THE DAILY EDGE: 25 MARCH 2020

Same chart with log scale, trying to find hope wherever it might be:

• More than 40,000 Spaniards have tested positive for the virus and 3,000 have died.
• Governor Cuomo said that with cases doubling every three days in New York City alone, as many as 140,000 people might need urgent care in the next few weeks.
• A 17-year-old California boy whose death was linked to the coronavirus on Tuesday may be one of the youngest victims of the outbreak in the United States. Gov. Gavin Newsom of California said that half of the 2,102 people who had tested positive for the virus in his state were aged 18 to 49.
• In Georgia, a 12-year-old girl who has Covid-19 was placed on a ventilator this week. And in Kentucky, a person who went to a “coronavirus party” attended by young adults has tested positive, Gov. Andy Beshear said.
• In a small example from the US, eight NBA teams have tested all their players, with ten of those players testing positive. That is an 8% infection rate across that small population. Almost all have been reported as being asymptomatic. If you extrapolate that across US as a whole, it is consistent with 27 million infected Americans. There are lots of reasons to think that NBA players would be more susceptible (they travel extensively and come into contact with a very high number of people). Nonetheless, it suggests the total number of cases is likely to be much higher than official figures suggest. By the same token, this would imply that the mortality rate is much lower than official figures suggest.
• The fatality rate per head of population in Italy far exceeds that in any other country so far, although Spain is on a similar trajectory, as is the UK (though it is still early days in the UK). Iran and France are also picking up, but Germany, Japan and the US remain at or below the trajectories of China and South Korea, to date.

THE WEST TAKES WRONG LESSONS FROM WUHAN

The cordon sanitaire that began around Wuhan and two nearby cities on Jan. 23 helped slow the virus’s transmission to other parts of China, but didn’t really stop it in Wuhan itself, these experts say. Instead, the virus kept spreading among family members in homes, in large part because hospitals were too overwhelmed to handle all the patients, according to doctors and patients there.

What really turned the tide in Wuhan was a shift after Feb. 2 to a more aggressive and systematic quarantine regime whereby suspected or mild cases—and even healthy close contacts of confirmed cases—were sent to makeshift hospitals and temporary quarantine centers. (…)

The steps went beyond what’s envisioned in many hard-hit Western cities. As a result, many doctors and experts say the recent lockdowns in the U.S. and Europe may slow the rise in new infections—if properly enforced—but still won’t be enough to stop it or prevent many hospitals from being overwhelmed, as they were initially in Wuhan.

“A lot of the lessons have been lost,” said Devi Sridhar, professor of global public health at the University of Edinburgh. “A lockdown helps buy time: The only way it will work is if you actually backtrack and start figuring out who has the virus.” (…)

Zhang Jinnong, head of the emergency department at Wuhan’s Xiehe Hospital, said the most important thing was to separate the infected from the healthy, and recommended hotels as quarantine centers where people could be isolated in separate rooms.

“You just need to turn off the central air conditioning,” he said.

He also said that in recent days he saw a handful of patients who had developed antibodies to the virus without knowingly being infected. That suggested to him that Wuhan might have already developed a level of “herd immunity.”

(…) the more systematic quarantine and testing regime in Wuhan after Feb. 2 is similar to measures that also appear to have been effective in South Korea and Singapore, according to many experts. (…)

An Antibodies Test: A Vital Weapon in the Fight Against COVID-19.

While the US continues to struggle without enough diagnostic tests for COVID-19, the quest continues for a different holy grail, a test to tell us who has already been exposed to the virus and now has some immunity.

The exciting news on the serologic testing front this past week is not a test that will come in a package to be shipped around the world, though those are in development. It is an assay developed by a team at the Mount Sinai Health System Translational Science Hub – a procedure that can be replicated in any lab, using a blood sample. (…)

One of the authors of the March 19 paper published on medRxiv, Florian Krammer of the Krammer Lab of the Icahn School of Medicine at Mount Sinai, explained on Twitter how the results of the new blood test can be utilized: “(A) With this assay we can figure out who was infected and who wasn’t. That means we can determine the true infection rate and infection fatality rate. (B) We can use the assay to screen for people who seroconverted and are now immune, and they can donate their serum, and it can [be] used to treat patients. (C) We can test healthcare workers and ask the ones who are already immune to work with infectious patients. In that way, the virus is not easily spread to colleagues or other patients. And (D) we can now use this assay to better study how our immune response reacts to the virus.”

Beyond those vital uses noted by Dr. Krammer, a serologic can test tell us who, given a measure of immunity, is in the best position to go back to work, to keep society moving and vital services functioning, and to begin to revive the economy after its COVID-19 swoon. (…)

Europe faces coronavirus choice: to close economy or not Countries grapple with a trade-off between public health and long-term hit to growth

California Governor Sees Easter Too Soon to Emerge From Shutdown. Newsom said that the state is likely looking at a period of eight to 12 weeks of shutdown, based on conversations with experts.

Premature Return to Normal Would Risk Disaster for Markets The coronavirus doesn’t observe Easter. Let’s just sit tight. (John Authers)

(…) It is uncertainty that roils markets. (…)

Chinese stocks, whether in Shanghai, Hong Kong, or New York, began to recover in early February, as signs came from Wuhan that the virus was coming under control, and that it wasn’t proliferating as badly as feared in the rest of the country. By the final week of February, when the situation had plainly stabilized, indexes were back level for the year. They then started to fall again as the problem spread outside China. Yet, remarkably, Chinese indexes have done comfortably better this year than the rest of the world. (…)

What mattered to investors was to gain some confidence that the virus was under control. Then the return to work could begin. (…)

MacroPolicy Perspectives president Julia Coronado:

• “If we go back to work and the disease continues to spread not only will people die and the 20% of our economy dedicated to health care be overwhelmed, but people won’t have the confidence to resume normal activity.”
  

• “They won’t go on airplanes or travel or hold conferences or events because they won’t be able to trust the public health response has been adequate to protect them.” (Axios)

Deal Reached on $2 Trillion Coronavirus Stimulus Bill

(…) Mr. McConnell said the Senate would move to vote on the massive bill later on Wednesday, setting up a rapid approval of legislation that dwarfs the annual discretionary budget Congress spends much of the year crafting and approving. House Speaker Nancy Pelosi (D., Calif.) said Tuesday she hoped to quickly approve the eventual Senate agreement, though objections from lawmakers could slow the process in that chamber.

Treasury Secretary Steven Mnuchin said that he had spoken to President Trump about the agreement and that Mr. Trump would “absolutely” sign it as it is written today. (…)

While the final terms of the bill remained under wraps early Wednesday, lawmakers had been eyeing sending one-time checks worth $1,200 to many Americans, with $500 available to children, with the assistance capped above certain income levels.

Those payments would be in addition to a broad expansion in unemployment benefits, which would be extended to nontraditional employees, including gig workers and freelancers, according to a Democratic aide familiar with the negotiations. The agreement is also set to increase current unemployment assistance by $600 a week for four months.

The Senate is also poised to approve $350 billion in loans to small businesses in an effort to keep Americans on payrolls as economic activity across the country comes to a standstill.

A major challenge in the negotiations was roughly $500 billion in corporate aid, much of which will go toward backstopping Federal Reserve loans. The Treasury Secretary will have the authority to directly lend a slice of those funds, and Democrats had sought to place controls on the money. The agreement will create a new inspector general and oversight board to oversee the aid.

Mr. Schumer wrote in a letter to Senate Democrats Wednesday morning that the legislation will also invest $150 billion in the health care system, already straining to respond to the quickly expanding number of infections across the country, and send $150 billion to state and local governments saddled with costs related to the virus. Those funding increases are among several lawmakers had intended to include in the package.

In the same letter, Mr. Schumer said the legislation included a ban on stock buybacks for any company receiving a government loan from the stimulus package. The ban lasts the term of the government assistance plus 1 year. (…)

Eurozone: Finance ministers show solidarity but prefer separate accounts

(…) According to Eurogroup president Centeno, Eurozone member states have on average adopted fiscal stimulus measures of some 2% of GDP and guarantee schemes of some 13% of GDP. (…) While all the national fiscal measures are impressive and significant and are a kind of implicit coordinated action, a real Eurozone-level counterpart to the ECB’s 750bn euro asset buying programme is still missing.

(…) the reluctance to agree on corona bonds or other forms of clear burden sharing, at least for now, means that a euro debt crisis could return in the aftermath of the current crisis, no matter when this will be. On Thursday, we will know whether European government leaders follow the advice of their finance ministers.

Steep drop in oil price fueled by COVID-19 and oversupply

Twenty-five days into the COVID-19 crisis (March 23rd), oil prices have declined 58 percent to about 21.96$ per barrel. In contrast, the Lehman crisis reached this low point after 59 days, and the 2014 oil price collapse reached it in 139 days. An agreement between oil-producing nations to curb production could prevent a further fall in prices, though weak global demand will keep prices bearish for longer.

• Coronavirus Complicates Kremlin Plan To Boost Oil Output The deepening coronavirus crisis is upending the Kremlin’s plan to ramp up oil production in its price war with Saudi Arabia—and prompting a backlash among the leaders of some of Russia’s largest energy companies, people familiar with the matter said.

(…) At a Monday meeting of top domestic oil companies convened by energy minister Alexander Novak, most participants argued against a production increase starting in April, the people said.

Some companies also favor returning to the negotiating table with Saudi Arabia. Present at the meeting were top executives from PJCS Rosneft, PJCS Lukoil and PJCS Tatneft, among others. (…)

Igor Sechin, head of Russia’s largest oil producer, state-controlled giant Rosneft, continues to support a production boost. Widely considered a staunch nationalist in President Vladimir Putin’s inner circle, Mr. Sechin was a key driver of Moscow’s exit from the OPEC pact. He argued that Russia’s yearslong cooperation with the Organization of the Petroleum Exporting Countries to limit production allowed U.S. drillers to gain market share. (…)

Mr. Sechin said last week that Russia and Saudi Arabia need to maintain contact. “These two are the largest oil producers, and of course, we need to cooperate, to exchange information,” he said, quoted by state newswire RIA Novosti.

But he reiterated that Russia needs to protect its market. “If you give up your market share, you will never get it back,” he said. “You look at what happened during these three years of our participation in the [OPEC] agreement. The U.S. oil industry grew at a rapid pace and came out on top in the world in oil production.”

Leonid Fedun, vice president of Lukoil, predicted last week that oil prices could fall to as low as $15 a barrel. He called the Saudi-Russian battle “a war of attrition, which the U.S. will win.” Moscow and Riyadh must resume negotiations, he said.

PANDENOMICS

DOW’S BEST DAY IN 87 YEARS

We keep besting most records…

Lowry’s Research yesterday night: “the criteria for aggressive investors to begin a staged buy program have not yet been met.”

  A friend sent me this note yesterday:

I am giving up drinking for a month.
Sorry ,bad punctuation:
I am giving up ! Drinking for a month.