This guest article on the impact of the Covid-19 vaccine is by Lars Kroijer, a regular contributor to Monevator.
When the history of the pandemic is written, the 16 January 2021 may stand out as the first day there was tangible evidence that the vaccines were starting to have an impact.
With that day came the first seeds of hope that the terror, misery, and mayhem of this crisis will finally end.
Covid and its consequences
The tragic death count from Covid-19 looms largest in our minds, of course.
More than two million globally have died so far.
Beyond that – and Monevator is a primarily investing blog – Covid-19 has crippled the global economy.
Some sectors have come to a standstill. Investors are naturally reluctant to invest in businesses directly impacted by the virus. One year into the pandemic, and new variants of the virus, the uncertain number of people infected, and the varying speed of the vaccine rollout leaves huge uncertainties.
In this article I will argue that while there remains many moving parts and huge unknowns going forward, we already have early signs that the vaccine is working to beat back this virus. With this knowledge, we – and the markets – can then try to predict how vaccine programs will reduce deaths and hospitalizations in different countries.
This is good news. Not only because of the hope of a brighter future ahead and the saving of countless lives. But also because if we can introduce a bit more predictability into all this uncertainty, then investors and employers may dare to back and support sectors that they would otherwise avoid.
Finally we could return to business as usual.
Progress of Covid-19 vaccinations in Israel
On 16 January, Israel announced that its 7-day1 trailing deaths to 15 January had fallen from 5.25 to 5.18 per million people.
That’s about a 1% decrease.
On 17 January it was announced that the same number for 16 January was again 5.18. No change from the day prior.
January 18 & 19 had small upticks in deaths.
That was followed by another ‘smallish’ decline on January 20.
This path in itself may seem unremarkable. But stay with me.
Israel began vaccinating people the week before Christmas (Hanukkah there). By 24/25 December around 2-3% of its population had been vaccinated.
As in most countries, those most at risk of getting seriously ill or dying were vaccinated first. This means the percentage of the vulnerable population that has been vaccinated will be disproportionately higher.
Since then, Israel has continued to lead the world in vaccinations2. The chart below illustrates the fraction of the Israeli population that has so far received the 1st jab of the vaccine.
Share of Israeli population (LHS) vaccinated to-date
How effectively does the vaccine reduce death?
The different Covid-19 vaccines approved so far vary in their efficacy at preventing infection.
Expected success rates range up to 95% – that comes after two jabs, around three weeks apart – but science suggests the vaccines offer protection of approximately 50% from around 10-14 days of receiving the first jab, and rising thereafter.
This suggests the 2-3% of the population who had been vaccinated in Israel by Christmas would have roughly 50% protection by around 3/4 January.
After that initial protection level of approximately 50%, the resistance grows in the following weeks to provide around 90% protection.
So early vaccine recipients may only have been 50% protected in early January, but protection would continue to grow after that.3
Israel has been using the Pfizer vaccine. Below is a table of how we could expect it to protect a recipient in the days following an initial jab.
Escalating protection for recipient from first Pfizer jab:
It is possible that vaccine efficacy will prove to be lower than expected. It’s very early days, but recently a medical expert from the Israeli government suggested just that.
However others have pushed back against some emerging doubts about Israel’s vaccination campaign.
As the efficacy numbers of the various vaccines become more concrete, we can re-run the model with updated numbers. For now though we’ll stick with what the efficacy studies have suggested so far.
By combining the number of people vaccinated with the time taken for the first jab to have an impact, we can get a sense of when vaccination began protecting some of the Israeli population:
The time taken between someone becoming infected with the virus before they unfortunately succumb to it varies a great deal. Factors include an individual’s resilience and the strength of the local hospital system (Israel’s is first rate). On average, 9-14 days seems to be generally agreed in the scientific community.
Of the 2-3% of Israeli’s population who had been vaccinated and had 50% (and growing) protection by early January, some will have gone on to contract Covid-19. A proportion will have died from it, but others survived because of that jab they received around Christmas.
This is where the tiny decrease in deaths I noted is potentially very significant.
Saved by the vaccine
From 1 to 16 January, Covid-19 cases recorded in Israel increased from 550 to around 950 per million people. (Not dissimilar to the UK).
That is a greater than 70% increase in the period, or 3.5% per day.
All else equal, you’d expect the 10 to 14-day post-infection death rate to eventually go up by a similar amount. A proportion of those infected in early January would succumb to the virus. The 7-day deaths per million in Israel would be expected to rise about 30%.
Yet in realty it declined, by 1%, in the seven days to 15 January.
Does this matter? Yes, hugely so
Israel’s trailing 7-day increase in deaths has not kept up with the 10 to 14-day prior increase in cases. Over the past couple of days, for the first time it has declined.
Something seems to be working and that is very good news indeed.
The next chart is of 7-day trailing deaths as a fraction of 7-day trailing cases, from ten days prior. While there is noise in the data, the trend is clearly downward. We presume this shows the vaccine having an impact.
Trailing deaths as a fraction of trailing Covid-19 cases in Israel
While Israel had ‘only’ vaccinated 2-3% of its population by Christmas, those vaccinated were in large part the most vulnerable.
We assume the likelihood of death from Covid-19 in this group is roughly 10-20 times that of the general population. We would expect deaths in this cohort to decline by around 20-40% once the vaccine has taken effect.
Limited precision
It is impossible to be more precise in estimating how deaths are curbed without knowing exactly who was vaccinated.
For instance, some vaccinated early will have been frontline workers. They are well-deserving, but not as likely to die from Covid as the very old or vulnerable. My 10-20 times figure assumes a mix of the approximately 25-30 times more vulnerable, and frontline workers.
It is impossible for me to be more precise with these numbers, considering the many moving parts and noise in the data.
But let’s assume my assumptions above are correct. Instead of 7-day deaths going from 100 to 130 in the trendline, it should remain at 100 deaths.
That is roughly what happened.
Looking forward to falling deaths
As vaccination continues, we will be able to partially check our maths.
We can already estimate how much likelier a vaccinated cohort is to die from Covid compared to the general population.
The first people to receive the vaccine were mostly very vulnerable. The next cohort is still vulnerable but a little less so. And so on down from there.
Below is a table with some assumptions on vulnerability to succumb to Covid by vaccination cohort.
You can see how vaccinating the more vulnerable first steadily increases the percentage protected who otherwise might have died from the virus:
For example, we assume the 4th percentile cohort of the Israeli population that is vaccinated – so number 300,000 to 400,000 of Israel’s approximately ten million people – are 7.2 times more likely to die from Covid than the average person. If Israel gets to the point where it has vaccinated 80% of the population, the last people it vaccinates will have a ‘death likely’ multiplier of less than 1. As the younger and healthier, they are far less likely to die from a Covid infection than the average of the population.
We cannot be too precise. New variations of the virus could evade the vaccine or diminish its efficiency, leaving early protection lower than 50%. Or perhaps the maximum efficacy of first jab could prove to be below 90%.
What’s more, the seemingly positive change in the past week in Israel could even be a short-term data aberration. Or perhaps Israeli hospital treatment or capacity has improved. (That’s unlikely though in light of the large increase in cases. You would actually expect this to lead to a disproportionate increase in deaths due to hospitals getting overwhelmed).
It could even be that reporting methodology of cases, vaccines, or deaths have somehow changed over the period.
But if the trendline has been broken and the recent decline in mortality in Israel is because of the vaccine, then it’s great news.
Deaths should go down very fast
Israel has now vaccinated an incredibly impressive 25% of its population.
Other countries like the UAE, the UK, and US are at around 19%, 6%, and 4% respectively.
Since these countries are largely vaccinating the most vulnerable people first, we should start to see declines in the death rates in the coming weeks here, too.
This is hugely positive. It saves many people and their friends and families the obvious horror of unnecessary death.
Even among those vaccinated who still get infected but do not die, we’d expect milder symptoms. This lessens the pressure on the hospital system. That should mean better outcomes for those that do get sick from Covid. Hospitals will be less likely to run out of ICU beds, ventilators and so on. (Remember deaths are a trailing indicator, not a leading one).
Also, reduced pressure on hospitals should free up capacity to treat non-Covid illnesses that have been put on hold. This should indirectly benefit many non-Covid patients (a positive externality that is not a part of this analysis).
Estimating a falling death rate from vaccination
Using the above logic, we could also approximate the number of deaths in a population from any delay in vaccinating. Especially in countries with high infection rates and low vaccination rates.
Some countries seem hopelessly behind in vaccinating their population. I don’t know how these delays are not a massive political scandal. It is not about being left or right on the political spectrum, but rather government competency. Some seem to be failing miserably and many elderly will die unnecessarily from Covid as a result.
Israel has set the standard. The logic developed below could estimate the number of additional deaths in a country that does not vaccinate as quickly and efficiently.
To check our assumptions against reality, we can compare what we would expect to be the impact of the vaccines on the trendline of percentage deaths of people who got infected 10-days prior with what actually happened in Israel once it began vaccinating.
In the week before Israel started to vaccinate, 0.9% of the people who contracted Covid ten days prior passed away. This percentage was fairly consistent with the period leading up to the start of the program.
Once Israel began to vaccinate, we would expect a 10-day delay before the vaccines started to offer protection. We’d then begin to see the death rate fall.
Refer back to the table above on deaths by cohort. Applying its assumptions to the fraction of Israeli’s vaccinated, we would expect to reduce deaths as follows:
We can also compare the expected decline in death rates to the actual decline in 10-day trailing death rates4:
The death rate lines roughly correlate in the days after we expect the vaccines to start providing protection. That suggests our model is somewhat correct in predicting the fall in the number of deaths.
The obvious conclusion it that the falling death rate is a result of the widespread vaccination program in Israel. These are however very early days, and there could easily be noise in the data in the weeks ahead.
But as the line of the expected future death rate in Israel suggests, we can expect the number of deaths to continue down in that country as protection mounts.
Will vaccination also reduce Covid cases?
I have read some medical experts say that those vaccinated are less likely to be carriers who can infect others. But there is not a clear consensus.
If the vaccinated were less likely to be carriers it would be great news. It would lower the number of cases, as there’d be fewer spreaders in society.
What’s happened so far? We’d hope for case numbers in countries like Israel and the UAE to decline if the vaccinated were less infectious. But so far their infected counts have continued to rise.
This in itself doesn’t prove that vaccinated people can be carriers. It could be because there are more infectious variants of the disease spreading it faster. Or perhaps some people are starting to take post-vaccine life for granted, and so behaving more recklessly.
Time will tell. Hopefully we will soon start to see cases as well as deaths decline in the most vaccinated countries.
Also, as of around 20 January only around 15% of Israelis had received a vaccine in time for the effects to be felt.
Most of the population has not been vaccinated. Thus any potential reduction in infectiousness has yet to apply to them.
Again, the reason we expect the death rate to decline disproportionately is because those vaccinated early were the likeliest to die.
Closing the curtain on Covid-19 as a crisis
The creators and producers of the vaccines and our health workers are the heroes of our time. Help is on its way, and soon.
The daily Covid news is still bleak, but as the fourth most vaccinated country in the world the UK is actually performing very decently. Don’t lose hope now that the end is – hopefully – in sight.
In the UK, a body called the Covid-19 Actuaries Response Group has produced a similar sort of analysis to mine above. It estimates falling deaths as follows, taken from The Spectator:
It’s looking good. But the alternative to these (relatively) optimistic projections is almost too much to bear.
If such analysis is flawed and deaths do not decline, then something is not working. The future would be far grimmer. Let’s hope not.
Predicting a brighter life after Covid
What should investors make of all this?
The analysis above suggests that vaccinating even a small percentage of the population that are very vulnerable has a disproportional impact on the number of deaths and severe non-death cases. That will result in reduced pressure on the hospital systems.
It also means we can begin to predict with some accuracy what will happen going forward.
This greater predictability should help alleviate the fear factor in the economy. More companies and investors will believe things are getting better. As Covid deaths fall and pressure on hospitals eases, governments will look to reopen their economies.
Hopefully this will put more pressure on slow-moving governments to keep up with the likes of Israel, too. That could save the unnecessary deaths of thousands of the most vulnerable.
We all know Covid cases initially go up exponentially. My hope is that by dramatically reducing deaths and serious illness on the most vulnerable, the vaccine will quickly reduce Covid’s impact on society. Perhaps even in a shorter time frame than is currently anticipated.
Lars Kroijer’s book Investing Demystified is available from Amazon. He is donates all his profits from his book to medical research. He also wrote Confessions of a Hedge Fund Manager.
- We use 7-day averages to avoid reading too much in to one-day aberrations, less accurate reporting on weekends and holidays, and so on. So basically, you add the number for today – say Saturday – and remove the number from last Saturday. [↩]
- Closely followed by the UAE (which includes Dubai). [↩]
- The second jab takes it up a bit further still, but importantly it also provides longer-term protection. [↩]
- That is, we can compare 7-day trailing deaths ten days after the 7-day trailing infection number. So deaths on 15 January compared to cases on 5 January, and so on. [↩]
A refreshing piece of rational analysis accepting the difficulty of seeing through uncertain data. Unlike, say, the Great Barrington Declaration or anything from the CRG. A positive and actionable result in both an investing way and a how to live way. Thank you – and from an odd source, too!
Very interesting article, thanks. Here’s to a better 2021.
I have to say, the UK appears to be doing an amazing job to date on vaccinations. Well ahead of nearly every country. Not sure how valid a comparision to Israel is, a lot of what I read suggests they may have managed to get hold of a disproportionate amount of vaccine compared to other countries and supply looks like one of the biggest limiting factors.
@Richard — Yes, while they were more muddled out of the gate than I would have liked I agree the UK authorities deserve credit so far. Definitely by a distance their finest hour in a mixed showing in the pandemic. 🙂
Regarding Israel, the point isn’t a direct comparison with UK, the point is to show how underlying data suggests vaccination is working already and should here and elsewhere in time – whereas plenty are saying it’s not.
Yes, of course. I think it was the lack of definition around what ‘hopelessly behind’ means (as everyone looks hopelessly behind Israel). And while I think credit is due for the vaccination programme (keeping up with the US and China whose resources far outstrip ours in particular) I do think they can be critizied for decisions in the last quarter of last year that has led to high hospital cases now.
What a great article, I love the last graph which paints a picture of lockdown release at the end of Feb (if the Govt. criteria is NHS overrun), although Im sure those more cautious would have us locked longer.! The only challenge is vaccine supply, I wonder if the graph is based on / predicated on certain vaccine rate, and given supply issues I hope we can meet that number.
Great article..!
Super article. The newspaper articles about those early Israeli findings have selected conclusions out of context in ways which make them incomprehensible – this makes it clear.
The same should apply to the UK, and it looks like an impact on overall deaths should be evident in 2-3 weeks. And I would hope that before that people will be looking to see if those vaccinated more than 4 weeks prior start to be under-represented in hospitalisations (assuming 2 weeks to get decent immune response plus 2 weeks post-infection before becoming seriously ill).
Maybe @TI could invite another guest author to give a different perspective on this.
Could include the following sections:
-Event 201 (Oct 2019)
-WHO engages in propaganda with CCP to first play-down the spread of SARS-CoV-2, and then heavily promote lockdowns (even though this was never guidance previously for such an outbreak of a new cold/flu type strain)
-Epidemic in UK ending June 2020
-The millions that will die worldwide due to the lockdowns
-The devastation caused to society by lockdowns, which may never be recovered from
-The many studies showing that lockdowns and masks don’t work
-Seasonality and use of fraudulent PCR testing to convince the masses there is a 2nd wave
-The coming ‘success’ story of the vaccines which will coincide with i) the end of this year’s flu season, ii) the reduction in PCR cycles & the use of a confirmatory test (hilariously insinuated in a WHO post 1hr after Biden sworn in), and iii) the soon to be halted testing of asymptomatic people.
Not sure what Ermine has against letting the healthy get on with their lives, and to give the vulnerable the choice to shield while herd immunity is built (the Great Barrington Declaration).
I suppose if most are concerned about their VWRL holding (S&P 6, Big Pharma, other mega-corps), then things are currently working out nicely for them. Maybe all will be so happy when they realise it’s too late to turn-back from the New Normal of yearly lockdowns, anti-social distancing, face-coverings and coerced vaccinations.
I for one am seriously looking for ways to escape the UK to avoid a life under hard-left totalitarianism directed by a global communist elite controlling us with continual lockdowns and compulsory vaccinations for seasonal cold/flu type viruses (new Coronavirus strain don’t you know).
@Algernond — I’ll leave your comment here to represent the ‘other side’, but I’m not going to answer it in any detail. It’s one thing to dispute or question uncertain data as a novel and unclear picture has clarified over 2020 and we tried to figure out what was going on with the pandemic, as both of us did.
It’s another thing to insinuate that vaccines don’t work or it’s all part of some political conspiracy.
I have zero tolerance for that on this site.
My site, my rules, plenty of other places you can post that if you want to.
I also note that like 99.99% of posters on the Internet, you don’t seem to be reflecting much on the fact that your previous assertions (it’s a “scamdemic”, there’s no second wave, asking me why I had fallen for the propaganda etc) hasn’t at all played out. Disappointing.
When it became increasingly clear over mid-to-late 2020 that the immunity I’d hoped had developed in London hadn’t, I copped it and put my hands up
Facts change, I change my mind. I recommend it.
Cheers.
Enjoyed reading this analysis. Thank you chaps. Looking back, we seem to have responded to the pandemic in a typically British way of dealing with crises: lots of bumbling by higher ups to start with, but a combination of the population pulling together and great home growth science and innovation delivering a cheap and speedy solution (making the higher ups undeservedly look like heroes).
Yes, a very good article, thank you. I was as skeptical as you at the beginning but I think we can all understand now how serious this pandemic has become. It’s certainly true that lockdowns have had many terrible side effects that will continue for many years (decades?) to come. But what was the alternative? I’m sure more and more of us are starting to know people who’ve had Covid, some very seriously. The only “progaganda” point with any merit is that all hospital admissions data compares now to the first wave, completely ignoring the seasonality of respiratory diseases. You could call this a “noble lie” though if it gets the general population to start taking things more seriously.
From a personal perspective, I just hope that primary schools can start re-opening in the spring as I don’t think we can take much more of home learning and socially isolated children.
I’m not sure what practical action investors can take though, as equities are already ridiculously pumped up by money printing. If anything, focus should move to how to preserve wealth through a period of inflation. How else are governments going to get out of the record debt levels other than with the same strategy employed after the Second World War?
NHS Employee here. A good analysis, but there are some key points not quite caught by this that are scary.
ICU dropping only 34% is not great news. The average age of an ICU patient is comparatively young. Think late 50s, early 60s. Many in their 30s and 40s. And some, around half, die. So the vaccine doesn’t really help here. Many elderly folk don’t go into ICU because it’s such a traumatic process. The analysis suggests a reduction of 34% reduction is great, but this isn’t enough when you’re starting from a level of 150- 200% normal levels. It means staff burn out, continued staff sickness, and elective procedure cancellations because it’s operating theatre staff that are needed to be transferred to ICUs to keep patients alive. The health service won’t find this easy.
Good news on the deaths though. The political pressure to loosen the lockdown will be growing as the deaths reduce.
Consequence could be grim. Lots of cases in the unvaccinated. Continuing at 1/50-1/100 rate until April. Many tragic deaths in the young, just smaller headline numbers. More people with “long covid” and damage.
It’s been a bizarre NHS winter for other reasons. Barely any flu or usual winter gastric diseases. All that handwashing is doing some good. It’s worth a look at the PHE surveillance data to see this.
Mixed feelings, the kids need to be in school, and we all need a holiday and a pint. Maybe we’ll get primary schools starting again in Feb.
@Algernond, your rant is totally weird, what are you on?
Epidemic in UK ended June 2020? Even if you don’t believe official statistics, that doesn’t square with almost all personal knowledge of Covid sufferers coming since then.
Lockdowns don’t work? Even the most superficial glance at UK Covid data shows that the only times cases have fallen significantly have been in a response to lockdown.
And without going through everything else line by line, the idea of a “hard-left totalitarianism directed by a global communist elite” is just fantasist. There are no governments or even influencers anywhere following communist principles, hard-left is a very small minority among those civilised countries that tolerate a range of opinion. I will grant that totalitarianism (but decidedly not left wing) is a real threat, see D Trump, V Putin, Xi jinping.
@David, on a more rational note, I agree it is difficult for investors to identify any action. The way I see it money creation (QE) has mainly served to inflate asset prices so far, and while it might eventually extend to general inflation the worst it will do to investments is return them to the long term trend. What complicates the issue is that all major economies are doing much the same thing, and company prospects tend to be valued in comparison to each other rather than reflecting the serious hit they have taken. There will be some fall-out!
It’s still going to be a danger to the young for a while yet however, especially long covid. Easing might even further stir up divisions between unprotected young and highly invested old. It’ll be a difficult judgement call but nevertheless R will fall and the young will eventually be vaccinated
I’m otimistic that our of this we’ll have better vaccines to other things, and better respiratory treatments, and better preparedness for Covid 22
Also I’ve discovered that wearing an FFP3 improves my asthma – I’m breathing warmer, filtered air. On the other hand the sanitiser has been awful in my skin – provide moisturiser if you provide sanitiser!
Well this was a v interesting article. Thanks.
David. What should investors do? Like almost always. Nothing. This crisis has been a great demonstration of this. Don’t sell. The best protection against inflation, money printing, government action is likely to be a combination of global equities and bonds mixed to your personal tolerance of risk.
Algernond. I’m always open minded but I struggle with that. One point perhaps is where the media is reporting the worst excess deaths since WW2 although 2018/2019 was lower so in a macabre sense perhaps this is catch up. Still interested to know where you plan to check out to. We all hoped without much substance a second, third etc wave wouldn’t happen. It did.
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/bulletins/excesswintermortalityinenglandandwales/2018to2019provisionaland2017to2018final#:~:text=1.-,Main%20points,and%202017%20to%202018%20winters.
Govt has broadly had a shocker. Most people can see that. Latest cockup on not closing borders earlier. But vaccines is going well so if you criticise you have to praise. Once people are vaccinated I think it’s going to be hard to v hard for them to adhere to any ongoing restrictions! there could be a real boom in consumer spending this and next year as savings are spent down for those lucky to have been relative winners.
Hi @SeekingFire. Currently thinking non-Western developed nation. These places haven’t been shaped by cultural Marxism / Postmodernism for the last 40 years, and so may be able to resist the same fate that West is falling to. The specific country I am thinking of does not have draconian rules forbidding people to socialise, has not eviscerated hospitality / small business, and they don’t test asymptomatic people (the ‘news’ says they don’t have ‘the ‘Rona like us because they are somehow cleaner & more disciplined of course). And they are not talking about vaccine passports.
I’m not sure why media would be reporting worst excess deaths since WW2 when 2020 is not even in the top 5 morality rate for the last 20 years?
https://twitter.com/Ringo14563582/status/1349643353995038721
I suppose it could be if it’s compared the previous 5-years baseline?
@David I have been trying to make my portfolio weather-proof for what I see as the long depression and coming currency crisis. Reduced my stocks / bonds, and added Gold / Cash. Nearly went All-Weather (with far less bonds of course), but then the excellent Commodities articles on Monevator put me of the Commodity ETCs. I also added some It’s for a bit of diversity away from VWRL.
Thanks a lot for the nice comments!
@NHSMgr – very much agree with you on difference between deaths and hospitalisations, and continued pressure on system. I tried to find good data on this that was somewhat consistent across countries, but couldn’t. If you have something I’d love to see it? Oddly it seems even deaths from Covid are defined very differently between countries. This makes it harder to make direct death rate comparisons between countries, but still think we can use trends within a country to try to understand the impact of things like lockdown policies or the vaccine.
I’ve stopped posting here on covid as after someone said politely it was spoiling the site; I thought about it and think they were right. But I will make this one post in response to some earlier comments about second waves.
To make my point, here is my graph of age standardised mortality (ASM), that is mortality adjusting for population size and age profile, for England based on monthly mortality figures from the ONS for the past 20 years.
https://ibb.co/NVJP3rt
What you can see in 2020 is that there was a covid epidemic in April/May 2020 but so far the graph shows in terms of an all cause mortality signal, only a winter resurgence in mortality, with mortality roughly in line with earlier years seasonal winter mortality. Clearly SARs-CoV-2 has become the dominant virus, which is why influenza has near enough disappeared (it’s not to do with social distancing). If SARS-CoV2 hadn’t been here other viruses would have taken up the space. Many more deaths are being labelled as covid deaths in this winter resurgence (they were genuinely labelled as covid deaths in the April/May 2020 period) and we know that because if that weren’t the case you would have a peak now in the ASM graph like happened in April. If that peak existed in the ASM data you could reasonably argue we were experiencing a second wave as big as the first but not otherwise. Some winter deaths are deaths FROM covid but that is what the seasonal winter viral resurgence indicated in the data is.
I’m guessing ASM for January will be higher than December’s figure so will be interesting to compare the January ASM with say the 2017/2018 peak, it may be higher who knows. Obviously mortality from the indirect increased deaths from undiagnosed cancers, heart attacks, and suicides etc feed into these ASM figures so adjustment is needed for that when looking at January.
Hospitals are undoubtedly busy, not necessarily in terms of numbers of total patients relative to previous years (although it varies between hospitals) but because the NHS is under-resourced and consequently often overrun in Winter, and that combined with staff isolating or off sick for other reasons, plus measures in hospitals that mean less patients can be treated, are some of the causes of the pressures. I make that comment based on looking at hospital patient numbers and from the insights of some of my friends working hard in hospitals in the North West.
It is worth restating that there are numerous scientific papers based on data analysis that show that lockdowns don’t work but the only scientific papers I’ve seen that suggest that lockdowns do work, remain models that simply ASSUME lockdowns work. So this winter resurgence in my view is pretty much what we would have seen anyway regardless of lockdowns.
Regarding the Israeli data. I understand Israel has been given preferential supplies of vaccine by Pfizer in exchange for detailed data, which I am sure will yield some important real world epidemiology in due course. All a bit soon to draw conclusions.
However we can’t simply extrapolate to the UK from Israel’s experience, because we are predominantly using a different type of vaccine, with a 12 week gap between doses. It will take until mid May (on government targets) for the first four priority groups (over 70s) to be fully vaccinated. There are other issues to consider in relation to lifting restrictions, which I may post if time/inclination, but suffice to say I hope the government resists making previous mistakes that have lead to longer and harsher restrictions, which were entirely predictable (and loudly predicted).
Vaccination has been going so well in my region that we’ve been rewarded with half supplies next week 🙁
@TI, I liked your solution to the covid problem. It’s your blog of course, but I remain unconvinced that Monevator is a good home for covid denialism. There’s plenty on Twitter if people really want to go looking.
@Seeking Fire. I think the impact of the massive rise in savings rates in 2020 is being overlooked. These chart shows it very nicely: https://fred.stlouisfed.org/series/GPSAVE and https://fred.stlouisfed.org/series/PSAVERT. We’re talking trillions.
Some love to create fear over government spending but those fiscal deficits are just the flip side of massive private sector saving. Last year left the private sector rolling in cash. Yes, QE and ZIRP may have helped inflate assets but private sector saving is the most important driver. Is has been for a decade and 2020 was that trend on steroids. That money ends up in bonds, S&P etc. Bitcoin hitting $40k is perhaps not so surprising.
So this year and the next is very likely to see a consumption boom from deferred spending. That’s very good for equities. But savings will fall, assets will be liquidated to pay for that. And eventually the transfer of wealth from public sector to private sector will be reversed, most probably through taxation. Perhaps not so good for equities, Bitcoin etc. If anything it’s not so much about equities vs. bonds vs. commodities etc. I see this much more as being long what retail couldn’t buy in 2020 and being short what they did buy. Anything easily bought by retail is just as as easily sold.
@Snowman — Nice to hear from you. Appreciate you restraining your comments here after it all reached a pitch — I did the same, as you may have noticed, in my editorial above the line.
Plus my view shifted more than yours seems to as the reported cases rose, so I wanted to pause and think more.
For the record I am still not in the drastic lockdown is definitely good camp, at least not as practiced in the West. Maybe if we had seen results like China or Australia, but we obviously haven’t. I continue to believe there are massive unintended consequences, as well as a scarcely comprehensible economic cost.
(While I’ve been eating my share of humble pie, I’d also note that on the other side those who shrugged off the cost of the initial lockdown as a short, sharp and easily bounce-back-able GDP shock might also order at least some pie to-go 😉 )
I do also continue to suspect that the age-related nature of the mortality of the virus was under-utilized, and I’m certainly pretty fed up with the sneering condemnation of the young, who have near-zero risk of dying but have had their lives hugely disrupted. (Fine, one can say they should follow the rules, but do so with compassion).
Maybe we could have had different rules for people under-30. I totally get community transmission to the more vulnerable, and I’m not saying they should have had no distancing measures, or that nightclubs should be heaving every night. But maybe young people could have been allowed to form different-sized bubbles or exist in campus bubbles or something more creative. The fact is we’ve seen huge community transmission anyway, while for instance students have lost many thousands of pounds in accommodation fees they can’t claim back as well as one of the best years of their allotted tally, for which they’re condemned regardless.
I’m clearly somewhat conflicted about all this now. Which is again why I’ve toned down my own posture. I think that’s preferable to becoming more strident when things become uncertain or don’t go my way, although it *is* difficult. 🙂
However I do believe, as I always have, that Covid is clearly a dangerous virus in that it’s killing old people.
I have changed my stance on immunity and the scale of the first wave; I continue to think both were bigger factors than reported/understood at the time, at least at the start, and so our speculation there wasn’t wholly unwarranted. But neither factor was of the scale I saw at my most optimistic, so I’ve changed my stance there, as I say.
But with all that said, I don’t really know why there’s still any debate about whether we’re in big second wave…
A few months ago ‘second wave skeptics’, who I initially had some sympathy with, were arguing it was just due to extra or less reliable testing or testing asymptomatic people or whatnot, even doing so when we grew to ‘only’ around 200 infections per 100K in London (which was already enough for me to shift my stance).
Even if there was some merit in the argument, infections went on to rise to over 1,000 per 100K in London a week or two ago!
So a five-fold increase on already high numbers. At some point you surely have to say “okay, it’s a huge second wave” even if don’t agree on the measures implemented to tackle it or the seriousness of the mortality?
Regarding the lower deaths figure to-date, I understand what you’re saying: that this indicates this wave must be smaller than last Spring because the death rate is lower, essentially.
Again, for me the quantum of deaths now would still be a reason to re-evaluate (there are now lots of deaths, with over 1,000 a day now being reported) but even if we accept the premise, there could be other reasons why the death rate is lower.
For example it’s been widely reported that treatment in hospital has improved over the year compared to March/April 2020. Just one example:
https://www.nature.com/articles/d41586-020-03132-4
Another reason could be that the most vulnerable died in the first wave, or that they’ve got better at protecting care home residents. Both seem plausible to me.
(Plus of course we might be getting the very first small benefits from the earliest vaccinations, to Lars’ point.)
I can’t see a reason to doubt that cold/flu is at least partly reduced due to lockdown? People aren’t meeting as much, they aren’t spreading viruses as much. Again, I do have sympathy with an argument that time will show this level of lockdown was disproportionate, though I think it’s much harder to make that case than 10 months ago, as I’ve said.
But why doubt the obvious? Viruses like Covid and flu spread when people get together. If they’re not as much, they won’t as much.
Regarding all-cause death and dying of Covid versus something else anyway (or *with* Covid), yes, I do still believe there’s something in this and it’s probably the area I remain closest to that line of my mid-2020 thinking. It’s pretty clear Covid is going to look like a small blip on the graph at the most on a 20-year view.
However set against that I’m not sure why I’d doubt all the medical staff who say hospitals are straining or ICUs are straining as a result of Covid in the here and now, or even the politicians who are seeing their popularity cratered by locking down?
If it was simply a matter of a cohort of mostly 80+-year olds sadly having this horrible death versus another, then I’d imagine medical staff are hardened enough for at least some more of them to articulate that perspective. But vanishingly few have. (I know, some (not necessarily you) will say it’s a mainstream media conspiracy etc).
I certainly understand why some emotions are running high.
After yesterday’s talk of lockdown until summer — bad enough — I was then listening to some medical spokespeople last night saying measures might have to continue indefinitely, because a chunky minority % of people people over-80 might not get the vaccine. I understand some will be vulnerable and can’t, but that’s surely a small proportion, and maybe we’ll have to roll the dice versus economic shutdown without end?
The conversation then went on to vaccine hesitancy. Personally I’m damned if I’ll stay in my house for another six months because some 80-year olds are fearful about the impact of a vaccine on the final 3-4 years of their life. What was the point of immense disruption to get us to vaccines if even vaccines aren’t the solution? I get it.
Enough will have to be enough, at some point. That is going to be the big debate in 2-3 months time.
Bottom line for now, pretty much everyone seems to have handled this virus poorly except China and a few other Asian countries (and I’m not sure I like the implications of that).
The skeptics were too skeptical. The Swedes were too complacent, or at least not explicit that they believed it was right to trade some older people for more widespread freedom. The borrow-and-spenders have underestimated the GDP drawdown and the level of State intervention required. The ultra lockdownists seem un-empathetic to the huge emotional pain it’s now causing, let alone the economic consequences, educational disruption and so on.
We should probably all stand down a tad, and hope the vaccines do deliver.
@TI I agree with vanguardfan – it’s your site and all but holy shit that diatribe from the guy above is THE SPIT of the Qanon stuff. In my opinion, they don’t deserve a place in polite society and I’d be delighted if you deleted it.
And a real shame to crash into that after a thought-provoking article.
Good summary of a constantly changing situation
I read everything including Locked Down Sceptics-have children as a GP-Noth EastPrison Governor-London and Deputy Head of a Secondary School-Glasgow
We await the Israeli progress with hope
If it works there is a way out -if it proves to be less than successful then all bets are off as to the way ahead
Next few weeks should clarify the situation one way or the other
Worth praying?
xxd09
@Andrew @Vanguardfan — Understand where you’re coming from re: virus extremism. My policy tends to be leave one extreme fringe-style comment stand to remind everybody they exist, and to give that faction their statement.
It was the same with Brexit, where I’d usually leave one ‘send the [foreigners] home, that’s what we really want’ then delete further racist/nationalist stuff.
We do live in a pluralistic society so I think it’s right to have the view in the mix if voiced. But I didn’t create a website to give the most extreme views a huge platform, hence them limit.
Just as importantly, I think it’s good for everyone to see the range of what’s out there. If I had moderated all Brexit arguments for example to be purely on-topic (economic) for Monevator, one would have hardly understood the range of opinions and motivations. Arguably it’s that sort of constrained understanding (especially pre-2016) that leads to ‘shocks’ like the vote for Brexit being so shocking.
Also, one person’s extremism is another’s point of view. Some would have called elements of my stance last summer virus denialism I’m sure; maybe they still would. I don’t want to argue that point, just emphasizing that moderation should understand that.
Finally, remember I do delete stuff as a last resort, but by definition you don’t see it. There’s all sorts of rubbish deleted over time.
I couldn’t find that ASM Chart on the ONS website although there was a spreadsheet located at https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/deaths/datasets/monthlymortalityanalysisenglandandwales .
A quick glance at Worldometers shows that the 7 day moving average of Covid cases only started to climb around 12th December and surprise, surprise, the 7 day moving average of deaths began to rise around 1st January.
From the ONS table, total deaths in England for December in the last 5 years are:
Dec. 2020 52,676
Dec. 2019 44,286
Dec. 2018 38,710
Dec . 2017 42,295
Dec. 2016 42,624
Suggest that some posters may be interested in reading something by that well known left-winger Christopher Snowdon, a regular contributor to the Spectator, who is Head of Lifestyle Economics at the IEA . See https://t.co/BjpBkTcu9u?amp=1 .
I wasn’t going to comment again, for the same reason @Snowman gave at the start of his excellent comment.
But my sprog insisted I shouldn’t let @TI get away with implying I’m an anti-vaxxer. I’ve no problems with the MMR, TB, Polio and other ones that are given in this country for example. It would seem to me that not to be classified as an anti-vaxxer requires not questioning anything the Govt. / SAGE / Big Pharma pushes is a bit odd.
Since I am commenting again, Christopher Snowdon is a bit of a Lockdownista it appears. Why else does he want to lockdown for Seasonal Coronavirus, when we never have done for Seasonal Flu/Coronavirus before? Also for balance you could check out the ripostes to him from Ivor Cummins (the guy he attacks in his Quillette article), and also refer to @Snowman’s excellent summary of the ‘2nd wave’.
Thanks to Lars for a little burst of optimism there, and positive conclusions drawn from what seems to be flat data.
Regarding everything else, stats for cases and deaths are subjective in many ways, and we will only see the big picture once the mists have cleared. But the daily stats for hospital admissions must be fairly objective.
To that end, trying to restrict transmission seems obvious, otherwise hospitals cannot help people other than covid patients. A specialist orthopaedic hospital, (Wrightington) cancelled my sister’s op because the staff were seconded to covid duty. Oncology depts have been closed (Cambridge).
I’ve been affected positively (savings! shares!) and negatively (an elderly relative classed as death from covid), while my 17-year-old is having her social life and academic pahtway blocked.
There’s no good or simple answer to all of this, but I hope the vaccine gets things moving soon.
Snowman,
I hesitate to reply to such terminally stupid drivel, but it’s a slow day, so here it goes.
When you say that lockdowns don’t work and cite numerous scientific papers, dear, you must do two things: A) define “work” and B) define “scientific”.
Can lockdowns eradicate a virus? No. They can’t, and they are not meant to. They are meant to slow down the spread so that people don’t have to die in hospital carparks and be stuffed into fridge trucks because morgues and grave diggers can’t keep up with the demand. Lockdowns are meant to buy us time so that vaccines can be developed, approved and mass produced to immunise the population. As an aside, I shall never cease to marvel at how anti-vaxxer dipshits rile and rave against “insufficiently tested” “artificial” vaccines, which presumably makes them too much of a risk, while at the same time advocating the everyone-in-the-water-including-nana approach to developing herd immunity. Because taking your chances with an uncertain load of protein-coated mutant RNA particles that since jumping from another species have demonstrably killed hundreds of thousands of humans is somehow safer and more fucking natural! I’ll be shortly circulating a petition to rename homo sapiens to homo fuckwiticus.
Which is a nice segue into our second topic – science. I’m very curious to find out what sort of a scientific method you are expecting to see when studying the impact of lockdowns. A double-blind lab experiment? We have 150 subjects locked up in Laboratory A4. 75 of them know they are in a lockdown, and the others don’t?
R Virchow believed that medicine was a social science and that politics was merely medicine on a large scale. When studying the effectiveness of social distancing measures in decelerating the spread of a new disease, yes, significant reliance has to be placed on projections. A study of social and biological plausibility translates into a study of causality from where we have to draw conclusions that are relevant to public health. We have to use quantitative sociology, biology and statistics here, is that not enough science for your liking?
@TI. As someone who has tended toward the “borrow and spend” mentality I would admit that UK GDP drops are worse and, especially, more persistent that I would expected in March 2020. I underestimated the size and duration of the UK second wave. I really thought that the UK government would learn from the first wave that you needed to act early and decisively. Unfortunately, it has tended to refuse to act until the public sentiment was on it’s side, which then results in a harsher lockdown and more economic damage.
I think though you might be being rather narrow in terms of your view of the GDP damage. At a global level, consensus GDP forecasts have been rising and 2H20 GDP has been better than expected, mainly due to the strength of the Asia export recovery. There will be substantial scarring and hysteresis, but it looks nothing like as bad as 2008. We can’t expect GDP to always go up. The UK will come out of it worse than most but I don’t lose sleep over that. It self-harmed economically between 2016 and 2020 and has reacted poorly to COVID. It reaps what it sows. I remain of the view that much of the UK economic scarring is just “harvesting” of jobs/businesses that would have disappeared anyway (no different to those who believe 80 year olds dying of COVID is just “harvesting”). These businesses were long in the tooth. It just required the right event to finish them off.
This damage all has to be weighed also against the biggest positive of COVID: it got rid of Trump. Without COVID, he would have still lost the popular vote but, due to the archaic electoral college, won the Presidency. We haven’t got rid of Trumpism but four years breathing space is still priceless.
On the topic of differing views – even though I strongly disagree with certain ‘others’ (eg. Trump supporters, Brexit voters, etc.), I’ve been trying to look at the causes for people voting as they are and the polarity between the two sides. Are technology companies responsible for creating slot-machine platforms that create echo chambers and feed extremist views? Are people disenfranchised by percieved or real inequality between themselves and others? Yes, people are to blame for the choices they make – but others (tech. companies, politicians?) are also responsible.
Back on topic – thanks for the positive article, Lars! It’s great to read something positivity – even better when the positive article includes charts and data for a spreadsheet geek like myself! In March I expected COVID to be under control by autumn. In autumn I expected it to be under control by Christmas… so I’m trying not to be too optimistic about a return to ‘normality’ (whatever that is now) within the next 2-3 months. Your article does provide some hope that maybe I will be able to talk to a wider variety of other ‘real’ (ie. not computer) people soon!
@flashb – many brexit voters at least, me included, don’t use social media at all. People like to find something to blame as if they wouldn’t have thought this way unless they were brainwashed by something – but in reality the personal experience of things like seeing so many jobs being done by what you know is a large continuous inflow of people, at the same time as you see years of wage suppression, and at the same time as you see businesses bricking the thought of not having endless cheap labour. There is a common logic spread by word of mouth that if migrants are not eligible for benefits when they come here but nearly all of them paying extortionate private rents, they will work at any price – they are good workers – they are *competition*. Warnings from remainders about the labour supply shortage we’re going to have actually inadvertently corroborates that it’s working
Think – without them you’d have to coax our reluctant benefits class off the dole, you might have to raise wages substantially to make it worth their while. Also imagine the inflation – my mortgage will disappear! – good thing I have equities, eh?
Remainers tend to think in terms of what’s best for the country or best for the world, leavers think about what’s best for their families – hence older people have families, and those families may be in unskilled work – so the correlation to “uneducated” doesn’t mean it’s a dumb decision, just that these people acknowledge that they are working in a sector that faces competition
Sure there are also racists among leavers / trump nationalists, but it’d be inaccurate to let the tail way the dog
This is one of the most important points for me: “New variations of the virus could evade the vaccine or diminish its efficiency”.
It isn’t just the risk that they can’t create a new version of the vaccine to counter each new resistant variant, but that even if they can it will take another 9-12 months to develop, fully test and then administer to the entire population. So they’d be forever playing catch up.
I see this as the biggest risk to the economy and equity markets as a whole (perhaps excluding lockdown-immune tech stocks, but even they might not be safe forever if governments are bankrupt and nobody has any money to spend).
To an extent they have this problem with the flu vaccine where they have some years given people a version that isn’t effective against what becomes the most prevalent strain that year. But with the flu it is less significant as the mortality rate is lower and there is no nasty “long flu” condition.
Anyway, I’m not holding my breath on lockdown/restrictions being loosened significantly (esp hospitality opening up indoors) before May or June at the earliest given that even 80 year olds won’t have all had their second jab until April.
@SemiPassive, I think you are over pessimistic about future Covid mutations. Firstly because there are biological reasons why any mutation won’t evade all the spectrum of antibodies produced against the vaccine, or indeed against a previous infection. Second because the regulators won’t need the same extensive testing for an updated version of the same vaccine as they did first time, simply because they already know so much about each vaccine.
I do agree a mutation might make immunity a little less effective, and the accumulated effect of multiple mutations possibly sufficiently less resistant to justify vaccine changes, but that will happen slowly and there will be time to plan that change. In fact since we don’t – and can’t – know how long vaccine-induced immunity lasts we may need our vaccinations renewed every few years anyway allowing an automatic opportunity to fine tune them to the currently circulating variants.
@Matthew – I think you give remainers too much credit. From what I have seen (myself included) most voted for what they felt was best for them and their families and not what was best for the country or the world. Whether that be they want the choice to work in Europe or they are worried about their livelihood or paying more taxes or being forced to emigrate. As ZX said, he is in competition with everyone else for limited resources. The aim is to maximise your share, and in this context we tend to start from the position we are right, we club with our likeminded tribe to reinforce this. Thus everyone else must be wrong and we then come up with reasons to explain how they could possibly be taking a position that is so clearly, to us, wrong. But this is human nature and unless you actually live someone else’s life it is very difficult to understand where they are coming from.
@Richard – again I think there was a spectrum within the tribe – definitely there were remainers who were primarily interested for self gain, although I imagine you also had a fair number of idealists, also I imagine some remainers were worried that there’d be a lurch to the right after brexit (left/right itself could either personal gain or idealism), and also there was a fair amount of moral pressure /shaming on the whole thing – hence why brexit&trumpism was a surprise in the polls – shaming can achieve votes on the cheap so to speak – you make voters feel like they’ll be considered racist, uneducated, and unable to face their EU friends if they vote leave
I personally also was (before 2016) getting the vibe that once here, a fair few migrants who I worked with were getting quite… assertive about how they did things, their right to be here, how they dislike the way we run our country and how they should have the vote – and culturally some of them are more confrontional/assertive in a way that we’re not used to – if too much time passed we would have lost too much of our own assertiveness, voice, etc – the cake of mixed sovereignty was getting more and more baked. It has even progressed to such a point that brexit was shocking to these people and not even thought possible, and if it had gone far enough to the point that they couldve voted in the referendum, it would be been permanently impossible from then onwards, and native culture would be been assimilated out of existence (we’re even made to feel ashamed about our past, our country vs other countries, etc). There was tension in society from the natives and brexit released that. I also think that the migrants who come here are basically people who chose to leave their families behind for money – they are not a real and fair reflection on EU countries themselves and were not the best representatives of their own countries.
Also for the record I think the right to work anywhere in Europe is mostly a one way thing – I can’t imagine learning french/german, let alone Lithuanian or polish to do a job that probably won’t be better paid – what is the motive for British to move out? Beyond retirement or semitourism
@all — Thanks for the comments and thoughts. Just a few quick ones as it’s late and I want to go to bed…
@ZX Spectrum 48K — Thanks for those further thoughts, and yes, you were one of the (several) people I had in mind. As I say we’ve all had our mix of getting things right and less right in all this pandemic, some more than others maybe and I certainly don’t think I’m close to the top of the list. (Perhaps that plaudit goes to @Vanguardfan, who got most of it all right in the end, which is a bit annoying considering how much I debated with them last spring. 😉 ) You’re probably right that I am looking overly at the UK (/European) picture, and I appreciate you probably would have liked your economic lockdown with more of the other measures successfully deployed alongside in Asia, which has indeed mostly quickly bounced back. (A huge bugbear of mine for the second half of the year was US analysts and managers saying “China is a bit ahead of us so we can see what’s ahead for us” not conceding at all that its pandemic was pretty much done by the end of March.) With that said I don’t think lockdown as sold is about cleaning the Augean stable in the UK by trashing weak/uncompetitive businesses, and anyway there’s a lot of collateral damage alongside. (I know several hitherto very successful people in hospitality who are being crushed through no fault of their own, for instance.)
@Matthew @Richard — Can we leave it there with Brexit on this thread please? One touchy subject per article comment thread is enough I think. 🙂
@Algernond — I was responding to your bullet points, which included the word success in ironic quote marks regarding the vaccine rollout. But anyway, rather than digging deeper into the hole, you might ask yourself why several readers on this thread – and more by email – have asked me to delete your comments, and nobody has chipped in a “hear hear”.
It’s possible you’re a clear-eyed visionary that sees what nobody else can see. But isn’t it just possible you’ve gone a little off the deep end on this? 🙂 Perhaps this can be a wake up call. (Indeed, that’s another reason why I do allow the odd extreme comment in the mix in these discussions. The hope that sunlight can disinfect.)
@TI – yes, fair enough! On the lockdowns, I still think the policy is primarily aimed at preventing hospitals getting overwhelmed and not directly about preventing deaths (although deaths do follow hospitalisations). Herd immunity (whether naturally or through a vaccine) is still pretty much the only way out of this. But, lets say the vaccine significantly reduces deaths but patients still need a stint in the ICU, I don’t see how we can lift lockdown unless the vaccine also reduces transmission. How you get out of that I don’t know.
I am still of the position that you lockdown to prevent hospitals becoming overwhelmed but whenever hospitals are not under serious pressure, let people get back to normality, accepting some deaths will occur. And looking at past behaviour, I think that is the government / CMO position as well.
@Richard #36
The vaccines should be highly effective at preventing disease, but even in those cases where you do get ill, apparently they are 100% effective at stopping you from getting really ill, so even if they do not stop transmissions, hospitals should stop being overwhelmed as more people get vaccinated. My hope, like yours, is that this will allow the government to lift gradually the lockdown, even if there are still deaths.
@Mathew #34
This is what xenophobia looks like from someone who does not think he is xenophobic.
The points made by @NHSMgr above are really interesting and don’t get enough mention.
One of the most interesting and encouraging things in these comments is to see how people are willing to change their mind, reconsider, as they learn more about this new disease.
I’ve also changed my mind a bit on covid. Not that I didn’t take it seriously.
But earlier last year, I thought that those of us under 50, without serious underlying conditions, were probably destined for something like flu if we got it. So it was about protecting others.
Now I’ve read more, I see that many working age people are ending up seriously ill in hospital, even though their death rate is lower. So if we “open up” over the summer, perhaps we will see a lot of long-term sickness absence and hospitalisation for severe disease, hitting those in their 30s/40s/50s who have to go out to work. And that’s not good for business, either.
I know an ICU nurse who would sit in her car and cry for a bit before setting off to her shift (at around 5am). That was back in March, talking to her was an eye-opener – staff must be so exhausted by now.
@Dan dodex – well the question was asked about where the mentality came from (i.e. Was it social media?) so in order that there’s better understanding between both sides, to build bridges I was trying to say that in my case far more personal experience than anything read online
I tried to come from a position of respect – i.e. Regarding competition.
There are also cultural differences which do exist and do clash to some degree, we can’t pretend we always have the same way of doing things, same opinions, etc
I’m pretty sure markets will turn down sharply as vaccine-escape mutants emerge. Difficult to say exactly when, but not until a large proportion of population have been vaccinated. It’s also possible vaccine resistant strains are already circulating – the Brazilian and South African strains don’t provoke s strong antibody reaction. The stockmarket rebound looks excessively optimistic to me. Defensive investing still required in 2021 I think.
@Ben – or what happened last time will happen again. Markets drop, you stick to the plan and keep buying, government steps in and pumps money in, markets jump up. You make money in the face of businesses collapsing. It seems perverse that for investors the vaccine failing would probably be more lucrative…. Then again past performance is not a indicator of future……
@Ben. I wrote this comment (https://monevator.com/weekend-reading-down-with-dividends/#comment-1196424) on April 13, 2020. Basically trying to highlight the massive possible bifurcation in outcomes that was still possible. The right tail was S&P500 going to 3500+ by year-end (“Trump’s wet dream”). It ended up at 3700+ … except Trump thankfully bogged it up!
So, yes, the “vaccine trade” is quite possibly priced to perfection. Remember thought that the offsetting factors. As I mentioned in #19, in the positive scenario, where the vaccine works well and we revert back to normality say by 4Q21, you’ll see consumption explode. Good for equities? Except those savings rates collapse and that forces assets down. Perhaps we get a bond tantrum, yields rise and equities reprice lower. Other scenario: vaccine doesn’t work so well. So equities down? Well bond yields fall further, those savings rates continue to rise and assets keep getting bought. Equities might go up more!
Unless you’re willing to take a view on those complex probability distributions, you’re better off just staying with your long-term asset allocation.
There are a lot of eyes on us in Israel, at the moment the data is pretty hard to pick apart because the vaccines have coincided with an initial “lockdown”, which wasn’t very locked down and then a stricter one where schools were finally closed, a very high infection rate and a rise of the British and possibly other strains.
latest interesting nugget to come out :
https://www.linkedin.com/posts/ksm-research-innovation_ksm-coronavirus-vaccination-data-insights-activity-6758438731407089664-pIe1/
@ZX – exactly, good post. I stuck to the plan last year in the face of the crash. I was lucky with the crash coming in late March as I actually made larger than normal pension contributions due to it being the end of the tax year. I am pretty sure I am in a much better place than if I had panicked and changed asset allocation to cash or bonds or stopped investing altogether.
@Oliver H — Early days but I’d say that’s very encouraging, all things considered. Good to see this genuine outcomes data coming in now. Thanks for sharing.
@Richard & ZXSpectrum
If it’s like 2020, I will be filling my boots again at point of maximum panic and irrationality, before the next round of QE.
Stockmarkets (UK excepted), property, gold, bitcoin all up massively this year due to QE. Exactly like 2009. Each time central banks resort to QE and get away with it, another future round becomes even more likely. They’ll keep doing it until it goes badly wrong.
@Ben – the issue with changing asset allocation to say cash with the aim of buying back at max panic and irrationality is knowing when that point is. I remember a number of posters who tried something like this last March, but the market rebounded faster than they could (or were willing) to jump back in. If you have a knack for getting it right, then certainly fill your boots. Whatever happens you will hear from those who were lucky enough to get it right this time. Doesn’t mean it is an optimal strategy for most providing their asset allocation properly reflects their risk / return profile.
@Richard
I’m not suggesting selling anything to free up cash, just using cash you might already have saved. Timing the market, as we know, is difficult. But you can profit from market inefficiency by buying during a rout. The trigger for me this year was hearing from a friend that she’d cashed in her Italian pension in mid March “before it loses any more money” – a reverse shoeshine moment. When everyone is blinded by loss aversion, the markets are trading at a genuine discount: all information is NOT in the price. Those moments are rare but usually obvious.
Thanks very much for this straightforward analysis, Lars. It’s good news that the UK is doing well (and I have elderly relatives over there) in vaccination rates. Speaking personally from the other side of the world its like being a voyeur at other peoples misfortune……given that life here in NZ is pretty normal and has been since we came out of lock-down at the end of April 2020 and the border system is working. I’ve had some interesting “discussions” on social media with commentators claiming NZ has a hard-line left authoritarian government led by Jacinda Ardern and the “concentration camps” set up (AKA 4/5* hotels) to control Covid! Some people have trouble with reality it seems….
On the flip side we don’t get the vaccine till Q2 onwards so it’s unlikely the kiwi penchant for foreign travel will be assuaged soon.
If you can view other countries as test-beds for different strategies then a number of countries have come out better (so far) and I’m sure there will be multiple analyses (and hopefully learning) to make the next pandemic less threatening. Like many other here my equities have just kept on going up and I’m pleased I did a little timing back in March with a small addition to my Kiwisaver retirement plan. An interesting offshoot of reading this blog (and others) was being able to point several colleagues to the resources and long term thinking to not shift dramatically to cash and crystalize losses – others were less well advised:
https://www.stuff.co.nz/business/121598872/bank-kiwisavers-were-the-biggest-panickers-in-14-billion-march-selloff
@TI (20)- not sure you’d count NZ and Australia as Asia – we tend to think of ourselves as part of Oceania.
@Snowman (17) – our winter flu season, coincident with Covid lockdown, just didn’t happen in NZ which has led to a lower winter death rate than other years –
https://www.rnz.co.nz/national/programmes/sunday/audio/2018767843/near-extinction-of-influenza-in-nz-as-numbers-drop-due-to-lockdown.
Just hope the N hemisphere flu season is similarly knocked back given those at higher risk are also at higher risk from Covid.
@Matthew (13) – thanks for the tip! Useful as a health care worker with asthma!
The statistics man on the BBC is expressing confusion that latest data from the ONS has one in 55 people randomly tested showing a Covid infection, yet hospitalisations and deaths are coming down…
But — as per our article above — is this not a sign that vaccination is working in the UK, as the most vulnerable start to leave the statistics versus less vulnerable / asymptomatic?
@The Investor – yes, in theory, but there is delay which stupidly seems to throw a lot of people. So important when data was collected. But yes, in principle you could have 10%+ of population w/ Covid and v few hospitalisations (like flu) if you vaccinated all the vulnerable. But worry re data in Israel – deaths not coming down fast enough…
I’m not sure if you will let this through, but I couldn’t resist, it’s hilarious.
And hopefully on topic of ‘the beginning of the end of the covid crisis…’
https://www.captiongenerator.com/2129947/Ivor-Cummins-downfall
@Vanguardfan — Yeah, that’s pretty funny and I’m a sucker for Downfall parodies. I wouldn’t want our discussions to deteriorate into making fun of other people for the sake of it, obviously, but as per my name check in comment #35 above, as far as I’m concerned you’ve earned a victory lap. 🙂
For my money that wobble in confidence in the Israel data has now well passed.
Check out these graphs from a regular and reliable Israeli source:
https://twitter.com/segal_eran/status/1360966354803843074
He notes:
Since the mid-Jan. peak:
60+ y/o:
64% fewer cases
48% fewer critically ill
50% fewer deaths
55-59 y/o:
52% fewer. cases
30% fewer critically ill
54 & under:
35% less cases
20% **more** critically ill
—
(Me again) Seems very clear that the rollout of vaccination is working to reduce serious illness and death when comparing these data sets.