Submitted by Michael Every of Rabobank
Suddenly the virus matters again. Or so it would seem, with stock markets discovering that, yes, they too can go down – as US infection numbers continue to go up and up. True, so far the mortality rates are remaining far lower in places like Texas than they were in New York – but reports underline that if you catch Covid-19 and recover it can still mean long-lasting or perhaps permanent lung or neurological damage: this is still NOT a ‘flu. The Fed’s Evans concurs that opening up too fast can worsen new spikes in infections. Indeed, while there is an obvious imperative to try to get back to normal, if the virus itself becomes normal within the population then there will never be a return to previous economic normalcy. We are all still hanging our hopes on a vaccine, which is where we have been since day one.
Let’s see how the UK fares as it is about to bravely re-open on 4 July with a 1-metre rule. That’s odd symbolism given it is a Sunday, so 3 July would have been more logical – but then when has logic played much of a role in anything on the UK Covid front so far? Indeed, the much-heralded 1-metre rule also doesn’t mean much: Bloomberg quotes a restaurant owner today saying they will still struggle to make any money with that kind of gap between seats as covers will fall from 30 to 18, or 25 at best if they invest in new tables. This has been blindingly obvious to some of us for some time. Of course, with...