Easily overlooked issues regarding COVID-19

We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.

[1] COVID-19 is incredibly contagious.

COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.

[2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.

There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.

[3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation. 

With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.

[4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.

The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.

China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.

[5] Our ability to identify who has the new coronavirus is poor.

While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.

[6] Some people get much more severe symptoms from COVID-19 than others.

Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.

Strangely enough, there is speculation that people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers (in non-peer-reviewed studies, here and here) predict that those of European or African ancestry will tend to get lighter forms of the disease. These findings are contested in another, non-peer-reviewed study.

Bolstering the view that East Asians are more susceptible to viruses that target the ACE2 receptor is the fact that SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.

Observational data with respect to COVID-19 is needed to determine whether there truly is a difference in the severity of the illness among different populations.

[7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.

Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.

Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.

Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.

All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized businesses will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.

Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:

  • Public transportation to be operating, so she has a way to get to work;
  • School to be open, so she doesn’t need to worry about her child while she is at work;
  • Masks to be available, so that she and her child can comply with requirements to wear them;
  • Stores providing necessities such as food to be open, or she may be too hungry to work

If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.

Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.

[8] A shutdown of as little as three months is likely to be damaging to the world economy.

Multiple things are likely to go wrong:

(a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.

(b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.

(c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.

(d) The world economy is likely to be pushed into recession, without an easy way to get out again.

[9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy. 

In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.

Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.

[10] Planners everywhere have been guilty of “putting too many eggs in one basket.”

Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.

If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to be sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,

A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.

“A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.

Conclusion

The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is now not functioning as expected.

If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?

The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?

 

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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2,589 Responses to Easily overlooked issues regarding COVID-19

  1. steven lightfoot says:

    Just love your stuff.

  2. Shawn says:

    IF ( a big IF) the global economy gets through this virus crisis without a big disruption, it might considered evidence of how resilient is our massively fossil-fueled industrial global system. David Korowicz and others have tried to document the fragility of this system to disruption. But with so much energy still available to the globe, the global economic system may be able to re-organize and adapt and life may go on somewhat as before. This will be quite the test whether we are very fragile or fairly resilient. My guess and hope is resilient. We shall see….

    • We shall see. I am afraid of a big disruption.

    • Mike Roberts says:

      I think we’ve already seen that it is very resilient. That doesn’t mean it can go on forever and it doesn’t mean that there won’t be a point where that resilience fails dramatically.

      • Harry McGibbs says:

        Right. Sooner or later Korowicz will be proven right and entropy will have its way with us. The question is one of timing.

        In that regard, this coronavirus may prove illuminating. Assuming no very near-term resolution, the economic fall-out from it will be be an absolute acid test of the central banks’ ability to reverse a serious downturn when they *appear* to lack ammo.

        In a few months we could either be in a worst case scenario or actually feeling quite reassured that there is still life and resilience in the global financial system.

  3. Tim Jones says:

    Very informative! Thanks Gail. Tim

  4. ssincoski says:

    Nice summary of where we are today. Do you think we can get another at the end of the month, or will they just come as you see the need?

    Don’t touch that dial boys and girls. Stay tuned for previews of our next exciting episode!

    • I have been writing posts about every three weeks. To some extent, they need to fit in between other things I am doing.

      Normally, I would put up a post about March 10, but I may think about putting one up sooner. I plan to be traveling two different places. I will be in Houston for the CERA meeting the week of March 9 – 14. Since I write about energy related issues, I get in as “media” (free). I have never been to one of these conferences. I am interested in hearing what people have to say about low oil prices.

      The other trip is a short personal trip, before the CERA meeting.

      So I may be writing another post in closer to two weeks, rather than three.

    • There is an article (not yet peer reviewed) out of the Los Alamos National Laboratory that seems to say that about all we can do with our many efforts is slow the speed with which the virus spreads. https://www.medrxiv.org/content/10.1101/2020.02.07.20021154v1.full.pdf

      I keep hoping I will see a final version, but I haven’t seen a final version yet. Maybe they will change their numbers in the next version.

      The numbers they gave in the report gave an initial daily increase in illnesses of 29%. With all of the restrictions that took place in Wuhan, this was cut back to 14% per day. This increase is still incredible.

      At these levels of increases, and with the amount of undetectable transmission that is going on, it is difficult to make an adjustment to the system that truly fixes the problem. If the rate continued at 29% per day, in theory the virus could spread worldwide in 90 days. At an increase of 14% per day, it would spread worldwide in about 6 months. At an increase of 10% per day, it would spread world-wide in about 8 months.

      Admittedly, transmission will likely slow in countries where people are more spread out and customs are different. But we still seem to have a problem with the lack of being able to tell who has it and is spreading it.

      At best, we are talking about a vaccine being available in 18 months. Somehow, it would have to be distributed worldwide as well. We don’t seem to have a chance to slow the spread enough to make things work very well.

      What we are seeing now is the very beginning of an exponential curve. The amount look low for a long time, before the suddenly seem to take off.

      • David L. Hagen (HagenDL) says:

        Agreed. 8 doctors warned of it in Wuhan the end of Dec. Beijing was notified early January- BUT refused to stop the Lunar New Year celebration/travel. That probably spread it faster than just local transmission.

        • Xabier says:

          The Chinese official attitude is truly disgraceful: I see that even now the Chinese ambassador is pressing the NZ government hard to lift travel restrictions which were imposed to protect New Zealanders.

          She maintains that cases of the virus ‘have been falling for 13 days’ and that it is all nearly over!

          She also states that ‘this is not the view of the Chinese government alone, it is the view of the WHO, and as members we ought to follow what they say’.

          We should recall that Tedros Yesus – the shifty Ethiopian at the WHO – argued that no travel bans whatsoever should be put in place, an argument very pleasing to Beijing but with no medical justification.

          We would actually be in very deep trouble if governments had all followed this dubious advice.

          Tedros is condemned by his own words, in his most recent speech at which he stated that there is ‘a brief window to prepare’ which will close some time soon.

      • Xabier says:

        I did a quick calculation for this thing spreading from just 1 infected person in this city, and it is clear that within a month or so no medical system could prepare adequately given the high % of serious complications – everyone will be on their own at home more or less, sink or swim.

        Not to mention the inadvisability of attending an over-crowded hospital – dangerous places at the best of times as we know from the stats on disease contracted while being resident at the best of times.

        To state the obvious, no medical system can grow exponentially, even with warning…..

        • I did a calculation of the expected number of hospitalizations in the US, if 70% came down with the virus and 20% were hospitalized. If you could spread these hospitalizations over a full year, it would add 46.2 million hospital admissions to the recent 34.3 million hospital admissions. These hospital admissions would be longer than average, as well. We would need to cover 2.44 times as many bed days as we used in 2018 (including regular as well as coronavirus hospitalizations as well as other hospitalizations). Somehow, we would need to more than double our hospital bed capacity. I have no idea how much would need to be added to intensive care capacity.

          We could not possibly afford to make a change of this kind. We would not have staff for this many beds either. Hopefully, some sort of drug becomes available, or it doesn’t affect our population as badly as others. The story is incredibly bad, if you work out the numbers of how many could be hospitalized, and how long the hospitalizations might be (over ten days on average). Length of stays are from this report: https://www.medrxiv.org/content/10.1101/2020.02.07.20021154v1.full.pdf

  5. Wolfbay says:

    A recent article claimed(I believe it was Chris Martinson site) that Asians were not anymore vulnerable than other ethnic groups but smoking was a big risk factor that increased mortality.

  6. Pingback: Easily overlooked issues regarding COVID-19 - Newzlab

  7. davekimble3 says:

    > COVID-19 transmits extremely easily from person to person.

    OR the protective measures (isolation, masks, etc.), are not good enough.
    Right from the beginning, an expert on TV said “Masks against viruses have to be a very good fit to the face, therefore solid with straps, and the filters mounted on them changed regularly and disposed of properly. These are expensive and NOT like the simple masks being worn by everybody I’ve seen. You can’t wear a mask and smoke at the same time.

  8. Ed says:

    China has taken drastic (heroic?) measures to slow (stop?) the spread. When everyone in China has had the virus and the survivor have survived my guess is they will carry the virus for ? months, years? life? Then the rest of the world will get it. Unless it mutates to a milder form we are all going to get it. Being a non-smoker, healthy, non-polluted environment I am optimistic. On the negative side male, not young 61. Bring it on let’s get it over with one way or the other.

    • We don’t know for certain that having the illness gives immunity. Some sources say it comes back worse! If this happens, the problem is the body’s over-reaction to the virus. An interview with Dr. Lipsitch gives some insight:

      https://news.harvard.edu/gazette/story/2020/02/harvard-expert-says-coronavirus-likely-just-gathering-steam/

      GAZETTE: Once people get this and recover, do we know whether they will have immunity?

      LIPSITCH: That is a very important question, but we don’t know the answer yet because it’s been too short a time. The evidence from other coronaviruses is that there is some immunity but it doesn’t last for long. Immunity to the seasonal coronaviruses lasts for maybe a couple of years, and then you can get reinfected. There’s a further question of whether that’s because the virus is changing or because your immunity is not very durable. Given that it’s a new virus, we can’t say anything with certainty, but it would be reasonable to expect immunity to be somewhat short-lived, meaning a couple of years, rather than lifelong.

  9. GBV says:

    “If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea.”

    Perhaps a good thing? Sometimes you need to smack people in the face to get them to wake up to the obvious…

    Anywhoo, wanted to share this:

    Chris sounds to be in agreement that the next 1-2 weeks should likely let us know where Covid-19 is heading for the rest of the world…

    Cheers,
    -GBV

    • Ed says:

      My birthday is May 1st I figure it will be clear by then.

    • Thanks for the link to the new video. I am afraid I am still not convinced that testing, testing, testing and masks are going to do very much good. If hospitals are going to get overwhelmed, I am afraid this will happen, regardless of the amount of testing or masks. If people dodge getting the virus from one person, they likely will find another person to get it from fairly soon.

      It is good news that the plasma treatment seemed to work. This means that there are some antibodies developing that are working.

    • Covidinamonthorayearoradecade says:

      next 2 weeks? yes and no…

      obviously we will know (a tiny little bit) more in 2 weeks, but this health/economic crisis is a long term one…

      I don’t think 2 weeks will give a clarity to the long range prognosis…

      we hear about symptoms not appearing for 24 days etc…

      I think it’s going to be region by region crises…

      new one(s) every month or two…

      he is/we are all guessing… time will tell…

      • Perhaps we will start to get more reports of the virus that are somehow out in the community, but are not related to getting off a plane or ship. We know that there likely are quite a few cases of this kind, but they are not showing up in the numbers.

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