May 22, 2020 | Lessons

What lessons did the virus give us? Did we react calmly, correctly?

Tom’s a contractor with a small crew in southern Ontario. Four trucks, usually eight guys. Just four now. The others asked to be laid off, to collect the CERB for four months. Tom told them to get their damn butts on the job site. They quit, and took the benefit.

Linda runs a women’s clothing store and was planning to reopen last week, but decided against it. “The wage subsidy program is just too much to give up,” she said. And the federal rent money is due soon. That’s lost if the store opens again, she says.

Across Canada 70% of small businesses remain closed. Hearing such stories makes one wonder how irreparably we’ve altered the economy. Paying people – eight million of them – not to work has consequences. The damage to federal finances could take a generation to fix after Ottawa threw more than $250 billion at Covid-19. (Another $75 million yesterday for indigenous people living in cities.)

As I mentioned last week when writing about Lunenburg, I’ve been in NS during the pandemic. Here are the virus stats for the province: the total number of cases is 1,046. Recoveries are 959 and deaths 58 (almost all at one long-term care facility, Northwood). Nine people are in hospital. Thus, there are 20 active cases in the province, of which 19 are at Northwood. That leaves one person.

Was this really a pandemic? Most cases were mild. Recoveries are increasing faster than infections. Several provinces have few active cases at all. The health care system was not overwhelmed. No bursting ICUs or run on ventilators. And yet thousands of elective surgeries were halted and care denied to sick patients. Dental offices were shut. The young mom I met in the park last week was devastated her 18-month-old toddler had been unable to receive scheduled vaccinations. Clinics shut. BC says it will take two years just to catch up on medical procedures that were postponed.

So there are two schools of thought.

On one hand we overreacted dramatically. Politicians let doctors take over the economy. They closed too much, idled too many, spent too freely and destroyed too widely. Public finances are a ruin. Paying people not to work was unwise. We could have achieved the same result with social distancing and sheltering the vulnerable in those retirement homes, without nuking society.

On the other hand, decisive action, emergency measures and draconian stay-at-home measures saved countless lives. Flattened the curve. We prevented an historic disaster from unfolding. The pathogen was defeated. And our guard cannot be dropped, lest there’s a second wave. This was a public health triumph.

Well, guess which story will be told, regardless of the outcome? Perhaps history will judge. But clarity will not be forthcoming anytime soon.

Meanwhile investors who did not panic, sell into a storm, go to cash or believe everything they read in the mainstream media, have done just fine. Balanced and diversified portfolios performed as they were designed to, blunting the decline and joining the recovery. By the end of 2020 it’s reasonable to expect this will be another year of positive returns.

Hopefully, after all we’ve gone through this decade – Y2K, the dot-com crash, Nine Eleven, the great Credit Crisis, the US debt ceiling debacle, the 2015 oil price collapse, Brexit and now the coronavirus – one thing is evident. It’s not different this time. It’s never different.

Allow me to give you an example of why humans screw up. We flatter ourselves that the times we inhabit are epochal and our lives are therefore remarkable. We exaggerate, lose perspective, drift to the extreme and sink into an emotional quagmire. It leads to bad choices.

When the virus came to town, this blog tried to adopt a reasonable, non-hysterical tone. We’re probably not all going to get infected and die, it said. And we didn’t.

I leave you with some of the comments, emails, texts and threatening messages I received in mid-March. They were not published. Now you know why.

Garth, you do not have a crystal ball, so stop your nonsense. Your wild claims about how the international response to COVID-19 is somehow overblown exudes a hubris based on a wilful blindness to what is happening. By the time this is over, several million will have died, the world’s healthcare systems will have collapsed, and the global economy may well have contracted by 50% or more. Try to lay off the smarminess and read what the epidemiologists are writing, because the real ugliness is yet to begin. – Jimmy, March 21

I estimate 60 to 80 percent of people worldwide will be infected over about the next year. Outbreaks will come and go but the end result will be 6 to 8 billion people infected and about 500 million deaths worldwide. This little virus will kill more people than all wars in history put together. Disruptions in daily life will be massive and prolonged. Many mega companies will be bankrupt. The stock markets will linger at levels around 30 to 40 percent of current levels for several years before recovering to be robust, maybe five,six,seven years from now. Sorry to ruin your day, Garth, but this is what really awaits us.  – Rob Klein

How many go to the grave parroting your dumbass comments about this being nothing to worry about? Shame on you, old man. Smarten up! This is not a topic you are qualified to comment on and you are actively harming people with your ignorance. Try reading about mortality rates, R0 values, herd immunity, and what happens to populations when exposed to novel viruses- all stuff you conveniently left out in your comments. This stuff is actual science, not just opinion from some ancient dolt flogging mutual funds. You’ll sound less ignorant if you at least partially grasp these concepts. – Pacificqa

A lot of people are going to die – millions upon millions across the globe, and majorly in the USA due to their incompetence and hubris and total lack of regard for human life. This is no time for your normally appreciated wit. We need you to get on the bandwagon and show some understanding of the seriousness of this dire situation, and also show some compassion & empathy. Money & investing is not on the priority list for most in such dire circumstances. There will not be a short term turnaround. The economic & supply chain disruptions are just starting. This is real, and the widespread implications are unfathomable. It is f’ing serious and deserves a f’ing serious response! – Janice Todd

Garth, are you still in denial of this? Still holding by your “millions will not die” claim? I too want to be optimistic but it is tough to accept your statement without any logic behind it. I hope soon enough you will explain your conviction in more detail. – Dimitry

Hubris Garth. You remind me of the giggling vacationers in Phuket in videos of the 2004 boxing day tsunami. It starts with them watching some big waves coming in. Then they realize it’s serious, then they turn to run right when it’s too late. – Faron

Wuhan Virus Mortality Rate: Assuming 3% mortality and 50% infection rate in Canada (37.6M) we would experience approximately 564,000 deaths and over 2.5 million (15% of those infected) hospitalized as this unfolds. – Jager

F-n stawk and ‘balanced portfolio’ shill shilling for you buddy leaches ‘driving Ferraris’. Well, guess what, marketing blog genius, many of the people, including your clients shilled out of their money won’t need their portfolios anymore b/c they will be dead of the virus soon! Arrogant prick. – Alexei Yur

Garth Turner May 22nd, 2020

Posted In: The Greater Fool

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