@pdxsag Post on Covid and Reopening

[Update from our correspondent @pdxsag.]

We are at the one year anniversary of WuFlu. Of course, the natural human inclination is to look back and ask, “what have we learned.” I'm not going to be that guy. Except, well, maybe to mention my late May 2020 estimate of 300k Covid deaths by the end of the year vs. 350k actual was closer than any of the TV experts predicted.

I can't exactly dunk on anyone though. I expected a baby boom, and that did not happen. Indeed, Oregon, for the first time ever, had more deaths than births in a calendar year. Ignoring immigration, which was still positive, Covid did tip the state into NPG (negative population growth). Interestingly, while excess deaths were almost 4k above the 5 year average, official Covid deaths were less than half that total, 1697. (1)

It should also be said Oregon has the fourth lowest Covid mortality rate in the US. I suspect this is owing to climate and population demographics more than anything we did or didn't do. It certainly was not mask mandates and stay-at-home orders (twit). Vermont and Hawaii were tied for lowest at 29 per 100k. Alaska next with 38 per 100k. Then Oregon and Maine tied at 47 per 100k.

With regard to population demographics, Portland, which is the one region in Oregon with the population density sufficient to sustain an actual epidemic, is relatively young and fit owing to Oregon's perennial popularity for in-state immigration over the last 25 years.

On the climate angle, Eastern Oregon, which is where it gets both hot and cold enough for central heating and cooling to be significant for seasonality, is very thinly populated. Within the Willamette Valley, the climate is too mild to see either of the summer or winter seasonality that we saw in the sun states or New England, Great Plains, upper Midwest, etc. If the nation wasn't so obese, I suspect we'd have seen a line extending from Oregon through Colorado, Kansas, Missouri, the southern Big 10 states and into North Carolina where Covid ended up being of little significance.

Nonetheless, negative population growth in a younger and fitter than average state with one of the lowest Covid mortality rates... Feels bad man.

Well, we are about looking ahead at CBS, and the question at hand is what do we expect for 2021. While I am loathe to make predictions on how international-NGO's, media, governments, and ultimately the populace at large will act and react from now until 2022, the epidemic itself is decidedly in the wind-down stage.

Like them or hate them, the mRNA vaccines are remarkably, incredibly effective. They might be the biggest win against infectious disease since the discovery of antibiotics. The irony between a completely novel mRNA vaccine being developed and released in 9 months, and the scurrilous crack-pot conspiracy theory that SARS-Cov-2 could be bio-engineered in a research lab is left as an exercise for the reader.

Israel is unabashedly setting the standard for effectiveness in a vaccine campaign. Their execution rivals the US circa 1950's. Don't ask why. The important thing to note is that two months into their campaign – one month for vax's to get to a widely distributed plus one month for immunity to develop in the vaccinated individuals -- the infection rate is dropping fast, and fastest among the over-65 demographic that were allowed first in line for vaccination (Segal). With another month of this, we might be using Israel to suss out exactly where the inflection point for herd immunity lies.

In the US and Europe, it's been the much slower game of natural seasonality taking over. Vaccines have been rolling out to be sure, West Virginia and Alaska are the best in the US, but they are the outliers. Don't ask why. Oregon, again with which I am most familiar, had our mortality rate peak in the first week of December. Backing up about one week to account for mortality lagging hospitalization, and one more week to account for hospitalization lagging infection, we can deduce the infection peak was 1-2 weeks prior to Thanksgiving. For week ending January 24, 2021, the latest week in which data is available, the mortality rate is now below the first week of November, which was when the fall flu season first began showing up in the mortality statistics. Even in California, the infection rate peaked prior to Christmas. The widely feared superspreader events from families gathering together over the holidays was entirely a media sensation.

If US and Europe is not enough to convince you the worst is behind us, India does not have a vaccination program and has been relying on cheap and boring old Ivermectin for treatment. News this week is that India has had around half the population infected and herd immunity is beginning to kick-in (Times).

All of these point to the economy re-opening soon. The equity markets appear to be in wild agreement. Energy, especially oil producers and refiners, have been bid, as have inflation plays like mining companies.

For students enduring remote learning and small business owners in the service sector, however, probably not too soon.

There's still a vaccination program to get firing on all cylinders. Also, an economic stimulus package to get through Congress to give the economy its own shot in the arm too. With a week of impeachment theater scheduled in the Senate it's necessarily going to be on the back burner for at least one more week.

But you can see how Biden has a bit of a needle to thread here timing-wise. He doesn't want to wait too long or Congressional Republicans might have an excuse that the virus is well behind us and we don't need a big stimulus package after all. Conversely, if Biden gets too much in front of the vaccination program and are people still sitting at home worrying about catching a communicable disease, he runs the risk that most of the stimulus direct cash transfers end up in coins – silver or Bit, doesn't matter. Neither is a strong multiplier of economic growth.

Using Israel as our model, if you assume the vaccinations finally hit their stride in February, and then allow another month for immunity to develop, it's probably late March/early April when spring fever hits the nation in full. The Covid-marms will have had their last hurrah shaming anyone considering heading to places sunny and warm for Spring Break in March, but I don't think it will be enough to change the plans of anyone that's already made up their mind. By April those that left town for Spring Break will be home long enough to come to the realization they are done being kowtowed. The Covid-marms will claim they fought the good fight, they held the line on Spring Break, and now they can declare victory. The war is over. The vaccinations give everyone their “because reason” rationalization. Spring has sprung. It is the season of new birth and new beginning. Not everyone will be completely convinced, of course. But Democrats are in charge now and they know better than to let Covid get hung around their necks like a rotting albatross for the next 2 years.