Been so busy last week+ haven't been around much (helping daughter and son-in-law in trying to purchase a house).
I can't recommend Nate Silver's Twitter feed enough. He does a great job of providing COVID related statistical data and calling out both the left-wing and right-wing spin.
The last week it has been great to see some legitimate good news on the data front. For the first time since this started we have good downward movement in the national numbers. The National positive case rate is around 7%, that is a level at which we should be able to start opening back up in a gradual and thoughtful manner. Deaths are now 30% below the peak (though still 200% higher than they were at the end of March).
The issue we have right now is we have a Federal Government that has refused to set legitimate triggers and trip wires (unlike say Germany) so everything is too haphazard. You need to have triggers so when things are going well you can move to the next phase of opening. You also need trip wires so if something starts to flash red you can pause and potentially go to a more restrictive layer if necessary (this is what happened in Germany over the weekend in 3 of its states). if you have triggers and trip wires then the data drives the speed of opening.
GA is going in the right direction as well, though not doing as well as the country as a whole. The positive case % is around 13% which is down almost 50% from its peak, but still above the 10% the WHO recommends before loosening any restrictions (and almost double the national average). Death totals have come down slightly from the peak (about 25%) but are still relatively flat and not showing the type of downward trend we are seeing nationally with a rate almost 300% higher than it was at the end of March.
So far people are being relatively careful, which is really helping. using debit and credit card data restaurant purchases have risen between 5-10% since GA has re-opened. My gut on this (and this is my hypothesis, not anything proven) is that those who were doing pick-up and take-out are the ones most likely starting to eat more in the restarants that are allowing that, while some who were not making any purchases from restuarants are at least doing take-out now. As long as cases don't start spiking again their should be a slow and steady climb in economic activity, obviously if there is a spike it will go down again. Overall spending is also up a little over 5%. The public did not completely stop spending in late March (though savings have climbed and credit card debt declined significantly - over 30%), people changed their spending patterns. Alot more online spending and a change in what types of purchases were made.
Keep in mind we are likely going to have a little bit of an economic surprise in October. A couple of the industries that got money from the government had conditions that they could not fire any employees until October 1st. Once that date hits I expect a significant layoff event as companies need to downsize. Airlines don't expect booking levels to reach 2019 levels until 2023. Service industries, especially ones related to travel - airlines, cruises, hotels, restaurants are likely going to be in a severe slump for years. Most countries are implementing quarantine procedures from international arrivals which will likely dampen any international travel (this is particularly important to Europe).
What Disney is doing in Shanghai is likely to be repeated in lots of places. They reopened Shanghai Disney last week. They were allowed to open at 30% capacity (capacity is 80K), they reportedly had more cast members there (12K) than customers. They have already said whenever they get back to opening their US and European Parks that wearing masks will be a requirement, and taking temperatures might be as well. I think it is still unlikely that we see large scale events (conferences, festivals, concerts, sporting events) for the most part until 2021. Doesn't mean their won't be sports, but either they will be without crowds or with limited crowds. Any larger event, mask wearing is likely to be a requirement to attend.
One item that hasn't been discussed much is that every decade industries rise and fall. Some companies go out of business, new ones are created. There is always change and displacement going on. You can never go back to what was, you have to looks forward to what is coming. Usually there is enough time taking place that you can minimize the displacement. But what has happened recently is basically a decades worth of change occuring in about 6-8 weeks. This is going to create a huge displacement issue. I'd guess 5-6M jobs that have been lost so far are likely permanent losses. normally that would be spread out over 10 yrs, instead it is concentrated in 2 months.
I also want to address popular left wing and right wing talking points that are inaccurate. First, there has been too much reporting of cases increasing as reason that things are going badly. If more people are being tested, then you should see more cases, it simply means you are catching more of them that you were missing. Focus on positive case % not total number of cases. On the right-wing you have the false stories about the numbers being inflated. As Nate Silver mentioned in one of his tweets, there aren't any data scientists that believe the numbers are overreported. They are underreported and most data scientists currently estimate the underreporting at 50-60%.
We also are finally starting to see much better modeling as we go along. UMAss Amherst, which creates an ensemble model for the flu every year, has now been able to create an ensemble model for COVID (one of the models inputted is from GT). That is helpful and is what modelers due in forecasting weather events like Hurricanes. The most recent weekly model for that came out yesterday and the ensemble estimate for deaths as of June 6 (some of the models only go out 4 weeks) is currently estimated at 112K with a range of 104K to 123K. What is interesting is as more data has become available some of the more pessimistic models have become more optimistic and some of the more optimistic models have become more pessimistic and are starting to converge more. For those models that go out to the end of July we have a low end of 147K deaths and a high end of 188K deaths as a mean number. Some of the models forecast a relatively continued slow downward trend, some others project a spike up again in July (not as large as the one in April, but still a spike).
I was forwarded a copy of a study that is in peer review yesterday from my wife. In it, they show that if you can get mask usage above 80%, then the transmission rate of the virus drops to just 1/12 of its previous rate. But you have to get to 80%. Almost anything less nets you almost nothing. This lines up with another analysis that I saw that if you are wearing a mask but someone who is infected does not the transmission rate is still almost 70%.
We need to understand that the health crisis and the economic crisis are intertwined. You cannot solve one without solving the other. If you focus on just one then both will fail.
If you truly want to get the economy moving as quickly as possible, then there are 2 things you can do as an American citizen to help. One of those is wear a mask. The second is use social distancing, if you do those 2 things then the virus will subside faster and we can open up more pieces of the economy faster. It turns out the Asian countries understood that with their previous encounters with infectious diseases. When they have an outbreak they are just conditioned to start wearing a mask and keeping more distance from each other, but it allows them to continue on more normally with fewer restrictions. Also, if you do those 2 things it also minimizes the amount of testing needed to keep outbreaks under control.
