Virus Diary II

As long as we’re shut in with time on our hands, let’s have a go at a sort of rolling diary to consider consequences of the virus. Here’s hoping most of the crazier predictions out there will look alarmist in retrospect. We’ll see what holds up over time.

Today is the first day of spring, 19 March, 2020:

• At this point, I’d say all bets are off on whether the U.S. election happens as scheduled. Whether or not it would be legal won’t stop speculation.

• It’s crazy the IOC hasn’t yet cancelled the Olympics. That shouldn’t be far away.

• Shorter, stronger supply chains on the other side of this? This looks like a safe bet.

• Walking in the park today, everybody giving everybody else ample personal space, it was clear it will take considerable time to unlearn social distancing. Does the virus hasten the Shut-In Economy?

• The ruble is the third-worst performing currency among emerging markets this month, losing about 10% against the dollar. The Brent oil price fell below $26 per barrel for the first time since 2003. Rumblings about Putin’s survival. At the very least Russia and Saudi Arabia picked the exactly wrong time for an oil price war.

• Radical decoupling of the U.S. and Chinese economies? Andrew Michta recommends it, piquantly:

“We must acknowledge our own complicity in what is now unfolding. The belief that globalization, through the radical centralization of market networks, was the unavoidable path forward has been exposed as a grave, near-delusional miscalculation. The offshoring by corporations of supply chains to China has not only eviscerated communities that were previously reliant on manufacturing jobs, but has also brought with it an unprecedented level of vulnerability and fragility to our economies. The populist revolts that have wracked Western democracies for the past several years are in part rooted in the pain that these dislocations have caused.”

• No prediction here, but a big break with the past. Judah Grunstein writes:

“for the first time in memory when it comes to a global crisis, the U.S. will not be coming to the rescue. From the beginning of the outbreak, Washington has been several steps behind state and local governments across the U.S. that usually depend on the federal government for guidance and leadership in crisis response efforts. And it has made no effort at all to coordinate responses among national governments around the world, which have grown accustomed to the most powerful and capable country on earth leading the way in times like these.”

It’s what Ian Bremmer calls the unwinding of the American order.

Please share your thoughts.

(Here is Virus Diary I, from two days ago.)