The Week the Pandemic Started to End — as the Depths of Covid Winter Begin

By John Banks

“But soft, what vaccine through yonder needle jabs?”

The second person in the U.K. to officially receive the Pfizer COVID-19 vaccine was an 81-year-old man named William Shakespeare. He didn’t say those words, but he should have.

There is a long way to go, and darkness dead ahead. For the United States, the worst is yet to come in terms of hospital system breakage, small business strain, and daily death tolls in the thousands.

But still, with a major Western country (the U.K.) getting a vaccine rollout underway — and with Canada planning to start in a matter of days — we can say, definitively, that this is the week the pandemic started to end.

The war with the virus is far from over, but the tide will turn in the next few months.

That is the good news. The bad news is that, before the turn happens, America will endure one of the darkest winters it has ever faced.

“December and January and February are going to be rough times,” said Robert Redfield, the head of the Centers for Disease Control and Prevention (CDC), on Dec. 2.

“I actually believe they’re going to be the most difficult time in the public health history of this nation,” Dr. Redfield added, “largely because of the stress that it’s going to put on our health care system.”

Extreme stress on the health care system is no longer a prediction. It is a reality here and now.

“Hospitals serving more than 100 million Americans reported having fewer than 15% of intensive care beds still available as of last week,” the New York Times reported on Dec. 9.

At the same time, one in 10 Americans live in areas where intensive care facilities are 95 to 100% full — the point at which people get turned away.

When too many people get sick at once, the system breaks. That is happening in real time. As of this week the COVID Tracking Project estimated 104,600 Americans currently hospitalized for COVID-19, in a country that has fewer than a million hospital beds in total. 

Hospital systems around the country are frantically improvising just to cope. At the Renown Regional Medical Center in Reno, Nevada, two floors of a parking garage were converted into an emergency overflow treatment site.

“Our frontline caregivers are seeing things that they never would have imagined,” said Tony Slonim, Renown’s president and CEO, “adding that the fight was personal because his own father died of COVID-19.

In rural America, meanwhile, patients turned away due to overflow may have to travel hundreds of miles for treatment — if they can find any treatment at all. In the Big Bend region of West Texas, there is one hospital serving 12,000 square miles.

As another grim marker of Covid Winter, the COVID-19 daily death toll broke 3,100 this week, representing more deaths in a 24-hour-period than the 9/11 terrorist attacks (where the toll was 2,977). There will be more such days, perhaps many.

For those who are economically vulnerable, the worst pain is still to come.

According to a recent survey from the National Restaurant Association, the restaurant industry is in “economic free fall.” Based on the survey’s findings, an estimated 110,000 restaurants have closed their doors, which is roughly one out of six nationwide. Without more fiscal help, and with new shutdowns coming as hospital systems face collapse, many more will close.

At the same time, multiple aid programs are set to expire by this year’s end. “If no agreement is reached in negotiations taking place on Capitol Hill,” the Associated Press reports, “more than 9 million people will lose federal jobless aid that averages about $320 a week and that typically serves as their only source of income.”

The November jobs report was surprisingly weak with just 245,000 jobs added. At that pace, America’s pre-pandemic jobs level would not be clawed back until 2024. With Covid Winter in full force, economists are expecting the December jobs report could be worse — and even show another net loss.

“Stealing to Survive,” reads a dystopian headline from the Washington Post. “More Americans are shoplifting food as aid runs out during the pandemic.” The most popular items in this desperate crime spree: “staples like bread, pasta, and baby formula.”

But Wall Street is looking past all that, and so are corporate CEOs.

On the other side of the vaccine rollout, there will be new expansion opportunities for well-capitalized corporate survivors, along with rock-bottom interest rates, ongoing support from the Federal Reserve and U.S. Treasury, and a strong desire to return to normal life.

Markets are booming here and now in part because investors are anticipating this bullish future — looking past the pain of Covid Winter — and in part because there is so much liquidity in the system, with the strong prospect of more to come.

Whenever the U.S. government or the Federal Reserve try to help Main Street, they wind up helping Wall Street first, because of the way the system works.

In some ways this is hard to avoid: If the next administration winds up canceling student loan debt, for example, some observers believe it could trigger another housing boom — or bubble — because unburdened millennials will be in a far better position to pursue home ownership. (Swapping the student loan payment for a mortgage payment.)

This is why Wall Street won the pandemic: The unprecedented monetary and fiscal help that started in March 2020 caused stocks to go up and up, touching off bullish investor sentiment that morphed into euphoria and now flirts with mania.

To the extent the monetary and fiscal help continues, so can the boom, with the justification of a second-half 2021 recovery on the other side.

The net result of this is one of the strangest split-screens you or I are likely to see in our lifetime.

On one screen, the undeniable optimism of beating the pandemic is front and center with vaccine rollouts underway; on the other screen, the outlook for the next few months is grim beyond description.

And on the economic front, at least one-third if not one-half of Americans are experiencing Great Depression levels of food insecurity and economic distress — even as the stock market blasts to new highs and sales of million-dollar homes have doubled year-on-year.

We feel profoundly fortunate, and grateful, to be participating in this bull market bonanza even as so many fellow Americans are fighting to make it through. Hang in there, and stay healthy.