Generational Dynamics World View

[John J. Xenakis]

** 05-Mar-2020 World View: Latest Coronavirus updates

Several days ago I described the latest updates in the Wuhan
Coronavirus (Covid-19) emergency. The following repeats that list,
with some updates and further context. These are my personal
conclusions, based on the thousands of reports that I've heard or
read.

My main conclusion is that the base scenario is that economic growth
will remain essentially at zero, and there will be no recovery until a
vaccine is developed, which experts say will not happen until 2021.
This is the predicted scenario assumed by this article. The details
of the predicted recovery are at the end of this article.

• Wuhan Coronavirus (Covid-19) is spreading rapidly, and is
  showing no signs of stopping.
  
  
• China claims that it's stopped in China, but no one knows what
  will happen when the draconian restrictions are lifted that are
  currently keeping tens of millions of people quarantined and isolated.
  However, South Korea appears to be having success with strict but less
  draconian restrictions.
  
  
• Many people are hoping that the warm summer weather will stop
  spread of the virus, but Singapore, which is on the equator and has
  warm summer weather, just had several new confirmed cases in the last
  few days. And even if the summer weather slowed the spread of the
  virus, history shows that it would return in full force in the
  fall.
  
  
• Sooner or later, everyone in the world will be exposed to
  Covid-19. 80% of the cases will be mild. Another 10% will be
  serious, but curable. The other 10% will be extremely serious, and
  will lead to some deaths. Most of the deaths will occur among the
  elderly, or people with a history of smoking.
  
  
• On Tuesday (Mar 5), Tedros Adhanom Ghebreyesus, director of the
  World Health Organization (WHO), shocked reporters by saying that
  about 3.4% of confirmed coronavirus cases have died. This is
  contrasted to the 0.1% death rate of the ordinary seasonal flu. At
  the beginning of this crisis, I heard numbers like 2.1%. Then, after
  a couple of weeks, the WHO announced that it was actually about 1%.
  So Tueday's announcement by Tedros is actually quite shocking.
  
  
• Infection does not provide protection from reinfection.
  Reinfected patients have a high death rate.
  
  
• When someone dies of coronavirus, it usually means that there is a
  cluster of undiagnosed cases behind it.
  
  
• Coronavirus is an economic disaster for China. China is overdue
  for a massive anti-government rebellion, the first since Mao's
  Communist Revolution civil war, and coronavirus could be the
  trigger.
  
  
• Businesses will be looking for ways to repair their broken supply
  chains as quickly as possible, by seeking alternate suppliers.
  
  
• Most companies will be at least partially back in business by
  summer, looking for ways -- robotics, working at home, hazmat suits,
  etc. -- to get things going again. For example, medical services will
  increasingly use a "Teledoc" model.
  
  
• Companies that depend on crowds of people will look for ways (such
  as using separation booths in restaurants) to maintain a sufficient
  social distance between people.
  
  
• Each country will use containment as its first strategy --
  tracking and testing travelers and others who might be infected,
  identifying others by means of contact tracing, and requiring those
  who fail the test to be isolated and quarantined in the homes or hotel
  rooms.
  
  
• When the containment strategy fails, each country will move to a
  mitigation and risk reduction strategy -- close public gatherings,
  encourage or force large populations of people to stay at home, shut
  down all mass travel -- air, bus and train. In Japan, for example, a
  closely scrutinized decision will be about the Tokyo Olympics which,
  if canceled, would have devastating consequences for Japan's
  economy.
  
  
• The objective of both the containment and mitigation strategies is
  to buy as much time as possible until a vaccine can be deployed.
  
  
• Lots of companies are working on vaccines, and something may be
  available for test purposes in a few weeks. However, it will be at
  least a year before a vaccine can be widely deployed, according to
  multiple experts.
  
  
• Wall Street stocks are in the biggest bubble in history, and the
  same is true of stock exchanges in many other countries. It is 100%
  certain that this bubble will burst at some point, leading to a global
  panic and financial crisis. It's possible that the Coronavirus crisis
  will be the trigger.

My base scenario for the unfolding of the coronavirus crisis is as
follows:

• Continued financial and business losses, with only marginal
  recovery, for a year.
  
  
• No recovery until a vaccine can be widely deployed, which experts
  say won't happen for a year.
  
  
• A strong V-shaped recovery as a vaccine becomes deployed in
  2021.

The recovery could be sped up if a vaccine could be deployed more
quickly, but experts insist that this is impossible.

On the other hand, the recovery could be derailed for years if the
current stock market bubble bursts and there's a major international
financial crisis, which history tells us is overdue.

The recovery could also be derailed by war. China's economy is
extremely unstable, and Mideast ethnic rivalries are churning up, and
either of these situations could spiral into a larger war -- which
history tells us is also overdue.

All in all, it will take about a year for the world to return to
"normal," but that will be a "new normal," living side-by-side with
Coronavirus. However, WW III and a global financial crisis may well
begin within a year. By 2021, the world will be a very different
place.

General advice from the experts: Wash your hands, cough into your
sleeve, and don't touch your face.