Generational Dynamics World View

[John J. Xenakis]

*** 21-Feb-20 World View -- Planning for Wuhan Coronavirus (Covid-19)

This morning's key headlines from GenerationalDynamics.com

• Planning for Wuhan Coronavirus (Covid-19)
  
• The V-Shaped Recovery
  
• Credibility of Chinese Communist Party (CCP)
  
• The CDC and the bioweapon rumors
  
• Xi Jinping and 'Social Instability'
  
• Developing a Vaccine
  
• Singapore - a coronavirus bellwether
  
• Japan - another bellwether
  
• Coronavirus in Africa
  
• War zones - Africa and Mideast
  
• The explosive situation in Idlib, Syria
  
• The Future of Coronavirus
  
• V-Shaped Recovery -- learning from the financial crisis
  

****
**** Planning for Wuhan Coronavirus (Covid-19)
****


Scientists at the Wuhan Virology Institute wear high-grade hazmat suits. On the institute's grounds is the Wuhan Biosafety Laboratory, which is designated to study the most dangerous pathogens, including viruses like Ebola and SARS. There are denied rumors that Covid-19 was man made at the Wuhan lab. (Daily Mail)

There's a great deal of hope in the air of a "V-shaped" recovery,
meaning that the virus is causing massive economic problems now, but
this will be followed a huge recovery, as things return to "normal" in
April or May. Other people, perhaps a lot more realistic, don't
expect resolution until well into summe.

This article describes the main issues surrounding the coronavirus.
The last section, "V-Shaped Recovery -- learning from the financial
crisis," describes how the virus crisis was permanently change
this generations behavior permanently.

****
**** The V-Shaped Recovery
****

China is claiming that the virus has now been contained because the
number of new cases each day has gone down for a few days. In the
West, the dream is of a "V-shaped recovery," where everybody will be
hurt in Q1, but then all that lost business will be regained in Q2.
In particular, the widespread hope is that the warmer weather in April
would bring an end to coronavirus, at least until the Fall, and by
then measures can be taken to prevent further spread. That's the
hope.

However, many people believe that the Q2 V-shaped recovery scenario,
while possible, is less likely than a scenario that extends well into
summer.

In a television interview of 2/19, Dr. Anthony Fauci of the National
Institutes of Health was asked how certain he was that the virus would
be contained and not allowed to spread in the US. He said (my
transcription):

<QUOTE>"Given the situation the way it is today, we've
successfully done that with the 15 cases that we have - 13 of
which were travel from Wuhan, and two of which were spouses of the
travelers. If we get a worldwide pandemic, where you have
sustained transmission in multiple regions about the world, then
it's gonna be very difficult to adequately contain it anywhere. I
think we did do a reasonably good job, but it's not going to be
absolute."<END QUOTE>

Fauci is a leading American expert. You can try to read between the
lines and decide whether he's just being cautious or whether he's
sending a signal that far worse is yet to come, but either way, a
V-shaped recovery is very far from certain.

In particular, he makes it clear that one scenario is that we may be
facing a massive worldwide pandemic, in which the world will be a very
different place by summer.

Fauci described the virus as follows: "But clearly this is a highly
transmissable virus that does have a disturbing level of mortality."

There are many conflicting reports about the spread of the virus in
America and other countries, and unfortunately there's no reason to
believe any of them.

****
**** Credibility of Chinese Communist Party (CCP)
****

Since the Chinese Communist Party (CCP) lies about pretty much
everything, few people believe that China is telling the truth about
the situation in China.

The Chinese were apparently aware of the virus as early as October,
and heavily censored any information about it. In fact, a
correspondent whose sister was a nurse working in Wuhan told me that
the Chinese began building new hospitals in Wuhan in November, which
is considerably earlier than they admitted to knowing about the virus.
A Chinese scientist, Li Wenliang, warned his colleagues of a potential
"SARS-like" disease in December 2019, but was harshly punished, and he
later died of the disease. Other Chinese scientists have been jailed
for describing what's happening.

This week, the CCP expelled three WSJ reporters from China, because of
an opinion piece that appeared in the paper, criticizing Xi Jinping's
handling of the coronavirus crisis, and referring to China as the
"sick man of Asia." The three reporters had nothing to do with the
opinion piece, but they were expelled anyway, and WSJ has now
apologized to the CCP thugs for offending them. This is how the CCP
extends its censorship around the world, since the WSJ will now have
to refrain from publishing information or else suffer other
retribution. The CCP imposes similar worldwide censorship about many
other subjects, such as Taiwan, Hong Kong riots, the South China sea,
or the Uighur genocide. Any publication anywhere in the world can be
punished by the CCP for publishing information that the CCP doesn't
like.

In January, as the size of the epidemic in Wuhan was becoming publicly
known, the United States began placing travel restrictions on
travelers from China. This infuriated the CCP, not only because they
tend to whine about everything that America does, but also because the
move gave cover to many other countries to do the same, and also to
Central and Southeast Asian countries to close their borders to China.

****
**** The CDC and the bioweapon rumors
****

In January, the American CDC, which has the best and most experienced
virologists in the world, offered to send people to Wuhan in January,
as the size of the infection was becoming apparent.

China not only blocked the CDC scientists, but at same time the
foreign ministry issued statements blaming the United States for not
offering to help. This is a typical example of the Chinese talking
out of both sides of their mouths.

There has been a World Health Organization (WHO) team that has been
permitted to enter the country in the last couple of days, and that
team contains a couple of CDC scientists. But according to reports on
Wednesday, the WHO team is still being blocked from visiting Wuhan,
and they're being confined to hotel rooms where they're being fed
filtered data by the CCP.

Last week on Friday morning, US Health and Human Services (HHS)
secretary Alex Azar was interviewed on CNBC, where he harshly
criticized China for its lack of transparency with regard to the
coronavirus emergency.

He was asked, "Do you know for a fact that this virus occurred
naturally, and not in some kind of P4 bioweapons lab?" He evaded the
question with this response: (my transcription):

<QUOTE>"We need to be very careful not to engage in
speculation here, until we have data and evidence. We need
transparent access to all first generation genetic sequencing.
And we gotta get on the ground and do what we always do -- work
shoulder to shoulder with the Chinese scientific experts. To just
look at raw data, and solve these questions."<END QUOTE>

Azar's point is that question won't be resolved until the CDC
scientists, the best in the world, are able to go to Wuhan and examine
the evidence. This was a message to the CCP that there will be more
unpleasant rumors, and the Chinese have only themselves to blame for
those rumors. If China continues to block the CDC, then they have no
right to whine about rumors that begin.

****
**** Xi Jinping and 'Social Instability'
****

The CCP gives the need for "social stability" as the reason for the
harsh censorship, and for expelling, jailing or torturing reporters.
By "social stabilty" they mean that they fear that people will turn
against Xi Jinping and the CCP.

Xi Jinping's own credibility is badly damaged. He said that everyone
would be back to work by now, and everyone knows that's far from true.
Furthermore, severe restrictions are still on in Wuhan, and regional
authorities around the country are still imposing local restrictions
on travel. China's entire economy is all but locked down, and tens of
millions of migrant workers who went home for the Lunar New Year are
unable to return to their jobs.

Many people have been out of work almost two months -- many of those
will not be able to afford food, or pay rent. This could generate
anti-CCP activism. Historically, this is exactly the kind of
environment that leads to an anti-Chinese government rebellion.

There are already some signs of resistance and criticism of the CCP in
Guangzho province, which is adjacent to Hong Kong, including the
arrest of Xu Zhiyong, the leader of the New Citizens Movement, which
is advocating greater freedoms.

This is highly significant. China's history is filled with hundreds
of crisis wars in the form of massive internal rebellions (civil
wars). The last two of these massive rebellions were the the Taiping
Rebellion (1850-64) and Mao's Communist Revolution (1934-49) -- and
both of these rebellions began in Guangzho province and spread north.
China is overdue for a new massive civil war, and any sort of economic
setback could be the trigger. The CCP leadership are very well aware
of this history, and are extremely paranoid about it.

****
**** Developing a Vaccine
****

Most commentators agree that the coronavirus will remain an active
threat until a vaccine is developed. Estimates are that some
companies will begin testing a vaccine within a couple of months, but
no vaccine will be ready for widespread use for at least 6-12 months,
and possibly longer.

In the meantime, some existing drugs are being tested. For example,
doctors in Thailand said they appeared to have some success in
treating severe cases of the coronavirus by combining Tamiflu with
anti-HIV drugs.

However, those who develop severe cases and survive often have damaged
heart muscles, and many have developed heart attacks.

****
**** Singapore - a coronavirus bellwether
****

Singapore is a good place to watch as a bellwether of what path the
coronavirus emergency is going to take for several reasons.

• Singapore is a modern, developed country, with a good health
  services infrastructure, and yet its small size makes it easier to
  observe.
  
  
• Singapore has reported one of the highest numbers of confirmed
  coronavirus cases outside China. Singapore has had 81 confirmed
  cases, 24 of which have been discharged.
  
  
• Initially, the coronavirus cases were all travelers from China.
  But since then, it's spread communally, even resulting in the
  world-famous incident of infecting several skiers at the ironically
  named Les Contamines ski chalet in the French Alps.
  
  
• However, an important research question has not yet been answered:
  Were all those communal infections first generation (all infected by a
  single traveler from China) or were they multi-generational (A infects
  B who infects C)? The answer to this question will help experts
  understand how much it will spread in other countries.
  
  
• I've heard some analysts say that Singapore has the outbreak under
  control. I've heard others say that the virus will "burn through" the
  entire population. So Singapore will provide a small test case for
  whether a full-scale pandemic can be prevented.
  
  
• Singapore lies right on the equator, and so it's entering a period
  of the hottest weather of the year. So Singapore provides an early
  warning whether warmer summer weather will slow the virus. Also,
  Singapore will enter a period of cooler weather in May, so Singapore
  provides an early warning whether the virus will spreading again the
  in the northern hemisphere in the Fall.

So, putting everything together, Singapore can provide an early
warning for what will happen in the rest of the world.

****
**** Japan - another bellwether
****

Japan is a bellwether in another sense.

Japan has over 59 confirmed coronavirus cases -- not counting the 454
cases that were identified in the Diamond Princess cruise ship. New
cases continue to emerge in prefectures around the country, and some
analysts are expressing fear that the infections will not be
controlled until infections are widespread.

So Japan is good country to watch to see how a developed Western
country deals with a spreading coronavirus epidemic, and possibly
a pandemic.

Japan has canceled a number of international events because of the
virus. The Summer Olympics is scheduled to be in Tokyo, and if that
event is canceled, it will cause long-range damage to Japan's economy.

Update: As this is being written, reports indicate a large outbreak
in South Korea. This may also be a bellwether.

****
**** Coronavirus in Africa
****

Countries like Singapore and Japan are developed countries with
sophisticated medical services infrastructure, capable of handling a
coronavirus outbreak -- although that claim is currently being tested
in both countries.

But there are many countries with no such infrastructure, including
many African, Mideast and Asian countries.

Africa appears to be extremely safe, since there have been almost no
reported cases there. But that's because no one is being tested. If
you don't look for cases, then you won't find any cases. And in fact,
Africa has a number of Chinese enclaves, thanks to the Belt and Road
Initiative (BRI).

As of Feb 11, Africa does not have any confirmed cases, but suspected
patients have been quarantined in Ethiopia, Kenya, Côte d'Ivoire, and
Botswana.

The World Health Organization is providing support to Africa, and is
providing prioritized report to 13 countries with Chinese enclaves,
since there is frequent travel between these countries and China. The
13 countries area: Algeria, Angola, Côte d'Ivoire, the Democratic
Republic of the Congo (DRC), Ethiopia, Ghana, Kenya, Mauritius,
Nigeria, South Africa, Tanzania, Uganda, and Zambia.

There's still an ongoing Ebola crisis in eastern DRC, in the middle of
a continuing ethnic war. International NGOs have been successful in
preventing the further spread of Ebola by standard techniques such as
contact tracing and quarantining people with symptoms, and aggressive
use of newly developed vaccines.

African officials are saying that the same techniques will be used to
control coronavirus outbreaks. However, there are significant
differences. Coronavirus spreads much more easily than Ebola, and
there's no coronavirus vaccine. Few people believe that a coronavirus
outbreak will be contained.

****
**** War zones - Africa and Mideast
****

There are several ongoing wars in Africa and the Mideast -- DRC,
Central African Republic, Mali, Cameroon, Yemen, Syria. There are
smaller ongoing clashes in other countries.

Sooner or later, there will be a coronavirus outbreak in one of these
war zones.

****
**** The explosive situation in Idlib, Syria
****

I want to call particular attention to war in the Idlib province in
northwestern Syria. I've been writing about this situation for
several years on the Generational Dynamics web site and forum.

This started as the Syria civil war in 2011, and it's evolved to a
final explosive confrontation in Idlib. There are four million
people, mostly women and children, packed into Idlib.

On Monday, Syria's sociopathic monster president Bashar al-Assad, the
worst war criminal so far this century, announced that his army will
mop up the rest of Idlib soon.

On Wednesday, Turkey's president Recep Tayyip Erdogan gave a speech
threatening both Syria's president al-Assad and his ally, Russia's
president Putin. In the meantime, al-Assad's army is pushing a
million people, mostly women and children, towards to the border with
Turkey.

It has just emerged that there's a cluster of coronavirus cases in
Qoms, Iran, with two deaths. It won't be long before these cases
spread into Iraq and Syria, and could start spreading among those
million people in Idlib.

And then either Turkey and Syria will be at war, or else Turkey will
open the border and allow those million refugees with coronavirus to
flow into Europe.

There are hard deadlines and hard positions here. It seems unlikely
that anyone will back down, and so this situation is expected to
explode by March 1.

****
**** The Future of Coronavirus
****

The coronavirus is spreading around the globe, and it is not known
today whether most countries will be able to control their local
outbreaks, or whether there will be a global pandemic. These
questions can't be answered today, so as I wrote in the past, it's
best to wait until early March to make new business decisions.

Economic activity has almost come to a standstill in China, as the
virus has affected global tourism, trade, manufacturing and
export/import. With many Chinese businesses shut down, supply chains
have been disrupted. Companies and countries with a high dependency
on Chinese components and parts will continue to suffer.

****
**** V-Shaped Recovery -- learning from the financial crisis
****

Politicians, analysts and economists who are hoping for a "V-Shaped
Recovery" are making the same mistake that they made after the 2008
financial crisis.

Once worst of the 2008 financial crisis ended, everyone assumed that
things would return to "normal." Economists would look at their 1980s
vintage economics models, and conclude that there would be an
extremely quick economic recovery.

What they overlooked is that people in the 1980s, during a
generational Unraveling era, behavr very differently than people in
the 2000s, during a generational Crisis era.

That particular difference in behavior can be measured by the
"Velocity of Money." This measures how quickly ordinary people spend
money they've received, versus saving the money in the bank. I
haven't updated this graph since 2017, but it shows the Velocity of
Money since 1919:


Velocity of money, 1919 to 2017 (St. Louis Fed Fred Graph #366117)

=// https://fred.stlouisfed.org/graph/?categ..._id=282038
=// https://fred.stlouisfed.org/graph/?categ..._id=366117

As you can see from this graph, the velocity started falling in 2000,
when the Nasdaq stock market crash occurred, and then started falling
very sharply since the 2008 financial crisis, and hasn't stopped
falling.

This indicates that the Nasdaq crash and the financial crisis were
events that permanently changed the behavior of the current
generations of people. They are permanently reluctant to spend money.
So the 1980s economic models are completely, totally wrong.

So I believe that we can apply this same lesson to the coronavirus
crisis. The assumption behind the "V-Shaped Recovery" is that as soon
as the virus is more or less contained, businesses will quickly return
to their pre-virus levels of activity. That may happen if the virus
is contained quickly over the summer.

But if there's a larger and longer-lasting crisis, or a pandemic, then
I believe that most people will be extremely reluctant to behave as
they did before the virus spread, and I believe that the economic
impact could be far more serious.

Sources:

• Americans on WHO team to assess crisis, China says (South China Morning Post, Hong Kong, 17-Feb-2020)
  
• Xu Zhiyong, New Citizens Movement, Guangzhou / Chinese activist detained after calling Xi Jinping 'clueless' on coronavirus crisis (Guardian, London, 19-Feb-2020)
  
• Coronavirus: Turn off air-conditioners and open windows to reduce risk of being infected, say experts (Straits Times, Singapore, 10-Feb-2020)
  
• Coronavirus in Singapore: Analysis of all 75 cases so far (Straits Times, Singapore, 9-Feb-2020)
  
• Singapore will likely spend big to soften economic blow from coronavirus outbreak (CNBC, 16-Feb-2020)
  
• Singapore Cuts Growth Outlook, Plans Stimulus Amid Virus (Bloomberg, 16-Feb-2020)
  
• Singapore sets aside $4 billion to help businesses and households amid coronavirus outbreak (CNBC, 18-Feb-2020)
  
• Coronavirus: 4 new cases including 3 linked to Grace Assembly of God church; 21 cases now linked to the cluster (Straits Times, Singapore, 18-Feb-2020)
  
• Hundreds of Americans flown home from cruise ship, 14 with coronavirus (Reuters, 17-Feb-2020)
  
• Hong Kong protesters rally against planned virus quarantine centers (Reuters, 16-Feb-2020)
  
• Will Coronavirus shift global investment from China to India? (India Today, 13-Feb-2020)
  
• Coronavirus crisis: It's time for India Inc to create opportunities (India Times, 16-Feb-2020)
  
• India - China trade / Coronavirus and Indo-China trade (India Times, 11-Feb-2020)
  
• Japan plans HIV drug trials to fight coronavirus as Diamond Princess cases rise (Reuters, 18-Feb-2020)
  
• Japan to trial HIV medications on coronavirus patients (Fox News, 18-Feb-2020)
  
• Japan enters 'new phase' of coronavirus outbreak (NHK World, Japan, 17-Feb-2020)
  
• Coronavirus threatens Japan rebound as GDP falls most in 5 years (Nikkei, 18-Feb-2020)
  
• Japan’s coronavirus support wins praise in China, showing further signs of improving relations (South China Morning Post, Hong Kong, 18-Feb-2020)
  
• Coronavirus Impact: Pay Attention To Shanghai, And Japan Infection Rates (Forbes, 16-Feb-2020)
  
• Kim Jong Un makes first public appearance in 22 days amid virus outbreak (Reuters, 15-Feb-2020)
  
• Africa prepares for coronavirus (Lancet, 15-Feb-2020)
  
• The coronavirus is about to hit Africa. Here are the big challenges. (Washington Post, 18-Feb-2020)
  
• Alibaba earnings top expectations but coronavirus is having a ‘negative impact’ on the business (Market Watch, 13-Feb-2020)
  
• Thailand / Coronavirus / Virus hits local computer supplies (Bangkok Post, 14-Feb-2020)
  
• Latest on coronavirus spreading in China and beyond (Reuters, 16-Feb-2020)
  
• Mobile World Congress / 5G Stocks: China Coronavirus Looms Over Supply Chain, MWC Cancelled (Investors.com, 17-Feb-2020)
  
• ‘Black swan’ coronavirus casts its shadow over the global economy (Guardian, London, 15-Feb-2020)
  
• Did coronavirus originate in Chinese government laboratory? (Daily Mail, London, 17-Feb-2020)
  
• Senator Cotton: China Refusing to Hand Over Evidence About Wuhan BioLab (Summit News, 17-Feb-2020)
  
• Japan Olympics / Beijing Finally Accepts American Infectious-Disease Experts, Weighs Delay Of Annual Party Meeting (Zero Hedge, 17-Feb-2020)
  
• 'More Than A Disgrace' - The WHO's 'Industrially-Necessary' Doctor Tedros Should Go! (Zero Hedge, 17-Feb-2020)

Related Articles:

• Iranian nationals in Qoms die of coronavirus (20-Feb-2020)
  
  
• Turkey sends tanks across border into Syria to confront al-Assad regime in Idlib (09-Feb-2020)
  
  
• Wuhan coronavirus hits China's economy hard, threatens world economy (02-Feb-2020)
  
  
• MIT criticizes 'toxic atmosphere' targeting Chinese students (30-Jun-2019)
  
  
• Hong Kong protests show historic split between northern and southern China (22-Jun-2019)
  
  
• Western leaders sickened by Assad's 'industrial strength' torture in Syria (22-Jan-2014)
  
  
• The velocity of money keeps plummeting, indicating no economic growth (04-Mar-2017)
  

KEYS: Generational Dynamics, China, Wuhan Coronavirus, Covid-19,
Wuhan Virology Institute, Wuhan Biosafety Laboratory,
Anthony Fauci, National Institutes of Health,
World Health Organization, WHO, Centers for Disease Control, CDC,
Alex Azar, Health and Human Services, HHS,
Li Wenliang, Xi Jinping, Xu Zhiyong, New Citizens Movement,
Taiping Rebellion, Mao's Communist Revolution,
Singapore, Japan, Diamond Princess, Summer Olympics, South Korea,
Africa, Belt and Road Initiative, BRI, Ebola,
Democratic Republic of Congo, DRC, DRC,
Central African Republic, Mali, Cameroon, Yemen,
Iran, Qoms, Iraq, Syria, Idlib, Bashar al-Assad,
Turkey, Recep Tayyip Erdogan, Russia, Vladimir Putin,
Velocity of Money

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John J. Xenakis
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