Map of the Future: May-Dec 2020
This document was written on May 4th, 2020
This is a predictive roadmap, with a lot of guesswork in it. It is fairly USA-centric, but will glance at some other locations I am forming opinions about as well.
The state of things
- ~1.2 MM Covid cases in USA
- Daily growth rate of Covid is ~2.5% or about 30,000 cases per day
- Dow Jones is at about 23,500, semi-stable
- We are at ~20,000 Covid tests per day at the high end.
- 20% Unemployment (U3) based on a wild guess compiled off of what a few analysts have said.
- Nationwide shelter in place in the US, and also in basically every other country in the world.
- Some people protesting the shutdown, some relaxation of shelter in place.
- The Fed is doing Quantitative Easing as hard as they can (~$8 Trillion), and have gotten in bed with the treasury department to do it even harder. This makes them now subject to much more political control. The Money Printer Goes Brrrrr
There is an eerie sense that people feel like "things are under control". I think that this is mostly due to the fact that things are not changing rapidly on a human scale but were a month ago. We have adjusted to the shelter in place, and are just getting cozy and watching some Netflix. Any serious look at what's going on shatters the "under control" idea instantly, but it requires both courage and abstract thought simultaneously, and provides little obvious up-side.
Covid-19 is going to define a generation, not the way 9/11 defined the Xers, but more like the way WW2 defined the "greatest generation". It would literally be reasonable to call the generation after the Millennials "The Covid Generation"1
The below map of the future is pretty bleak, and is based on guesses, and lots of linear extrapolation. At the moment I don't really trust anything much more complicated than that because there is so much uncertainty and so many interactions. I am, however, really excited to be on record with numbers which I can use to see how wrong I am as we progress.
1) New Cases Per Day / (Recoveries Per Day + Deaths Per Day) falls below 1 and stays there. Right now using wikipedia numbers this number is about 3.5. On April 1st (before shelter in place's effects really kicked in) this number was 10.5.
If this happens it means that we are actually getting better, and the number of active cases is falling. I don't see how this can happen any time during this year, but hopefully I'm wrong.
I like this number because I can be I can understand it as opposed to complicated models of R0. Obviously its inputs might be being cooked.
2) Something like the Roadmap To Pandemic Resilience gets implemented.
There is a nice 15 minute explainer video on that link, but the short version is we would need Testing & Contact Tracing, and a lot of both.
"If TTSI interventions at this level do not succeed, and we have not developed capacity to test broadly and at much higher levels in work and school community settings (e.g., 30 to 100 million a day), we would need to revert to collective social distancing." --Roadmap to Pandemic Resilience
As a reference point, we are currently running something like
20k 200k tests a day. Seeing that number go way up, like 10x the number of new cases a day up, is a sign we might be breaking off of the narrative I describe below.
[Edit: Looks like I got that number wrong! we are in slightly better shape than this document indicates. Keep an eye on the testing number Here, If it starts dramatically out-growing new cases, we may have found an exit to this timeline ]
The Jobs Report. Best guess is unemployment (U3) will be reported at 21% ±2.5% This is well below an accurate number, but for reasonable reasons. Basically, unemployment is rising so fast that two weeks or so between when they sampled it, and when the report it, hide really significant movement in the number.
I specifically predict that this will not be over 25% (The nominal computed unemployment rate at the peak of the great depression) and that it will not be below 18% (The floor of plausibility, even with political cooking of the books) [90% certainty]
I do not think that this will shake the markets [80% certainty], or the political world at all, both have already factored this into their narrative pretty well, and it's just not news or newsworthy. I think keeping an eye on U6 (a different unemployment measure, which counts things like the long term unemployed and the severely under-employed, such as a lawyer who works part time at Starbucks because they can't find work lawyering).
Shelter in place will remain through the end of the month. Discontent and protests amongst the poor, rural white population will grow. At the moment these protests are being painted as racist, and while they absolutely contain a non-negligible amount of racists, the protests are clearly about something else. Just to clarify, I think that they are totally wrong about it being "time to open up the country", but I'm pretty sure they are being motivated by a blend of economic need and a machismo ideology. Regardless we can expect them to get louder, and the people calling them racists to get louder, in lock-step. This is bad because it means the politicization of health policy along culture war lines, and means that legitimate concerns about privacies and freedoms will also get swept into that morass.
At this point I'm expecting right 2.5MM ±.3MM Covid-19 confirmed cases [80% certainty]. That is an unmodified extrapolation of a 2.5% growth rate. Seeing as how we are already sheltering in place as hard as we are likely to, and that only seems to have brought growth rate down to 2.5%, I can't really see any reason to expect it to go lower, though a signifiant portion of people will probably be loosing their will or ability to "Shelter in place" properly, so I wouldn't be shocked to see this number creep higher.
The Jobs report comes out, and it shows Unemployment (U3) at 31% ±4% and U6 well over 40% [90% certainty]. This will actually make some headlines because it will be "Unemployment higher than in the Great Depression" and very hard to cover up or spin any other way. Most people will still largely not care, because it will have been obviously true for at least 3 weeks already, and therefore not really have shock value as news. The Markets will not react to this, as they actually don't care much about unemployment (See: jobless recovery)
This may prompt a second stimulus payment that tries to directly put cash into peoples pockets or some sort of rent forgiveness / suspension [30% certainty], perhaps even one which is set up to be recurring for the duration of the disaster. This may be the seeds of the Universal Basic Income.
Pressure will have grown to lift "shelter in place" orders, and lots of places, particularly those that lean rural, red, or libertarian, will start opening up businesses again. This will be done despite having no actual progress in ways to control the spread of Covid-19. It will be a trend as opening up won't appear to raise the Covid growth rate due to the two week lag between infection and symptoms.
- Some sort of robust contact tracing program. This probably comes out of the Google/Apple effort. It doesn't need to be perfect, but if you haven't heard about it in the sense of "here is how you activate contact tracing on your phone" it hasn't really happened
- Something like 200,000+ test per day. (NOT infections, but tests. They need to be testing like mad)
Neither one of these things means much without the other. I'm not expecting to see the tests.
- Some form of "Certified safe" card/patch/lanyard for people who provably don't have it from the last XX days.
Even if I'm totally wrong about number of Covid cases, and it has fallen to well under 1MM, that does not indicate that it is safe to stop Shelter in Place. New Cases Per Day / (Recoveries Per Day + Deaths Per Day) being under 1 means that Shelter in Place has been working, not that it is ok to stop. It would however be a hopeful thing because it would indicate that we could simply Shelter in Place for another two or three months, and watch the numbers fall to near zero as a viable solution.
July is going to be really rough.
I expect the total number of US Covid cases to have crossed 6MM. This is based on the prediction that some places will be (prematurely) lifting of shelter in place due to social and economic pressure, and that people will getting sloppy or hostile where it is still going on. I'm also guessing that at this point lots of hospitals are getting overwhelmed. Because it happened gradually the overwhelm doesn't look like "people dying in the hallways" but something more like "orderly triage". It still means people are dying, they just will have an assigned seat while they do it.
Sadly, I don't think that this will cause much of response in media, economic, or political terms. Basically like the boiled frog, it will have happened too gradually to be really news-worthy. The 4th of July will probably see more anti-lockdown protests, and a wave of BBQs in flagrant violation of the lockdown as political statement. This, particularly given its patriotic theme, will be characterized as racist, and will likely cause further politicization as well as a bump in infection numbers.
The Jobs Report comes out on the 3rd, and my guess is that it will be about the same as June's: 31% ± 4%. Still worse than the GD, but most of the people who were going to get laid off have already been, and the loosening of lockdown that I am predicting for June will have pulled those numbers up a little.
Q2 Earnings come out over the month. These are going to be crooked, cooked to within an inch of their life, and still devastating. Essentially everyone will have made no money at all over the quarter with a few notable exceptions (Investment banks, Amazon). This is going to cause the "E" part of "P/E Ratio" to change suddenly, and all of the stocks will be obviously overpriced again. My guess is that that this will trigger the second downward leg of the current financial crisis. This will see the Dow fall well below 18,000 again, maybe as low as 12,000. It may be that some combination of fiscal stimulus and wishful thinking push the date that this happens out to August, or that the second leg of the crash happened before this, but one thing that I am pretty sure of is that we are not at the bottom of this bear market.
The Fed may try even more dramatic moves than QE and bottomless money printing at this point. This would include some pretty crazy bailouts, and possibly buying large amounts of actual stock. This becomes interesting because all of a sudden politicians get to have a vote directly about who runs companies. It's a change that won't seem all that interesting until a few years from now, but watch for it. If the Federal reserve buys stock on the market, it means huge changes in the basic structure of our country a few years down the line.
Most states will likely tighten shelter in place rules again, but now they will be subject to dramatic political forces and have been caught up in the narratives of the culture war, and in the narratives that are starting to spread as part of the election. This will lead to less effective collective action and worse government decision making. Expect to see dramatically different SiP policy in traditionally red / blue states.
Over 10MM cases of Covid, though a meaningful number of them are either recovered or dead.
Hospitals are overwhelmed. Telemedicine is completely normalized for normal problems.
Public schools do not open. Some blend of remote classes, and parent-based childcare continues.
Universities launch another semester of remote classes. In general things go a little smoother with this.
Unemployment remains high, over Great Depression levels.
Election madness really sets in at this point. This year is going to be really crazy. Mostly it will happen through screens, because most people will still not be going out. Back in Jan I predicted a pretty sure win for Trump, but I no longer see this as the case. When the economy worsens people often vote for the challenger, and I can see that happening. I'm not saying that Trump is going to lose, I'm just saying that I have too many major uncertainties at this point to model anything.
The level of emotional intensity is going to be deeply unpleasant and people might actually start simply unplugging from the political news as well. Senate races will also be a mess.
A hurricane makes landfall. I'm basically putting this in August because it's the soonest it might realistically happen, but it's more likely in September. Regardless of when it happens, if it happens (which is pretty likely) it's going to cause a lot more trouble than usual. People will need to either try to Shelter in Place through it or flee its path. All those displaced people are going to stir the Covid Pot, and cause another spike in cases in that area, which will already be having problems with resources and infrastructure (medical included).
This falls into the category of "normal".
20MM Covid cases, which will be entirely politicized (along with everything else). These numbers are way too wobbly to take seriously at this point, but honestly the same is true with everyone else's.
Public schools do not re-open, at least not in person.
Election madness is in full swing. There will likely be plenty of political rallies despite the obvious danger of doing so. There will likely be a lot of groundwork to de-legitimize whatever the election results are. This will run along the lines of polling-place availability, vote by mail arguments, and various other concerns about voter suppression and or false registration. The dis-information and miss-information will likely be deep.
The good news is that while a lot of election shenanigans may occur, and this election may actually be rigged to the point of being illegitimate, I don't think we are going to see that particular demon let loose.
40MM Covid Cases. I think it would have slowed down quite a bit by now, except for people doing stupid things like political rallies, and or being forced to go to polling places in person. These numbers are way too wobbly to take seriously at this point, but honestly the same is true with everyone else's.
I sort of hope that early October is going to be the peak in the US. At this point the medical system is totally overwhelmed everywhere, but it just sort of feels normal. There is likely what effectively amounts to a parallel medical system for everything else.
The actual election happens, results come in. Either way there will be much wailing and gnashing of teeth by about half of the population, and the winner will likely be seen as one of the least legitimate leaders ever elected. They will also have one heck of a mess to clean up.
Q3 Earnings will again be abysmal, and it will have become apparent that there just isn't anything that fiscal policy can do to make this better. At the same time it will be obvious that there is a lot it could do to make things worse. The money printer will continue to go "Brrrrrr". There will be serious conversations about nationalizing several industries (though it is unlikely that the word "nationalize" will be used. It's more likely that it would be something like a series of shells through which the Fed ends up buying controlling positions in companies).
Despite huge cash infusions, and months of crazy money printing, there is still no inflation in sight, that likely won't come until next year, or maybe even later.
30MM Cases. Most of the essential workers who were going to get it will have had it already. Spread will be slowing dramatically due to "Herd Immunity". These numbers are way too wobbly to take seriously at this point, but honestly the same is true with everyone else's
You will not travel to visit people for Thanksgiving. It's going to be Zoom or nothing.
20MM Cases. Most of the essential workers who were going to get it will have had it already. Spread will be slowing dramatically due to "Herd Immunity" These numbers are still way too wobbly to take seriously at this point, but honestly the same is true with everyone else's
The will have long ago announced that school will be suspended until the end of next summer.
You will not travel to visit people for Christmas, again it's going to be Zoom or nothing.
Random other things you might notice
At some point you're going to notice a ton of new shows that are animated. The hunger for media is going to be huge, but you can't really get a set together and working right now, on the other hand you can pretty much do an animated show or film from script to premier without ever having two people in the same room.
For the moment we are still seeing things that were shot pre-Covid and are being edited while SiP is up, but eventually that footage is going to run out.
Sports in empty stadiums for sure. There is bound to be some weirdness with this beyond what is imagined, for instance, why fly a bunch of teams around for home and away games when you can just keep all the teams somewhere cheap in the middle of the country, and play all the games on the same few fields? I don't think we are going to see open stadiums for at least another two years, so we probably are going to have another few rows with Astrix next to them in columns of sports stats.
A lot of people, all around the world, are really going to hate China now. This will be combined with a new emphasis on de-globilization, and suddenly I don't think China is going to be the factory for the world anymore. This is going to be really hard on the Chinese "Economic Miracle", and China may have a "Lost Decade". All the US companies that were offshoring to China as fast as they could are going to either reverse or stop (and probably be legally required to one way or another).
At the same time people are still going to shop by price, so there is going to be a real two sided pinch on profits. This is probably a time when things are really going to double down into heavy automation.
Conferences, Night Clubs, In-Person Dating, Festivals are going to be dead for a few years. There will be dramatically different norms for attendance once they get started again. Online degrees are going to become a totally legitimized thing, and schools may start to see their campuses disintegrate.
Contact tracing is going to happen, and the "surveillance state" is probably going to reach a new level of normalization.
There are going to be some pretty durable new dress code and behavior norms. We have gradually moved to the point where there is no difference between "in the home clothes" and "out in public" clothes, but that's about to be reversed. There will be definitely be a new version of something that is going to turn into formalwear or public-wear.
- 1. The Greatest Generation was also called the G.I. Generation in reference to the war