The coronavirus outbreak

Thinking out loud about the likely path forward of the outbreak, including discussion of disease progression.

At this point, the main points of uncertainty are:

  1. The mortality rate
  2. The reproducibility rate, R0, both in the absence of intervention, and especially given a particular intervention.
  3. The percentage of cases that are asymptomatic, and whether or not asymptomatic cases are infectious
  4. The percentage of cases that are transmitted before symptoms onset.
  5. The time between infection and symptom onset.

A running diary of academic studies and discussion of the above is included below:

  1. WHO Mission to China Report.
    1. R0 of 2 to 2.5, in the absence of interventions.
    2. Transmission is mostly within families. “In China, human-to-human transmission of the COVID-19 virus is largely occurring in families.”
    3. At least this report doesn’t seem to think that asymptomatic infection is important. “Asymptomatic infection has been reported, but the majority of the relatively rare cases who are asymptomatic on the date of identification/report went on to develop disease. The proportion of truly asymptomatic infections is unclear but appears to be relatively rare and does not appear to be a major driver of transmission.”
    1. Incubation period of 5-6 days
    2. Based on available information, the median time from symptom onset to laboratory confirmation nationally decreased from 12 days (range 8-18 days) in early January to 3 days (1-7) by early February 2020, and in Wuhan from 15 days (10-21) to 5 days (3-9), respectively.
    3. “China has a policy of meticulous case and contact identification for COVID-19. For example, in Wuhan more than 1800 teams of epidemiologists, with a minimum of 5 people/team, are tracing tens of thousands of contacts a day. Contact follow up is painstaking, with a high percentage of identified close contacts completing medical observation. Between 1% and 5% of contacts were subsequently laboratory confirmed cases of COVID-19, depending on location.”
  2. The Lancet, “Feasibility of controlling COVID-19 outbreaks by isolation of cases and contacts”
    1. With a given reproducibility rate (R0), whether or not an outbreak can be prevented depends upon if contacts can be traced and isolated.
    2. Another important factor is the percentage of cases that are transmitted before symptoms onset. This paper assumes 15%.
    3. Finally, the percentage of cases that are asymptomatic (subclinical) is important. The paper assumes there are 10% subclinical cases.
    4. With an R0 of 1.5, outbreaks can be contained as long as 50% of contacts can be traced.
    5. With an R0 of 2.5, outbreaks can be contained as long as 70% of contacts can be traced.

3. Experiment in Town of Vo — everyone was tested, twice. First time around, 50% of cases were asymptomatic!

4. Estimating the infection and case fatality ratio for COVID-19
using age-adjusted data from the outbreak on the Diamond
Princess cruise ship
. On the cruise ship, half of all cases were asymptotic.

5. Center for Mathematical Modeling of Infectious Disease. A number of interesting estimates:

  1. Percentages of pre-symptomatic transmission.

6. Mortality rate of Corona Virus — mortality rates of 1.5% ?

7. In the US, 40% of Coronavirus hospitalizations are for young people. Elderly still the majority of mortalities.

8. What is the secret to South Korea’s success? 74 cases March 18th down from 909 at the peak. Done so without taking authoritarian measures. Tested more than 270,000 people. This, along with contact tracing, and case isolation.

Still early, because a lot of their cases were within one church group.

Earlier experience with Mers showed laboratory testing is the key.

Korean Center for Disease control developed tests, cooperated with diagnostic manufacturers to develop commercial test kits.

Close contacts and those with minimal symptoms whose family members are free of chronic diseases and who can measure their own temperatures are ordered to self-quarantine for 2 weeks. A local monitoring team calls twice daily to make sure the quarantined stay put and to ask about symptoms. Quarantine violators face up to 3 million won ($2500) fines. If a recent bill becomes law, the fine will go up to 10 million won and as much as a year in jail.

Still, the numbers of new cases have dropped the past 2 weeks, aided by voluntary social distancing, both in the Daegu-Gyeongbuk region and nationwide. The government advised people to wear masks, wash their hands, avoid crowds and meetings, work remotely, and to join online religious services instead of going to churches.

The government hopes to control new clusters in the same way it confronted the one in Shincheonji. The national testing capacity has reached a staggering 15,000 tests per day. There are 43 drive-through testing stations nationwide.

9. Hopelessly ineffective CDC, FDA responsible for scale of pandemic. These broken organizations will be impediments during the current crisis.

Coronavirus storyline #10: unemployment

March 24

Latest numbers below. For a number of states we are starting to get the full picture. Total of 2,265,108 claims from 37 states. Best estimate for total claims for all 50 states is 3.8 million.

StateTotal New Claims Source
Alabama9,000 Source
Alaska4,046 Source
Arizona 29,000 Source
Arkansas10000 Source
California742,000 Source
Colorado28,000 Source
Connecticut72,000 Source
Delaware10,000 Source
DC7,000 Source
Georgia27000 Source
Hawaii4,500 Source
Illinois64,000 Source
Indiana54,000 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan108,710 Source
Minnesota95,000 Source
Montana4,820 Source
New Hampshire34000 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina 113,002 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
South Carolina10000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
West Virginia4000 Source
Wisconsin70,000 Source

March 23rd

Latest numbers below. For a number of states we are starting to get the full picture. Total of 2,087,000 claims from 37 states. Best estimate for total claims 3.8 million.

StateTotal New Claims Source
Alabama9,000 Source
Alaska4,046 Source
Arizona 29,000 Source
Arkansas10000 Source
California564,000 Source
Colorado28,000 Source
Connecticut72,000 Source
Delaware10,000 Source
DC7,000 Source
Georgia27000 Source
Hawaii4,500 Source
Illinois64,000 Source
Indiana54,000 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan108,710 Source
Minnesota95,000 Source
Montana4,820 Source
New Hampshire34000 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina 113,002 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
South Carolina10000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
West Virginia4000 Source
Wisconsin70,000 Source

March 22nd

Updated data below. For the 29 states I have data, there is a total of 1,822,979 new unemployment claims over the past week. However, of the 29 states, some states only report claims for a few days. If I assume the average claims of the non-reported days are the same, this comes out to 2,800,000 claims for the week for the 29 states. This is about 2.5% of the total civilian labor force in these states. Applying this number to the non-reporting states, this gives a total of 4,146,920 new unemployment claims for the week.

This calculation assumes that (i) for states that have reported, non-reporting days are similar to reporting days, and (ii) states that have not reported are similar to states that have reported.

StateTotal New Claims Source
Alaska4,046 Source
California564,000 Source
Colorado28,000 Source
Connecticut72,000 Source
DC7,000 Source
Hawaii4,500 Source
Illinois 64,000 Source
Indiana22,583 Source
Kansas11,355 Source
Kentucky17,230 Source
Louisiana47,000 Source
Maine4,900 Source
Maryland5000 Source
Massachusetts19,884  
Michigan55,000  Source
Minnesota 95,000 Source
Montana4,820 Source
New Jersey 15,000 Source
New Mexico10,879 Source
North Carolina83,000 Source
Ohio140,000 Source
Oklahoma5,986 Source
Oregon18,000 Source
Pennsylvania353,664 Source
Rhode Island43,000 Source
Tennessee6,092  
Texas61,500 Source
Virginia14,540 Source
Wisconsin45,000 Source

March 19

Latest figures. The total from 21 states (sum doesn’t include NY and TX which are listed below) is 883,047, but keep in mind many states have only reported a few days of claims.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island (2nd source) 6,282 on Monday, and 17,779 in the last 8 days. Now, 30,000 in the last 9 days. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday, 21335 Tuesday, 33,238 Wednesday . Compare with 562 last Sunday.
  4. Connecticut (2nd source) (3rd source) Friday 2000, Sat & Sun 8000, Mon 10,000, Tuesday 10,000 , Wednesday 12,000. Now 56,000 for the week.
  5. Hawaii 1500 on Monday, 3000 on Tuesday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota (2nd source) 31,000 on Monday and Tuesday, more than 10 times total from last week. 50,000 on Wednesday
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky (2nd source) 9,000 on Tuesday, compared with normal 2,000 / week. Sunday through Tuesday, 17,230
  12. Pennsylvania (2nd source) 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March. Now, total is 121,000 online applications. Now 180,000 Tuesday, Wednesday, Thusrday. 
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.
  15. Louisiana (2nd source) (3rd source) 3,600 on Monday and Tuesday, compared to 1,698 for week ending March 7. New source says 11,000 on Tuesday. New source 30,000 since Sunday.
  16. Maine 4,900 Sunday, Monday and Tuesday, more than March of 2019
  17. New York Office receive 21,000 calls by noon Tuesday, compare with 2,000 calls total last week
  18. Illinois 41,000 on Tuesday and Wednesday, compared with 4,500 same two days 2019
  19. North Carolina 4,700 Monday and Tuesday, compared to normal 3,500 per week
  20. Oregon 18000 on Tuesday March 17, compare to 800 Sunday March 15
  21. California Sunday, 40,000, Monday 70,000, Tuesday 80,000, compare to normal 2,000 daily
  22. DC 7600 since Monday
  23. South Carolina Increase of 400 percent
  24. Oklahoma 846 Monday, 1,994 Tuesday, 3,146 Wednesday

March 18

Updated state unemployment numbers. If you have more please send a comment or email.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island 6,282 on Monday, and 17,779 in the last 8 days. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday. Compare with 562 last Sunday.
  4. Connecticut 30,000 since Friday, compared with a typical 3,000 per week.
  5. Hawaii 1500 on Monday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota 31,000 on Monday and Tuesday, more than 10 times total from last week. Now 50,000 for the week.
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky 9,000 on Tuesday, compared with normal 2,000 / week
  12. Pennsylvania 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March. Now 120,000 for the week.
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.
  15. Louisiana — 3,600 on Monday and Tuesday, compared to 1,698 for week ending March 7.
  16. Maine 4,900 Sunday, Monday and Tuesday, more than March of 2019
  17. New York Office receive 21,000 calls by noon Tuesday, compare with 2,000 calls total last week
  18. Illinois 41,000 on Tuesday and Wednesday, compared with 4,500 same two days 2019
  19. North Carolina 4,700 Monday and Tuesday, compared to normal 3,500 per week
  20. Oregon 18000 on Tuesday March 17, compare to 800 Sunday March 15
  21. California Sunday, 40,000, Monday 70,000, Tuesday 80,000, compare to normal 2,000 daily

WSJ: Layoffs are beginning

March 17: Numbers are starting to trickle in and they don’t look good.

Slate: Unemployment filers are overwhelming state systems.

WSJ: State unemployment sees surge in claims.

US Survey: 18% have hours or job cut due to coronavirus.

A round up of state by state unemployment rates.

  1. Colorado 3,900 on Monday, 6,800 Tuesday as of 10:00 am. Compare with 400 last Monday.
  2. Rhode Island 6,282 on Monday, and 10,000 in less than a week. Compare with 10 last week
  3. Ohio 12,000 on Sunday, 36,645 Monday. Compare with 562 last Sunday.
  4. Connecticut 30,000 since Friday, compared with a typical 3,000 per week.
  5. Hawaii 1500 on Monday, compared to 300 last Monday.
  6. Mass Monday, 19,884 filed, compare with 17,382 entire month of February.
  7. Tennessee 6,092 since March 8, compare to 2,031 previous week
  8. Minnesota 31,000 on Monday and Tuesday, more than 10 times total from last week
  9. New Jersey 15,000 on Monday.
  10. Michigan 5,400 on Monday, compared to 1,300 normal
  11. Kentucky 9,000 on Tuesday, compared with normal 2,000 / week
  12. Pennsylvania 50,000 on Monday, more than 50,000 on Tuesday, compare to 14,000 first week of March
  13. Texas 16,000 last week, compared with 4,500 the previous week
  14. Maryland 5,000 on Monday, a five-fold increase.

Reuters: Norway unemployment jumps from 2.3% to 5.3%

Coronavirus storyline #9: manufacturing

March 17: The data is sparse of course at this point. One data point is the New York Manufacturing survey, where an overall index of activity fell by 34 points, the largest fall ever and similar to level seen during the Great Recession.

In Europe many factories are shutting down, either because of the virus or because of supply chain disruptions. France’s PSA (Peugeut, Opel, etc) is closing all European plants. Michelin is shutting factories in France, Italy, and Spain for a minimum of one week. Volkswagen is set to shut its main plant within days because of supply chain issues.

WSJ: Manufacturing continues to hum along. Companies are staggering shifts.

FT: UAW calls for two week halt in US production.

Coronavirus storyline #8: government support for companies and industries

March 17: On the table in the United States $50 billion for airlines. Many industries are coming to the table asking for handouts.

  1. Casino industry
  2. Cruise ships and hotels could be on the table as well.
  3. Tourism industry asks for $150 billion.

There can and should be resistance to the government just handing out cash to the corporations. See this nice Op-Ed by Tim Wu. For years airlines have abused their market power to saddle consumers with absurdly awful service, high feeds, and low quality, while making record profits. Instead of saving the profits for a rainy day, they have saddled the companies with debt, and used most of their cash flow for dividends and buybacks.

In France, a number of packages are being considered: €32 billion in deferred tax and social security, €8.5 billion for two month payments to workers temporarily laid off, €300 billion for bank loans for businesses.

Coronavirus storyline #5: debt markets

Commercial paper

The market for short term commercial paper is freezing up. The difference between the three-month commercial paper interest rate and the benchmark government overnight indexed swap rate increased to over 1 percentage point, from 0.24 points at the start of the month. Total amount of commercial paper outstanding is $1.1 trillion.

March 17: Fed launches $10 billion fund to help liquidity in commercial paper.

Bank Lending

Bank lending is also freezing up. Overnight interest spread for between bank lending is increasing.

High yield debt

The performance of corporate bond markets has held up surprisingly well. The S&P high yield bond index is down about 13% as of March 16. The cost of insuring bonds against default, however, has been rapidly increasing

Municipal bonds

Muni bond market is doing okay, only off 1.2% as of March 16.

Coronavirus storyline #6: housing market

March 22

Mortgage rates still above 4%.

March 18

Mortgage rates remain elevated.

Fannie and Freddie suspend Mortgages for 60 days.

Redfin CEO: Housing is down, but from high levels. Interesting commentary on Mortgage market: “One bullet that the government fired to help housing this week didn’t hit its mark. Even as the Federal Reserve has lowered the federal funds rate to zero, mortgage rates have increased about 30 basis points, from a low of nearly 3% in early March. Money has only gotten cheaper, but the people originating loans can’t keep up with demand; volume is so high that lenders are taking profits.”

March 16

Although interest rates have been pushed to the zero lower bound, mortgage interest rates seem to be increasing, at least for now. The reason is that banks don’t want to hold the mortgages, and nobody wants to hold mortgage backed securities. Spread between 10 year treasury and mortgage rates is now over 3 percentage points.

Although mortgage rates are increasing, it seems that mortgage refinancers are not yet informed about this, and they are submitting refinance applications at a record place.

March 17: Mortgage rates now dropping, down to 4.1%.

Coronavirus storline #4: Airlines

March 16 – Airlines are in trouble and already there is talk of a $50 billion bailout. International travel is at a standstill, and companies are canceling routes at a furious pace. United Airlines is cutting its flying in half in April and May.

This of course brings back memories of the post 9/11 airline bailouts, where the government handed out $5 billion in cash to airlines and billions more in subsidized loans, insurance payments, and other benefits, although not all of the loans were used up. It should be noted that several airlines went into bankruptcy around that time, including United Airlines and US Airways.

March 17 – In the $850 billion bailout proposal, it seems there is $50 billion for airlines.

Coronavirus economic storylines

The public health story line is, of course, the most crucial of all. But on the economic front, there are a number of important storylines to follow. This thread will be updated regularly.

Last updated: March 18th, 9:20 am.

Markets

  1. Stock market. Down 30% so far, wiping $9 trillion off household balance sheets, including $1 trillion from 401ks.
  2. Corporate bond markets broadly down. Freezing of asset markets, especially for corporate debt and commercial paper. Pressure on credit markets.
  3. Oil and gas: oil prices down about 50%. At the pump, price per gallon drops from around $2.50 to around $2.25.
  4. Housing market. Although interest rates have been cut, mortgage rates aren’t declining much at all, due to the fact that mortgage issuers don’t want to hold the mortgages, and nobody is buying MBS. Effect of mortgage rates.

Industries

  1. Restaurants are struggling to survive. 5 major cities and several states have shuttered all restaurants. Foot traffic down 50% in many cities. Many restaurants going out of business and laying off workers.
  2. Retail: many stores closed until end of March. As of yet, still paying workers. Most online stores staying open.
  3. Oil and gas firms. Oil prices fell from ~$60 a barrel to ~$30. Many US fracking companies will go bankrupt.
  4. Sports, entertainment, tourism. Sports canceled. Concerts and major events canceled. Worst box office weekend in 20 years. Tourism in free-fall. Hotels laying off workers.
  5. Airlines. Travel from Europe shut down, number of routes flown halved. Talk of a $50 billion bailout.
  6. Manufacturing is doing relatively better than services in the US, but sentiment is dropping, and factories in Europe are shutting down.
  7. Online retail. Amazon to hire 100,000 workers.

Government Response

  1. Monetary policy. Federal reserve cut interest rates to zero (the lower bound?) Quantitative easing is started.
  2. Fiscal policy is still in its early stages. Trump proposes $850 billion stimulus, possibly including direct cash transfers. Small House Coronavirus bill still struggles to be passed.
  3. Support for companies: airlines, hotels, and casinos asking for bailouts, but there is strong pushback.

Consumers

  1. Overall spending, still little data. In Seattle, consumer spending with credit cards down 10%. Driven by hotels, movie theaters, restaurants. Spending on childcare, health care up big.
  2. Low interest rates leading to increase in applications for mortgage refinancing.
  3. The one high point of consumer spending is the effect from consumers stocking up. Many shelves have been emptied, especially for toilet paper and cleaning supplies.
  4. A second high point of the virus is an increase in online spending. Amazon will try and hire 100,000 workers.

Workers

  1. Unemployment numbers trickling in. Large daily jumps in Rhode Island and Ohio. One survey finds 18% of workers have lost hours of jobs.
  2. Risk of being infected on the job. Manufacturers are spacing their workers further apart, hurting productivity.
  3. Productivity while working from home?

China and Italy

  1. China and Italy. China had a large contraction in January and February.

Coronal storyline #3: retail

March 18

From Neil Saunders: 14% of retail shops in the US are closed or closing.

March 16

Data from China for January and February has just come in, and retail sales have dropped 20.5% year over year. This could be a preview of what is happening in the US, as many stores are now closing at a furious pace. USA Today has a roundup:

  1. Apple is closing all stores outside of China until March 27. Employees will continue to be paid. The online store will be open.
  2. Patagonia similarly is closing stores until March 27, and continuing to pay its workers. The online store will be closed as well.
  3. Nike will be closing stores until March 27th.
  4. lululemon, Abercrombie & Fitch, Lush, and Urban Outfitters are likewise closing their stories.
  5. Columbia Sportswear, REI will likewise close. Roundup from Neil Saunders.

At least so far, the stores are continuing to pay employees. If stores remain closed past March 27th, this may change of course.

Malls, department stores, and other establishments are also cutting their hours, even if they are staying open.

On the flip side, sales at grocery stores and big box retailers have been boosted by people stocking up on supplies. Many shelves have been picked clean at Costco, and other stores are having to close early so the shelves can be restocked. There has been a “run” on every day staples such as toilet paper and hand sanitizer. It is unclear how long this panicked buying will last.

CNN: Walmart having trouble keeping shelves stocked