don't come off of it alive. That doesn't make it pointless to even have ventilators though, a 40% survival rate is certainly better than a 0% survival rate for those who need a ventilator.

Do they die because or inspite of the ventilators?

It's both. You're sedated (comatose) to tolerate the tube and allow the machine to manage the pressure. After a few weeks the air pressure destroys your lungs and the sedation causes you to lose muscle strength. So you get sicker day by day.

I'm still waiting for an interview with a ventilator survivor. None so far.

Sure here's the source. The 66% - 90% death rate on ventilators appears to be accurate but there's a lot of variance in the data and no rigorous studies yet.

https://www.sfgate.com/news/medical/article/Some-doctors-mov...

Quarantine doesn't work unless you know who is potentially contagious. The fact that covid-19 is contagious in asymptomatic people and we don't have good testing makes it impossible to isolate the virus without shutting down the economy.

Not sure what you're talking about here. In Australia for example we are flattening the curve and the measures are working. And we simply passed laws to protect the interests of landlords and renters so there won't be some explosion in litigation.

And just letting hundreds of thousands of people die alone, on the streets or in the homes and with no proper burial or funeral is not something people will tolerate. It would be like dropping everyone in the middle of a war zone.

"What we fundamentally got wrong is that ventilators don't work in 66% - 90% of cases, so "flattening the curve" was largely pointless and distracted leaders from low-tech solutions like quarantine centers and palliative care."

It's far from pointless.

Flattening the curve means a lot fewer people get sick all at once. That buys time for treatments and vaccines to be developed.

It's also not nearly as overwhelming to the health care system.

Flattening the curve is justified to not overwhelm medical facilities, but the new coronavirus is so infectious I doubt we'll develop a vaccine before we achieve herd immunity.

A lockdown until we develop a vaccine is economically impossible, as it's estimated to take at least a year. A vaccine will be useful for next year's coronavirus.

Thankfully the actual death rate is lower than what the models projected. Antibody testing will do a lot to dispel the fog of war surrounding this issue.

It is entirely possible. Econo locally, we will be revisiting how we handle risks and what acceptable margins are.

At the very least, you're going to be buying people months, possibly years of life for millions of people by having a lockdown.

If we were to end the lockdown now there would be way more infections and deaths in the short-term then there would be otherwise.

Some deaths may happen anyway due to economic hardship, or social unrest, but the deaths from infections in the short-term are going to be greatly reduced, and even in the long term, the longer the lockdown can be sustained the fewer deaths from infection there are going to be.

In the meantime, the government really has to step up to the plate and come up with solutions to the economic problems, which (unlike the pandemic) are under human control.

Flattening the curve isn't just about ventilators. It is about keeping the entire system functioning. The simplest example is testing. How are you going to quarantine carriers if we don't flatten the curve, can't keep up with testing, and have no idea who has the virus?

Flattening the curve provides valuable time to figure out the best strategies. Like the ones you mention and more.

> What we fundamentally got wrong is that ventilators don't work in 66% - 90% of cases, so "flattening the curve" was largely pointless.

Use of ventilators coincides with severe cases, and up until this point we haven't learned enough about curing those infected with this virus to recover all such cases.

Why are you assuming the ventilator recovery rate is static?

We should assume that by "flattening the curve", we've bought valuable time to learn more about this virus, getting closer to better methods of recovery.

Ventilators will always play a role in keeping patients alive who've deteriorated to the point of requiring them.

I don't think anyone had the impression that ventilators cured anything, which your phrasing of "ventilators don't work" seems to imply.

> Ventilators will always play a role in keeping patients alive

No they don't. After a few weeks your lungs turn to mush, among other problems.

Can you share sources/data showing some of the fallout from covid-19 mitigation efforts?

I can't help but think we could close a lot less shops if everyone wore (even sub-N95) masks

So you want to speculate on this? All evidence is strongly against what you are proposing. It would without doubt lead to more deaths.

Why would anyone even consider the course of action you are proposing?

I've already had people close to me die. You should think some more and be able to provide a reasoned argument or be quiet until you can on this.

Taiwan seems to have done it.

Compare NYC and Taipai public transit during virus it's stark:

https://i.redd.it/ufezdm2hjul41.jpg

https://www.thenation.com/wp-content/uploads/2020/04/commute...

Citation please.

That has certainly not been true of China, S.Korea, NZ, Germany, Australia or other countries that have successfully followed a suppression strategy.

Citation for what?

Taiwan has similar population as Australia, is higher density than Sydney AUS, and has a fraction of the cases and deaths. They didn't close everything down they did targeted tracking/testing and isolation of individuals, mandatory masks on transit, fever checks in public etc.

Ok, so not just masks.

I don't know Taiwan's details but it sounds like they followed a test and trace strategy which is vastly different.

Thanks for clarifying.

Sorry you are misinformed.

That's broadly true I'm sure.

In this context about anything in particular?

Universal mask wearing is part of the approach they have taken in South Korea, Taiwan, and Singapore and it seems to have largely worked in those places.

The whole "masks don't work" line being pushed by the US government and the media seems to be about keeping people from buying masks that are needed in the hospitals. In the process they are sort of lying to people about the effectiveness of mask wearing as a piece of overall strategy.

Only with other controls. It's ridiculous and will certainly lead to more deaths to suggest that only wearing certain types of masks is in any way a valid solution of any type.

This sort of misdirected conversation will kill people. Please stop it. It is highly irresponsible.

If you disagree please cite a credible source.

Please do not include anything relating to any of Trump's briefing as those are all discredited and fake news.

You are arguing against a straw man, literally no one is suggesting that masks by themselves are a magic cure all. If masks don't have efficacy then why do hospital staff wear them? The CDC's own guidance for air travel says that people in close proximity with sick passengers should wear masks. In an environment when anyone you encounter is likely to be sick wearing a mask makes sense as part of the overall strategy.

[0] https://www.cdc.gov/quarantine/air/managing-sick-travelers/c...

No! Mask wearing is definitely not a thing in singapore. Only on 3rd april did the singapore government stop discouraging mask wearing. Less than half the people still out and about now wear masks.

> The whole "masks don't work" line being pushed by the US government and the media seems to be about keeping people from buying masks that are needed in the hospitals

I actually don’t think this is correct, it’s a reasonable assumption but actually the “masks don’t work” has been accepted Western medical dogma for decades. They were giving the same advice years ago even in times of no mask shortage - to only wear a mask when you know you are sick or if you are a care provider. See, for instance, a roundup of research and previous advice here. https://slatestarcodex.com/2020/03/23/face-masks-much-more-t...

I think the main thing that made CDC turn around now was that the number of asymptomatic or very-mild symptomatic patients with COVID-19 who are spreading the disease during the initial infection when they don’t know they are symptomatic really makes the advice to not wear a mask unless you are sick not make sense since you don’t know when you are sick until it’s too late...

Confusion between the different mask standards and their effectiveness is also a point where I think people are talking past each other.

NIH has a study on their website that says basic surgical masks are roughly equivalent in protection or N95's in practical real word settings when respiratory illness is involved. [0]

There is also supposedly a huge supply of the Chinese N95 standard equivalent "KN95" masks available. They are said to be made in the same way but the factories that make them haven't gotten regulatory approval from the US Government.

Why not import KN95's and give them out to the public since healthcare can't / won't use them.

[0] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4868605/

>What’s so strange to me is how much trust is being placed in these test results

This is meme by this point but: it's possible that uncertainty has already been priced in by the markets. I don't think any trader actually thinks the infection rate is exactly what the official numbers are.

If you just let the virus run its course you would have so many extremely sick people at once that it would overrun the health care systems in every country. Many more people than just COVID patients would die, and the death rate of COVID patients would go way up due to inadequate care.

The fallout from letting the virus run its course is way beyond taking the current rates and extrapolating to the entire worldwide population.

Everyone who poses this question can’t seem to fathom that they’re arguing against something that can’t be undone. It’s not lockdown vs. reopening in terms of damage, but a competent, thorough response when this first emerged vs. mitigating the deaths and injuries from not having acted appropriately at the outset.

Your question presumes that if we stop "trying to avoid covid-19 deaths" that we'll experience what we're seeing now.

We won't. US case load stopped growing about 5 days ago because of the mitigation effort. Prior to that, it was doubling every 3-4 days. So just in the immediately verifiable present, there are 2-3 thousand people alive today in the US who wouldn't have been had we not locked down.

That's just today. Let the virus run rampant and you get to the doomsday scenarios that everyone likes to scream about.

The point is that the mitigations are working, and because they are working we have a good measure of how much worse the pandemic could be. And it could be really, really bad.

If you have a better plan, it needs to be proposed and justified. But "let's not do this because of other causes of death" doesn't work, numerically.

Time to look at out of the box solutions https://www.stephenharrodbuhner.com/wp-content/uploads/2020/...

I really wish people who followed this sort of thing actually had some integrity and honesty. And by that I mean when they do have an illness or disease that they don't resort to "Western medicine" and instead relied on Gaia to get them through it.

At least then the problem would sort itself out.

No one I've seen make this argument seems to have any numbers to back up the "the cure is worse than the disease" argument. The do nothing case is pretty clear 1-2% of the Global population dies. Probably more because once the healthcare system is overwhelmed that percentage goes up.

> The do nothing case is pretty clear 1-2% of the Global population dies.

And the population of the Earth could handle that without a blip, particularly as it is concentrated in the groups with the least economic contribution.

life is much more than just an economic contribution. Society is made by people that have relationships far beyond economics (family, friends..). Money plays a big part of course but people were also happy when there was less money around. Loosing one (or more) dear one is much more devastating that an economic crisis.

Sure I guess if you think you are in the group that won't be affected that is easy to say. If you wanted to be really crass you might say that since it has a much higher mortality rate among older people it will be a huge boon for government's fiscal position because it will cull the rolls of Social Security beneficiaries.

Part of this argument, for me at least, isn't number based. I'm of the opinion that culturally we put far too much value on being alive and far too little on quality of life. You can see it in our conversation (here most people just want to talk about death numbers), our laws (ie euthanasia is illegal), and our news cycles.

Everyone dies. All of humanity does not exist for most of the age of the universe, to say nothing of individuals. That's a trite thing to say but it is no less true. Not everyone gets to live a good life, even fewer in situations like this.

Our DNA wants to stay alive, the existential dread is understandable, but culturally I think we'd be a lot healthier if we put more value in quality of lives than the preservation of them. Now balancing this is not easy and I'm not saying in our current situation we should just lift all measures, but if framed that way the conversation starts to take on a different tone than just looking at potential death rates as the overall guiding function.

That is not at all clear. The Nembro article, which based solely on the article itself looks like the ~upper bound on the ~worst case, posits 1% age adjusted deaths. The world population pyramid is very different from Italy's, so I bet it won't even be 1%.

Then, it's not about lives, it's about years of life lost. The average age of the deaths is >80 in Italy, close to that in WA (median is >80, not sure about the average). In years of life lost, one boy who was shot while the lockdown was being enforced in Kenya (iirc) is "worth" on the order of 10-20 average COVID dead (even if you don't weight earlier years of life heavier, which I would). A 30-year-old committing suicide in isolation in the US (acquaintance of a friend) is worth close to that.

Then, if you want a real example of loss of life from a major economic crisis, look at life expectancy in Russia between 1980-2000, or birth rates during the same and GD.

Finally, I would also argue having experienced the former that for (low) 100s of millions of people in ex-USSR, you have to count the 90ies as years at least partially lost, because they were spent in survival mode with giant loss of time and human potential. Personally I'd rather live a good life and die at 80 than throw away my e.g. 30ies working two jobs and trying to find where I can buy cheaper pasta, and live till 85.

The Italian data is skewed old. We're not seeing that so clearly in Spain, France, or the UK.

https://twitter.com/ActuaryByDay/status/1246866119597621248

There’s evidence the lockdowns are actually REDUCING other deaths, such as from car accidents, air pollution or violent crimes:

https://thehill.com/changing-america/resilience/smart-cities...

https://news.slashdot.org/story/20/03/15/2024248/will-corona...

I wonder how that works? Those at risk of death from air pollution are surely in a risk group that wouldn’t do well with covid.

Without a lockdown, I imagine asthmatics and the like would be dying A LOT more

I think we should also view lockdown costs in life time lost. Hundreds of millions of people now lost a month or more of their lives

I did the math on this a few weeks ago because I was curious. My math was this: (Population x A) / (LifeExpectancyInYears x 365.25)

A is an unknown variable that equals the what amount of a day people consider as "lost" as a result of mandated lockdown. IE, if everyone considers each day they spend not able to go about their business as a day of their life completely lost than A would equal 1. I suppose some people could consider the cost of a day lost to mandated quarantine as greater than 1.

Anyway, by my calculations based on a US life expectancy of 77.5yrs (28,287.5 days) and a US population of 330 million then that puts the lifetimes lost per day at 11,666. Note, that's lifetimes lost. IE, as if 11,666 babies were born each day, but instead of living the their full life expectancy they all immediately died.

edit: Markdown ate my asterisk symbol and \ doesn't work as an escape character apparently? Changed asterisks to x and the x variable to A.

Well, I don't know. I can't go eat out. I can't get together with friends, but I can call them. I can't play pickup games of ultimate frisbee. I can't go into the office. But I get to hang out with my wife and daughter. (I think that's great, but my wife is less enthusiastic.) I'm getting some things done around the house. I can still take the dog for a walk - I just avoid anyone else who's also out walking. I'm doing somewhat less of what I want, but I wouldn't regard it as "losing a month of my life". I don't like playing ultimate that much.

Life time lost? If you can't work remotely just pick up some indoor hobbies. Learn Spanish or French, learn to play guitar, experiment with electronics, contribute to an open source software, or teach something you know to someone else over video. Life doesn't stop as long as we have bandwith.

Covid-19 fallout is also saving lives with regards to traffic deaths and air pollution.

My main concern is: will we actually learn anything from this experience? We have had a couple of small scale trial runs over the past two decades. We got through those fine, but never considered what would happen if the spread got out of hand.

I'm not going to pretend to be innocent here. It doesn't take an expert in infectious diseases or economics to at least prepare themselves and their family. There are also decisions that we make collectively, though not institutionally, that are dubious. Some people are lucky in that their role in society is important enough that they are valuable in this crisis. Others will more-or-less have their value to society restored as soon as this is over. Then there are the people who's social value depends upon economic prosperity. Those people are going to be hit the hardest.

Then there are the institutional decisions. Some of those are the craziest. Organizations to handle domestic violence, homelessness, mental illness, etc. were scraping by in good times. Transient labor is not an issue in itself, reliance upon it is. While I'm guessing that your reference to transient labor refers to seasonal foreign workers from the context, something similar has been created in local job markets. Many people are working several jobs simply to make ends meet. They cannot provide their own safety net in the case of any crisis (personal, national, or global). In the worse of cases, they are providing a vector for the spread of disease (e.g. hospital and nursing home employees working at several facilities).

On top of all of that, we have the government. I'm not talking about politicians here. They are certainly part of the problem when the don't listen to their own experts, undermine them, or simply get rid of those they don't agree with. I am talking about the civil service. These are the people who provide continuity and should be doing comprehensive planning for different scenarios. (Not to mention ensuring that government services can handle emergencies.) What I have been seeing are a slew of half baked solutions that reflect politician's distorted world view that are, at best, addressed after reality is exposed to them.

My apologies for the rant. Part of the reason for it is that I think the wealthier nations will pull through this, but we could have done a lot better if we went into it prepared.

> starvation abroad (due to local hoarding, which has begun)

Is there any evidence that this could happen? I live in a small Northern European country and there have been absolutely no shortages of TP or food items here. Even at peak toilet paper demand, when I went to the supermarket one brand was sold out, but there were plenty of other brands available - the same happens if they have a promotion, so maybe it was just a coincidence.

It seems that most of these issues are caused by supply chain problems, not a lack of available food, and the bigger a country, the harder the impact is felt.

A lot of the common produce items are grown locally, it's mostly out-of-season (tomatoes) and more exotic fruits (mandarins, avocados) that are shipped from the other side of Europe or Africa. Almost all meat, dairy and grain items are produced locally. If we were only able to eat food grown within our country, I don't think we would be faced with mass starvation.

Any evidence? People were already starving in poor countries. Imposing lockdown measures makes the hunger situation worse. If you don't have food today then dying of an infection next week is the least of your concerns.

https://www.concernusa.org/story/worlds-ten-hungriest-countr...

Industrialized countries will have sufficient food for a while, but if major sectors of the economy are shut down for months then supply chains will break down and we'll start to see empty grocery shelves.

A quick Google search shows that the 2008 crisis caused 500k extra deaths due to cancer alone due to lack of funds to treat it.

That really shows you the scale.

Also some studies from Africa showed that economic downturns reliably predict wars.

500k extra, or early deaths?

I can't imagine that 500k people got cancer from 2008, and if they had cancer they may have already been approaching death.

Numbers like that seem extremely suspect because they can be spun however you like by assuming how things would have been.

I've seen some discussion. Bill Gates was talking about steps to end the lockdown yesterday https://www.youtube.com/watch?v=PKg40HX6oUo

eg. Restarting factory production probably worth it soon, large sports events not.

A big problem with this is there are so many unknowns - will there be effective treatment, a vaccine and so on.

There's all this talk of "this is what the virus unchecked leads to, so we can't let up".

I'm not suggesting we throw up our hands and attend tightly packed concerts.

I'm suggesting we stop pushing for an R value of 0, and instead deliberate what the least costly options are (both economicly and in human life) keeping the R value under 1.

We might not be conciously pushing for an R value of 0, but it appears that way.

And yet the stock market is already recovering. I guess "worst crisis since Great Depression" has been priced in?

There is always lots of volatility at a bottom. The stock market thought that the Great Depression was over quickly also.

At the end of the day, either the market is right or wrong.

How can the market be wrong?! The market is the market.

The market today strongly disagrees with the market yesterday.

That means the market is volatile, not wrong. For the market to be wrong, there has to be some truth against which the market is being measured, and there is only the market.

The market is based on information known by people playing it. That information can be wrong, or at least very inaccurate, meaning the market will be in an incorrect position that will have to be corrected when better information is available.

Of course, our information is always imperfect, especially about the future but even about the present, so it is constantly being corrected. So maybe being right or wrong is the wrong way to put it.

It is unsure if it's the first and last wave

There were some bull markets within the Great Depression, so like then, maybe the green days aren't here forever and we'll test new lows.. but for some reason I feel like it'll be bad but we'll be more resilient than the Great Depression (eternal optimist!).

Give it some time - way to early to say it's recovering. Yes it's gone up, like a lot but that may be temporary.

Taking the S&P 500 as an example, it is trading roughly where it was last May, so I guess last May’s optimism was actually “worst crisis since Great Depression” pessimism. /s

There's a reason for the term 'dead cat bounce.'

especially when it is propelled up by $4T...

Dead cat rocket? Sure, it goes up pretty well - until the fuel runs out...

The increase we’ve seen in the last two weeks make zero sense to me. It’s almost making me lose trust in the market as I feel like it’s rigged. We’re in a complete state of unknown, nobody knows when this will be over, unemployment raises like crazy, the US now realizes that coronavirus is hitting them the hardest...

It’s rigged insofar that maybe people have insider information we don’t

There's no downside risk. The USG and Fed will do everything in their power to keep us in a continuous state of "numbers go up." Borrowed billions of dollars to buy your own stock, and now you're underwater? Don't worry! We'll bail you out.

They're on the edge of what they can do with that and not kick off an inflationary spiral.

No one knows where the edge is. Deflation might be a bigger concern right now due to accelerating loan defaults.

"Inflationary spiral" is the explicit policy. The assertions seem to be that stocks must always go up, and housing must always go up. That's inflation. Manufactured goods don't go up as much because they continually cost less to make and distribute, usually through offshoring and consolidation, hollowing out local economies.

There's a difference between a couple percent a year to convince people to invest rather than hoard, and becoming Zimbabwe or post war Germany where we're printing new larger denominations of dollar bills like a real inflationary spiral causes.

You say "invest rather than hoard", I say "waste rather than save". With how the rent treadmill is presently binding up, it certainly looks like we could have used more saving by all players, large and small.

These moves by the Fed have essentially been necessitated by most everyone having to put their savings in the Wall St casino ("the Line always goes up"), a circular causality that will be harder and harder to repudiate - ie a "spiral". It's just a slow-starting spiral due to being the world reserve currency.

> the US now realizes that coronavirus is hitting them the hardest...

looks like the death toll will be well below all the current models so far, so that's probably why the market is reacting this way?

A bunch of people sold off in a panic, a lot of volatility hit, people like Buffett bought at the bottom (and publicly advised others to do so), so who knows.

Unemployment is artificially high for now. Companies are incentivized through PPP to lay people off, especially with UI bonuses.

How are companies incentivized to layoff staff through PPP? My understanding is one of the eligibility requirements is that you can't have reduced your staff since Feb 15th, and if you have, you need to re-hire them to become eligible.

The entire point of PPP is to incentivize companies _not_ to layoff their staff.

You can lay them off. You just have to rehire them by June 30th. And 75% of the loan must go to payroll, so you can't axe the entirety of your staff. If you can layoff someone who makes close to the maximum for UI, with the $600/week bonus, the laid off make an adjusted $1000/week for the duration of the bonus + qualifying period. That's a pay raise for many employees in the service sector - so the employee is also incentivized to be laid off to make close to as much as they did (or more!) and do absolutely nothing.

This is all contingent on you re-hiring them, of course. Otherwise it's bad for the employees and you might get penalized under PPP. But restaurants around the nation are axing their entire staff and promising to bring them back June 30th, while maxing out PPP loans. Plenty of other businesses, too.

>> The entire point of PPP is to incentivize companies _not_ to layoff their staff.

Yes, I am aware. Would you also believe that the government had competing incentives with another program in unemployment insurance that caused this situation inadvertently?

We almost did this at my company; our accountant ran the numbers and we would have benefited to the tune of nearly six figures in doing so (spending the excess on "qualifying purchases" with the remaining 25% like rent), but I felt bad exposing my employees to the phone trees and websites of the unemployment office. They're overloaded AND incompetent.

From what I've seen, Buffett hasn't started buying yet.

https://finance.yahoo.com/news/investors-wondering-where-war...

https://finance.yahoo.com/news/why-warren-buffett-ignoring-c...

He did however sell some airline stock.

https://www.fool.com/investing/2020/04/06/warren-buffett-sel...

Ah, that's interesting. I read an article that said he was bullish on US stocks in February/March, but I must have been misremembering.

The increase in the last two weeks is because it's becoming obvious that:

1) The US's response to this was competent.

2) The measures put in place are working.

3) The projections are improving substantially.

4) The time horizon is shrinking.

5) We are starting to understand how to treat this.

(+ "in the us").

Two weeks ago we were looking at places like Italy, and extrapolating that the US could see deaths in the millions. A week ago that projection went down to 100-200k, and yesterday it went down to 60k. Obviously that is still a massive catastrophe, but it's nowhere near the catastrophe we were fearing two weeks ago.

Additionally, the writing is on the wall that manufacturing is going to be moving away from China as much as possible in the near future. Much of that, for American companies at least, is going to come back to the US, probably at the hands of massive tariffs.

That's all good news for the US economy.

>US realizes the coronavirus is hitting them the hardest.

Where did you hear this? It is absolutely not true.

The US's response could not be described as anything even approaching competent. This is still just getting started.

Let's check back in a few months and see how this comment has aged...

What should the US have done that other countries are doing?

We closed travel early, we started closing businesses early, and we hold daily press conferences with multiple medical and financial experts that are directly informing the entire population of what measures they should be taking.

edit: it seems like the general response to "what should we have done" is "the federal government should have shut down travel/businesses nationwide".

Is that even legal for the federal government to do? I know that when Trump floated the idea of travel restrictions for NY, Cuomo called it an act of war (https://www.cnn.com/2020/03/28/politics/cuomo-ny-quarantine-...).

Not suspending federal support for testing would go a long way.

We still haven't really closed travel: even the source of the biggest current outbreak, NYC, still has airports operating! And not only for medical flights... you can just buy yourself a plane ticket from NYC to Miami if you want to visit. The first significant US outbreak was in Washington state in February, and there were no real travel-restriction measures to/from the Seattle area back then either, which is part of how it spread across the country. It probably wouldn't be possible to do a China-style quarantine of an entire region, like the way they completely locked down travel to/from Hubei, but we didn't do anything even 25% of the way there... SeaTac kept operating for weeks as if there was no issue, with large volumes of passengers exiting the source of the then-biggest outbreak.

We were also quite late on shutting down businesses, although some places later than others. Fairly high-ranking officials (the Oklahoma governor, the NYC mayor, etc.) were openly encouraging people to go out to big events as late as mid-March, weeks after there was evidence of community spread.

> We were also quite late on shutting down businesses

Hell, there are still eight states that haven't, per the map at https://www.nytimes.com/interactive/2020/us/coronavirus-stay....

How about waiting for 4-6 weeks while the CDC shipped a buggy test before we started actually ramping up testing. We could have had a trajectory like South Korea.

The federal government should have enacted stay at home measures.

By leaving it up to the states, it's been bungled and the covid outbreak is lasting longer and killing more people. This leads to stay at home needing extensions and a further drain on the economy.

I really think martial law at the federal level would have been the end of our democracy. I don’t think it’s a good trade off. The current measures aren’t doing so bad in the realm of possible outcomes.

There are a lot of steps before martial law.

Hell, have the President do a public address from the Oval calling on the states to issue a coordinated stay-at-home order. Lay out the reasoning, the benefits.

Would've helped in Florida, apparently.

https://www.miamiherald.com/news/politics-government/state-p...

> “I’m in contact with [the White House task force] and I’ve said, ‘Are you recommending this?’ ” DeSantis said. “The task force has not recommended that to me. If they do, obviously that would be something that carries a lot of weight with me. If any of those task force folks tell me that we should do X, Y or Z, of course we’re going to consider it. But nobody has said that to me thus far.”

You’re being pedantic. Some Republican governors were scared to enact stay-at-home without Trump’s blessing. It has nothing to do with what’s legally possible in the US.

The Federal government does not have the authority, it is expressly prohibited. What you think “should” have happened is literally impossible without dissolution of the US government. This is not remotely controversial, the Supreme Court has visited this many times. States are sovereign and autonomous entities for this purpose, same as for most things.

A surprisingly small number of Americans have any understanding of the structure of our government, a glaring failure of our education systems. It is no wonder that foreigners have so many misconceptions about the nature of US government given how few Americans understand it.

It's a failure of our eduction system, but it's also a complete failure of traditional media.

My guess is that it is because most major traditional media outlets are national entities. It's easier for those national media entities to talk about a government that appears relevant to their entire audience (the federal government), instead of 50+ articles each scoped at the state level.

This damages peoples' ability to do correct sensemaking because they overweighting entertainment sources as if they were data sources.

Germany also has a strict Federal structure, but they managed. They called a meeting of all the state governments, together with the Federal government, and agreed on a set of procedures. Each state does things a bit differently, but they're largely on the same page now.

Why wasn't anything like this attempted in the US?

The US Federal government is similar to the EU; member States have considerable amounts of absolute sovereignty, their own forms of government, and their own legal systems. Importantly, the Federal government cannot operate in a State except with consent of the State, which is withheld in numerous instances. The Federal government works for the States, not the other way around, and the States are free to ignore requests by the Federal government on most matters. Why wasn't the response coordinated across the EU? Same answer applies to the US. It would be like herding cats. The Federal government can ask nicely but no one is required to listen

Externally, the US presents a common negotiating front. Internally, it is 50+ separate countries. Americans interact almost exclusively with their State governments when in the country, not the Federal government. This explains, for example, why there is no "national" ID in the US. Americans are citizens of their States, first and foremost, and each State has their own independent ID systems. What makes the US somewhat unique is that Americans have an absolute right to change their citizenship among the member States at any time. There was a time not that long ago when many Americans more closely identified with their State citizenship than their Federal citizenship.

The EU is not at all comparable to the United States. The US is most certainly not composed of 50 sovereign countries, and the US has a powerful central government - something the EU almost entirely lacks.

A much better comparison is the Federal Republic of Germany, which has a strongly federal constitution, much like the United States. The Federal government in Germany has very little formal ability to impose quarantine measures on the states, but it effectively managed to do so. The Federal government called a meeting with all of the state governments, which are individually run by different, competing political parties, and managed to have all the states agree to take a similar set of measures.

The Federal government in the United States could have done the same, but chose not to. The political reason for that inaction is clear. The President's #1 priority is the economy and, specifically, the stock market. He doesn't like the idea of quarantine measures, because of their impact on the economy. He spent two months downplaying the virus, and has now shifted to blaming the WHO for his own government's failure to contain the outbreak.

> There was a time not that long ago when many Americans more closely identified with their State citizenship than their Federal citizenship.

That time was over 150 years ago.

That is a strange but understandable misunderstanding of the relationship between the Federal government and the States in the US, it is not remotely like Germany. German states are much weaker both in theory and practice. The Federal government often cannot intervene unless the States ask them to, and the States control the terms of that intervention. People raise this issue in every major natural disaster under every administration, baffled why the Federal government doesn’t do more, oblivious to the legal and practical structure of the US government. In my own lifetime there have been many cases where States actively restrict Federal operations within their jurisdiction, with full support of the Federal courts.

By convention, the States typically allow the Federal government to operate freely within their jurisdiction, but it is not an obligation as it is strictly at the pleasure of the State. When there are strong disagreements between the Federal and State governments, this is a major point of leverage. Many Federal programs have been successfully killed by States prohibiting Federal operation in their States.

I'm very familiar with the constitutions of both the United States and Germany. From what you're saying, I strongly suspect that you're only familiar with one of them.

The German Federal government is highly constrained in what it can do in many areas of life, because those areas are under the control of the states. This is why there are 16 different high-school diplomas (Abitur) in Germany, for example.

Formally, there is a strong division of powers and responsibilities between the federal and state level in both countries. But in both countries, the Federal government wields a great deal of informal power. The Federal government has access to much greater financial resources, which it can wield to coerce states. My personal view is that this Federal power is even greater in the US than in Germany, due to the enormous political power of the President and the greater financial power of the US government (Germany has to deal with the ECB, while as Trump has shown, the President can directly bully the Federal Reserve).

If Trump had made strong statements about the need to impose quarantine measures early on, that would have had a big effect. There are many instruments at his disposal that he could have used to coerce recalcitrant state governments with. Instead, he downplayed the virus until mid-March, and has continually argued against the shutdown (see his Twitter thread). In Germany, Merkel met with the state governments, they agreed on a set of common measures, and she gave a televised address explaining those measures. She's been pretty consistent in her messaging, unlike Trump. Maybe that's because she's a physicist, and he's a real-estate mogul, or maybe it says something about what plays well in each country.

I was born a citizen of both Germany and the US and have worked in both countries. Using Germany as your exemplar was to your disadvantage. I have also worked internationally for the UN, and with multiple major governments at a high level. I am under few illusions.

That aside, you did not actually provide evidence contrary to my assertion.

You vastly understate the power of the US Federal government when you compare it to the EU, and understate the power of German states. I don't know what you mean by "evidence" here. We're not discussing some sort of experimental result. We're discussing the basics of the American and German constitutions.

It has nothing to do with legality and everything to do with Republican governors being scared to act without Trump’s approval since they’re scared of losing their power. All Trump had to do was recommend stay-at-home orders be implemented by the states and it would’ve happened. You saw it with Florida and Georgia, and the Georgia governor had the nerve to claim he didn’t know there was asymptomatic spread.

This is not a legal issue, it’s a political one.

"Enacting" stay at home measures are as simple as recommending them or working with states to set a standard set of measure, which did not happen. Instead, the focus was on keeping people working for the economy.

You're too quick to interpret something illegal just so you can jump on the complaining-about-education band wagon.

How about not making the states big against each other for medical supplies?

Competent would have been starting production of masks and ventilators in January, and closing borders at the same time, and mandating mask wearing in public in early February.

Testing, if they had spun up testing in January and mandated testing of every International traveler that had been to a country with an outbreak in the past two weeks they probably could ahve avoided a total shut down like we have now. The bungled testing is the original sin that got us to where we are now. The ventilator thing is a bit of a side show because by time you have a problem big enough to need a ton of ventilators it is already out of control.

Two things:

1. Tested widely early on, like South Korea did.

2. Shut down public life weeks earlier, once it became clear there was community spread.

The Federal press conferences feature a few informative experts, but they also feature one very prominent source of disinformation: the guy in charge. He downplayed the virus for months, and gives rambling, poorly considered, sometimes damaging statements (e.g., causing a run on a drug needed by Lupus patients, because he likes the idea that this drug is a miracle cure that will allow America to go back to work). His latest performance was a dishonest attack on the WHO, meant to redirect blame for mismanagement of the crisis onto that organization.

Comparing the Federal press conferences to those in other countries is really eye-opening. If you want to see what good, factual, relatively unpolitical press conferences look like, take a look at the daily updates in Singapore or Germany.

Trump has been true to form in his lying and aggrandizing at every point, but I think the public has just gotten used to it. The CDC and state governors have been mixed, but the hardest hit states (WA, NY, CA) have been pretty aggressive.

This is an emotionally charged political comment. If you only watch CNN and read the NYT, you might think this.

But if you look at the curve, and per-capita death numbers, the US seems to be doing a good job managing the crisis relative to its size.

Has anyone in the US died because they didn’t have a ventilator? Not that I’m aware of. Washington State is already on the downslope.

The history books will be very kind to Trump for his response, much to the chagrin of an inexplicably biased literati class rooting against him.

Yes indeed yours is an emotionally charged political comment, thanks for prefacing it with the warning.

NY has started splitting ventilators.

The implication of your assertions is that the market is irrational right now. You could make a lot of money buying some puts in July.

(And I hoped you’d appreciate the ambiguity in the opening sentence :-) Ultimately we’re all in this together and we all want what’s best for the country and world.)

If the US had does as well as South Korea it would have 1,300 deaths and ~200 new infections per day. Instead we have 10x as many deaths per capita and at least 150x as many new infections per capita today.

50m people, 208 deaths, 27 new infections yesterday. https://en.wikipedia.org/wiki/2020_coronavirus_pandemic_in_S...

330m people, 14,696 deaths (cdc), 32,039 new infections yesterday: https://en.wikipedia.org/wiki/2020_coronavirus_pandemic_in_t...

They are a poorer country with a higher population density, yet somehow we failed.

The reason why Trump went from "its a democratic hoax" to "100k-200k dead" was literally the Overton Window. Pick the biggest, most unlikely number, get everyone used to that, and deploy the puffery when it doesn't happen. Markets are responding to that. It was a pretty good move because that argument co-opted the opposition who was claiming a million or more would die. That was BS, and the administration's position calls them on it and puts them in a position of declaring a win because the unreasonable number is... unreasonable. But as for the market? This is all a game.

EDIT: My post will probably age-like-milk when we're still in lockdown in November with 300k dead and we all have long hair and are wiping our butts with the lawn like sick dogs.

What’s so strange to me is how much trust is being placed in these test results. Across the country doctors are telling people they can’t test people so stay home in self quarantine until you have difficulty breathing. Consider, 1/2 of all tests in New Jersey have been positive, nationwide it’s 1/4th for a disease that shares many symptoms with the flu.

While the official infection rate might have more or less stabilized it’s not going down and it’s vastly low. So, what’s making them think 100-200k is a high enough to call it a safe benchmark?

By official numbers NYC infection rate is already 1%, for that to be low and infection rates steady it’s going do easily hit double digits very quickly.

I don’t understand the obsession with testing. Ok, if we are doing random samples or antibody tests, then I agree it’s important so we can understand the true prevalence and mortality rate. But that’s not what we are doing right now.

Otherwise, it just seems like a political exercise to boost the numbers and cause panic. If you’re symptomatic, is the best course of action really to leave your house for a test? It seems like it would be better to call the hospital and let them know your condition (so they can estimate upcoming hospitalizations). Then, stay at home and only go to the hospital when your symptoms worsen. Get tested when you go to the hospital.

Many people are infectious without symptoms, others have yet to show significant symptoms. So to actually stop the spread you need to discover these people and quarantine them. South Korea very effectively used this policy and they turned a significant outbreak to near total containment. https://en.wikipedia.org/wiki/2020_coronavirus_pandemic_in_S...

Going from a peak of 1,062 cases per day to 27 yesterday is huge.

Those estimates weren’t created or solely vocalized by the administration

Yes, if you only just assume that markets are perfect and information is symmetrical.

Manufacturing will be moving to places like Vietnam and Malaysia. Nothing significant is going to be domesticated. The vaunted Foxconn factory in Wisconsin is still vapor. China would have already had it done and running.

Back in February, there were a handful of cases popping up here and there. And then growing in each hotspot from 5 to 10 to 20, etc. It didn't take long for things to get out of control.

Without some major game-changer in the next two months, its hard to see a reason why the same thing won't just happen again. Hopefully over the summer it's not as contagious due to hot weather.

The first game changer is widely-available testing, and contact tracing. The second game changer is a vaccine. We should have the first in a month or two. The second... who knows?

a lot of investors have a lot of cash equivalents on their hands after the market plunged few weeks ago. That cash is set on fire with $2T in stimulus and more coming. There are not that many investment alternatives with interest rates becoming negative elsewhere

My wild-ass-guess is that many companies can go into hibernation of some type. Furlough enough staff, take some government aid, stop wearing out tools, stop consuming raw materials. If you're a car manufacturer, for example, sure you have _some_ costs rights now with production lines stopped, but just how much?

There is your answer: https://www.nasdaq.com/articles/volkswagen-is-burning-over-%...

VW, is burning 2bill a month in cash, just by sitting idle.... Furloughing can save maybe %20 of the costs.

A lot of the fixed recurring costs (costs and obligations that keep going even if you are not producing anything) make at least 30% of the producing value....

So, just for VW, if it sits idle for 6 months it will cost 12 Billion dollars.....

That's just one example, but there plenty of companies with the same spot. They can absorb few months of this situation, but after that all bets are off.

Your article is 2 weeks old, since which VW have furloughed many staff (also worth noting it's $2bn per _week_). Where do you get your minimum baseline on staff cuts only saving 20% from?

It doesn't make much sense to me either, but I have a couple theories. One is that the spending bill that made it through congress and/or action by the Federal Reserve have caused a temporary bump. Another is that the infection rates in the U.S. have slowed somewhat and this is being interpreted (correctly or incorrectly) that we're at or near the infection peak, and that the worst-case scenario is probably averted. A third theory is that even with all that's happening, most people who had money before all of this began still have money, and they're using it to buy stocks while they're on sale.

Markets are up because the Fed has injected about 12 trillion to capital markets. These dollars need to find a place to sit.

which can lead to hyper inflation as well

A lot of people covering heavy short positions.

If we are focused on job losses (and this article is), then it's a false comparison, since many of these job losses are temporary. Some amount of the contraction should rebound as the disease abates.

It's still a massive problem, but the Fed intervening quickly and the fact that many of these jobs are coming back (plus the healthy unemployment payments/bonuses) mean comparing straight up unemployment claims is disingenuous, and the stock market reflects that.

Still the SPY500 is down 500 points, which isn't "recovering" yet.

The market is pricing in a smooth recovery without a second wave of infection. It is not pricing in how much this will affect the poor, due to a cultural and class disconnect. I bet 50% of residential renters don’t pay rent for May.

It seems we’re wildly overextended, but I booked a loss on some short-term puts today so maybe my judgement isn’t the best. I’m still holding longer dated puts because I think we go down, the pre-pandemic economy is gone, we don’t know what’s left.

Edit: There were large outflows from equity mutual funds and ETFs last week. The most ever.

Just hearing Powell, members of the Fed and the talking heads in CNBC makes me think they live in some sort of crazy bubble. To think we can bounce back immediately is absolutely bonkers. Half my tenants can’t pay the rent the next few months, some have lost their jobs, layoffs are now happening in non-consumer industries and software spend is mostly halted. Everyone will be cautious in traveling to public venues, let alone spending a lot on frivolous goods for the rest of the year.

There just won’t be a quick bounce back.

But I guess if you live in the Hamptons and have a nice comfy job interacting with the rich all day, you probably are unaware of all this..

It hasn't.

The finance industry is full of well-wishers and optimistic people right now. My complete outsider and uneducated hypothesis is that the fund managers are still trying to figure out what to do in this unprecedented crisis and are watching each other like lemmings. While millions go without jobs and we head towards an inevitable spike in bad debt.

My wife watches CSPAN in the background and they dance around the phrase "depression" by calling it the D-word in their commentary.

Look at the VIX (volatility index), as long as it remains elevated there is fear in the market that further volatility is expected.

The stock market isn't the economy. It's related to the economy, but it's not a good measure of how the economy as whole is doing, nor does it say anything about how well the average person benefits from the economy.

One major difference between the Great Depression and the current situation is that the government has made it very clear that they will do whatever it takes to soften the economic ramifications of the pandemic. A huge contribution to the Great Depression was the government’s deliberate inaction.

“Regarding the Great Depression...we did it. We’re very sorry...we won’t do it again.” - Ben Bernanke, 2002

Normally government intervention in an economic crisis is opposed by one of the two political parties, for whatever reason - often a desire to avoid rewarding “bad behavior” that led to the crisis in the first place. In this case, the only bad behavior was on the part of the government and their total failure to plan for this scenario, and so the entire political spectrum is willing to spend money in order to fix it.

So I think there is optimism not just that the health consequences may not be as severe as was originally forecast, but that there is a path and political consensus for the government to manage the economic fallout as well.

The printing presses injecting four trillion dollars into it over the past few weeks are to thank for that 'recovery'.

The fed is lending money to companies that would otherwise be going bankrupt, and is buying junk bonds from anyone they can.

The prior owners of the junk bonds then turn around, and spend that money on buying stocks. It's madness.

Stock prices are being propped up in part by easy credit from the Fed, which is a very dangerous position to be in. If investors get spooked at all, the unwinding of this credit bubble will get very ugly very fast.

The fact of the matter is that Covid-19 is causing a substantial real loss of productive capacity, and barring some unforeseen breakthrough in treatment options, this is likely to continue for at least a year, possibly two or more. So I'd be very careful not to take too much comfort in the DJIA chart at the moment.

Look at the stock market from 1930 to 1932, and you'll see a series of dramatic upswings, even while the overall trend was steep down.[1] Lots of people lost fortunes trying to jump back in when they saw the market "recovering."

I'm not making any particular prediction for this time. I'm just saying, don't get overconfident just because it's going up lately.

[1] https://www.macrotrends.net/2484/dow-jones-crash-1929-bear-m...

I'd argue that the market was really slow to crash in the first place.

It was obvious for at least a month that the pandemic would have a massive impact on the economy due to China shutting down and the near certainty that it would spread all over the rest of the world and cause massive economic damage and loss of life.

Yet the market kept on trucking until it finally crashed. If it had really priced in all that information, it would have crashed way sooner.

ironically the gains made by globalization has made the world more resilient than in the 1930's

I'm part of that - I was buying stocks a couple of weeks ago after nothing for ages. My hypothesis was largely that things are peaking and at the time I thought it will be over soon. I'm a little less optimistic now.

I don't think we have much danger of the main failing of the great depression - a collapse of the money supply because governments wouldn't step in. They seem pretty willing now but the virus itself remains a problem.

Or it's priced in the Federal Reserve buying up trillions of dollars in junk debt: https://www.bloomberg.com/news/articles/2020-04-09/fed-unlea....

Ok, but how noteworthy is this really? I mean, what do people expect to happen when 90% of the human race stops going to work for multiple months? And in the US, the government has incentivized small businesses to furlough employees so they can collect unemployment benefits. I realize that was not Mnuchin’s intention, but it seems to be widespread in the service industry, for example. Because of this, unemployment data is unfortunately meaningless for the time being.

I’m optimistic we’ll see this elusive “V shaped recovery.” But we won’t have a clear picture of what this recession really looks like until people are allowed back to work and we can see what the unemployment numbers revert to.

That said, I’m also worried about downstream effects like changed habits after quarantine, and avoidance of activities like going out to dinner.

And the market in the US went up today.

Are people in denial, algos are driving this, or something else?

It's not all bad news out there. Didier Raoult was reporting today the results of testing anyone who turns up and treating with hydroxychloroquine and z-pak. Looks like 0.5% mortality mostly in the over 80s, and the infection rates for Marseille as a whole coming down I think from 350 cases a day to 100 or so, the ICU emptying. I know people are saying it's all unproven but at some point they'll probably say oh look it actually works, kinda.

'Market learned to smooth out crises, because so many happened' is now least true than ever.

Let's check how non-capitalistic countries do after the crisis, for good measure.

Not trying to bash capitalism, just saying that volatility never truly goes away.

Please don't take HN threads further in a generic ideological direction. That leads to the night in which all cows are black and all threads the same.

https://news.ycombinator.com/newsguidelines.html

> 'Capitalism learned to smooth out crises, because so many happened' is now least true than ever.

I didn't notice that statement in the article, but I did notice this one:

> Lockdowns imposed by governments have forced many companies to close and lay off staff.

Who are you quoting?

The only hit Google returns is you, in this thread.

I'm paraphrasing from memory a conversation I had. The gist is that volatility goes away with the time because market learns to anticipate and smooth out the crises, even if it's an unexpected out-of-blue event, since over sufficient enough time it would have happened at least once.

Maybe this still holds true, but the time frame for that must be massive.

I see. Effectively no one then. You just put some stuff in quotes for authority.

I only tend to treat double quotes with authority.

How a pandemic of this nature was not planned for, war gamed, and drilled until we could gain SOME intuition as to the optimal actions and effects countries should take to avoid economic meltdown while doing the vulnerable population right is beyond me. The U.N. was created to promulgate this kind of cooperation, and here it has utterly failed.

The UN was created so countries like the US and USSR could have a forum to talk with each other and avoid nuking the entire world. How well do you think the UN would have helped those two cold war superpowers coordinate on a global pandemic? What you're looking for is a world government, not an international forum.

One would surmise that when such a forum exists, it should be utilized to plan for global events that affect every country, regardless of what the original intentions were of setting it up.

That assumes the countries of the world have enough common understanding and respect for each other to actually create and execute such a plan. They don't.

One of the great things about HN is that ideas are put forth and discussed on how much better the world could be, not simply state how terrible it is.

Or at least some kind of world health authority, e.g. a WHO with teeth. Don't have to have the whole world government part.

Given the baffling array of pro-china behavior by the WHO lately, I'm not so sure that's a good idea.

I think I get what you say because it's very chess-like. But IMHO reality is more poker-like. Or maybe I mischaracterize or miscategorize your ideas?

All I hope for is that this going to serve as a cautionary tale in the future.

I predicted this 2 weeks ago; https://news.ycombinator.com/item?id=22699657

Addendum; With the Fed printing money like there is no tomorrow the US dollar could lose reserve currency status and if that happens then it will make the '29 crash look like a cake walk. Overnight the US standard of living will drop 20-30% and slowly grind even lower over the next decade.

Silver lining? It will finally put an end to the parasitic Military Industrial Complex and endless "regime change wars" (as Tulsi Gabbert would say) but also end the welfare state overnight. There will no longer be Magic Monetary Theory money to fight over for either political party.

Losing reserve currency status is not a fait accompli at this point so watch the dollar/bond market and price of gold as this will tell the tale. Because there is no real alternative to the dollar at this point, they could still pull a rabbit out of their hat and save the system. Beware that your precious 401K/IRA money is not your money and is the only pile of cash that the politicians can use to slow a dollar sell off. Look for bank bail-ins and mandatory 401K/IRA purchases of US Bonds as cover for Fed bond buying.

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