No matter what the doomsters say... the Coronavirus is not the end of the world. But, it might still have trigged the global economic reset we've long feared...
That the virus will abate is a simple matter of fact. Just as suddenly and quickly as it struck, it will feel like it fizzles out much faster than we expect. Its simple maths.
The modelers I'm working with show the Virus will peak in around 6-8 weeks, and then infections will start to fall. There will be future successive waves – which will be damaging and trigger market reactions before immunity is gradually built up. The virus will have a volatility all of its own. Understanding that will be key to understanding economic and market consequences.
Other models show similar results. Watching the various scenarios play out on cluster charts on the Laptop yesterday was fascinating – rings of infection creating walls of immunity, while the virus seems to sleep before exploding elsewhere. Understanding how the successive waves of the virus will trigger new clusters, how it hides, and especially how it will impact the economy is going to be ... educational.
Its complex math – but makes sense. Earlier this week, Rob Hillman, the quant behind the model I'm working with, confidently predicted UK schools would close. It happened. Next up is the rumoured London lockdown – and I hear 40 tube stations are closing this morning. Its not the end of the World – but it feels like it and its unprecedented.