“The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence” –Charles Bukowski
The quote above is presented with more than a hint of self-deprecating irony (I did spend some formative years in the UK). Indeed, I am often told I am a little bit too confident in my opinions.
Now, with that disclaimer out of the way…
On May 26, I penned a (quite pessimistic) editorial for Timmerman Report.
“We are going to see a continuous, substantial increase of infections and fatalities in the US starting (very, very roughly) early / late July, if not sooner. Quite likely, by August / September, we are going to revisit the peaks of daily confirmed infections and fatalities we saw in April”.
It turns out I wasn’t pessimistic enough.
As I write again a month later, on June 26, the US just recorded total confirmed cases above 2.5 million (https://www.worldometers.info/coronavirus/country/us/ : please refer to that site for any statistics reported below, unless otherwise stated), as well as over 126,000 deaths. I am not sure this includes the revisions the state of NJ just posted (with an incremental ~2,000 deaths). As discussed in a previous article, fatalities in pandemics are often undercounted.
Nevertheless, this is a tragic situation, and a very different trajectory from other western countries.
COVID-19 in the 10 Most Affected Countries (Confirmed Cases / Day)
Source: Johns Hopkins University Coronavirus Resource Center
Over the past month, the US has seen 800,000 new cases, and 24,000 more deaths. On May 26, US positive tests numbers were ~1.7m and ~102,000 fatalities. For about three weeks, the numbers, while grim, appeared on a daily basis to be trending in the right direction. There was a measurable reduction in overall hospitalizations and fatalities in the US: this was the result of a combination of drastic (and effective) lockdown measures (and citizens compliance with distancing measures) in the hardest / earlier hit regions (NY and New York City above all, and NJ, MA, CT, RI).
Those *inevitable* measures brought temporary, partial control of the pandemic in those regions. Those locations can now, tentatively, and carefully, try to re-open their economies in stages. And be mindful that the virus has not gone away “magically” and that people need to continue to be vigilant and responsible.
However, the uncontrolled spread in the remainder of the country means the proverbial cat is now truly out of the bag. And it is not going to get back in there, either.
Suffice it to say that the 7-day moving average (which smooths out weekend reporting issues) has now reached >34,000 cases/day and it is likely to increase quite a lot in the coming days, now that the trendline is on an inexorable, dramatic upswing (see Florida below). The previous 7-day average peak was ~32,000/day back on April 10. April 29 represented the highest single-day peak of confirmed daily cases until now, with ~39,000 positives (and a very significant decrease in numbers in the following days).
However, yesterday (June 25 for those of you losing track of time) surpassed 40,000 confirmed cases (the highest number of cases in a single day, ever), and almost every day this week has shown confirmed cases above 30,000. I expect today to be much higher. This is not good.
I would like to tackle some commonly heard objections to my message of doom, before reverting to dwelling on the main article topic later on.
OBJECTION No. 1: This is nothing: cases are going up simply because we are testing more! You are such a worrywart! Why do you want to ruin my vacation??
I do not want to ruin your vacation, but, no.
While it is accurate that testing capacity has increased substantially (see www.covidtracking.com for a comprehensive picture on tests, confirmed cases, hospitalizations, and patient outcomes) in the US, to roughly 500k tests performed daily, the percentage of people resulting positive on tests has very substantially increased (we are now roughly at 7-8% positives, vs ~5% only 10 days ago).
So, the percentage of the US population being infected is increasing, and quite rapidly (this should be expected: this is a very contagious virus). It is particularly concerning to see substantial increases in positive rates in populous US states such as California, Texas, Florida (see below in the answer to Objection No. 3).
In the past week alone, Florida’s daily new case count has gone from 3,822 last Friday, to 5,511 on Wednesday, to an astonishing 8,942 today. If you think this is not going to result in a substantial increase in hospitalizations and eventually a massive death toll, I would love to receive a healthy helping of whatever it is that you are smoking.
And, please, before you even ask: we are a long way away from reaching “herd immunity” for the entire population.
OBJECTION No. 2: The virus is simply infecting more of us young people: we are not like those old geezers (insert any proclamation of young invincibility of your choice here)! Worse case scenario, I will take generic steroids once I am getting intubated, I heard it works! (exasperated sigh). As George Bernard Shaw eloquently said, “youth is wasted on the young”… Trying, however, to be more constructive (if not altogether convincing to people who are somehow refractory to reason), here are some counterfactuals:
- As Sharon Begley (@sxbegle) wrote today in STAT News, and as reported in a huge variety of published scientific literature, COVID-19 attacks a variety of organs, ranging from the (obvious) lungs to kidneys, heart & cardiovascular apparatus, brain / CNS, and others. Let’s please also not forget that this is a new virus, and that we still do not know much about its long-term effects. There are clear and increasing reports showing that even young, apparently asymptomatic / mildly symptomatic people who recovered from the infection have possibly long-term effects such as reduced lung capacity, potential systemic / long lasting inflammation, and increase in diabetes risk. The US population already is relatively unhealthy to start with, so we really can’t afford to have an exceedingly long tail of co-morbidities plaguing us for years after this pandemic… Is that drink at the bar or that pizza really that important? (Note: a good pizza is indeed very important to me, as an Italian, but, you know, priorities).
- The virus spreading uncontrolled amongst the population, even if only in the strata that believe themselves “not at risk”, increases dramatically the likelihood of reaching much more at-risk demographics. Especially since we do not have a proper contact tracing and isolation set of protocols in place (or at all, actually) across the country.
- It is true (and great news indeed) that some initial hopeful results are emerging from medical research: the publication of the (robust AND randomized) UK RECOVERY trial results (just published on June 22, after topline data announced on June 18), confirms that oral or IV dexamethasone (a cheap, generic steroid) significantly reduced the 28-day mortality rate among hospitalized patients receiving invasive mechanical ventilation or oxygen (but it didn’t provide a benefit to more moderate patients who weren’t receiving respiratory support). So, yes, dexamethasone (and not other steroids, for those of you who buff up at the gym) appears to save the lives of about one out of every three patients being intubated, and about one out of every five patients who need oxygen support for breathing. BUT, that means the rest of the patients still die. Do the math, and wear a mask.
OBJECTION No. 3: The number of US deaths has not gone back up! It was down recently. Why are you worrying? I want to go to the beach bar with my buddies!
First of all, I would like to make the (perhaps silly) argument that, even if we manage to maintain fatalities at the current rough run rate of 3,500-4,200 per week on average, this is still a disaster that should be cause for immense concern. In four short months, this pandemic has already cost the US more fatalities than WWI and Vietnam. And we are a long way from being safe.
I would also like to remind readers (at least those of you with a sense and perspective of history) that the US altered the planet’s geopolitical landscape following a horrific terrorist attack in 2001 that caused ~3,200 casualties: those interventions, performed at immense subsequent cost to the country (in both blood and trillions of dollars of treasure), were never questioned.
Why are we not taking this deadly pandemic as seriously, with a comprehensive strategy and a plan?
That aside, I agree that, SO FAR, fatality rates are not (yet) increasing dramatically across the entire country. However, it is important to remember a few things:
- As discussed here in Timmerman Report on Mar. 18, fatality increases lag ~2-4 weeks behind hospitalization increases, which themselves lag ~2-4 weeks behind increases in number of infections. And there are now at least 5 US states reporting substantial increases in hospitalizations. I am particularly concerned about Texas and Florida, since they have some very large / dense cities: as we learned (or should have) from New York (and Milan, Paris, London, and Wuhan before that…), highly populated, dense urban centers are the first and most highly affected, since it is easier for the infection to spread to the most vulnerable population segments there. We are beginning to see alarm bells ringing from hospitals in Houston, the fourth-largest city in the US behind New York, Los Angeles and Chicago.
- Current week-on-week growth in fatalities are actually already extremely concerning in Alabama (120% growth), Kansas (100%), South Carolina (57%) and Arizona (56%). I do hope we do not re-enact the tragedy that befell New York, this time across multiple locations across in the country, but we are heading inexorably there without any meaningful course correction. Texas has (I think) decided to stop messing with itself. As I write, Texas Gov. Greg Abbott announced closing of bars and limiting gatherings, in a further rollback of its reopening plans. So, there is hope. But: I cannot but look with regret and sadness to the fact that no lessons were learned here, from other countries and from the lives and livelihoods lost. American Exceptionalism (seen today through an “it can’t happen here” attitude) can sometimes be a very dangerous pre-existing conviction indeed, especially against a virus who only obeys an evolutionary, biological imperative and does not care what you think you know.
Now that those pesky objections are out of the way, let’s look a bit across the pond, again, to the country in Europe that was hit early and hard (yes, of course it is Italy (eyeroll).
How are they doing? Can we apply any additional lessons from there to here?
As can be seen in https://www.worldometers.info/coronavirus/country/italy/, Italy seems to have turned the corner: the number of daily new cases seems to have stabilized around 100-200 per day now, from a horrific peak of more than 6,000/day in mid-late March. The number of fatalities has also decreased to low double digit (20-40) / day from a peak of almost 1,000/day at the end of March.
Now, I do not know what you think of my native country, apart from the obvious facts that the food, the art and the people are amazing. But I do hope we did not give you the mistaken impression that we are organizational geniuses with an extremely efficient government and an obedient and compliant population, also excelling in biotech and pharma R&D. Because, and I am sorry to burst your bubble here, nothing could not be further from the truth. Trust me.
However, what the country’s government did realize early on (never too soon, but soon enough) was that the pandemic’s exponential growth rate and high infectivity was the enemy. They locked down initially a few affected villages / small cities in early March, then Lombardy a few days later, and then entire country on March 9 (See Mar. 10 Timmerman Report article).
Even with that, the effects in Lombardy were catastrophic, as we all know.
One thing you might not know, is that there were very, very few cases outside of Lombardy. The lockdown basically pre-empted the spread to the rest of the country. Not fast enough to prevent more than 30,000 deaths. But it could have been a lot worse. And local, regional and national governments ALL ALIGNED in providing clear, simple, unequivocal communication to the population: Stay At Home. (See May 26 Timmerman Report about clear messaging).
There is now an entire comedy art form / meme unwittingly created by the videos of (especially southern Italian) mayors *screaming* to their constituents to take the lock down and social distancing seriously: go to this video and have a laugh. Trust me it is funnier in Italian. But they saved lives by shutting down, *at the same time*, the entire country.
Many grave, in some cases fatal, mistakes were made. Of course, they did not know better, and human nature is what it is, sadly. Early on, elderly patients were first admitted to hospitals upon suspicion of infection and then brought back to their retirement homes. That unwittingly spread the infection in the most vulnerable demographics.
In late February and early March, industry lobbyists forced the government to wait a few additional days before imposing the lock down, costing many more lives (sound familiar?). Local government officials, in Milano and the Lombardia region, mocked openly the curfews and lockdowns early on, spreading an “insouciant” attitude (sound familiar?). Also, remdesivir was not available, hospitals were severely lacking in PPEs and other essential equipment and instruments, and so on.
This is far from over. As summer arrives, and people relax their precautions and behaviors, as families reunite after months of separation, there is a risk, even a likelihood, that the infection will regain a foothold. My mom in Italy went to the hairdresser the other day, and I almost had an apoplectic fit when I heard.
I hope we in the US avoid what is currently happening in Iran, where cases started to rise again around May 2: fatalities initially did not increase (cue the usual crowd of pundits mentioning “young people are getting infected so nothing bad is going to happen”). However, if you go to https://www.worldometers.info/coronavirus/country/iran/, you will see deaths starting to pick up again ~3 weeks following case increases. But, by starting from a low base, there is the possibility of containing a second wave.
Back to the US: how do we then look forward to the future? What is our strategy to get out of this mess? Is there a strategy??
As J.L. Gaddis discusses (extremely eloquently) in his wonderful book “On Grand Strategy”: strategy is the alignment of aspirations and capabilities. That alignment often requires mastering the arts of logistics, communication, as well as leadership.
If I, the Persian emperor, want to conquer Greece, and invade it with a massive army, I better make sure my supply lines are adequate to the task of feeding my army, and that I have navy captains that know the local waters before engaging enemy fleets (you should really read the book). Otherwise, a not-quite-united country of basically goat herders can wipe out a force 10-20x bigger.
What are our aspirations? That part *should* be easy: going back, safely, as soon as possible and with minimal loss of life, to a “normal” living environment.
What are our capabilities? Well, that part *should* also be very easy. This is, after all, the richest, strongest, most technologically advanced nation on earth. We just sent a new (reusable!) manned rocket to the International Space Station! We have the largest representation of leading biotech and pharmaceutical research, in truly incredible innovation clusters like Boston, NYC, SF, etc. Yet the US has consistently lagged on testing (see chart below).
We should be able to test, trace, isolate infected individuals, make sure our hospitals have plenty of spare capacity and equipment to contain potential surges, and have a corresponding research and manufacturing plan to both develop treatments / vaccines and ensure they can be delivered in the safest way and shortest possible delay to the greatest share of the population.
As also discussed in Gaddis’ book, achieving this alignment does have some essential, mandatory requirements: an earnest and frank assessment of capabilities needed to then achieve your objectives, and a leadership who can then execute and create new capabilities when needed.
And there’s the rub.
To wrap this up:
- I no longer believe the US is going to be able to test, trace and isolate its way back to “normal”, whatever that is. For one, the virus is by now endemic in pretty much every state and very likely in too many communities to be able to “contain it”. The genie is out of the bottle, cat out of the bag, horses / barn door, etc etc. You see my point. Too late for that.
- The government policy of basically abandoning each individual state to its own fate has resulted in a patchwork of inconsistent (and often incoherent) measures: amongst other nefarious consequences, a chunk of the population has therefore seriously underestimated the seriousness of the pandemic. It is now exceedingly difficult to “re-educate” that population to implement healthier behaviors (masks, social distancing, etc.). I will spare any commentary on the absurdity of each state government having to basically figure out from scratch what to communicate, how to fight a pandemic, purchase PPE and diagnostic equipment, hire / consult with experienced virologists / epidemiologists in a time-sensitive crisis, build (again from scratch) a test / trace / isolate infrastructure, etc. etc. Insane does not even begin to describe it. Perhaps NY, MA, CA, WA and a few other large, knowledge-intensive and resource-rich states can do that (but why should they re-invent the wheel every time?). But the Dakotas? Wyoming? Montana? Kansas? The coronavirus task force did its first public briefing today after two months. Do they believe the virus just magically “reappeared” out of thin air? I am not sure my frustration is showing at all here?
- We still have a few months (at a minimum) before additional pharmaceutical interventions could show efficacy and then become available in order to make a meaningful difference on severity and fatality: we need that time and those interventions to help us “manage” while we pray for a safe and effective vaccine. We have to limit the damage until then.
So, what are we left with? Not much, without some clear leadership. But, we should try. The alternative is too hard to bear. Some extremely common-sensical suggestions below.
- Impose mandatory mask wearing in ALL public spaces. Impose fines for violators. Ban large (or medium-size) gatherings. You might find it shocking, but America led the world during the 1918 flu pandemic (please, do not call it “Spanish” flu, it actually started in Kansas and spread was facilitated by WWI troop deployments…) in imposing mandatory mask wearing with fines and jail terms for people not complying. Forget the debate about individual liberties etc.: your individual “liberty” to not wear a mask should stop when you are threatening the entire community’s welfare.
- Keep higher-risk populations as isolated as possible, with particular care for nursing homes, long-term care facilities, prisons, meatpacking plants and other highly-dense populations.
- Step up manufacturing of PPE and (for the love of all that is holy), sort out viral testing *at speed* and scale, and serological testing at a sufficient accuracy to make a difference. This is absolutely necessary for the months ahead (see below).
- Prepare for the autumn. I am not sure what the fall’s flu season will look like, but we need to be able to differentiate between different respiratory infections so that COVID-19 patients can be screened and isolated. Train an army of contact tracers properly and across the entire country. Employ / train the legions of unemployed in the service, hospitality and airline industry to provide that essential service. Make sure everybody in the country receives a pneumococcal vaccine and a flu vaccine as soon as it becomes available.
I closed my Mar. 10 article with the words: “We have no time to lose. And may the fates look upon us with mercy”.
We lost 16 weeks.
The fates, like the virus, do not seem to care.
It is up to us.
Follow Otello Stampacchia on Twitter: @OtelloVC
This article expresses the personal views and perspectives of the author. The views and perspectives expressed here do not necessarily represent the views or perspectives of Omega Fund Management, LLC or any officer, director, partner, member, manager or employee of Omega Fund Management, LLC or any of its affiliated entities.