Stages Of A Pandemic: Denial, Panic, Fear, and Rationality

We’ve been accused of panicking.

It just ain’t so, Joe, as our M.O. is to try and panic before everyone else.

What will be the big negative shock that shakes the tree loose?   Your guess is as good as ours but it shall come.  – GMM,  Nov 25, 2019

The stock market was a bubble in search of a pin.  The coronavirus was that pin.

Moreover, GMM was out with one of the first analyses of the impact of coronavirus on the global economy in late January when most still thought it was a yuppie beer from Mexico.

There is a supply shock to global manufacturing as many factories in the world’s supply chain will be shuttered for longer, which shifts the global supply curve left, increasing-price and production pressures.  Ergo component shortages, higher prices, and lower production.

The 2 percent decline in the U.S. stock market and collapse in bond yields are signaling a potential global aggregate demand shock that offsets inflationary pressures of the supply shock.  – GMM,  Jan 31st

Do The Math

We suggest those in denial and still can’t grasp exponential growth read the following thread — 8 million cases in the U.S. by the end of May?  Double yikes!

Where do you think the S&P will be if that happens, which could move us from the current state of denial to peak fear?

We also suggest you have a quick read of the following Atlantic article,  which keeps the current crisis in perspective.  We have pulled out the money quotes for you.



Whenever a new microbial killer emerges, we go through each of these stages, starting with denial as government officials insist that there is no outbreak. When smallpox appeared in the Roman Empire in a.d. 189, one local prefect attributed the upsurge in deaths to a displeased Jupiter, while another assigned blame to a poisoned barrel of wine.

…denial led to panic. Denial always leads to panic.

…With an outbreak like COVID-19, everything from the source, to the means of transmission, to recovery rates remains essentially unknown. So each new piece of information—even data that should be reassuring, like the downward revision of mortality rates—elicits more panic. 

...“A pestilence isn’t a thing made to man’s measure,” Albert Camus observed in The Plague. “Therefore we tell ourselves that pestilence is a mere bogey of the mind, a bad dream that will pass away.” Panic is exhausting. Only so many witches can be tossed into wells or rolls of toilet paper hoarded before knee-jerk anxiety progresses to a steady state of fear. 

...Fear dissipates eventually, replaced by a more realistic sense of the risks. An epidemic, even one of a disease as seemingly easy to transmit as COVID-19, while burdening public-health systems and potentially deadly for the elderly and those with compromised immune systems, is eminently survivable by the majority of the population. 

…Which brings us to the last stage of epidemic grief: rational response. After denial, panic, and fear, we can finally get down to the business of basic sanitary measures and infection protocols.

...If you want to panic, go right ahead. It’s what we do. It’s what your ancestors did. Then be afraid. Eventually, however, roll up your sleeves and get to work, scrubbing this bug back to whatever its host species happens to be. We’ll get there. Humanity has so far survived every microbe that has jumped the species barrier, and we will survive this one.  – Atlantic

Finally,  Chris Martenson has been all over and right about the coronavirus since Day One.   We can learn from anybody and don’t engage in the ad hominem attacks to discredit his work just because many accuse him of being a doomster and prepper.   Those who were mocking him last week are probably out shopping and hoarding toilet paper as we write.

Even his latest video from a few days prior is outdated.   That is what exponential growth does, folks.  The data moves at a lightning-fast speed.

The United States is going to have a lot of self-inflicted wounds. – Chris Martenson”

As the Atlantic piece concludes, we — well most of us — will survive this.   Not before some very dark days and much lower stock prices, in our opinion.

Wake us at 1800 on the S&P500.

This entry was posted in Economics, Equity, Uncategorized and tagged , . Bookmark the permalink.

4 Responses to Stages Of A Pandemic: Denial, Panic, Fear, and Rationality

  1. Pingback: Exponential Growth 101 | Global Macro Monitor

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