It’s not a second wave you have to worry about now. It’s about what’s happening in Texas.
There’s still a lot of uncertainty about where this Covid Crisis is going, but for my money, right now it all hinges on America.
The next couple of weeks are going to be pivotal. If America keeps Covid at bay, then it is entirely possible we’ll snap back with a V-shaped recovery.
However, if it gets away from the Yanks, then America’s in trouble. If America’s in trouble, then the entire global economy is in trouble.
And right now, the signs are worrying. Take a look at the daily case count. You can see there that it’s starting to tick up again.
Now some people are calling this ‘the second wave’. But that’s not quite right. This is still the first wave. It’s just showing up in new places now.
That is, it’s not new cases bouncing back in Northern states like New York.
It’s new cases appearing in southern states that have never had it before.
It’s better to think about it as ‘The Southern Wave’.
Ad right now, cases are escalating rapidly in some southern states with large populations. Arizona’s case count is particularly scary. (Note, these charts show us cases per million population, to make the lines comparable.)
The New York experience is in there for comparison. For Arizona right now, the New York experience has now become the best-case scenario.
Even some smaller southern states are seeing cases start to pick up in a worrying fashion.
While these charts are concerning, there’s every chance that they actually understate the problem.
And that’s because the positive test rate is well above 10% in Arizona, Texas, Florida and Georgia; and rising less dramatically, but steadily, in five other states.
The official rule of thumb is that you want the positive test rate to be running around 5%. If you can do that, then you can be pretty confident that you’re catching all the cases that are out there.
A positive test rate above 10% suggests that community spread is much worse than what your statistics are telling.
Now go back and look at Arizona’s curve with the knowledge that the numbers are probably much worse!
The place to probably watch now is Texas.
The place to watch now is Texas. Houston appears the most at risk of all major cities in the south, with cases doubling every six days and hospital intensive-care capacity on track to be exhausted in less than two weeks on current trends.
The Governor has told people to stay home unless they really have to go out – an informal stay-at-home order – but he’s staked his political career on reopening the Texan economy, and it’s not looking like he’s about to back down.
And what happens in Texas, and the south, will determine America’s fate. If cases get out of control there, then there’s every chance virus will blow back North, and that’s what raises the risk of a second wave in northern states like New York.
And if that happens, then we’re all in trouble.
I’ve still got faith in our American cousins. They are incredibly capable, despite the antics of their leaders.
I think the base case is that they get on top of this.
But I’m watching it closely. This is existential threat number one.