Via Calculated Risk:
On March 31st, I wrote:
This is a healthcare crisis, and the economic outlook is based on presumptions about the course of the pandemic.Unfortunately the course of the pandemic has been worse than I expected. Although social distancing clearly worked in slowing the growth rate of infections, many people have recently relaxed their guard – and COVID-19 cases, hospitalizations and deaths are still rising in many parts of the country.
Stories like this are concerning: Arkansas governor says several people who attended pool party infected with COVID-19
Several people who attended a swim party in Arkansas have contracted coronavirus, Gov. Asa Hutchinson (R) confirmed Saturday.
“There were positive cases coming out of a high school swim party. A high school swim party that I’m sure everybody thought was harmless. They’re young, they’re swimming, they’re just having activity and positive cases resulted from that,” the governor told reporters Saturday.It is possible to open the economy without an increase in infections. For example, in Japan, the economy is mostly open, however 1) everyone wears a mask, 2) there is robust contact tracing, and 3) everyone is urged to follow the 3 C’s (avoid Closed spaces, Crowded places, and Close-Contact settings) (Cool graphic!).
However, in the US, contact tracing is still ramping up, many people aren’t wearing a mask or face covering, and – based on many stories like above – people are not following the 3Cs.
Since the course of the economy will be determined by the course of the virus, I’m not currently sanguine about the economic outlook.
Yep. I expected the virus to be burning out in the US going into June and the Summer months. Instead, increasingly it looks like it will be fighting it all year with large-scale lockdowns on and off around the country.
That the S&P500 has flown far above elsewhere leaving it still very vulnerable to another crash when the reopening fails expectations horribly. Some high-frequency indicators, also from CR:
The mismanagement of the virus is extreme.