26/9/20: Workers Should Brace Themselves for the post-COVID19 New World

 

My recent article on potential long-term impacts of COVID19 pandemic on corporate development and investment strategies for The Currency: https://www.thecurrency.news/articles/24259/workers-should-brace-themselves-things-will-only-get-worse. 

25/9/20: COVID19 Update: Nordics

 

Sweden is not acquiring the fabled 'herd immunity', folks. And other Nordics are now in a full-blown second wave of the pandemic:

As the figures above show, 

• Sweden has been experiencing a reduction in new cases through the first week of September. This resulted in Swedish daily case counts finally dropping below the numbers reported in other Nordic countries. 
• Since the start of September, Nordics ex-Sweden have entered the second wave of Covid19 pandemic, further exacerbating their relative position compared to Sweden.
• However, Sweden itself is now experiencing the second wave of the pandemic, and Sweden's historical troughs of new cases have remained always higher than the troughs reached by the other Nordic states.
• Both Sweden and the rest of the Nordics continue to enjoy low levels of deaths, however, in line with the numbers of new cases, Nordics ex-Sweden are showing signs of the new wave of the pandemic lifting deaths counts relative to the past troughs.

25/9/20: COVID19 Update: Russia

 

Russia is now experiencing the second wave of COVID19, although it is still in the early stages of this development:

Russia first started to impose lockdowns around March 2, which lasted through mid-June (an earlier partial lifting of lockdowns in Moscow took place in the first week of June). The lockdowns coincided with much lower daily cases and deaths than are being registered currently, but despite this, Russia is not currently planning to impose stricter controls on social activities in the wake of the accelerating pandemic numbers. The reason for this is the expressed hope that the recently-released vaccine against the COVID19 will be widely available to the general population by November 2020. The vaccine does not have an independent peer-validated confirmation of its effectiveness so far. 

Here is a table summarizing Russia's relative positioning compared to other BRIICS, the EU27 and the U.S.:

Note: data excludes China, for two reasons: (1) China's officially-reported case numbers are less than 100,000, and (2) I have zero credibility in China's officially reported COVID19 statistics, so while questions can and should be raised about robustness of data reported in BRIICS overall, China's data suggests an altogether novel levels of data manipulation compared to its peers.

25/9/20: COVID19 Update: Countries with 100,000 cases and higher

 Summary tables for 36 countries with 100,000 cases and above:

The U.S. continues to 'lead' the world in terms of sheer magnitude of the pandemic, followed by India, Brazil and Russia. The U.S. also continues to dominate the world tables in the numbers of people who died from the COVID19, followed by Brazil, India and Mexico. 

While the U.S. only accounts for 4.3% of the world population, it accounts for 22% of all cases of COVID19 and 21% of all deaths from the disease. 

Meanwhile, the highest per-capita rate of infections is registered in Quatar, followed by Panama and Peru. The highest per-capita deaths are in Peru, Bolivia and Brazil, while the highest mortality rate (deaths per confirmed cases) are in Italy, Mexico and the UK.

Out of all countries with 100K cases and higher, plus the EU27, as ranked based on three criteria (cases per capita, deaths per capita and deaths per case)

• The U.S. ranks 8th worst performer,
• The EU27 ranks 16th worst performer
• The U.S. ranks worse than any EU27 member state in the 100K table, with exception of Spain (ranked 3rd worst).

25/9/20: COVID19 Update: U.S. vs EU27

 

Updating U.S. and EU27 numbers for COVID19 pandemic for the last 7 days:

Per above chart, the U.S. continues to pull away from EU27 in terms of deaths per capita of population. However, as shown in the chart net, EU27 is now in a full-blown contagion wave number 2, with new cases exceeding prior (wave 1) peaks.

The increase in new cases in Europe is now also reflected in rising death counts. Current EU27 death counts are in excess of the numbers that triggered winter shutdown of the European economies.

Key takeaways from the above:

• EU27 is now in a full-blown second wave of the pandemic, with case numbers well in excess of anything witnessed during the first wave peak.
• As the result, in the last 10 days, EU27 new case numbers have surpassed the U.S. on 3 occasions.
• Despite this, overall counts of deaths in the U.S. remain above those in the EU27 (as been the case since July 12). Current excess gap at +59,010 up from +40,079 a month ago and +11,917 two months ago. The gap is still rising.
• EU27 death rate per capita has effectively flattened-out at around 303-308 per 1 million prior to August 2, 2020, but is rising once again since then (326.5 currently). U.S. deaths per capita continue to increase (619.9 currently).
• Put differently, current U.S. death rate per capita is 90 percent above that for the EU27 and this gap is still widening.
• Currently, adjusted for population differences, the U.S. has 96,000 more deaths than the EU27. Adjusted for later onset of the pandemic in the U.S., America's death toll from COVID19 is to-date is 100,500 higher than that of the EU27. 
• Adjustments for differences in demographics between the U.S. and the EU27 would increase the above numbers of excess  mortality even more, while adjusting for the state of public health in the U.S. (obesity, poor nutrition, neglect of chronic conditions etc) will reduce the number. While these factors cannot be directly accounted for in my estimates (I am sure, medical research will be able to do thus), I strongly suspect that the two factors will offset each other. Hence, excess mortality in the U.S. compared to the EU27 stands at around 95-100,000 people. All killed, to a large extent, by the inadequate public health system and policy responses in the U.S.

25/9/20: COVID19 Update: Worldwide Cases and Deaths

 

This week's update on worldwide numbers for the pandemic:

New cases are now trending up once again, as the world continues to experience the first wave of the pandemic. 

Meanwhile, new deaths remain relatively stable at highly elevated levels. The local trough in deaths counts that took place at the first week of June is now firmly surpassed and we are still close to the post-trough peak. 

The above conclusions are also confirmed by the growth rates which have ticked up significantly in the second half of September.

To see the trends more clearly:

Key takeaways from the above charts and tables:

• As of 12/09/2020, we have once again surpassed past all-time peak and are currently running at historical highs in terms of new cases.
• Local peak in daily deaths counts was attained in the first week of August. From then on, we are witnessing a mild moderation in daily deaths counts.  
• However, we are now past the prior moderation in the rates of growth in both cases and deaths, with the start of September marking a clear uptick in daily growth rates in both series.
• Current daily rates of growth are running in line with past peak periods averages (post-April) for new deaths, and above past peak averages for new cases.
• There is absolutely no evidence of any moderation in the global pandemic numbers, and there are alarming trends in the numbers coming from the geographies that have experienced the most severe first wave of the pandemic prior, namely Europe (see net post on this).

22/9/20: COVID19 Update: German Economic Growth Forecasts 2020-2022

 

Germany's ifo Institute published their forecasts for 2020-2022 today. These represent an improvement on Summer forecasts, but continue to show big impact of the COVID19 pandemic lasting beyond 2021:

Private consumption is expected to be 0.82 percentage points below 2019 at the end of 2022, and barely in line (0.78 percentage points above) with 2018 levels. GDP is forecast to reach 1.34 percentage points above 2019 levels in 2022. Employment levels are projected to stay below 2019 levels through most of 2022, and unemployment numbers are expected to stay above their 2019 levels through the entire 2022. General Government deficits will remain in 2020, 2021 and 2022.

Using pre-2020 trend growth, German economy would have been 1.66 to 1.85 percentage points ahead of the GDP levels now forecast for 2022, which means that under the current forecasts, we can expect recovery to the pre-COVID19 trend GDP by the end of 2024. This assumes ca 1.7 percentage points growth over 2023-2024 horizon, which may be quite optimistic, given prior trend growth rates of 0.975% pa. 

ifo forecasts note the state of economic uncertainty: "The degree of uncertainty in our forecasts is enormous because nobody knows how the coronavirus pandemic will develop, whether there will be a hard Brexit after all, and whether the trade wars will be resolved". Which, of course, highlights the environment of VUCA that we are living in.

18/9/20: COVID19 Update: Countries with more than 100,000 cases

 
Some descriptive stats and relative rankings for countries with the largest number of cases:

In terms of relative and population-adjusted performance metrics:

• The U.S. ranks 6th highest in the pandemic extent (number of positive cases per 1 million of population). The EU27 as a whole ranks 23rd highest.
• The U.S. ranks 8th highest in terms of deaths per capita (number of deaths per 1 million of population). The EU 27 ranks 14th highest.
• The U.S. ranks 18th highest in terms of mortality rates (deaths per case). The EU 27 ranks 7th highest. 
• The U.S. accounts for just 4% of the world's population, but the country accounts for 24% of all global cases, and 22% of all deaths. In comparison, the EU27 accounts for 6% of the world's population, 8% of all cases, and 16% of all deaths.
• U.S. country relative positioning across three metrics for comparison (32 sum score) is worse than that of the EU (44 sum score), Italy (35 sum score), Israel (64 sum score), Germany (70 sum score), France (37 sum score), and Canada (51 sum score).
• U.S. country relative positioning across three metrics for comparison is better than that of Spain (23 sum score) and the UK (29 sum score).

18/9/20: COVID19 Update: U.S. vs EU27

 

Updating charts for the U.S. and EU27:

• Deaths per capita: the U.S. has overtaken the EU27 since May 18, and the trend for the U.S. continues to be worse than that for the EU27.
• EU27 death rate per capita has effectively flattened-out at around 303-308 per 1 million prior to August 2, 2020, but is rising once again since then (321.7 currently).
• U.S. deaths per capita continue to increase (604.1 currently).
• Overall counts of deaths in the U.S. are now above the EU27, since July 12, with current excess gap at +55,593 up from +34,553 a month ago and +6,187 two months ago.
• Currently, adjusted for population differences, the U.S. has 92,384 more deaths than the EU27. 
• Adjusted for later onset of the pandemic in the U.S., America's death toll from COVID19 is to-date is 98,726 higher than that of the EU27.

Big news is that, as stated in prior updates, the EU is now officially in a second wave of pandemic:

Although deaths in the EU remain below prior wave peak, these are rising and, accounting for lags in new cases, are likely to continue to climb:

Meanwhile, the U.S. numbers are starting to show some indicative signs of re-acceleration. If confirmed, the U.S. will also join the EU27 in entering a second wave of the pandemic.

For now, the EU27 continues to exhibit better cumulative case counts and deaths counts than the U.S., in absolute terms and adjusted for population differences and vintage of the pandemic onset.

On a cumulated basis to-date, the U.S. public health system is now responsible for ca 92-99,000 excess deaths compared to the EU27 - deaths that would have been preventable were the U.S. policymakers to give a damn about public health system in America. This should be criminal, but sadly, it appears to be normal. 

18/9/20: COVID19 Update: Worldwide Cases and Deaths

 

Global cases are now once again on the rise and hitting new historical highs:

Daily deaths are running at elevated levels and showing signs of some uptick on the recent local lows:

As the result, both new cases counts and deaths growth rates are now positive and rising:

In summary, the pandemic continues to rage across the globe, without any moderation. Significantly, there is now a full-blown second wave underway in Europe (more on this later). 

17/9/20: Exploding errors: COVID19 and VUCA world of economic growth forecasts

 

Just as I covered the latest changes in Eurozone growth indicators (https://trueeconomics.blogspot.com/2020/09/17920-eurocoin-leading-growth-indicator.html), it is worth noting the absolutely massive explosion in forecast errors triggered by the VUCA environment around COVID19 pandemic.

My past and current students know that I am a big fan of looking at risk analysis frameworks from the point of view of their incompleteness, as they exclude environments of deeper uncertainty, complexity and ambiguity in which we live in the real world. Well, here is a good illustration:

You can see an absolute explosion in the error term for growth forecasts vs actual outrun in the three quarters of 2020 so far. The errors are off-the-scale compared to what we witnessed in prior recessions/crises. 

This highlights the fact that during periods of elevated deeper uncertainty, any and all forecasting models run into the technical problem of risk (probabilities and impact assessments) not being representative of the true underlying environment with which we are forced to work.  

17/9/20: Eurocoin Leading Growth Indicator 3Q 2020

 

Eurocoin, CEPR & Banca d'Italia leading growth indicator for Euro Area economy is pointing to renewed weaknesses in the Eurozone economy in August, falling to its lowest levels in the COVID19 pandemic period:

As the chart above shows, Eurocoin fell from -0.5 in July to -0.64 in August, its lowest reading since June 2009. The forecast September indicator is at -0.30. Through August, we now have five consecutive months of sub-zero readings. Based on July-August data and September forecast, we are looking at a GDP contraction of 3.5 percentage points in 3Q 2020. This is mapped out in the chart below:

As the chart above shows, average annual growth rate in the Eurozone for 2020 is now sitting at -6,33 percent, far worse than the previous low of -0.575 in 2009. In quarterly readings, we now have two actual and one forecast quarters of 2020 all performing worse than the peak of the Global Financial Crisis / Great Recession contraction (see green entry in the chart above).

As before the COVID19 crisis, Eeurozone economy is performing woefully. On no time horizon did Euro area manage to achieve average annual growth of 2% (chart above).