ISA Risk Alert: The Coronavirus Crisis (8th of April)

Daily Summary

The number of known cases of the coronavirus (Covid-19) around the world rose to nearly 1.5 million, while the number of fatalities from the virus rose to more than 83,000.  This keeps us on pace for our earlier forecast of 4 million cases and 350,000 deaths by the end of this month.

The death toll from the coronavirus crisis in Europe surpassed 50,000, with Italy, Spain and France accounting for more than 80% of the total fatalities in Europe.  Worse, officials in a number of European countries warned that the actual death toll in that region was likely much larger than the official figure.

The number of cases and fatalities in the United States also continued to rise rapidly, with outbreaks in cities such as Detroit, New Orleans and Miami accounting for many of these new cases and fatalities.

Testing levels remained dangerously low in many areas of the world, suggesting that the number of actual cases of the coronavirus around the world may be larger than the official number by a factor of ten, or more.

Despite claims to the contrary from some quarters, the average age of the fatalities in this crisis remains quite high.  In Europe, where a majority of the deaths have occurred, the average age of the victims in most countries is near or above 80 years old.

Key Developments

Wuhan Reopens: Wuhan, the city at the epicenter of the Covid-19 crisis, emerged from its eleven-week lockdown, although some restrictions remain in place.  Meanwhile, China issued a lockdown for the northern Heilongjiang province due to cases coming in from Russia.

European Divisions Widen: Despite holding 16 hours of negotiations, European leaders could not reach a deal on how to respond to the economic devastation being caused by this crisis.  Some northern EU member states do not want the responsibility of holding southern European debt.

Trend to Watch

More data has been released in recent days showing the dramatic decline in air pollution in areas of the world where bans on travel and public gatherings have been in place for a few weeks now.  This could lead to long-term policy changes for travel and transport.

The Coming Days

Politicians in many parts of the world are calling for the process of localization to be accelerated, meaning that more production of goods and provision of services should be done in the market of the end-user.  This trend began well before this crisis emerged.