What if Covid-19 is a demonstration of strength?

Well, the world’s pets must be enjoying themselves…

And I get to spend all day listening to my newborn daughter’s various sound effects.

Inconveniently, the only sound which seems to wake her is my cough. Yes, I have one and have had it since January, when the home-visiting midwife infected me…

The impact of Covid-19 is now well beyond financial markets. In fact, financial markets were the earliest warning of what was to come. And, given they continue to be volatile, more bad news is ahead.

But let’s look at what’s really going on. I mean what our response to the crisis is telling you.

The historical comparisons are fascinating.

Our lockdown is taking place without any disruption to communications at all. I can contact anyone at any time and Southbank Investment Research’s teams have been doing a lot of that. Work continues, almost as usual.

We can deal in financial markets as much as before too. For better or worse…

I can eat food from literally dozens of different countries without stepping out my front door. I can get just about any household item in the world delivered to me too. The missing O-ring for a breast pump came from Germany in days.

And yet, the streets and trains are empty… Travel is cut off… The world is in lockdown.

Heck, show all this to someone a few decades ago and they might wonder whether there’s a pandemic on at all, or whether this is just a preview of the future under normal conditions. Where people just don’t bother going outside any more, because they don’t have to.

If we had drones to deliver takeaways and groceries, would our self-isolation be permanent and complete?

Of course not. We’re still human. Tech should be enhancing interactions, not culling them. Tinder, Rumbler and who knows what else show that we use technology to interact more, not less.

My point is that you’re seeing proof of how robust our society has become. The fact that we’re able to stay at home to stave off a pandemic is a sign of strength.

That’s the opposite narrative to what you’ll hear elsewhere. Our interconnections and globalisation have put us at risk, they’ll tell you in the media.

But if this is what a pandemic looks like in the 21st century, then we’ve done a rather good job of being able to deal with it. In the Western world, at least.

That’s not to ignore the horrific costs some of us are paying. In all sorts of different ways.

But it does still, comparatively speaking, highlight how far we’ve come from pandemics of the past. We’re worried about shortages of medical devices that didn’t exist not so long ago… We’re worried about the financial position of airlines that didn’t exist when the Spanish flu struck.

The speed of the reaction has been extraordinary when it’s needed to be. Only politicians clouded the matter. And they supposedly did it to manage the rate of the virus’ infection, because they know it can’t actually be stopped.

The UK, thanks to good luck and timing, is able to learn from other places where infections have peaked. Our supply chains for goods and services have had time to adjust. Amazon is hiring a 100,000 people to manage demand.

Not so long ago, putting an economy into lockdown in the way we have would’ve done more damage than we could bare. Instead of a lockdown, coronavirus would’ve been a risk each person is forced to bear while going about their day-to-day lives in order to survive.

Today, it’s possible to cut that risk dramatically for many of us. We’re able to impose an extraordinary change to our lifestyles to try and protect hundreds of thousands of people.

The fact that it’s possible and that we’re able to is the extraordinary thing.

The concern is who will pay for all this in the end. But that was yesterday’s Exponential Investor.

One last thing before you go. It’s a bit of a pet peeve of mine…

For those of you who are obsessed with testing and rolling out mass Covid-19 tests, don’t forget to consider false positives. From Kareem Shaya on Twitter (@kareems):

Back-of-the-napkin base rate math. Suppose:

  • 100 true positives per 1MM [million] people
  • 0.1% false positive rate
  • 0% false negative rate

If 1MM [million] tests are randomly distributed you’ll get:

  • 100 true positives
  • 999.99 false positives
  • 91% chance that any given positive is false

The last thing the country needs is bucketloads of false positive coronavirus patients to overload the health system. Which means testing should be targeted, not broad.

And the fact that we can argue about all this proves my point – this is going to be the best pandemic to be alive for, ever.

Until next time,

Nick Hubble
Editor, Southbank Investment Research

Category: Technology

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