I had a stunning conversation last night with a very good friend that went something like this:

It’s just the flu, bro.  You are glued to the fake news on CNN 

He is a restaurateur and I was trying to convince him to start making contingencies.

Upon hearing the above response,  I recommended he read my post,  Stages Of A Pandemic: Denial, Panic, Fear, and Rationality,  which was just loaded up to the GMM website.

Clearly, he is in stage one – denial.

I went on to explain, yes, he was partially right,  COVID-19 is a type of the flu, but a new or novel flu, which probably originated from animals and the human body has yet to build up immunities to help fight it off, unlike the seasonal flu.  Still many unknowns about this corona beast now infecting the world.

Exponential Growth

What struck me most was that he, like many of us have difficulty grasping the concept of exponential growth in a real-world context beyond finance.  I shared with him what is happening in Italy, which had only 3 reported cases less than three weeks ago to now 7,335 cases as of March 8th.   Of course, it is difficult to unpack the true growth of transmission and distinguish it from the ramping up of testing and counting.

We suspect the numbers will look much higher as governments begin and ramp up testing, which almost surely is and will be the case in the United States.

Elbow Of The Curve

COVID-19 starts with a few cases, morphs into clusters before moving beyond the elbow of the curve to an explosion of cases.   We both agreed there is so much we don’t know, such as how many people in our area are currently infected, and that we will survive and get through this crisis.

By the way,  he is first-generation Italian.

Dow futures are down 900 points and April crude oil is down over 20 percent and printed at $30 bbl., stunning.

Seat Belts

We are ignoring Kudlow and strapping ourselves in.

Stay frosty, folks.