By Moon Of Alabama
The price war in the crude oil markets which Russia initiated did not cause today’s stock market fall but it also did not help. While cheap oil is supposed to be good for the economy the drop will also cause significant damage in the U.S. financial markets as the whole fracking industry in the United States is laden with debt and is now destined to be wiped out. Expect crude prices to sink to $20 per barrel as frantic overproduction and a drop in demand due to the virus coincide. Russia is well positioned to win this price war. Others are not.
It is the virus pandemic that causes the downturn in stock markets. But what makes the Sars-CoV-2 virus, as the novel Coronavirus is now officially known, so dangerous? The Covid-19 disease the virus causes is basically a flu though its seems to be one of the more severe kinds.
But it is a totally NEW kind of flu and that makes all the difference.
Each year some 15% of the world population will be infected with one or more of the dozens of flu viruses we know. The people get ill and most will recover while they also develop some immunity against the specific virus they were infected with. Over the years this sums up to a basic immunity level within our societies. So many people already had a flu from the well known viruses that most of them will not get infected during another flu season. We have also developed vaccines against the most well known viruses. They help to keep the people who work in health care on their job even when many new flu patients come in.
But when a new viruses evolves everything is different. Our societies do not have a basic immunity against a new virus. Without countermeasures many more people will get sick during the first, second and third wave of a new virus onslaught than during a normal flu season. Health care staff will also get infected and must quarantine itself. Some health care workers will probably die. Hospitals will become overwhelmed and the health care system will break down just as it did in Wuhan, China. The breakdown of the health care system also leads to a much larger number of virus death than under a working health care system.
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Here is a surgeon in Bergamo, Italy, describing such a situation:
The cases multiply, up to a rate of 15-20 hospitalizations a day all for the same reason. The results of the swabs now come one after the other: positive, positive, positive. Suddenly the emergency room is collapsing. Emergency provisions are issued: help is needed in the emergency room. A quick meeting to learn how the to use to emergency room EHR and a few minutes later I’m already downstairs, next to the warriors on the war front. The screen of the PC with the chief complaint is always the same: fever and respiratory difficulty, fever and cough, respiratory insufficiency etc … Exams, radiology always with the same sentence: bilateral interstitial pneumonia. All needs to be hospitalized. Some already need to be intubated, and go to the ICU. For others, however, it is late. ICU is full, and when ICUs are full, more are created. Each ventilator is like gold: those in the operating rooms that have now suspended their non-urgent activity are used and the OR become an ICU that did not exist before.
The current case fatality rate in Lombardy has now topped 6%. We know from China (ex Hubei province) that in a functioning health care system the death rate of Covid-19 patients is lower than 1%. It is not the virus that kills more people in Italy, it is an overwhelmed health care system.
A health care system that is overwhelmed with Covid-19 cases can also no longer take care of regular cases. People with an acute heart attack, with diabetes problems, or kids who have fallen off a bicycle will find that the hospitals are full and unable to care for them.
The only way to prevent such a catastrophic development is to spread out the timeline during which the epidemic happens.
We can do that by lowering the reproductive number of the disease. Under normal circumstance one sick person will infect two, three or even many more healthy ones. We can lower that number by prohibiting large congregations, by isolating infected persons and by good hygiene.
People who test positive or show symptoms need to be quarantined. Everyone needs to be made aware of the dangers and learn how to avoid them. Washing ones hands helps as soap easily destroys the fatty lipid layer that forms the skin of the virus.
The control measures China took in Wuhan were designed to drive the reproduction numbers down.
The effective reproductive number [in Wuhan] dropped from 3.86 before interventions to 0.32 post interventions.
Some of the measures China took were severe but they worked:
The daily Covid-19 onset and the control measures across different periods
South Korea has also demonstrated how quick and decisive action can keep the numbers manageable.
After the virus has passed through our societies in two or three slow waves our communities will have developed a sufficient basic immunity level. In a year or two we may even have a vaccine against it. The virus will then become a relatively harmless addition to the ones we already know.
An example for this is the Hong Kong flu of 1968. The then new H3H2 virus infected 500.000 Hong Kong residents. In 1968 and 1969 it killed more than a million people worldwide even though it had a death rate below 0.5%. Our populations are now largely immune to it and an H3H2 vaccine is now part of the general cocktail of a flu vaccination.
No country will be spared by this virus and the impact will be similar everywhere.
What must be done now is to flatten the curves, to lower the number of Covid-19 infections so our health care systems can cope with the epidemic.
In the United States the Sars-CoV-2 epidemic is still seen as a Monday to Friday problem.
The reason for this is that the president and a significant part of the U.S. population have yet to understand the issue.
Donald J. Trump @realDonaldTrump – 14:47 UTC · Mar 9, 2020
So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on. At this moment there are 546 confirmed cases of CoronaVirus, with 22 deaths. Think about that!
This is not a common flu. This is a NEW flu. We have zero basic immunity against it. Without countermeasures the number of cases will explode and there will be many serious ones. They will overwhelm the health care systems and that makes all the difference.
All countries need to test as many people as possible to isolate positive cases. People who test positive but show no symptoms should not be send home to their families. China has learned that doing that only creates new clusters of cases as all family members are then likely to get sick. Those who develop symptoms must be isolated separately and with access to care. Only the 20% who will develop serious complications should be admitted to dedicated hospitals.
The U.S. must take measures to make tests available and free for all. It must also deliver the necessary healthcare free of charges. The National Disaster Medical System (NDMS) Definitive Care Reimbursement Program can be used to carry the costs.
There needs to be some form of incentive for everyone to take sick leave when necessary. The behavior below is dangerous but the man had likely no other choice.
ABC News @abcnews – 1:24 UTC · Mar 8, 2020
#BREAKING: Authorities say a man with coronavirus ignored instructions to self-isolate pending test results, instead working several shifts at Hobart’s Grand Chancellor Hotel.
People must be made able to pay their bills even when they are sent into quarantine. The simplest way to achieve that is to make sick leave pay mandatory by law. Undocumented immigrants must be able to seek tests and healthcare without fear of deportation. That requires a change in the current mandatory notification scheme.
More economic measures will have to be taken to restart the economy after the slump the pandemic will cause. Large and diverse government spending program will have the best effects. Tax breaks for the rich will not do.
Today’s market crash and Trump’s ignorant and disastrous handling of the pandemic make it now less likely that he will get reelected. The pandemic also guarantees that demanding medicare for all will become a huge winner.