Historically in a typical pandemic, the number of daily new cases accelerates rapidly, peaks out and declines slowly into the tail of a statistical “bell curve.” If that pattern persists with Covid-19, the U.S. could see encouraging improvements in new cases as soon as 60 days. Possibly anticipating that turnaround, corn and soybean futures flickered upward today, and the recent 30% drop in Wall Street stocks hesitated with a modest upward nudge.
March 19, 2020 — Today, China announced the first report of zero new Covid-19 daily cases from infections transmitted within China’s borders. That’s consistent with the expectations of retired top-level Chinese safety expert, Chen I-Wan. We reported his comments on this site February 16:
“We are all calm, patient, waiting for the Beijing government to declare ‘no new cases for … days.’ This might happen in another 15 days. We all are confident that the Chinese government is presently taking all necessary measures to fully contain the epidemic and restore normal life as soon as possible.”
South Korea has recorded a similar flattening and decline in new cases. Meanwhile the U.S., Europe and Mideast daily new case count is still rising. If America’s aggressive new quarantine efforts generate a pattern of control somewhat similar to China and Korea, we could see the daily rate of fresh American cases slowing in another month.
Here’s a chart of China’s economic activity track record so far, measured by traffic congestion, electrical power use and real estate property sales. Note that the sharpest drop in these economic indicators hit in late January, when cases were multiplying rapidly and panic, especially in the Wuhan region, was most intense.
America’s border closures, “social distancing” and other measures have started approaching the intensity of South Korea’s citizens’ quarantining rules. Thus we could soon begin to see new infection rates slowing. Warmer weather into April and May should also help constrain Covid-19 transmission. Distortions in ag commodity markets should calm down a bit. At the moment, retail beef prices are rising but live cattle prices have tanked, at least temporarily.
The nearby chart of new Covid-19 cases, based on WHO data, illustrates the bell-curve nature of epidemics. South Korea and China imposed drastic quarantine conditions and turned the infection rate around fairly quickly. Italy, Iran and other countries may not be as aggressive in quarantines. We recommend following charts on the Wall Street Journal’s “Daily Shot” posted online by Lev Borodovsky. It’s a quick daily update of major economic changes.
Already, some macroeconomic forecasting gurus are chatting up a recovery rebound in stocks as the Fed pumps billions of dollars into the economy to feed the stampede for cash.
The Corona panic could lead toward a much more resilient and muscular American economy. Examples:
1. We sense a “fierce resolve” to reverse America’s 90% dependence on China for most pharmaceutical ingredients. Some Chinese pundits have mocked America: “We’ll cut off your drug supplies and let you drown in a sea of virus.”
2. The same concerns are stalking ag chemical suppliers. Ag consultant Brad Forkner noted at a recent farmer seminar: If you’ve been in a big ag chemical distributor’s warehouse, did you notice how the totes of glyphosate vary in color, one shipment from the next? What are the Chinese glyphosate makers trying to get rid of?”
3. The surge in work-from-home and kids sequestered at home is slowing or choking internet speeds in some rural areas. In rural Montrose west of Minneapolis, one home-schooled student told us today, “It takes about 30 seconds for Chrome to open a page. Barely usable now.”
With such dependence on internet viability, how comfortable would you be with an America dependent on the security of high-speed routers Made in China?
4. The Wall Street Journal notes that families who self-isolate at home tend to increase their nibbling on traditional home-prepared “comfort foods.” Our longer-term hope is that America’s health food revolution will accelerate toward foods that are fresh, non-GMO and more nutritious. Toxin-free, raised closer to home. Prepared in home kitchens. That’s the kind of nutritional freedom we really need.
Update March 20: We encourage you to read George Parry’s comprehensive analysis of current and historic pandemic impacts at his blog site. It’s titled “Apocalypse No,” and offers a stabilizing perspective for societies in near-panic. Here’s the link.