Source: Shane Oliver @ShaneOliverAMP
This is about as close as we will get to a pure lab experiment measuring the efficacy nonpharmaceutical interventions (NPIs) intended to reduce infectious contacts, folks.
The 1918 influenza pandemic resulted an estimated 500,000–675,000 deaths in the U.S. and 50–100 million deaths worldwide.
The intensity of the 1918 pandemic, whether assessed as total excess deaths, the rate of increase in the epidemic curve, or peak death rates, varied widely among U.S. cities. Cities also varied widely in their choice and timing of implementation of NPIs designed to reduce disease spread. Many cities closed schools, churches, theaters, dance halls, or other public accommodations; made influenza a notifiable disease; banned funerals or other public gatherings; or introduced isolation of sick persons. In some cases, these NPIs were put in place in the first days of epidemic spread in a city, whereas in other cases, they were introduced late or not at all. — PNAS
Note how St. Louis flattened the death curve (not the infection curve) with aggressive action in banning public gatherings within a few days of the first cases being reported. Philly was complacent, however, downplaying the threat and lagging in its policy response by just a few weeks more than St. Louis. Two weeks!
The contrast of mortality outcomes between Philadelphia and St. Louis is particularly striking. The first cases of disease among civilians in Philadelphia were reported on September 17, 1918, but authorities downplayed their significance and allowed large public gatherings, notably a city-wide parade on September 28, 1918, to continue. School closures, bans on public gatherings, and other social distancing interventions were not implemented until October 3, when disease spread had already begun to overwhelm local medical and public health resources. In contrast, the first cases of disease among civilians in St. Louis were reported on October 5, and authorities moved rapidly to introduce a broad series of measures designed to promote social distancing, implementing these on October 7. The difference in response times between the two cities (≈14 days, when measured from the first reported cases) represents approximately three to five doubling times for an influenza epidemic. The costs of this delay appear to have been significant; by the time Philadelphia responded, it faced an epidemic considerably larger than the epidemic St. Louis faced. Philadelphia ultimately experienced a peak weekly excess pneumonia and influenza (P&I) death rate of 257/100,000 and a cumulative excess P&I death rate (CEPID) during the period September 8–December 28, 1918 (the study period) of 719/100,000. St. Louis, on the other hand, experienced a peak P&I death rate, while NPIs were in place, of 31/100,000 and had a CEPID during the study period of 347/100,000. Consistent with the predictions of modeling, the effect of the NPIs in St. Louis appear to have had a less-pronounced effect on CEPID than on peak death rates, and death rates were observed to climb after the NPIs were lifted in mid-November (7–9). — PNAS
Policy Failure
Here’s to hoping we are St. Louis and not Philadelphia but our late start, dithering, and horrendous leadership, including misinformation and mixed messaging disseminated by the Administration almost surely condemns the nation as a whole to the fate of The City of Brotherly Love during the fall of 1918.
…Alex Azar [Secretary of Health and Human Services], he did go to the president in January. He did push past resistance from the president’s political aides to warn the president the new coronavirus could be a major problem. There were aides around Trump – Kellyanne Conway had some skepticism at times that this was something that needed to be a presidential priority.
But at the same time, Secretary Azar has not always given the president the worst-case scenario of what could happen. My understanding is he did not push to do aggressive additional testing in recent weeks, and that’s partly because more testing might have led to more cases being discovered of coronavirus outbreak, and the president had made clear – the lower the numbers on coronavirus, the better for the president, the better for his potential reelection this fall. — NPR
Upshot
Trust the scientists. Though I believe in miracles, and we are going to need a big one, but never bank one.
As the death toll rises and the economic carnage increases, there is going to be holy hell to pay come the November election.
President Wilson And The 1918 Flu
Very eerie parallels of how President Woodrow Wilson handled the 1918 Flu. See here.
Global Macro Monitor 
President Reagan On The ’87 Stock Market Crash
We are reposting this piece. History rhymes. The U.S. was in the midst of conflict with Iran during the 1987 crash as we are today.
The Fed tried to stem the selling today and who knows what would have happened if they didn’t step up.
Originally Posted on April 21, 2018
President Reagan certainly understood the nature of markets.
That is they do whatever they are going to do, sometimes without a fundamental rhyme or reason. Very different from the current occupant of the White House who seems to think every uptick in the S&P is all about him, and he is not afraid to take credit for the upside and tweet about it.
Before going to President Reagan’s comments about the October 19, 1987 stock market crash, we first review some data, which lends light on the 1987 crash.
The S&P500 had just completed a massive run from September 1985 before peaking on August 25, 1987, moving up almost 87 percent in less than two years. That qualifies as a bubble in our view.
Yuuuge Decline In Interest Rates
Much of the move was attributed to a sharp drop in interest rates.
The 10-year Treasury yield fell almost 350 bps in less than a year before making a local bottom in September 1986. Interest rates then began to move sharply higher, utterly roundtripping almost the entire move by the day of the crash.
The 10-year yield had risen 300 bps year-to-date on October 16th, closing back above 10 percent, increasing almost 150 bps just since the S&P peaked on August 25th.
The S&P500 was already down 16.33 percent from its high before crashing on October 19th. Markets rarely fall out of the sky and usually signal something big is coming by a sharp rise in volatility. Think of a Richter scale before a volcano blows.
This is why we take the early February volatility shock seriously and a signal of regime change, and give a much higher probability for a potential major price reversal than most in the market are anticipating.
Finally, the S&P500 fell 23.43 percent from the October 16th Friday close to the intraday low on Tuesday before a mysterious buyer stepped into to the Major Market Index futures contract at 12:38 p.m, setting the stage for one of the most powerful rallies in history.
We believe the 1987 stock market crash was an accident waiting to happen due mainly to a toxic cocktail of a severely overbought market and rising interest rates. All that was needed was a buyers strike coupled with some catalysts or reasons to bail and take profits. The same reasons may or may not have mattered if not for such a toxic cocktail.
Given the nature of the New Economy, we seriously doubt the government will allow such a similar short-term crash, say, 15-25 percent, to occur again. We now have no doubt the Fed will step up and announce they will do whatever it takes and become the buyer of last resort to keep the market from melting down in one or two days.
Why? Because it would be the end of the world and they surely know it.
The thought of the Fed directly purchasing stocks as the Bank of Japan now does contradicts everything Larry Kudlow’s dictum, “free market capitalism is the best path to prosperity” stands for.
Privatizing profits and socializing major Wall Street losses are now forever institutionalized especially given the structure of our asset driven global economy. The “Powell put” may now have a little lower strike price than many traders would like but it is absolutely still in place. No doubt about it.
Oy veh! Sorry deflationistas.
Iran Again
By the way, the U.S. was also in the midst of a conflict with Iran in October 1987.
President Reagan’s Comments
Now to President Reagan.
Asked after the close if the stock market crash was his fault, the President delivers the ultimate money quote, in our book:
Profound. We can learn from the Gipper to refrain from trying to explain or attribute daily stock market moves to certain factors. Any one of the catalysts we deem moved the market in a certain direction on a given day could have moved it 180 degrees the other way with a different set of technical conditions.
Reagan truly understood market noise.
Full Transcript Of October 19, 1987 Informal Exchange With The Press
Here is the full transcript with reporters that day, October 19, 1987.