US President Donald Trump speaks during the daily briefing on the novel coronavirus, Covid-19, at the White House on Sunday. Photo: AFP / Eric Baradat

The 100-page US Government Covid-19 Response Plan of March 13 says the “pandemic will last 18 months or longer and could include multiple waves of illness.” I am trying to identify the waves by making some charts, which is what retired analysts do on rainy days.

This lakeside number cruncher is not an epidemiologist but I have a feeling the first wave may peak in April or May, giving us a false summer hope followed by another wave peaking in early autumn. That holds open the possibility of a huge wave in December-February 2021. 

This recession could be worse than 2008 but probably milder than the Great Depression of the 1930s. Unemployment could be 9% by the November election.

The US number compares with PRC 81,348, Italy 53,578, Spain 25,496 and Germany 22,364 as of March 22.  Japan was 1,055.

The explosion is exponential so the log graph better shows how the momentum of the expansion remains steady. (Arithmetic chart shows this: 2,  4,  8, 64, because 8 is 2 to the third power and 64 is 2 to the fourth power. That’s exponential. Log chart shows this:  1,  2,  3,  4.) 

Daily reports of new cases tend to be volatile, but sustained reduction in new cases could be still months away.

Let’s see whether warmer weather brings this down. Of the four types of coronaviruses that had been investigated before this crisis, two weaken into warm weather while two do not. We don’t know about this new one yet.

This being a new bug, the doctors do not know whether having a mild case will immediately give immunity, although basic immunology suggests such a likelihood. This bug appears to destroy the lungs of those above 60 more than those below 40.

Reports so far suggest that a US resident my age has about a 90% chance of survival, which also would mean there is a one in ten chance that he or she will kick the bucket.

I’m in Japan. Some critics say the Japanese number is low because there has not been mass testing such as they’ve done in Korea. Others say it is because of the system of Hokenjo (National Health Inspection Offices) scattered throughout the country. Hokenjo workers actually do individual tracing to find the source of all transmissions.

There are too many differences to apply the US model to Japan and say that is going to repeat here. The demographics are different (fewer young folks with no respect for social distancing relative to more senior folks here who are not that social). Hand shaking vs. bowing. Shoes in house, no shoes in house. Eating sandwich with hands, eating with sticks, etc.

It is relatively easy to control, track and trace people coming into Japan and moving around Japan. The US has no facility to do that. Not even ICE can do that.

As long as you can trace and isolate, you can stay within the containment parameters.    Once you have 5,000 cases that you cannot even trace, you have Northern Italy – the mitigation phase.

The US numbers exploded around March 6, or 45 days after the discovery of the first carrier.    But the actual explosion may have been earlier. We do not know because there was almost no testing. By day 55 after first discovery, the US was adding 1,000 people each day with no testing and no tracing.

I wrote earlier warning of recession. The question has been whether this one will be worse than 2008 or, heaven forbid, as bad as the 1930s.

It looks like the US unemployment rate will spike from a recent 3.5% to maybe 9% or 10% within weeks, then drop as we get into summer.

Peak unemployment for the financial crisis (or “Great Recession”) was 9% in 2009, and the peak for the Depression was 15% in the early 1930s.

There are trillions of dollars of near junk (BBB-rated) corporate bonds that are likely to be re-rated as junk in the coming weeks. That means a bloodbath in the bond market. 

Meanwhile new cases of Covid-19 should increase from 5,000 per day to 10,000 per day in the United States.

I’m watching labor figures to show the scale of US layoffs. According to the Wall Street Journal, “State-level anecdotes suggest claims for unemployment benefits — a proxy for layoffs — could hit more than two million in Thursday’s Labor Department report. Long-term prospects are bleak, with predictions emerging for losses of up to five million jobs this year and a drop in economic output of as much as $1.5 trillion.”   

The Journal, under the headline, “Worst of the selloff isn’t here yet, analysts warn,” reports: “Many market watchers say Wall Street is only now coming to grips with the economic damage being wrought by the virus.”

We are witnessing a huge shutdown of the global economy like we have not seen since the Great Depression.

Photo: C. Joy Williams