Peak virus expected in 8 weeks: mortality at three million people

US, WASHINGTON (ORDO NEWS) — Last Thursday, Goldman Sachs Investment Bank tried to reassure its nervous clients from commercial banks by holding a conference call with the participation of its chief economist Jan Hatzius and chief physician Michael Rendel. One of the participants in the meeting took notes, and then made them public.

This conversation, during which the bank tried to minimize the impact of coronavirus on the global economy, was then replicated on social networks and through messengers such as WhatsApp. The bank had to explain itself for the comments made during the meeting.

Here are some conclusions made at that meeting. Securities markets may fully recover in the second half of 2020, and unlike 2008, there is no structural risk to the global financial system. Despite such optimism, the bank nevertheless drew attention to the exceptional contagiousness of this disease.

Of course, meeting notes are always an interpretation of the facts. But there is also the full text of the Goldman Sachs comments that have been distributed over the Internet. Here are excerpts:

50% of Americans will become infected with coronavirus (150 million people), and it is very contagious. It looks like a common cold (rhinovirus), which has about 200 strains, and with which most Americans become infected 2-4 times a year.

They will be infected 70% of Germans (58 million people). This is the second most powerful industrial economy that will suffer from the disease.

The peak of the virus is expected in eight weeks, after which the disease will decline.

This virus is concentrated geographically between 30 and 50 degrees north latitude, and this suggests that, like a common cold and flu, he prefers cold weather. The upcoming summer in the Northern Hemisphere will help tackle the epidemic. That is, the virus is most likely seasonal.

Of those infected, 80% will become ill in mild form, 15% in moderate form, and 5% will be in critical condition. The symptoms are mild like a common cold, and the symptoms are mild like the flu. Such people will sit at home and relax. 5% will be in critical condition, and mostly it will be elderly people.

Mortality will average up to 2%. First of all, it will be the elderly and people with a weak immune system. The result is up to three million people. In the United States, about three million die every year from old age and disease, which is closely interconnected (much less dies from accidents). Since there is such a close relationship, this will not mean that three million died from the virus. It’s just that older people die faster due to respiratory problems. But the burden on the healthcare system will increase.

And further:

There is now a debate on how to deal with the virus, while there is no vaccine. The United States is quarantined. Britain is for allowing the virus to spread, believing that people will have natural immunity. Quarantine is unlikely to be effective, and it will cause serious economic damage, but it will slow the spread of coronavirus and give the healthcare system more time to cope with the load.

The Chinese economy has been hit hard, and this has affected the supply of raw materials and global supply chains. To recover, she will need up to six months.

World GDP growth rates will be the lowest in 30 years, amounting to about 2%.

The S&P 500 stock index will show negative growth for 2020 at a pace of minus 15 to minus 20 percent.

Economic damage will also come from the virus itself, but the main damage will be caused by market psychology. We have always had viruses. Stock markets in the second half of the year should fully recover.

In the last week, a price war over oil erupted between Saudi Arabia and Russia is imposed on viral exposure. Lower energy prices generally benefit industrialized economies, but the US is now a major energy exporter, and therefore domestic energy prices will be negatively impacted.

This situation will continue for some time, because the Russians are trying to economically strangle the American shale producers, and the Saudis are between two fires and do not want to cede market share to either Russia or the United States.

Technically, the market as a whole is looking for a reason to reboot after the longest rate increase in history.

There is NO structural risk. No one even talks about it. Governments intervene in markets to stabilize them, and the private banking sector has a very good degree of capitalization. This is more like September 11th than 2008.

In a written statement to Forbes, Goldman Sachs insists that this is nothing more than a brief summary of the meeting. “The text of this summary has not been prepared or approved by Goldman Sachs, it contains erroneous information and statements that were not available at the meeting. During the meeting various statistics on the pandemic were cited with reference to competent sources such as governments. They are far from in all cases were presented as the Goldman Sachs point of view. The market and economic views and evaluations outlined during the meeting coincide with the findings of the studies currently being published, which may be presented upon request.”

The bank refused to specifically state that the published comments did not match what was said at the meeting.

A bank spokesman recommended that we pay attention to the Goldman Sachs research report on economic issues of March 13 and 15. Banking documents of this kind are widespread, and dozens of them are produced every day.

They have been carefully edited, written in a tricky economic language, and they are usually given for payment to bank customers (and sometimes the media, if asked politely and courteously). Do their contents coincide with leaks?

To some extent, yes, because the report of March 15 has a forecast that in the first quarter economic growth in the US will be zero, in the second quarter there will be a five percent drop, and recovery will begin in the second half of the year. The third quarter – an increase of 3%, and the fourth – 4%.


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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.