The Coronavirus is a mixed bag of truth, lies, deception, confusion, reaction and overreaction. It has become clear, that the greatest threat and thing to prepare for is not the virus, but the reaction to the virus. The virus will pass, but governments and the populous reaction to it have changed everything, and an entirely new course has been set politically and economically and financially.
While reasonable precautions should be taken to prevent and manage the spread of COVID-19, we should not be fearful, panic or overreact. Fear is what causes social & news media, governments, markets and individuals tend to overreact to whatever is going on around them.
The virus does present a threat, but it pales in comparison to a plethora of other mortal threats in this world, and society is overreacting. Many suspect the virus will also slow with the warmer weather, like the flu season which usually finishes off in mid-April. Although most citizens seem to only exhibit minor symptoms if affected by the virus at all, it is still good to take precautions without over-reacting. While the COVID-19 numbers are likely skewed due to the number of unreported cases, below are some statistics on the common flu and how it compares to the Coronavirus to provide some perspective.
- 5% – 20% of the U.S. population that will get the flu, on average, each year.
- 200,000 Americans hospitalized each year because of problems with the flu.
- 34,200 flu-related deaths in 2018-2019 Season
- Globally the flu kills 290,000 to 650,000 annually –The World Health Organization (WHO) estimates
Worldometer on Coronavirus: (As of 4.1.20) https://www.worldometers.info/coronavirus/
- Total Cases: 927,986
- Deaths: 46,491
- Recovered/Discharged: 193,474
- Active Cases Globally: 688,021
- Total Cases in US: 211,143
- US Deaths: 4,713
It is important to consider the facts, as well as how people will react to situations regardless of the facts when planning for practical preparedness in these situations. While the numbers are likely off due to many unreported cases in which citizens never went to the doctor or hospital because their symptoms did not become severe, and while age, prior respiratory issues and/or already weakened immune systems have been a factor in the majority of deaths, it remains a threat and markets, individuals, and governments will continue to react.
Is the Coronavirus as Deadly as They Say (3.24.20) WSJ https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464
Inaccurate Virus Models Are Panicking Officials Into Ill-Advised Lockdowns (3.25 20) The Federalist https://thefederalist.com/2020/03/25/inaccurate-virus-models-are-panicking-officials-into-ill-advised-lockdowns/
The Dow reached its all-time highest point 29,551 on Feb. 12, 2020. It closed Monday, March 23 at 18,559, down over 11,000, then rose to 21,336 to finish the week. This was the largest drop since the 2008 financial crisis and the largest rise in history. The Federal Reserve lowered interest rates a half percent, and then lowered them again March 15 to almost 0; lower than the 2008 Financial Crisis. Even more worrisome, they are making the largest infusion of cash into the overnight repo market in history. They also are going to be buying $500 billion Treasury Securities and $200 billion Mortgage Back Securities. This dramatic action clearly shows that the financial fallout is much greater than people think, as these actions are unprecedented.
Even when markets and central banks have a firm foundation, they will fluctuate with world events, but not to this degree. However, when stock market growth cycles peak and/or go into freefall and economies begin to falter, central banks lower interest rates and infuse cash into the banking system to attempt to re-stimulate the economy to sustain growth if possible. Regardless of the actual or perceived threat posed by the Coronavirus, investors are reacting and market analysts have no grid system for what’s happening and no clue what will happen next. In the last week of March, the longest Bull market in American history ended with the Dow dropping more than 20% and the shortest Bear market in history, lasting only three days, having risen 20%. Currently, the Dow is still down 8,000 points from its high, but needless say it’s a roller coaster.
The Federal Reserve and many of the other central banks of the world have lowered interest rates and printed massive amounts of money, so there is not much more they can do from this point forward. The banking system is in trouble, to the degree that the FDIC put out a video asking people not to take their money out of their banks. The lowest, longest-running rates of unemployment have also come to a halt, with unemployment rates skyrocketing. What will happen next is unclear, as all the restrictions aren’t over yet and the degree of economic fallout is still to be determined.
Dow Escapes Bear Market With a 6% Rally (3.26.20) WSJ
Record Rise in Unemployment Claims Halts History Run of Job Growth (3.26.20) WSJ https://www.wsj.com/articles/the-long-run-of-american-job-growth-has-ended-11585215000?mod=hp_lead_pos2
Dow Plunges 10% With Stimulus Details Uncertain (3.18.20) Bloomberg
FDIC Asks Americans to Keep Their Money in the Banks (3.25.20)
Fed Cuts Rates to Near Zero and Will Relaunch Bond-Buying Program (3.15.20) WSJ
Stocks Plunge 10% in Dow’s Worst Day Since 1987 (3.12.20) WSJ
Fed Unveils Dramatic Measures to Ease Market Strain on Virus (3.12.20) Bloomberg https://www.bloomberg.com/news/articles/2020-03-12/n-y-fed-to-conduct-purchases-across-range-of-maturities-k7ozy3u5?srnd=premium
Federal Reserve Issues $500 Billion to Overnight Lending Program (3.14.20)
U.S. Will Suspend All Travel From Europe for Next 30 Days (3.11.20) WSJ https://www.wsj.com/articles/coronavirus-outbreak-prompts-trump-to-question-europe-travel-restrictions-11583971156
Stock Markets Down More Than 7% After Trading Halt Lifts (3.9.20) WSJ
As with any emergency, take common-sense steps to be as prepared as possible for any situation and the public’s reaction to it. Utilize good judgment in purchasing extra food and provisions, and keep some extra cash at home (don’t hoard the toilet paper!). The following articles contain a variety of viewpoints and suggestions in regard to the Coronavirus. I am not necessarily in agreement with everything in these articles and interviews, but if you are looking for more information on this subject you may find these helpful.
March 2nd Coronavirus Update We’re all Gonna Get it, But We’ll be Fine (3.2.20)
What Are Your Odds of Getting the Flu https://www.webmd.com/cold-and-flu/flu-statistics
CDC US Coronavirus Outbreak is a Matter of When Not If (2.26.20) The Blaze
CDC outlines what closing schools, businesses would look like in a pandemic (2.25.20) CNBC https://www.cnbc.com/2020/02/25/cdc-outlines-what-closing-schools-businesses-would-look-like-in-us-pandemic.html
This Is How Many People Die From the Flu Each Year, According to the CDC (2.11.20)
WHO Declares Coronavirus Outbreak a Global Public-Health Emergency (1.30.20) WSJ https://www.wsj.com/articles/coronavirus-triggers-damage-control-from-governments-companies-11580396657