eInvest: Things can get better as quickly as they got worse
Disclaimer: Please note that these are the views of the writer, Tamas Calderwood, Distribution Specialist at eInvest and is not financial advice.
In the space of few weeks we have gone from a handful of Coronavirus cases in Australia to almost 6,000 (as at 8 April). We have seen a run on toilet paper and longer life food, the shutdown of restaurants and cafes, mass switching to work-from-home and thousands of layoffs combined with a boom in demand on Centrelink. Oh, and then there’s the markets…
It’s hard to believe that in late February everything felt pretty normal. However, I think there is cautious room for optimism that, at least domestically, things could return to a recognisable new normal within 4-6 weeks.
I know that people were saying optimistic things in August 1914 when war was drawing Europe asunder. “It can’t happen” changed to “it’ll be over by Christmas” which then became “how will we ever win this war?”.
But then I think about another crisis that came out of the blue, shocked us all but then suddenly stopped getting worse before things started getting better again, quickly. I’m talking about the terrorist attack of September 11, 2001.
I claim no personal connection to this event other than that I was one of 8 million people in New York that day. I was on Manhattan around 12km North of the World Trade Centre when we watched it all unfold.
The only reason I mention 9/11 and the coronavirus on the same page is for the observations these events gives us on human nature and how we react under the shock of sudden, huge events. New York’s test was compressed into a day while the Coronavirus is unfolding in a rapid, months long but incessant march across the world. So a big difference is that New York’s crisis got very bad very fast.
After the first two buildings were struck, images streamed in from the Pentagon. Then we got reports of United Flight 93 crashing in Pennsylvania.
Rumours swirled both mouth-to-mouth and in the media: more planes were coming, more cities would be attacked. How much worse could it get? Then the towers started collapsing.
By the end of the day the shock was palpable but so was the comradery and the instantaneous impulse for people to help each other through blood banks, construction equipment, transportation, food, accommodation – anything to help out.
And finally, the bad news did end that day. Just as rapidly as its started, it stopped. The consequences would unfold for years, while the grief was more immediate, but it did end and life did go on, if under a new normal rather than the seemingly blissful normal of the past.
I think something similar could happen with the Coronavirus, at least domestically within Australia, although under a more languid timeframe.
At writing we have 4,359 cases in Australia. Importantly, the rate of new cases has been steady for a week. Given our state of lockdown and the now serious quarantining of arrivals from abroad, along with the relentless pursuit of those infected, we may see the rate of new infections begin to fall.
The death rate in Australia is very low compared with the rest of the world. This is testament to our health system and medical staff but also perhaps to Australia’s climate being more hostile to spreading pathogens, given our summer warmth and sunshine.
Then there is treatment. Right now, every top medical professional in the world is working on the same thing; Coronavirus. Some fairly common drugs and drug combinations are showing promising effects on infected patients. It is possible that within just weeks we will have a clear path of treatment for those that fall ill. A vaccine, ultimately, is the goal – but it will take longer.
Finally, testing kits are becoming faster and more widespread. In the past week, have you thought that sniffle or sneeze or cough might actually be the start of something… bigger? Well, with widespread, cheap and constant testing that paranoia goes away.
If this trinity of factors combine – falling infection rates, effective treatment and widespread testing – then the Coronavirus will begin to obey our rhythm rather than the reverse. It is plausible to think that this will start happening within weeks. If infections plummet and we have confidence in treatment and testing, most things can reopen and we can go back to work. International travel might stay off the cards for a while and other businesses will no doubt get hit, but this island continent could open for business just as quickly as it closed.
Now when that happens… I suspect there will be crazy street parties combined with a desire to get back to work as quickly as possible, along with a persistent and heightened sense of vigilance.
The rest of the world may take longer to get back to its (new) normal.But then, Australia has always been the lucky country.
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