12/12/20: Hungary's risk improvement in peril

 My comment for Euromoney on changes in sovereign risk profile for Hungary: https://www.euromoneycountryrisk.com/article/b1pjjpq2xr2bfy/hungarys-risk-improvement-in-peril-as-it-bites-the-hand-that-feeds-it. 

10/12/20: U.S. Labor Markets Update: America's Scariest Charts

Continued unemployment claims are running below the 2008 GFC peak for the third week in a row, but adjusting to pre-Covid19 cycle unemployment roughs, we are still ways to go:

Despite making some serious inroads in reducing unemployment, U.S. labor markets are still half-alive and things are starting to look shaky:

• Latest weekly change in continued unemployment figures is an increase of 230,000 - the first rise in 13 weeks.
• Pre-Covid19 trough was at 1,702,000 continued claims. We are currently at 5,757,000.
• Compared to pre-recession 12 weeks low, current unemployment claims are 334% higher or more than 3.3 times higher.
• New claims are also rising: the latest confirmed data is a weekly increase of 23,977 - the largest in 5 weeks.
• The latest preliminary data shows new claims up +228,982 in the week of December 5th, based in States' data.

Meanwhile, labor force participation rate is weak: down from 61.7 in October to 61.5 in November. Which is below 2020 average of 61.8, which itself is not impressive. And employment to population ratio is down from 57.4 to 57.3 in November too. Woeful:

Average duration of unemployment is rising:

And jobs creation is effectively stagnant:

Thus, in summary we have:

• An uptick in new unemployment and continued unemployment
• Decline in labor force participation
• Anaemic jobs additions
• Falling employment as a share of population
• Widening duration of unemployment

Things are not getting 'back to normal'. 

4/12/20: COVID19 Update: U.S. vs EU27

EU27 vs U.S. comparatives for COVID19 pandemic to-date:

• The U.S. retains higher death rate per 1 million population (844.6), than the EU27 (624.4). 
• Current U.S. death rate per capita is 35% above the EU27, though this gap is still closing (it was 42% a week ago).
• Gross counts of deaths in the U.S. >> the EU27 over 12/07 - 1/12.  This was reversed on 2/12, with total EU27 deaths currently at 278,914 vs the U.S. 276,316. 
• Adjusting deaths to account for a 1 week lag in the onset of pandemic in the U.S., relative to the EU27, current U.S. deaths are 21,435 above those in the EU27
• Adjusted for population and pandemic timing differences, the U.S. deaths are 77,048 above those in the EU27.
• While the EU27 led the U.S. in new deaths and case counts through 20/11, since then, the U.S. has retaken the lead in new cases counts. 
• Daily deaths counts in the U.S. are now expected to start exceeding those in the EU27 once again.

Starting with 20/11/2020, the U.S. once again overtaken the EU27 in the number of daily reported cases, based on 7-days moving average:

The data above is yet to reflect massive potential contagion event of Thanksgiving travel in the U.S. and the related movements of students from and back to the colleges and universities that allowed in-person teaching in the Fall 2020 semester.

Shorter lags between contagion and diagnosis of COVID19 cases imply longer lags between new cases arrivals and hospitalisations, which in turn further elongates the lags between new cases detection and associated deaths counts. This is clearly evident from comparing the following figure dynamics with prior figure dynamics:

Put differently, current better performance by the U.S. compared to the EU27 in the second wave of the pandemic in terms of daily deaths counts is unlikely to remain for much longer. EU27 daily deaths trend appears to have peaked about a week ago, while the U.S. deaths trend remains upward-running. 

Little comfort for the wicked... right? 

As the chart above shows, even with more favourable deaths dynamics during the current wave of the pandemic, the U.S. deaths per capita remain horrifically above those in the EU27. Worse, over the last four days, we are seeing some tentative signs that the EU27 daily deaths counts might be moderating. Meanwhile, the opposite is taking place in the U.S.

4/12/20: COVID19 Update: Countries with > 100,000 cases

As of today, 67 countries around thee world have registered > 100,000 cases of COVID19. Here are the summary tables of core statistics covering these countries:

Summary stats:

Since the start of the second wave of the pandemic in Europe, EU27 are now once again having higher share of contributions to overall death counts (18.5% of world's total) than the corresponding share for thee U.S. (18.3%). Actual gap is 0.172 percentage points. However, in more recent days, EU27 new case numbers have been falling, while those in the U.S. continue to rise. This suggests that in weeks to come we are likely to see another reversal in deaths shares.

Just two weeks ago, combined share of global deaths accounted for by G7 countries plus Spain stood at 34.5%. Today, it is at 35.0%. For the U.S. the number shifted from 18.6% to 18.3% currently, while for the EU27 it rose from 16.6% to 18.5%. This clearly highlights the shift in the pandemic impact toward Europe in the last two weeks.

U.S. mortality rate from COVID19 has moderated over the last two weeks, falling from 21.9 deaths per 1,000 cases to 19.54. For the EU27, mortality actually rose from 23.0 to 23.3.

Overall, the worst performing country across three metrics of cases per capita, deaths per capita and deaths per 1,000 cases is Belgium, followed by Peru and Spain. Italy ranks the fourth, Argentina the fifth and the UK ranks the 6th worst performer,

The U.S. ranks 7th worst and the EU27 ranks 21st worst. 

24 countries have more than 500,000 cases and 14 have more than 1,000,000 cases. The U.S. is the only country with more than 10,000,000 cases at 14,139,703. The second largest number of cases is in India at 9,571,559. Brazil is the third with 6,487,084 cases. Only seven countries recorded more than 50,000 deaths so far, of which four recorded more than 100,000 deaths. The U.S. has the largest number of total COVID19-linked deaths in the world (276,316), followed by Brazil (175,270) and India (139,188).

4/12/20: COVID19 Update: Worldwide Cases and Deaths

 Updating data for COVID19 pandemic worldwide:

Global number of daily new cases was on an upward trend through July 2020. In August, new daily case additions have been relatively flat. However, since the start of September, new daily case numbers have risen once again, implying that Global Pandemic is yet to attain its first overall peak.

New daily cases have appeared to peak for the current wave of the pandemic around November 21. However, since the start of December, 7 days moving average has resumed its upward momentum. This implies that we must exercise extreme caution in interpreting end of November timeline for the peaking of the second wave.

The chart above clearly shows the difficulty in interpreting global peak of the pandemic. Overall, notionally, we have experienced what appears to be three waves: 

1. Wave 1 peaked around April 9th and the first trough took place around the end of April.
2. Wave 2 started from the first days of May and peaked between August 1 and August 14.
3. Wave 3 started from the second trough of August 27-29th and has (to-date) peaked around November 21.

However, statistically, neither Wave 1 nor Wave 2 attained a true peak, as post-local peak troughs were to shallow to genuinely mark a statistically significant deviation from each prior local peak.

In other words, there is little in the data to allow us to call the aforementioned Waves 1 & 2 as genuinely distinctive waves of the pandemic.

The above aside, back to data: looking at the daily deaths rates

Unlike new cases, daily deaths show more distinct waves patterns. Specifically, 

1. Wave 1: peaking around April 22 generated a post-peak trough around June 3 that is statistically significantly below the peak values. This defines a statistically valid wave.
2. Wave 2: starting from around June 7 and peaking around August 13. This wave ended in a trough of September 22 which is not statistically significant at 95% confidence level. This means it is harder to call this a genuine wave.
3. Wave 3: starting from around October 23 and currently still accelerating. There is zero doubt that this is a well-defined wave.

Looking back at the more current data, deaths counts are rising steeply, with some slight moderation in the last few days. This moderation in the growth rates is highlighted in the chart below:

It is important to contextualise the above chart before drawing any conclusions. Growth rates in both deaths and new case counts have moderated. But this moderation is coming off extremely high levels in both time series. Put differently, suppose we start at a value of 100 and grow by 20% in one period. This means one period rise is 20% * 100 = 20 units. Suppose we start instead at 300 and grow by 10% in a period. This implies increase in units of 10% * 300 = 30 units. 

With this in mind, even moderated rates of growth wee have witnessed since the start of December are worrying. Here are two tables summarising monthly statistics for bot cases and deaths and growth rates statistics in both new cases and deaths. 

In summary, the pandemic continues to rage and it appears that much welcomed moderation in the new cases dynamics witnessed in the last week of November is unlikely to hold. Worse, within a week, we will be going into pre-holidays mode around the world and in the U.S. we will be also experiencing lagged cases uplifts due to Thanksgiving travel. 

Stay safe everyone: December will be a hellish month.

3/12/20: Ireland PMIs: November

 

Ireland PMIs are out for November and they show the impact of the re-amplification of COVID19 impacts on the economy.

Services PMI fell from 48.3 in October to 45.4 in November, the lowest reading in 5 months and the third consecutive monthly reading sub-50. The pandemic period average is now at 39.3.

Meanwhile, Manufacturing PMI rose from 50.3 in October to 52.2 in November, marking the second consecutive month of readings above 50.0 mark. Pandemic period average is now at 48.2. 

Construction sector PMI (through mid-November) is at 48.6 - marking third consecutive month of sub-50 readings.

As the chart below illustrates, Manufacturing is the only sector that is providing growth momentum in the economy and much of that is down to multinationals. In services sector, activity of multinationals (which are doing well) is more than offset by continued declines in activities of domestic enterprises. 

Composite PMI posted a third consecutive month of sub-50 readings at 47.7 down from 49.0 in October. Markit's Composite PMI is calculated based on manufacturing and services indices. To rebalance the overall activity measure to include construction PMIs, I calculate my own 3-sectors index which is based on each sector contribution to Ireland's gross value added. With economic activity shifting toward manufacturing during the Covid19 pandemic, this index is becoming more weighted to reflect manufacturing sector PMI, hence the 3-sectors index rose in November to 50.2 from 49.7 in October.

Overall, the PMIs and my 3-sectors index are all pointing to entrenchment of the Covid19 pandemic headwinds in the Irish economic activity in November. 

29/11/20: Bubblishiousness

 

Illustrating FOMO and Bubblishiousness vs Reality: Tesla

Source: https://twitter.com/michaeljburry/status/1333110859329990661?s=20

Ya kidding me, not... It's like 10:0 score right now...

19/11/20: COVID19 Update: Nordics & Sweden

 Updating comparatives for Nordic countries:

New cases are blowing up in Sweden and are now on the declining trend in the rest of the Nordics. Charts above are showing Nordic countries adjusted for population size differences to Sweden. 

18/11/20: COVID19 Update: Russia

 Updating pandemic data for Russia: some summary stats first

The above stats clearly show that Russian pandemic is in  full-blown second wave of infections and deaths. As the chart below illustrates, however:

• Russian second wave has been associated with exactly matching dynamics in both cases and deaths without any substantial lags;
• Both cases and deaths are yet to show any signs of stabilization and peaking (which is distinct from the EU27 experience so far);
• The two effects combined suggest that Russian pandemic numbers are likely to continue to worsen into December.

You can see more Russia summary stats and comparatives to other countries here: https://trueeconomics.blogspot.com/2020/11/181120-covid19-update-countries-with.html. 

18/11/20: COVID19 Update: U.S. vs EU27

Comparatives for the pandemic development across the EU27 vs U.S.:

Thanks to an absolutely savage second wave of the pandemic, EU27 is now closing the gap with the U.S. in terms of total deaths, both in absolute terms and in per capita terms:

• Deaths per capita: the U.S. has overtaken the EU27 since May 18, and the trend for the U.S. continued to be worse than that for the EU27 until early October.
• EU27 death rate per capita has effectively flattened-out at around 308 per 1 million prior to August 2, but has been rising once again since then (498.1 currently).
• U.S. deaths per capita continue to increase (760.1 currently).
• The U.S. & EU27 are in 3rd (U.S.) and 2nd (EU27) waves of infections. Since Oct 1st, EU27 cases have surpassed the U.S. on all but 3 days & deaths on all but 16 days

The trends are horrifying, albeit in the EU27 we are now seeing potential decline in cases from the second peak. The U.S. appears to remain on the increasing trendline in terms of new cases: 

As the U.S. 3rd wave of new cases is blowing up, and the EU27 2nd wave appears to be subsiding, we are likely to see deaths accelerating once again in the U.S. and falling in the EU27, so the deaths gap between the U.S. and the EU27 is likely to revert back growing excess U.S. deaths.

• Overall counts of deaths in the U.S. are now above the EU27, since July 12. 
• Current excess gap is at +46,983, which is down on peak excess deaths gap of 68,152 attained a month ago. 
• Adjusted for population and pandemic timing differences, the gap is 113,081. Put differently, 113,081 Americans would have been alive today were the U.S. responses to the pandemic similar to those adopted by the EU27.

Summary statistics really paint an awful picture: 

• November has been thee worst month so far in this entire pandemic in terms of daily cases increases for both the EU27 and the U.S. 
• In terms of deaths counts, the U.S. is still lagging behind the EU27, but November to-date is now ranks as the second worst month in daily deaths counts in the U.S. and the worst month in the EU27.

For more EU27 - U.S. comparatives, including comparatives to other countries, see: https://trueeconomics.blogspot.com/2020/11/181120-covid19-update-countries-with.html. 

18/11/20: COVID19 Update: Countries with > 100,000 cases

 Updating the tables for countries with more than 100,000 recorded cases of COVID19:

• U.S. continues to lead globally in terms of deaths and new cases counts. On per-capita terms, the U.S. ranks 7th worst in the world in terms of cases per 1 million of population, 12th worst in terms of deaths per 1 million of population and 27th worst in the world in terms of deaths per 1,000 officially detected infections. The country has, by far, the most expensive (as a share of GDP) healthcare system in the world.
• In contrast, were they treated as a single entity, BRIICS+Turkey have better than average performance in terms of number of cases, number of deaths per capita and an average (statistically)  rate of deaths per 1,000 cases.
• Worldwide, 20 countries now have more than 500,000 cases and 5 countries of these have more than 50,000 deaths.
• On per capita basis, the worst performing country in the world for cases counts is Qatar, followed by Belgium and Czechia, Armenia and Israel. In terms of deaths per capita, the worst country in the world is Belgium, followed by Peru, Spain, Argentina and Brazil. 
• In deaths per 1,000 confirmed cases, the worst performing country is Mexico, followed by Ecuador, Bolivia, Egypt and Iran.

18/11/20: COVID19 Update: Worldwide Cases and Deaths

 Updating data on global COVID19 pandemic spread:

Some summary tables first;

November-to-date is an outlier month in terms of both, case numbers and deaths. While the former is in part driven by better availability of testing, the latter runs contrary to the expected outrun of improved testing: higher rates pf testing lead to earlier detection of the disease and, in theory, should lead to reduced deaths. Unfortunately, this is not the case. Daily average new deaths are running at 8.294 so far in November - a massive increase on October and the highest average for any month so far. Worse, thee geography of new cases has shifted from less-developed countries (South and Latin America, India etc) to more advanced economies (the U.S. and Europe), which should, in theory, see a reduction in daily deaths counts (due to better public health systems). This is not happening.

Table above shows dramatic jump in the rate of growth in deaths in November, compared to every prior month. It also suggests longer lags in deaths increases following cases increases, which may be due to earlier detection and younger cases demographics. This, however, is not comforting. Again, earlier detection and younger demographics should lead to slower rates of growth in deaths, not higher.

Charts for cases and deaths:

Moving averages clearly show relentless growth in the pandemic since the start of October for cases and the end of October for deaths. The global pandemic is accelerating, not abating.