Virus Outracing Efforts to Measure, Contain, Compensate

The furious governmental efforts at all levels to cope with the increasing spread of the coronavirus as a disease and as a crippler of the economy Friday did not seem to be keeping up with the steepening curve of infection.

As more governors close down non-essential business in their states to keep individuals separated as much as possible, hospitals across the country were still short of basic medical supplies. It was not clear how fast those supplies will be delivered or how many weeks or months the shutdown of the economy will last.

The preeminent virus expert, NIH’s Tony Fauci, told reporters most cases of infection are the result of being close to an already infected individual. Virus droplets floating in the air for any distance, surface contamination and other avenues are distant seconds to proximity. Testing is good to do, he said, but its slow mobilisation is not as important a mitigation factor as following guidelines to stay at home with intensified hygiene.

CME Clearing’s auction of the portfolios of Chicago’s Ronin LLC’s clearing operations caused hardly a ripple when the small peripheral clearing house could not meet its capital requirements and “no clients were impacted.” It was not surprising to hear analysts predict the demise of some larger market-related operations in the near term.

The Dow was off about 17% for the week, 4.55% or 913 points for the day. One hundred and eight billion in bond funds went to cash during the week. Cable TV channels solemnly spoke of what’s becoming, with a 30% decline so far, the worst month for stocks since 1931.

President Trump, in the Coronavirus Task Force briefing, seemed quicker to anger than ever. His dispute on national TV with his top expert over the efficacy of the anti-malarial chloroquine, of which he said he is a fan, left many medical professionals aghast. There were quick to tell interviewers the confusing exchange was “dangerous” from several perspectives.

Trump argued, “What do we have to lose” by trying chloroquine. Fauci answered, using the universal “you” and not directly addressing the president, “The information that you’re referring to specifically is anecdotal, it was not done in a controlled clinical trial. So you really can’t make any definitive statement about it.”

There was much more. Trump’s castigation of a network reporter for asking a simple question was video replayed through the day on cable channels.

His assertion Friday that he has activated some provisions of the Defense Production Act he invoked Wednesday did not jibe with his tweet the night before that he was not ready to do that. Nevertheless, apart from any DPA mandate, GM announced it is preparing to help manufacture respirators. Vice President Mike Pence said thousands more can be converted from their use in anesthesia. Elsewhere, Boeing’s two top executives announced they are foregoing their salaries.

Secretary of State Mike Pompeo confirmed what the week’s crowded entry points along the Mexican border had suggested days ago, that the southwest 2,000-mile southwest border is now being sealed, something anti-immigration advisers at the White House could not quite accomplish previously. Any undocumented asylum seeker, migrant and those undocumented farm workers needed throughout California will be quickly returned to their country of origin before they get to Customs processing centres through some mechanism involving special airplane transport. Mexico warned it is not accepting any of those rejected other than Mexican citizens.

Trump said that the borders with Mexico and Canada will now be treated “equally,” with the cross-border flow of commerce preserved.

Tens of millions of Americans face the next week off the job in New York, Connecticut, Pennsylvania, New Jersey and California without knowing if it is only the first of many such weeks. Former Trump administration FDA Commissioner Scott Gottlieb told CNBC, “We have weeks to go.” Peak US infection might be “a couple of months” away.

At the beginning of this week the fringe projection of two million layoffs to be reported next week seemed extreme. Like so many other dire projections, by Friday several mainstream analytical firms said layoffs look to reach 2.5 million or more. The first week in April may be twice that.

The promise on Capitol Hill of guaranteed federally paid leave seemed mostly irrelevant so far as firms ignored Treasury Secretary Steven Mnuchin’s plea for them to keep staff on the payroll. By the time checks and electronic transfers are on the way in two weeks, millions will have applied on line for unemployment benefits, their last pay cheque spent. Applications in some states are already up 1,000% from normal levels.

Mnuchin tweeted his announcement Friday that the tax filing deadline of April 15 has been moved to July 15.

The Wall Street Journal editorial Friday may become a historical document, the first to raise the question of whether government aid of any size is sustainable and capable of saving the economy from very long-term damage. One reporter at the Task Force briefing amplified on the theme, asking if the virus hazard is worth all the expense when auto fatalities, ordinary influenza and other mechanisms of mass mortality have never prompted a shutdown of the economy. The NIH’s Fauci said that is a “false equivalency” and if lives can be saved the effort is certainly worth it.

If the virus response legislative package Congress will pass Monday is only the first of a series of trillion dollar plus government remedies, some analysts wonder if the strength and safe-haven status of the dollar worldwide will have been altered a year from now. Meanwhile social media posts indicated widespread confusion over the partisan Capitol Hill debate over the meaning of the word “bailout”.

It fell to Republican Senator Mitt Romney on Friday to question how South Korea could be returning so many virus test results in four hours when US results of far fewer tests are taking four days or more. South Korea’s virus fatalities are just 94.

Trump and Pence kept repeating Friday how lives were saved by blocking entrants from China early on yet have never addressed the question of many in the medical profession how the intervening month could have been “squandered,” in the word of one CNN interviewee. One unnamed member of Pence’s staff tested positive.

Governors, increasingly aggressive in their mitigation efforts, were told again Friday that the federal government will assist them but virus mitigation is first a state responsibility. NewYork Governor Andrew Cuomo, kept drawing praise nationally for his “fireside chats” and Friday was given more credit because of the way he took ownership of the controversial shutdown of non-essential commerce in New York City and the rest of the state. “Blame me,” he said, adding if he saves one life he’ll be happy. “If the number doesn’t slow down, close the valve,” the governor said.

It was about the time of Cuomo’s order that oil prices headed back down with US West Texas Intermediate plunging 21% to under $20, at $19.84. Gold climbed 1.47% to $1501.10 late in the day.

In the neighbourhood of the bottom line, Italy’s death toll Friday reached 3,248, 627 of them Friday, with a public health system that analysts said is better equipped for mass casualties than the United States. Commercial considerations have limited US hospital beds to what’s needed for standard levels of demand and no more. Thirty percent of Italy’s cases are critically or severely ill. China’s percentage was 20%.

In Spain, 235 more deaths Friday brought that total to 1,002. In the UK, where deaths rose to 177, Prime Minister Boris Johnson ordered pubs and restaurants closed.

In the United States, where no one can yet say if the outcome will be Italy’s or South Korea’s or China’s, the death toll is 233. COVID-19 is now reported in 185 countries with total deaths of 11,370.

Colin Lambert

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