Skip to main content

Tale of Two Pandemics and Economic Crisis: 2009 and 2020!

Almost every article you may have read regarding current COVID pandemic, you would see references to  Spanish Flu Pandemic of 1918-1919. But I was surprised to read that just 11 years back, we had similarly wide-spread Swine Flu pandemic in 2009. The CDC site gives very detailed information and timeline about this pandemic.  Let's look at some of the comparisons and timelines and learn/predict the course of COVID pandemic

H1N1 Pandemic 2009:

  • First case detected in USA on Apr 15. CDC reported to WHO 3 days later
  • 2 weeks later, WHO declared that Pandemic alert
  • The distribution of tests started by CDC in May
  • Jun 11: WHO officially declared it as Pandemic (less than 2 months after first case)
  • Jun 25: Infections reached 1 million
  • July: Reached peak of first wave and Vaccine trials begin
  • Oct: Vaccine approved and second wave started
  • Some school closures but not wide-spread
  • Nov/Dec: 5 vaccines approved and CDC put orders of 100 million doses
  • Aug 11, 2010: WHO officially declared end of H1N1 Pandemic (14 months duration)
  • Total infections: US only: 60 million; World-wise: 700 million to 1.4 Billion; Deaths: US: 13000; Worldwide:300,000
  • First year of Obama Presidency
COVID Pandemic 2020:
  • First case detected in Wuhan, China sometime in Dec 2019
  • China informed WHO on Dec 31, 2019
  • WHO declared Pandemic on March 11 (3 months later). The delay of one month and lack of preparedness by most governments (central and states) can be attributed to significant deaths.
  • Current stats: US: Over 5 Million infections and 175,000 deaths; 21 million infections and over 700,000 deaths and unfortunately counting
  • Over 100 vaccinations in trials and Government ordered over 500 million doses from multiple companies
  • Over 50% schools moved to online only
  • Last year of Trump's first (and most likely last) term and election year
The financial crisis of 2008-2009 was already wrecking US and world economies when Pandemic came. 
The US and world economies were riding high when COVID 2019 Pandemic came. COVID Pandemic caused the wreckage of US economies with unemployment reaching depression levels
In both cases, markets tanked and reached bottom in March only to recover sharply. Given there are so many similarities, what do we expect in next few months:
  • Multiple vaccinations will be approved in late 2020. There would be campaign to vaccinate world population (similar to Apr 2010 campaign is US)
  • The COVID-19 Pandemic will end (as declared by WHO) in second half of 2021
  • Multiple stimulus would be passed to support the economy and unemployed population
  • Fed will keep all its schemes and interest rates low for foreseeable future
  • Markets would continue to go up given the fiscal and monetary stimulus support as well as potential of economy rebounding sharply
So as investor, I would recommend continue to make slow but steady investments and don't chase bubble stocks. Last 2 weeks had demonstrated that markets are broadening and sector rotation has started. Small caps are up by 7% while S&P is struggling to break thru all time high of 3386. Check out IWM (small caps) and MDY (mid-caps) ETF. They have higher potential to catch up to rally of big-caps and hence outperforming larger brother SPY

For my Indian friends, Happy Independence Day!

/Shyam



Comments

Post a Comment

Popular posts from this blog

2025 = Is it going to be 1997 or 2000?

Happy Holidays... After 5 months of hibernation with no real reason than writing block, I decided to use quiet morning of Christmas day to start writing again. Lot has happened in last 5 months - in particular release of Animal Spirits with Fed starting interest rate reduction cycle and historic victory of President Trump for 2nd term. As the year turns into 2025 and stock markets at all time high, one would wonder, what's next?  To answer this, one needs to look back at 1920s and 1990s to give us some context on where markets may be headed. 1920s saw invention of televisions, radio, wider adoption of cars, vacuums, penicillin and many other which we consider household items now. These inventions created roaring 20s with markets going up by 500% eventually leading to crash of 1929. However during mid-20s, markets keep going up due to excitement of these inventions and end of World War-1 and Spanish Flu Pandemic. 1990s also saw many inventions - the key being launch of Netscape in 1...
Post a Comment
Read more

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...
Post a Comment
Read more

The Politics and Gamesmanship of TikTok!

TikTok is less than 3 hours from going dark on USA's east coast if TikTok owner Bytedance (and Chinese Government) follows thru its "bluff" to honor the law " Protecting Americans from Foreign Adversary Controlled Applications Act" which goes into effect on Jan 19, 2025. And suddenly there is lots of politics and gamesmanship around TikTok.. Let's look at the players and their positions US Congress: The " TikTok Ban" law was passed by congress with bipartisan support and coincidently it goes into effect one day before new administration takes charge. Everyone knew the exact date and time of oath taking ceremony of new President...but maybe the congress did not think that there would be change of President and did not bother to put effective date post new government taking charge...that created a window of 36 hours of "law being in effect" unless... President Biden: Biden himself did not think that he won't be President for 2nd term. S...
Post a Comment
Read more