Coronavirus – Please Don’t Panic; This is Just a Drill

 

 

Sorry to seem optimistic, folks, and spoil all your fun, but Coronavirus is not looking like the next version of the Black Plague. So please don’t panic and do all sorts of stupid things like selling off all your stocks. Because that’s what some people would like you to do.

Why The Stock Market Likes the Virus

The best way for those in the know to make money is when the market fluctuates, particularly when it fluctuates in a predictable way. When those who manipulate the stock market decide we’ve had enough volatility and the stocks are low enough that they can make a fortune buying them, a lot of this desperation will gently disappear from the media. Count on it.

The Canadian Economy is Not Going to Implode

Canadians, hewers of wood and drawers of crude oil that we are, get most of our real income from resource extraction. Logging, mining and oil production are not high on the list of social interaction.

About 20% of our industry is aimed at producing something. The rest of our economy recycles the paycheques of the resource people providing services for the rest of Canadians. If the population stops using services, a lot of people will be out of work, and the economy will have a big dip. But for a short time, our economy won’t collapse because the production paycheques will still be coming in.

“Compared to the Flu”

Accurate data is difficult to obtain at this early date, and analysis of that data is also very complex, involving the uncertainties of honest reporting by various countries and the different results for various age groups. Fatality rates in China seem to vary between 0.4% and 2.9%. Italy’s statistics are skewed by the fact that their population is one of the oldest in the world. But given the differences, how do the statistics compare?

There are dozens of strains of the flu. The A type (the one that causes pandemics) has 144 subtypes, which mutate constantly.

Usually there are four strains of flu in any given year. The averages we see in flu statistics are based on a world population that receives a vaccine that attempts to predict which four.

But what would the statistics be for that one new type that shows up and there is no vaccine? It’s obviously going to be far higher than the average. The H1N1 killed up to half a billion people in 2009. Corona 19 may not be any worse. Only time will tell. At least this time we’re doing something about it.

The Best Practice

So why is every government in the world taking such draconic measures this time? For two reasons. The first one is that we don’t know for sure. So far, this virus is acting in similar enough ways to the others that we will get a handle on it eventually, but what if we don’t?

The second reason is that we need the practice. Governments will learn a great deal about the handling of any plague through the successes and failures of this session. The United States will take many years to live down its woefully inadequate response. Italy, France and Spain will modify their plans. China will perhaps take permanent action against their wild animal markets. Governments in general will stop assuming that Big Pharma will save us, and see the advantage to putting money into independent medical research. We can always dream. But until then, what should we do?

Flattening the Curve: Social Distancing

Here’s the key to what most thoughtful countries are doing. There’s a great article in the Washington Post that demonstrates graphically how infection works. Their simulations demonstrate clearly what the scientists (Remember them? The ones nobody would listen to?) have been telling us.

The way to minimize damage from a disease like this is social distancing. Forced quarantine never works, because sooner or later it breaks. One estimate of the Chinese situation speculated that their quarantine delayed the further spread of the disease by 3 days at most.

Why is  Social Distancing the Best?

For two reasons. In the short term, it slows the spread of the disease. This means the health care system doesn’t overload. In the long run, it reduces the number of infected. When a certain percentage of the population finds the disease fatal, this is known as a Good Thing.

So, what to do? Stay home. Restrict your contacts. That’s about it.

Social Patterns.

One element that skews this datain ppositively is that these models are usually based on random contacts. In real life, we don’t all react with a random set of people. On any given day of the week, I meet and talk to the same people, day after day. The same people walking their dogs. The same cashiers in the supermarket. The same neighbours and family. You don’t have to isolate yourself completely to reduce your chances of getting the virus. You just have to restrict your contacts to a small circle of people.

This is why big gatherings are so bad; large numbers of random contacts create the formula for the fastest spread.

Where’s the Good?

If everything goes as it normally does, we only have to hold on for a couple more months, and the heat of summer and the social distancing of outdoor activities will solve the problem for us.

Think of this as a training run, preparing us for harder times that might come. After all, the 1918 flu epidemic came back three years running. Next year, the world’s response will be a lot less panicky, a lot more scientific.

And next, year, when the new flu/corona shots come out, I would bet there’s going to be a whole lot more people lining up for them.