Thursday, March 12, 2020

Coronavirus:Donald Trump::The Terminator:Sarah Conner

 - by New Deal democrat

For the past few weeks I have said that, when it came to coronavirus, the news would outrun the data. The last 24 hours seem to have been a watershed moment for that news. 

Both an NBA player and a major Hollywood star have tested positive for the virus. The entire NBA season has been shut down. Many universities are suspending classes and sending their students home. Large public activities, like St. Patrick’s Day parades in major cities, have been canceled. 

Meanwhile, as I write this, stocks on Wall Street look set to open over 5% down, after having fallen over 20% in just the past 3 weeks - the fastest descent from all-time highs to a bear market in history (yes, even faster than in 1929).

This is what exponential growth looks like. Everything seems normal until all of a sudden, it isn’t.

The renewed crash in stocks this morning is a thunderous lack of confidence in Donald Trump. Wall Street may not be “the economy,” but in the aggregate traders are pretty shrewd. What happened last night is that Trump gave an ill-thought-out, slapdash major speech in which he said among other things, that he was effectively halting all commerce with Europe. That would be nearly catastrophic for the economy. The fact that his surrogates have since “corrected” his error does not help at all - it simply reinforces that he is completely winging it.

In terms of Trump winging it, the allegory that comes to mind is

Coronavirus:Trump::The Terminator: Sarah Conner

Trump is trying to BS his way through a pandemic, like (to mix metaphors) the guy from Die Hard tries to schmooze Hans Gruber, while, to go back and quote from the Terminator: “It can't be bargained with. It can't be reasoned with. It doesn't feel pity, or remorse, or fear! And it absolutely will not stop, ever....”

Meanwhile, even the high-frequency economic data is one week old, which may as well be an eternity. Initial jobless claims, at 211,000, are nearer the *low* end of their two year range. Rail cars ex-intermodal units and coal actually *increased* over a year ago. Only intermodal rail units continued their accelerated decline, down -14.1% YoY.

Finally, a bunch of graphs demonstrating the exponential growth rate of coronavirus in the US have come out in the past several days. 

First, here’s Jim Bianco of Bianco research:

If the present growth rate continues, he expects to see 25,000 cases by March 21.

And this is from the WHO:

By way of hope, I can only offer two things: (1) since the federal government under Trump is going to be useless or worse, some States may seize the initiative and run competent containment programs; and (2) the most important things you can do are completely within your own power - wash your hands, don’t touch your face, avoid public gatherings, practice social distancing.

But in the aggregate, expect exponential growth - meaning sudden worsening by orders of intensity - to continue.