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Table of contents
- Intro: Why am I writing this post series?
- Initial outbreak
- Global spread
- Not a flu
- Medical outlook
- Outro: Lockdown
Intro: Why am I writing this post series?
Whenever I sat in history class at school, two questions were always gnawing at the back of my mind.
First: As we examine the vast mosaic of the past, can we truly connect the dots to understand the relationships between cause and effect of different events? Or are we drawing arbitrary lines that match the stories that we have in our minds, in attempt to make sense of an infinitely-complex sequence of events?
And second: What was it like to live through those times? When people came upon a historic milestone, could they see its significance? When they faced an important turning point, could they plot the road ahead? At what point of putting the puzzle pieces together, did the larger picture become obvious?
History → Economics
Over the past decade I have been asking myself those questions about a particular time in recent history: the 2008 financial crisis. What was the true relationship of cause and effect between the stock market tumble, the real economic slowdown, the US subprime mortgage crisis (marked by the collapse of Lehman Brothers), the Baltic and Spanish housing bubbles, etc.? Has no one noticed these bubbles before they burst?
What were the immediate catalysts for the stock market avalanche? How long did it take for people to realise that the sharp declines reflected a new trend? When was the word “recession” used for the first time? When did we officially go back to a growth trajectory? I don’t recall what those events seemed like in real time, but I do remember that nothing was as clear as it seems in retrospect.
And why do I care? Because ever since the 2008 financial crisis, I’ve been planning to tackle the next one head-on. Don’t let your investment manager read the following sentence, but… I actually believe that the stock market can and should be timed. And to time it correctly, one needs an excellent real-time understanding of events.
I’ve been anticipating another financial crisis, but haven’t imagined a pandemic apocalypse that seems straight out of a Sci-Fi movie. But the convergence of two historic events has provided me with extra incentive, not only to analyse this ongoing crisis as part of my investment journey, but also to document it.
The Plague Diaries are my attempt at creating a real time accounting of the 2020 coronavirus pandemic, as it occurred, while addressing its medical, financial and social impact. Hopefully, this will prove an interesting read a few years down the line. Since we are already quite deep into this event, I will start by summarising everything that’s happened so far, starting with the medical aspect.
The outbreak started in December 2019 in the Chinese city of Wuhan. Several people working at a fresh-food market were admitted to the hospital with respiratory symptoms, in what was first suspected as a new SARS outbreak. On January 7th (which happens to be my birthday), Chinese authorities concluded that this was actually a new virus strain, nicknamed “novel coronavirus”.
Did you know? Viruses have different names from the illnesses they cause. For example, “HIV” (Human Immunodeficiency Virus) is a group of viruses that cause “AIDS” (Acquired Immunodeficiency Syndrome). Novel coronavirus is officially named “SARS-CoV-2” (Severe Acute Respiratory Syndrome CoronaVirus 2), and the disease it causes is called CoViD-19 (CoronaVirus Disease of 2019).
The virus quickly spread in Wuhan, then to other major cities in China, racking about 10,000 cases by the end of January. Confirmed patients began to pop up in different countries, but all of them had contracted the disease in China. On January 30th, the World Health Organization declared a global emergency, but still viewed this as an epidemic – a collection of regional outbreaks.
By mid February, the death toll of novel coronavirus in China had surpassed that of SARS. The medical system in different parts of China was undergoing a meltdown trying to deal with tens of thousands of cases, and field hospitals were quickly erected.
Global Spread: Going Viral…
During February the disease spread to many countries, with first confirmed cases of person-to-person transmission outside of China. Still, media attention was focused on specific points of outbreak, most famously on board the ‘Diamond Princess’. This luxurious cruise ship eventually docked in Japan and went under a long quarantine, throughout which many of its passengers, from different countries, became infected.
By the end of February, thanks to strict quarantines, the number of new cases in China began to shrink. Meanwhile, serious outbreaks were emerging in Iran and Italy. Most countries already had diagnosed cases, but since their numbers was relatively low, they still thought they had the situation under control.
March was when the disease truly hit worldwide. Almost every country was already infected, and the number of confirmed cases was beginning to multiply. On March 11th, WHO announced the corona update a worldwide pandemic. Serious outbreaks were emerging in Spain and New York. After a long time in denial, the US has finally announced a national crisis and started performing tests.
On March 19th, Italy became the country with the most confirmed cases and highest death toll. The Italian health system is in meltdown, with too many patients to treat, and much of the medical staff itself being put in quarantine. Many other countries are facing significant outbreaks, which are beginning to put pressure on medical systems. Shortages of protective gear are being reported.
Meanwhile, China reported no new local infections for two days in a row. If these publications are correct, China has successfully contained the virus. Production and transportation of products from China to the rest of the world has been restored. South Korea also seems to be gaining control of the outbreak.
As of yesterday, March 20th, there were 266k confirmed cases of coronavirus worldwide, 11k deaths and 183 affected countries (essentially every country except a few in Africa and some islands). Europe is considered the current epicentre of the pandemic.
Another great source of real-time data is offered by Johns Hopkins University.
A more detailed timeline can be found here.
Not a flu
The specific strain which causes CoViD-19 is believed to have mutated from a previous strain seen in animals, and gained the ability to spread between humans. The virus is extremely infectious: It is transmitted through droplets emitted while coughing, sneezing etc., and can survive on surfaces for hours or days.
Some patients are asymptomatic. Most develop mild symptoms that include fever, cough and breathing difficulty. As a general estimate, about 80% can recover without treatment, 20% require hospitalisation, and 5% require intensive care, mainly due to acute respiratory distress. Deterioration to critical condition is much more common in elderly people or those with background diseases, but can also occur in young healthy patients. Interestingly, the disease has almost no impact on children.
Mortality rates are difficult to measure, as many carriers are never diagnosed. Even among confirmed patients, mortality rates vary significantly between countries: between 0.4% and 4.5% under proper medical care. Sadly, the number can go as high as 9.5% where medical facilites begin to fail. In comparison, the death rate of seasonal flu is about 0.1%.
There is currently no vaccination and no official treatment for coronavirus. However, initial findings suggest that some medications used for other diseases can promote recovery and keep some of the complications in check.
Being a newly-discovered virus strain, there is a lot we don’t yet know about the novel coronavirus. To me it seems that the major questions are:
- Can it spread in warm weather? Initial estimates said “no”, but for now the approaching spring does not seem to be slowing down the spread.
- Can you become re-infected after recovery? How long does immunity last?
- How long will it take to develop a vaccine, or a more effective treatment? How fast can we produce and distribute it?
- Will this strain mutate into something worse? I’ve read one professional analysis which concluded that it probably won’t, but this remains a concern.
The answers to these questions will determine how the medical crisis unfolds. What happens when we lift the quarantines and travel restrictions? Will there be a second outbreak, and when? Can we drive the novel coronavirus into near-extinction, like the horrible virus that caused the Plague / Black Death? Or will it become ingrained in our lives, like a very dangerous seasonal flu?
You may have noticed a gaping hole in my descriptions throughout this post: I have not discussed the measures taken to contain the outbreak. This will be the topic of the next episode in this post series, describing the different approaches taken in different countries, as well as their psychological and social implications. The third episode will deal with the economic implications.
Final point: We are all worried about ourselves, our friends and families, our jobs, investments, and the economy. But let’s take a minute to remember the dead, the sick, and the mourning, and to praise the efforts of the medical staff and other emergency workers in treating and containing the disease.