Plague Year Journal VI: The pathology of uncertainty

We continue to learn more about the malign virus behind Covid-19. But the tension between the need to open up the economy and to avoid a second wave is acute. Decisions to be made over the next month or so will have huge consequences, writes Victor Hill.

Fears of a second wave

Of all the extraordinary things that have occurred worldwide over the last week one of the most fearful is the return of Covid-19 to China – the country in which the disease first emerged, and which we thought had eradicated the virus entirely on account of the robust lockdown in Hubei Province over the first quarter of this year.

On Monday (15 June) authorities in Beijing confirmed that there had been 79 confirmed new cases of Covid-19 in China’s capital, a city of over 20 million people. That figure was upped to 137 new cases yesterday (18 June). China’s official figure for deaths from coronavirus has hardly moved at all since late March and stands this morning at 4,634 – barely one tenth of deaths recorded here in the UK. Yet many observers suspect that China’s official figures are underestimates. Therefore, this admission of a second wave in Beijing is significant.

Naturally, the Chinese authorities are blaming foreigners. The official line is that the new wave originated from contaminated salmon reportedly imported from Norway. Supposedly, the virus was detected on a chopping board in the Xinfadi fish market. I’m no forensic biologist but I can think of all kinds of reasons why this claim is suspect. I mean, how did the salmon become infected? (And can fish carry the SARS-CoV-2 virus anyway?)

The entire neighbourhood in southern Beijing has been designated high risk. Schools, swimming pools and gyms are all closed as of yesterday. More than 1,200 flights to and from Beijing have been cancelled and railway services have been reduced until 09 July at the earliest. Ten nearby areas have been designated medium risk including Beijing’s financial district. Sports arenas have been ordered to close. Buses are enforcing social distancing. Restaurants are being disinfected – again. Other Chinese provinces have warned against travel to Beijing.

Meanwhile, the sudden sell-off on Wall Street last Friday (12 June) of seven percent or so was attributed to fears of a second wave in the USA. That is allied to concerns that the monetary stimulus by the Fed and others and the fiscal stimulus of the Federal government may not be enough to stave off an L-shaped recession aka a slump. Fed Chairman Jay Powell warned last week that many of the 22 million Americans laid off by the lockdowns will never recover their jobs.

Imperial College London (name change imminent) warned in late May that the US was re-opening too quickly and that 24 states had an R0 level of above one including Florida, Texas and California. Houston is considering a second lockdown. The Texas Medical Centre admitted last week that both new cases and new hospital admissions had hit a record high, threatening to overwhelm capacity. It emerged that 16 friends were infected with the virus after partying at a crowded bar in Jacksonville Beach, Florida to celebrate a friend’s birthday on 06 June[i]. According to New Scientistweekly confirmed coronavirus cases are increasing in no less than 21 US states.

In Germany, 650 workers at a meat processing factory in Gütersloh (Nord Rein-Westfalen) tested positive for the virus this week, prompting the federal government to extend the ban on large events (e.g. football matches) to October at the earliest.

In the UK it is significant that the NHS Nightingale Hospitals have not been stood down, despite being empty. The vaccine programme is, according to Professor Karol Sikora[ii], “not looking good”, and the much-vaunted contact tracing app which was being trialled on the Isle of Wight, as I predicted in this month’s MI magazine, has been formally binned in favour of the Apple-Google decentralised platform. But even this won’t be up and running until the winter. No wonder there are mutterings on the Tory backbenches.

Statistics and lies

The UK government has asserted that not all Covid-19 mortality statistics are comparable – which is not surprising since on a deaths-per-million count the UK is one of the worst in the world (623) with Belgium (836) the worst of all. Nevertheless, over the last week a number of sources have suggested that mortality statistics have been underestimated. The Financial Times reported that in Spain, if a Covid-19 fatality was not recorded on the day that it actually occurred, then it was not reported at all.

Also, the WHO suggested that Russia should review the way that it counts coronavirus deaths, describing the country’s low mortality rate as “unusual” (for which we should understand “incredible”). Russia has recorded 561,091 cases of Covid-19 yet only 7,660 fatalities. Incidentally, all visitors arriving in Russia must now pass through a coronavirus disinfection tunnel in which they will be sprayed with bleach – much against the advice of the WHO. (Don’t tell Ms Patel – she might want to try that at home.)

It is clear that there are different practices internationally as to whether Covid-19 is considered to be the “underlying” or “primary” cause of death and that statistics are skewed accordingly. A team of researchers at the BBC estimated this week that the official worldwide statistics – 8.58 million cases and 456,458 fatalities – represents a significant underestimate of fatalities by at least 130,000[iii]. They concluded this having analysed excess death figures for 27 countries.

One metre or two?

When will the pubs and restaurants re-open in the UK? The fourth of July? As I write we don’t know for sure. What we do know is that a degree of social distancing will still be required. And most leaders in the hospitality sector are saying that the current two-metre rule is entirely unworkable and will make most of the hospitality sector unviable. On the other hand, if it is reduced to one metre – as in France, now – what does that mean? How does a server place a plate of food before a diner without getting closer than one metre? I really would like to know.

Restaurants will be asked to determine the maximum number of customers they can accommodate while still reasonably following the social distancing guidelines. According to UK Hospitality, the two-metre rule will mean that most restaurants will only be able to generate 30 percent of normal revenues – which will almost certainly make them financially unviable. That would entail mass redundancies, thus accelerating the incipient tsunami of unemployment. On the other hand, UK Hospitality thinks that a one metre-rule would equate to 70 of normal capacity – and a lot of existing establishments might survive (though not prosper).

This last week two Michelin-starred restaurants in London – Le Caprice and The Ledbury -announced that they will not re-open and that their staff would be made redundant. The pillars of London’s gastronomic pantheon are crumbling. Richard Caring, CEO of Caprice Holdings said that the government’s indecision on the matter is “killing the country”.

In an article for the Daily Telegraph on Wednesday (17 June) Carl Heneghan, director of the Centre for Evidence-Based Medicine at the University of Oxford and Tom Jefferson, an honorary research fellow there, argued that, based on the evidence of 172 scientific papers, the risk of catching infections is higher in healthcare settings (i.e. hospitals) that than in the community (we already knew that, thanks) and higher indoors than outdoors (no way?). However: “What the evidence cannot say is that there is any measured distance that reduces your risk.”

More bad news about the after-effects of Covid-19

Last week worrying scientific evidence emerged that Covid-19 might be a catalyst to trigger the onset of diabetes in previously healthy people. A group of 17 world-class diabetes experts wrote a letter to the New England Journal of Medicine to that effect.

The mechanism of transmission is still unclear. However, some scientist have hypothesised that ACE2, the protein that binds to the virus and which allows it to penetrate human cells, is located not only in the lungs (which are the principal targets of acute Covid-19) but also the pancreas, small intestine, the liver and the kidneys which are involved in the glucose metabolism. It has been known for some time that viral infections can cause Type-1 diabetes.

It has also become apparent that some patients who already have diabetes but are not aware of that are highly susceptible to Covid-19. The virus can cause severe complications for patients with pre-existing diabetes. According to one study, up to 30 percent of patients who have died having tested positive for Covid-19 have been diabetes sufferers. That may be one piece in the jigsaw of why black and South Asian Britons have suffered disproportionate mortality given that they tend to have a higher incidence of diabetes than the UK population as a whole. Additionally, a lot of evidence points to a deficiency in vitamin D being a risk factor.

Furthermore, there is an increasing body of evidence that Covid-19 patients suffer neurological damage[iv]. Some neurological symptoms are non-life threatening (though very unwelcome) such as widespread loss of taste and smell. At the other end of the scale some Covid-19 patients have developed encephalitis – a potentially lethal inflammation of the brain. This suggests that the virus can kill neurons. The fear is that Covid-19 may engender long-term chronic neurological conditions in some survivors, of which extreme fatigue, dizziness and migraines are just some. Scientists know that viruses such as herpes simplex can lodge themselves in neurons and reactivate after time so as to cause disease later in life.

All this means that there could be long-term consequences for healthcare demand even after the virus is finally “beaten”.

Sorry, but antigen tests are of limited use

Antigen tests to determine if you have had Covid-19 and now recovered can be purchased privately from the American company Abbott Laboratories (NYSE:ABT) and the Swiss company Roche (SWX:RO) for around £180 each. Both tests for the IgG antibody in the bloodstream are approved by Public Health England (PHE). The NHS has widely tested key workers with these products in order to determine whether they have already had the virus and are now presumably immune (though that immunity is in question).

The problem is that it turns out that not all those who have contracted the virus develop the IgG antibody. That means that the Abbott and Roche tests are generating a lot of false negatives. According to a study by PHE, out of 93 confirmed Covid-19 victims only 78 tested positive with the Roche test. The Abbott test was more successful scoring 90 out of 94.

The question then arises: how can patients recover from Covid-19 without developing the necessary antigen? The likely answer is that some people can beat the virus my mobilising their T-cells alone – these are the “non-specific” immune cells which attack any invader instantly.

This is important because scientists up until now believed that antigen tests would be critical in getting society and the economy back to normal by splitting the population into three groups: (a) the susceptible; (b) the infected; and (c) the recovered and thus immune. Mr Blair has advocated mass testing along these lines through his Institute for Global Change[v]. But now, it is not at all clear that that is the solution, or that immunity certificates would be reliable.

Meanwhile, design flaws in the NHS home swab tests (to determine if people have got the virus) have meant that thousands are indeterminate.

The UK begins using Dexamethasone to treat Covid-19 patients

The good news this week was that the first anti-Covid-19 treatment with demonstrated efficacy has emerged – and it has been first trialled in Britain on 11,500 patients by scientists at the University of Oxford. The common steroid dexamethasone – which is cheap, has been knocking around for years and is in plentiful supply – has been shown radically to lower the risk of death for the sickest patients by one third. The drug – which is commonly used to treat arthritis, severe allergies and asthma – costs just £5 a dose.

UK Health Secretary Matt Hancock announced that all patients on ventilators would receive the steroid immediately. Up until now about 40 percent of all patients placed on ventilators have sadly died. Prospectively, that figure could now be reduced to 26 percent. The prevailing hypothesis is that the steroid prevents the immune system from causing a cytokine storm i.e. an autoimmune response.

It should be noted that some doctors are trying to keep patients off ventilators as they believe that they make Covid-19 worse for some people as it involves sedation. And the high air pressures applied in ventilation could be worsening lung damage. There are less invasive and traumatic treatments available, including oxygen masks and nasal cannulas.

School’s out

School children are back at school right across Europe – but not in the UK. Everyone agrees that this is disaster for children, few of whom are keeping up with their coursework online. A UCL study out this week found that 20 percent of pupils (that’s over two million) do less than one hour of schoolwork per day at home, or none at all.

Most head teachers want their schools to be re-opened. But the two-metre rule entails that most schools can only be operated at half capacity. And the trade unions remain intransigent.

No second lockdown

As William (Lord) Hague wrote this week, a second lockdown would be catastrophic for the economy – and it almost certainly would not be accepted by the populace. In the first months of the lockdown people in the UK and elsewhere were remarkably compliant with the restrictions – more out of fear, I suspect, than any noble conception of social duty. But there is a limit to that compliance. It is now evident that people are flouting the remaining restrictions at scale and with total impunity. The police were harassing people for sunbathing alone six weeks ago; now they do not even disperse mass gatherings of protesters in our city-centres.

It is quite possible that there will be a second wave before the virus burns itself out, as the Spanish Flu did by the end of 1920. But we are going to have to find ways of living with it, managing it and treating it more effectively. Professor Sikora thinks that the virus “is tiring” – becoming less aggressive, given that the viral load in recently infected patients is much lower than it was two months ago. Let’s hope he’s right.

Churchill, a great man who was, amongst other things, a keen student of human psychology, once said: If you find yourself in Hell – keep going.

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Next week: Why Mr Trump’s chances of getting re-elected in November are in free-fall – and why that matters for geopolitics (and for British investors).


[i] See: https://miami.cbslocal.com/2020/06/17/16-friends-coronavirus-florida-bar/?utm_source=&utm_medium=email&utm_campaign=30773

[ii] Let’s declare this pandemic over, Daily Telegraph 17 June 2020, https://www.pressreader.com/uk/the-daily-telegraph/20200617/282024739510099

[iii] See: https://www.bbc.co.uk/news/world-53073046

[iv] See: https://www.newscientist.com/article/mg24632842-800-coronavirus-seems-to-reach-the-brain-what-could-this-mean-for-us/

[v] See: https://www.independent.co.uk/news/uk/home-news/coronavirus-latest-tony-blair-testing-trace-nhs-covid19-a9550041.html

Victor Hill: Victor is a financial economist, consultant, trainer and writer, with extensive experience in commercial and investment banking and fund management. His career includes stints at JP Morgan, Argyll Investment Management and World Bank IFC.