MORTGAGE CREDIT NEWS BY LOUIS S BARNES - April 3, 2020

The economy and the virus. Can’t do one without the other. But one is so much more important than the other that we don’t need to bother with the other.
But before that, a challenge and duty to all: don’t believe and don’t spread unverified information. My dad’s advice: “Keep your crap-detector turned on.” Our situation is perfect for magnified headlines, fringe theories, garbled math, and plucking at our emotions until we can’t think at all. And the authorities are caught in cross-purposes: they must frighten us enough to get us to behave, especially the knuckleheads, but not so much that we faint. If you have not already, rent “Contagion” -- scary, accurate, and in particular study Jude Law’s character, the composite for today’s energetic misinformer.
The course of the virus including our reaction is so much more important than the economy that there is no reason to pay attention to the economy. The Fed is paying attention to it, Congress is poised to do the one thing it’s good at (hosing money), and leaders are rising to the occasion, especially several governors performing superbly. Give thanks for the improbable but top performance by Treasury Secretary Mnuchin.
Ignore the economy for several reasons. The awful new data is a magnificent mud-wallow for scare stories. We cannot know how new reports will correlate with recovery when we go back to work. We already know the few things which matter: the economy and household finances were in excellent shape going in. Many economic cars are parked because we turned them off, not because bad teenagers from Wall Street poured sugar in their tanks and ruined them. We do not have $3 trillion in mortgages which should never have been made. And coming out will be disorderly, probably regional with the virus winding lower at different speeds in different places. Not over, lower.
I hunch that we have about April before structural damage begins to set in. Life between now and May 1st, and then coming out of lockdown will depend on the extent of infection, testing, and mortality. The three are linked, but to understand and to master our fears we must think of each separately.
Testing... Mr. Pence said yesterday that the US is testing 100,000 people per day, and drew deserved horse laughter. The WSJ reports Germany with one-quarter of our population now testing 500,000 per week, soon to be 200,000 per day. Keep an eye on Germany. Even the German-speaking one-third of Switzerland has far lower mortality than its French and Italian cantons. Culture may be in play. Discipline, and personal touching only by appointment. A clunky sense of humor may repel the virus.
Then, this insight (NYT) “The importance of viral dose is being overlooked in discussions of the coronavirus. As with any other poison, viruses are usually more dangerous in larger amounts. Small initial exposures tend to lead to mild or asymptomatic infections, while larger doses can be lethal. Dose sensitivity has been observed for every common acute viral infection.” Hence one reason for fatal infection among the young and healthy, and especially medics and police. Spend another 18-hour day in intimate contact with the infected, and while exhausted not notice that your mask was ever-so-slightly askew.
Hence also the minimal risk of a significant dose if maintaining six-foot distance, and in well-ventilated space, and outdoors. The range of dosing from mini to max may explain the wide range of symptoms, at most accounts 80% mild to none. Prince Charles is my age, in and out of quarantine in one week, although his mother may prefer that he phone her.
Mortality is the real concern, but impossible to measure because we can’t know how many are infected until we test widely, and in another couple of months have serum tests for immunity. But we do have some data on mortality, Italian reports with 80% or more aged over 60 and 90% with other health impairments.
Mortality among younger and healthy people not receiving megadoses of virus may be little different from seasonal flu, one-tenth of one percent, 0.1% -- 30,000 people this winter in the US out of 30 million infected. However, Covid-19 makes more people sicker than seasonal flu and requiring much more care to survive.
Try this mortality math puzzle: WSJ research in Italy found a large increase in deaths not included in official Covid mortality. In Bergamo, population 120,000, in March 2019 only 125 people died of all causes. Last month, 553 died but officially only 210 from the virus. The year-over-year excess was likely to have been entirely from virus -- 352 people. If mortality was 1% of all infections, high in Bergamo because of the large elderly fraction and overburdened health care, that would guesstimate 35,000 total infections in the town.
If enough people in any confined community acquire immunity by infection, the disease dies out -- herd immunity. If Covid has R2 contagion, half of the herd needs to acquire immunity. Bergamo and Wuhan may have gotten there, and NYC is working on it.
The NYT yesterday reported the change in our travel behavior based on the movement of our cell phones. The NYT has put all virus reporting in front of its paywall, the phone-travel link here, and the most impressive graphic below. We are a disorderly people, placing personal freedom above nearly everything. However, in many counties where we have been asked to stay put, we have. In Seattle the average daily travel distance has fallen from 3.8 miles to 61 feet. The Old South does not yet get it.
As last week and in weeks ahead, circle back to Colorado, which along with Seattle may be the first to open because we were the first to be serious about distance and scrubbing.
As of today, 5.8 million people in CO, 3,728 cumulative infections (undermeasured 4x-10x says the State), 710 cumulative hospitalizations, and 97 deaths. Among Boulder County’s 320,000 citizens, since the first case detected on March 14 the cumulative case count is 138, hospitalized 33, recovered 68, and two people have not survived.
CO charts below. Fatalities are likely to be accurate, although heavily weighted by the 21 nursing homes now involved here. In special horror, care facilities must have hands-on help. There are not enough tests for workers, and some sources suspect among current testing a 30% rate of false-negatives.
How long will Colorado stay closed, can stay closed, only to protect our most vulnerable?

This data and map are NYT, as linked above. The still-moving South is shameful, and will keep the rest of the country at risk longer than necessary. The still-moving people on the high plains and in mountain boondocks -- it’s a long way to a grocery store, with physical proximity only to antelope and jackrabbits:

The information below was collected by New York City through March, more than 40,000 infected and 1,562 dead as of yesterday. The large circles are 1,000 cases. Use the Bergamo math, but a far lower rate of mortality because of better care, and hospitals not allowed to become sources of infection, but NYC still subject to spread via unavoidable density. If mortality is 0.3%, 1,562 deaths convert (divide deaths by .003) to 520,000 actual infections as of two weeks ago, when many of those who have died were infected. To get to herd immunity in NYC, maybe 4.2 million infections would be necessary, 12,600 deaths. Possible, but more likely a tailing, not an end before we must go back to work.

Colorado data as of April 2. Linear growth, not geometric, especially mortality. Both may be flattening -- and geographic dispersion in the last chart tells some stories...

Our first hot spots were ski resorts. The large blob west of Denver is Eagle County, home of Vail (link to interactive version, if you can get past paywall is here, current data for each county under cursor). Cases are still growing in the mountains but some have been brought up by refugees from the plains. Other areas -- Aspen, Telluride -- with early heat have cooled, and the other dozen big resorts never truly ignited. All resorts closed three weeks ago.
The blobs east of Denver are tricky. The county populations are concentrated at their west edges, near Denver, may reflect rural resistance to distancing, and the high mortalities reflect nursing homes located there for inexpensive labor. Colorado Springs suffers the worst because of one, most-unfortunate, elder bridge tournament.