I have been writing about the coronavirus pandemic since February 2020, because of its obvious effect on the stock market. The media have failed to provide more than a short-sighted perspective and they have been too timid in their criticisms of our mistakes. They write about today’s news but have not adequately discussed what we we did wrong and what we should realistically expect by the end of the pandemic in 2021 or 2022. I am providing my thoughts about the pandemic’s effects on the economy and health of the U.S. population.
We did not do enough to fight the pandemic early on, and I would still opt for a 6 week absolute lock down to rid the country of the virus while we wait for a vaccine next year. But what we currently are doing is still reasonable, as anyone can see by looking at the stock market.
Americans are bored with it and moving on with their lives
Americans are bored with the pandemic, how it is affecting their lives, and all of the news coverage. A significant percentage of us have decided to forget about it and just move on.
However, outside of events in our own families, this will be the single biggest event of our lifetimes. It is historic and it will affect the entire world more than anything else any of us will ever see. It will kill more people, make us change our behavior more, and cost more money than other event since World War II. Because it is so significant, I am writing a comprehensive article that looks back at our mistakes, and forward to how it will end.
I am a physician
My M.D. degree is from the University of Chicago. My board certification is in ophthalmology and I have a subspecialty in infectious diseases of the eye. Viral eye infections are particularly important.
I also began my career as a medical scientist and I have published many medical papers. With that background, I pay a lot of attention to the medical aspects of the pandemic.
I am disappointed by the path our political leaders have chosen. It is not too late to change direction and save lives and dollars.
However, it is clear that everyone has come to accept the current approach of everyone just being careful until there is a vaccine. I will simply continue to wear my mask and gloves when I am out. Also, I will defer travel and avoid crowds until after I am vaccinated.
I am a taxpayer
As a taxpayer, I am mad. Our mismanagement of this crisis in February and March is costing all of us money and it weakens our economic future. We will have spent $5 trillion by the time the pandemic is over. This is far greater than what we would have spent if we followed the recommendations of medical experts.
The United States pays twice as much as any other country for heath care. As one of the people paying the bill, I expect to get the best product in the world when I pay so much more than people in other countries. Instead, the health care I am receiving for the pandemic is significantly worse than that of many other countries that are spending far less.
I am a U.S. citizen
As a U.S. citizen, I am angry that our government is responsible for tens of thousands of avoidable deaths. Also, it has been exposing me to more risk than people in other countries face.
The politicians from both parties have mismanaged this pandemic to an extent that I could never have imagined. This is especially true of January through March. Our death rate is many times greater than that in several other developed countries. I am 68 years old with some medical issues, and the risk to my life is significantly higher because of the terrible decisions our politicians are making.
Columbia University estimates that more than half of the deaths up to this point were avoidable. If we end up with 500,000 dead Americans, that could mean that hundreds of thousands will have died needlessly. Blame this on the unwillingness of our politicians to do what countries with great leaders have done to save their citizens.
I am a trader in the financial markets
As a trader for 34 years, the economic impact of the pandemic fascinates me. The media have disappointed me by not being more aggressive in presenting realistic assessments of what has happened and what is likely to follow.
On February 29, there were no deaths yet in the United States. I wrote, “You have to wonder if half the world will be infected before there is a vaccine.”
Then, I went on to say, “This could be the worst pandemic since the 1918 flu, which killed 50 million people. I know that sounds crazy, but that is what the math looks like to me.”
Also, I said, “If I am right and it is a much bigger problem than what the experts are saying, it could easily lead to a 30 – 50% correction this year.” The S&P was down 34% less than a month later.
The stock market is telling us that the New York disaster was the result of no social distancing and no masks. It was not a sign of what was going to happen across the country. It is approving the current results, and therefore what we are doing now is reasonable. Not ideal, but reasonable.
It was obvious in February to medical experts
Medical experts saw that our leaders did not understand what was going on. It was clear that the politicians were ignoring expert advice and instead chose to make purely political decisions.
It is not as is the leaders had no way to know how serious this was in February or even January. President Trump’s trade representative, Peter Navarro, on January 29 sent a memo to the President and many other officials warning that 1 – 2 million Americans could die and the pandemic could cost trillions of dollars. The result? Don’t do anything because it could hurt the stock market and the fall election, and simply hope that the virus miraculously goes away.
I have frequently talked about the pandemic in my trading room, and have also written extensively about it on this website. Ten days before the WHO called it a pandemic, I said I disagreed with the delay and called it a pandemic. I speculated that their hesitation was political because they were denying the obvious.
Why do I give the pandemic so much attention? Because it is the single biggest event in our lifetimes, and the horrible way that Washington is handling it astonishes and saddens me. Big problems allow big people to stand tall. We have no giants in either party stepping up to meet the challenge.
I am shocked, and I think it is important for everyone to think much more about the pandemic. It is affecting all of us far more than it should. Maybe a million Americans will die. That is understandable in a poor country with a weak health care system. It is outrageous to have that happen in the U.S. when so many other countries are doing an incomparably better job.
Americans cherish their rights
As time goes on, we get more information. That allows us to develop higher probability opinions about what lies ahead. Too many Americans are unwilling to do what is necessary to stop the spread, especially when our leaders are telling them to not bother. They prefer to resume their normal lives and they accept the risk of getting infected. Because of our system of government and the freedoms we enjoy, that is their right.
The problem is that when they exercise their right, it infringes on the right of those who choose to minimize the risk of infection. If 30% of the population ignores all precautions, the virus will spread unchecked. I have been saying that it was likely to infect 100 – 200 million Americans. That is still true.
No one is safe when 30% of the population is not not taking steps to prevent the spread
The coronavirus will also infect many people who are doing everything possible to avoid infection. The indifferent person does not have to kiss a cancer patient to kill him. But if he gives the infection to someone who gives the infection to others, eventually it will get to vulnerable people who will die.
Many of these people who are doing everything possible to avoid the infection have medical issues that greatly increase the risk of them dying. A father with a 5 year old daughter receiving chemotherapy now has an increased risk of losing his child. Three times more people over 65 years old will die if they get infected than people under 50 years old. That 30% who does not care if they themselves get sick is telling them, “Too bad for you, but I am unwilling to give up my freedom any longer to save your life.”
This is like smoking back in the 1960’s. We just accepted that one person could decide to smoke in a crowded room, or on an airplane and everyone else had to tolerate it. Eventually we decided that this was ridiculous and politicians passed laws to stop the tyranny of the minority.
Misleading comments from government medical experts
Why are my numbers so much higher that those of Dr. Birx and Dr. Fauci?
I continue to say that once the pandemic has ended, 500,000 – 1 million Americans will have died. But the White House said in March that 60,000 deaths was going to be the worst case. At the time, I said that its worst case was much better than my best case. Since then, they have continued to ratchet up their estimates. It was going to be 80,000, then 100,000, then 160,000, then 200,000, and now they say 240,000 is the worst case.
They have access to great medical experts. Why are their numbers always so wrong? Because you have to listen carefully to what they sometimes add to the end of their sentence. For example, instead of saying, “The pandemic will take 200,000 lives,” they say sometimes add, “by August 1st.”
They are not talking about the final total. It’s like saying in May of 1942 that 200,000 American soldiers would be dead by August of 1942. Who cares? People want an estimate of the final total at the conclusion of the war, which ended in 1945, and not a number that they will have to increase every month.
Dr. Fauci and Dr. Birx are doing a very difficult job
Dr. Fauci and Dr. Birx are national treasures. They are doing the very difficult job of trying to bend the administration in the direction of science when it is much more interested in politics ahead of an election.
They know that they have said many things that, while largely true, are misleading. This is because they have to be afraid that the political wing of the White House will be quick to fire them if they go too far from the White House’s message.
If that were to happen, whoever replaces them might not provide a strong enough scientific voice. They are trading some of their integrity and lifelong, hard-earned respect to help the rest of us.
Knowing the number of deaths 2 months from now is useless
Why are the endless bad estimates important? Because they are meant to deceive the American people.
The vaccine will not be available until the beginning of 2021 at the earliest. Let’s say they begin to vaccinate people in February 2021. That is 250 days from now. In the absence of a vaccine, it is reasonable to assume that we will continue to lose at least 1,000 people a day. The average might be 2,000. That will add 250,000 – 500,000 deaths to the 100,000 that we already have had.
It will take months to vaccinate the 70% of the population who will want to be vaccinated. Maybe another 100,000 – 200,000 more people will die before the infection is under control.
Also, the number of deaths is much more accurate than the number of infected. Many infected people do not have symptoms and most never get tested. But we know that 0.5 – 1% of infected people die. Since we already have 100,000 dead, then we currently have 10 – 20 million people who have been infected, not the 1.8 million that Johns Hopkins and the government are reporting.
It is clear Washington is trying to mislead the public. They always say whatever is to their benefit, especially in an election year.
The politics in an election year
Many new laws ahead
There will be many new laws over the next 10 years in response to the current pandemic. Most people now realize that there will always be another pandemic. They therefore want new laws.
We need to see the data before we decide how restrictive the laws will be. I mentioned in an earlier report that we could reduce the speed limit to 10 miles an hour. That would save 50,000 lives a year. But the vast majority of Americans prefer to drive 60 miles an hour and have 50,000 strangers die.
Ten million Americans will not die from this pandemic, but if that were to happen, or if there was a 2nd serious pandemic in the next 10 years, public opinion would force politicians to pass strict laws. More people would be eager to give up freedom to save lives.
If “only” 500,000 people die (more than in World War II, the Korean War, and the Vietnam War combined), which I think is likely, the new laws will probably be minimally restrictive. That is only 10 years worth of car deaths. The laws will have more to do with insuring that there are enough masks, gowns, and ventilators in a government storage facility and that we have a more rapid response. They will have less to do with restricting our behavior.
Very restrictive laws are excellent at saving lives
Americans have dozens of times more deaths per 1 million people than South Korea, China, and Taiwan. Dozens!
This is the greatest blunder in America’s history. Even when we stopped flights from China, 36 other countries beat us to it. Even China banned flights from China! We were late and we stupidly allowed 40,000 people to come from China as exceptions. We waited forever to ban travel from Europe. Yet, most of the infected people coming into the U.S. came from Europe, not China.
And where were the democrats? They did nothing either. We did not have any leadership in Washington from either party. Three years from now, studies will show that we will have lost hundreds of thousands of people needlessly.
The citizens of those other countries where the governments saved so many lives were not given a choice. The governments imposed strict containment policies that Americans would only accept if we had strong leadership telling us how important this was. We needed a Lincoln, a Roosevelt, or a Kennedy.
Strict policies include totally shutting cities down, monitoring everyone’s location and contacts, testing aggressively to find contagious people, security cameras and drones everywhere, and giving people different color codes on a phone app that shows their risk level. All we would have to do is test, test, and test to find infected people and then isolate them for 2 weeks. That’s it.
We would not have to resort to the brutal extremes that China used. For example, if they decided that someone was probably infected, police went to person’s home and dragged him and his family out as they kicked and screamed. Infected people were then forcibly kept in huge make-shift confinement facilities for 2 – 3 weeks.
Inherent flaw in our political system
Everyone understands that the Fed does a great job protecting our economy. It is free to make important economic decisions without worrying about public opinion or an unhappy president. Yes, the president can always replace the Fed Chair, but the backlash would be severe. The result is that the Fed is as independent as it needs to be.
What many may not know is that the Fed was created by an act of Congress in 1913. There is nothing about it in the Constitution. Congress has the power to write similar laws that would protect us from other things, like pandemics.
Suppose there was a health care commission that made all decisions about our health care, including responses to pandemics and running a universal health care system, and it was independent of the president. I bet our results would be like those in South Korea instead of among the worst on the planet. It would be nice if there also was a balanced budget commission that prevented us from passing a huge debt onto our kids and grandkids.
The flaw in our system of government is that those making decisions are only concerned about what happens up to the next election. Politicians focus on very short-term solutions to every problem. They ignore the obvious reality that the best solution to many problems requires a much longer perspective.
But if you are in Congress or the White House, you lied your way to the top over many years to get as much power and control as possible. People like that are not going to be thinking about ways to give any of their power away.
Our choices are reasonable but not the best
We are now being reasonable, but we are not making the best choice
I want to emphasize that I think what we now are doing is rational and reasonable. But what we did for the January through March was ignorant. That greatly amplified the cost in dollars and lives.
When I say reasonable, it is, but I would instead have us sacrifice for 6 weeks and rid the country of the virus. However, I respect the people who feel otherwise, and they are making a reasonable decision.
I don’t think it matters too much what we do at this point. The damage is already done and there is no leadership to do otherwise. The stock market is telling us that what we are doing now is fine.
Besides, too many Americans are bored with the whole thing and prefer to let virus do whatever it’s going to do. They have concluded that the risk of another New York is small. Many are now no longer willing to let the virus control their lives. That is understandable.
Why has the United States handled the pandemic so much worse than other countries?
Because we’re stupid. Also, we have ignorant people running our government. And finally, the way our government is designed incentivizes focusing on reelection at the expense of all else.
Both parties are at fault. Why didn’t every democrat constantly scream about this every day on TV in February and March? Because they, like the republicans, are more interested in the November election than the lives and economic well-being of the people. It is simply easier to do nothing other than tell people to be careful.
We will have foolishly spent $5 trillion dollars on this and we will have lost 500,000 to a million lives. One in 5 Americans lost their jobs, 40 million people. All avoidable if we had strong leadership.
This will go down as the most tragic political blunder in history. It is comparable to Mao Zedong’s Great Leap Forward from 1958 – 1962 that resulted in 20 million deaths in China. He, like us, was more interested in a political idea than in his people.
Politicians acted rationally, but in their interests, not ours
Most medical experts knew no later than February that we were heading to a disaster. What would have happened if the government in January or February totally shut the country down, like China? We would have had maybe 1,000 deaths instead of the hundreds of thousands we will have. Also, we would have spent maybe $500 billion to pay the bills for our citizens for those 6 weeks. That is only 10% of what we instead will pay.
What’s wrong with this scenario and its great result? The great result is the problem. If we did it, politicians from the other party would say we wasted $500 billion and made people suffer for 6 weeks over nothing. They would point to very few deaths and angrily argue that we vastly overreacted.
The problem is that this is very credible and most Americans would believe it. That would be the end of that politician’s career.
Politicians are smart and they understand this. Our Constitution forced them to choose between doing what is best for us, which would get them kicked out of office, or doing what was right for them, which will cost us hundreds of thousands of lives and trillions of dollars. They made a very rational decision, but it was a disaster for Americans.
There are many serious problems with our system of government, as with all governments. Unfortunately, there is no a path forward that would fix them.
Bad lock down yields bad results
There are studies that have concluded that a lock down done poorly, like in the US, actually leads to more deaths than it saves. If a country does not do an absolute lock down for 6 weeks, and find and isolate every infected person, the lock down will be ineffective.
Examples of how a badly conducted lock down kills people include people getting depressed and committing suicide, or drinking themselves to death, getting heart attacks and strokes from stress, not getting medical treatment for other medical conditions like chemotherapy, and not getting diagnosed and treated for diseases that then become deadly.
Reducing restrictions will be bad for the stock market
It’s astonishing how so many Americans appear to not believe that the outbreak in New York City actually happened. It’s just easier to dismiss big numbers. Is 500,000 deaths more important than 5,000? Most people think they are the same. It’s just a lot of dead people.
If they thought more about it, they would realize that the same virus that killed so many people in New York is still out there. There will probably be many mini-New Yorks in the fall and winter, ahead of the vaccine.
And their community could be the next New York. If a family member dies, they will suddenly become shocked and outraged by 500,000 other deaths.
Our healthcare system can be overwhelmed again
The New York catastrophe really happened
Why should anyone assume that they will be less likely than New Yorkers to get sick? New Yorkers are not part of an inferior species. Yes, New York has subways and congestion, and there was no recommendation to wash hands, wear masks, and stand 6 feet apart. But going to a pool party in Arkansas puts you in close contact with as many people as going on the subway in New York. When you go on the subway, you go on one car. Is that exposure drastically different from being at a street party in Miami?
Therefore, the number of infected people will go up across the country over the next several weeks. And this is happening at a time of the year when it should be going down. However, the numbers will probably not get much attention until we are back above 2,000 deaths a day later in the year.
Also, it is unlikely that we will have another New York. Enough people are being careful to prevent that.
What will stock market investors think about the number of cases ramping up? Many will think that a lot of Americans will become even more cautious. That will result in less spending, more unemployment, reduced corporate earnings, and lower stock prices.
As you know, I think there is a 70% chance of about a 50% retracement of this 2 month rally before there will be a new high. A significant increase in the number of Covid-19 cases over the next couple months could be the trigger for the reversal down to begin.
Curve flattening and exponential growth no longer factors
Why no more talk about flattening the curve?
The biggest concern early on was that if a large number of cases came at the same time, they would overwhelm the healthcare system. The result would be inadequate treatment and more deaths. That happened in New York City earlier this year.
However, enough people are wearing masks, frequently washing hands, and practicing social distancing so that we have not seen another big spike in cases. Since everyone is aware of the danger of a spike, we will probably not see another one. Therefore, there is no longer a need to talk about flattening the curve.
No more talk about exponential growth
The primary concern about exponential growth was that a rapid increase in cases would overwhelm our ability to care for patients. Because the health care system is not being overwhelmed, there is rarely any more coverage of the ongoing exponential growth in the number of new cases.
I wrote about herd immunity in May. If enough people have immunity either from vaccination or from recovering from Covid-19, the total number of new cases will go down. The more contagious a virus is, the greater percentage of the population needs to be immune to achieve herd immunity. For Covid-19, I talked about the math last month. We will need about 70% of the population to be immune to being to have the number of new cases steadily decreases to the point that the pandemic will have ended.
Remember, the US went from 1 case in January 21, 2020 to close to 2 million diagnoses cases today. The actual number is likely at least 5 times that.
Here’s a thought about exponential growth. Which would you rather have, $10,000 a day for a month or a penny that doubles in value every day? I’ll take the penny. If you take the $10,000 every day, you will have $300,000 at the end of the month. But if you take the penny, you will have more than $5 million!
The obvious importance of a vaccine
Can we stop the virus without a vaccine?
Yes, but our political leaders are choosing the easy way out. Tell people to be careful and hope for the best. It will work reasonably well, but I think a much more aggressive approach for 6 weeks would be better.
Look at China, South Korea, Australia, or Taiwan. Most cities in China have not had a new case in 6 weeks and they do not have a vaccine. And there have been very few new cases in South Korea, Australia, or Taiwan.
Johns Hopkins University data is some of the most respected out there. They show that the U.S. death rate is 30 dead per 100,000 people in the population. Compare that to South Korea, which has 0.52 deaths per 100,000 people. They handled this 60 times better than us. Not 50% better or twice as good… 60 times better!
If you prefer to look at a big European country, Germany has had 10 deaths per 100,000 people. That is 3 time better than us. Why? Their leadership put science ahead of politics.
Why are we so far behind the truly great countries? They are not using a secret plan. What they do is simple. They test extensively to find every infected and exposed person, then quarantine the person for 14 days. If we did that, the infection would be over in 6 weeks without a vaccine and without any treatment. We would sacrifice for 6 weeks, and save hundreds of thousands of lives and trillions of dollars.
What is a virus?
A virus is a clump of genetic material, either RNA or DNA, covered with a protective protein layer. The coronavirus is an RNA type of virus. It has a greasy overcoat. Since soap binds to fats, the CDC hopes that washing hands with soap will coat the viral surface and prevent the virus from attaching to cells.
Its surface proteins attach to your cell surfaces. The virus then works its way through the cell membrane and into the cell. Its RNA takes control over the cell’s replication process. The cell manufactures virus particles instead of new cells. Then the cell dies. When the cell wall breaks down, the new virus particles then go on to invade and destroy other cells.
The coronavirus is especially attracted to lung cells. If it destroys enough lung cells, the patient suffocates to death.
Is a virus alive?
You sometimes hear of vaccines that use live viruses. That is misleading because it is not clear that a virus is a form of life. You would say that every cell in your body is alive. But if you take some RNA out of a cell, would you say that the RNA is alive? Probably not.
Remember, a virus is just a clump of RNA. You can think of it as a chain where every link is one of only 4 molecules. It is pretty simple. This is similar to computer code, which is just a chain where every link is either a zero or a one, yet it can accomplish incredible things. For example, it allows me to write this on my computer and you to read it on the internet.
A cell is generally considered the smallest form of life. Bacteria are cells and are therefore a form of life. They are at least 20 times bigger than viruses.
There are many things within a cell, and the cell needs them to stay alive. But those things are not alive. RNA is an example. When it is within a cell, it can affect the cell’s function, but the RNA is not the life form. It is just a collection of molecules.
The collection can do something, and doing something sounds life-like, but they are not alive. The molecules in dynamite can do something as well, so just being able to do something is not enough to qualify as life.
History of vaccines
What did Edward Jenner do?
Long ago in England, some cows had blisters on their udders, and it spread to other cows. They called this cowpox. At the time, no one could have imagined viruses, but people back then understood that some illnesses passed to other people or animals. The milkmaids often got blisters on their hands. Everyone understood that it was caused by the same thing that was causing the blisters on the cow udders.
Edward Jenner was a medical student at the time and he noticed that the milkmaids who caught cowpox did not get smallpox. It turns out that cowpox is a member of the Orthopox family of viruses, as is smallpox. The viruses are related.
Dr. Jenner had no way to know that, but he wondered if there was shared immunity. Maybe getting cowpox does something to your body that makes you not get smallpox. No one at the time had any concept of microscopic infectious agents like bacteria or viruses.
As a young country doctor in 1796, he took some fluid from a blister of a cowpox patient and scratched it into the skin of the arm of James Phipps, an 8 year old boy. James got a single blister and it went away. Dr. Jenner wondered if the boy would be like the milkmaids and never get smallpox.
Two months later, Jenner took some fluid from a blister of a smallpox patient and scratched that onto the boy’s skin. This is called a challenge and it could have killed the boy. But no smallpox developed. A new branch of medical science was born.
Can we do challenge testing?
Can we do a challenge on the people currently being given vaccines in testing? That would quickly let us know if the vaccine was effective.
We cannot because this is a deadly disease and there is no treatment. If they develop the infection, 1% will die and 20% of infected patients are at risk of having permanent damage to their lungs, kidneys, heart, and brain. You can only consider a challenge if you have a cure, in case the person gets sick from the challenge. There is no cure for Covid-19.
The 1st vaccine came from a cow infection
While Jenner is credited for inventing the 1st vaccine (vacca is the Latin word for cow), at least 6 other people had tried something similar to this before Jenner. However, he was the 1st to publish his results and to provide advice on how to produce his vaccine. Doctors throughout Europe copied his procedure and it resulted in a dramatic reduction in the number of new smallpox cases.
This sounds like the distant past, but before smallpox was eradicated in 1979, it killed about almost a half a billion people. It used to kill 80% of infected children and it wiped out 90% of indigenous people of Mexico in the 50 years after Cortes’s arrival in 1519. It also killed as many as 50% of Native Americans in what is now the United States. Vaccines are incredibly important.
Creating a coronavirus vaccine
Vaccines are much more complicated than what the media is portraying
The media and the government are making the process of creating a Covid-19 vaccine sound simple. Just take a part of the virus, inject it into your arm, and you will then never get infected. But what does it mean, “take part of the virus?” A virus is not like a watermelon where you can just slice some off. So what is it?
Our immune systems reacts to foreign proteins. It creates antibodies, which are also proteins, and they attach to the foreign proteins on the surface of the virus. This can prevent the virus from doing something harmful, like invading and killing cells.
The spike protein is the one that matters
Remember, a virus particle is covered with proteins. Some are responsible for attaching to cells. With the coronavirus, the protein that does the attaching sticks out above the surface of the virus and it is called the spike protein. That is the focus of the vaccine makers. Making a vaccine that attacks other viral proteins will not stop the infection.
We have to carefully select which proteins to immunize against. We need to create a vaccine that will specifically prevent the spike protein from doing damage. Sometimes people refer to this as “killing” the virus.
The vaccine does not kill the virus. But it stops the virus from multiplying. White blood cells then remove and destroy the damaged virus particles from the blood stream, ending the infection.
Other approaches to creating vaccines
The Lancet is England’s premier biomedical journal and one of the world’s most respected scientific publications. It published a study from China last week about a vaccine that uses a common cold virus to help generate immunity to Covid-19.
There are 200 different viruses that can cause the common cold. Some are coronaviruses. So can some adenoviruses. These scientists took a weakened strain of an adenovirus and used it to “vector” part of the Covid-19 virus.
They used genes from the coronavirus that create the spike proteins on the surface of the virus that attach to human cells. When these genes are inserted into the adenovirus, the adenovirus creates these coronavirus proteins on its surface. The body reacts by producing antibodies to those surface antigens.
Then, if a person gets exposed to the actual coronavirus, there will hopefully be enough antibodies to attach to its surface proteins to prevent the virus from attaching to cells. These are called neutralizing antibodies.
There are other approaches to making a coronavirus vaccine as well. Each is being tested by different medical centers and companies. These include recombinant protein vaccines, RNA vaccines, and DNA vaccines. Assuming that many will be effective, we will have to choose the safest before giving it to billions of people.
Not all antibodies give immunity
Remember, you can create vaccines that will create antibodies to many of the coronavirus proteins. But the only proteins that matter are the spikes on the surface of the virus that attach to human cells.
Antibodies to those proteins (those antigens) are called neutralizing antibodies. Researchers are looking for an antibody that will bind to those spike proteins on the surface of the virus in a way that will prevent the virus from attaching to our cells.
There is another problem with vaccines. We need them most for the people at greatest risk of dying. These are the elderly and people with weak immune systems. Neither easily produce antibodies. If you immunize them, many will not make enough antibodies to become immune.
It takes a lot of hours to develop a vaccine
Creating a vaccine involves a lot of trial and error. Are you picking the right virus protein to create your antibodies? Are there better choices? What about the dose of the vaccine? How long do the antibodies and immunity last?
Sometimes researchers will work on what they think will be great. Then, 6 – 12 months later, they discover that patients do not produce enough neutralizing antibodies to prevent an infection.
The process of finding a safe, effective vaccine can take years. Here, it will probably take only 1 year if we are lucky. Since February, I have been saying a year to a year and a half. That is still true. There is a 40% chance of 2 years or more, and maybe a 20% chance we will never have an effective vaccine. It is important to remember that there is no vaccine to Herpes, HIV, and many other viruses, despite decades of attempts to create one.
Many vaccines take more than a decade to develop. Having 100 companies and medical centers all working on a vaccine should greatly reduce time needed.
This is an exception to Warren Buffet’s rule about how great things take time. He once said, “No matter how great the talent or efforts, some things take time. You can’t produce a baby in one month by getting nine women pregnant.”
Here, we are essentially trying to do just that! If it takes a million hours to develop a vaccine, having 100 research teams working on it will greatly reduce the time.
With 118 teams working on a vaccine, why isn’t there more good news?
The WHO last week said that there are 118 teams working to create a vaccine. Why not? It’s your lottery ticket to get famous and you will have 7 billion customers!
We have heard some good news recently from Moderna, Oxford, Merck, and Johnson&Johnson. It’s enough to make physicians believe there will probably be a safe, effective vaccine, and the 1st versions of it should be out next year.
But think about this. If there are 118 teams working, why are we not hearing 118 pieces of good news every week?
It is because creating a vaccine is difficult. If the other 114 companies had good news, we would have heard. Since we have not, I assume they have nothing good to say.
That in part is due to some of them being unsuccessful. For most, it is simply too early. Yet, they have been working for months.
That should tell us that making a safe, effective vaccine is difficult and it will probably take longer than the politicians are predicting. Remember, President Trump in February said that we would have a vaccine in 3 – 4 months. Dr. Fauci said that we might have 60,000 deaths. Biden has not said anything, despite having lots of opportunity.
We are looking for a 1st vaccine and not the final vaccine
It is important to note that scientists will continue to work on coronavirus vaccines for decades. The 1st vaccines will not be the best, but right now, even a mediocre vaccine would be great.
A minimum goal is to create a safe vaccine that simply reduces the severity of the infection in 60% of immunized people. It is possible that it only creates partial immunity. For example, immunized people might still get Covid-19, but a less severe form.
Hopefully, the 1st available vaccine will completely prevent infection in at least 90% of immunized patients. Also, we want the immunity to last at least a year before we have to get another dose, if we ever need a booster shot.
I mentioned that coronaviruses are an RNA type of virus. That is important because RNA viruses do not carefully verify that their duplication in cells is accurate. This results in lots of mistakes. A mistake is a mutation. It often is big enough so that the vaccine is no longer very effective. You then have to create a new vaccine.
Mutations cause vaccines to fail, and they cause cancer and evolution
As a side note, everyone knows that mutations are common in all species. They are responsible for vaccines no longer working, and for cancer and for evolution.
Humans have 20,000 genes. Each is a long chain of molecules. When a cell divides, it tries to make an exact copy of every gene.
It is going to make mistakes. The sperm of an average man has about 20 mutations. That means the average sperm has about 20 genes different from those of the rest of the man’s body. The same is true of for a woman’s ovum.
With 20 mutations each generation, there are about 1,000 every thousand years. Over tens of thousands of years, the difference can be enough to create subspecies and new species, which is the basis of evolution.
The economic news gets lost with so much other news
It’s the economy, stupid
All of this talk about viruses is because it directly affects the economy. The longer people are unemployed and fearful of many activities, the less consumer spending there will be. Since 70% of GDP is from consumer spending, this pandemic is reducing the quality of life of the average American.
The most optimistic talk about vaccines is coming from the White House. With an election in only 5 months, it is in its best interest to have people be confident that a vaccine will be here soon and everyone will get his job back.
If people are confident, they will spend money. That will increase the number of jobs. The White House hopes to be rewarded in November for getting us through a disaster.
There are some problems with this. I doubt that there will be a widely available, effective vaccine before next spring at the earliest. Also, despite a vaccine, at least 500,000 Americans will eventually die from this pandemic. People should get a sense of this before the election.
It is important to remember that the selloff in February and March was a major bear surprise. There is a 70% chance of a 2nd leg down sideways to down. It probably will begin within a couple months. If it comes in October, the White House will be in trouble.
We are in the midst of the most significant worldwide event since World War II. But it does not feel that big. The economic data and the number of infected people and deaths are going to be so extreme that history will see it as incredibly important.
There will probably be a vaccine sometime next year. It should be good enough to greatly reduce the number of new infections. If 60 – 70% of the population is immune, we will have herd immunity. That will lead to a steady decrease in the number of new infections until Covid-19 is no longer significant.
Because the coronavirus is an RNA virus, we should expect mutations. Once we are vaccinated, the immunity might not protect us from a mutated coronavirus. We might have to get updated coronavirus vaccines every year or so for a long time, just like the flu shot.
There was panic when the pandemic hit. Then there was euphoria when we realized that this was not going to be as bad as the bubonic plague, and when the Fed guaranteed that it would protect the economy. Consumer spending is still down and unemployment is up. Also, the stock market is probably in the sell zone. Traders should expect about a 50% retracement of the 2 month rally over the next few months. The stock market should continue its 2 1/2 year trading range at least until the end of the pandemic in 1 – 2 years.
Traders believe that the March low was too low and they probably think that the February high is too high, given the unemployment rate. This should result in a trading range at least through the remainder of 2020.