I want to start off in introducing this piece by saying that the scenario I’m about to present is only one of several possibilities and is opinion based on my independent analysis.
As a primer, my track record in analyzing the novel coronavirus spread and its economic impact has been as follows:
January 24, 2020: With the Dow at 29,230, I warned that the stock market was “not pricing in any type of event involving this coronavirus spreading across the U.S.” and that the market was “extraordinarily overpriced relative to near-term risk”.
January 30, 2020: I was critical of the World Health Organization’s first major press conference on the matter, where they thanked China repeatedly and did little to stress that the coronavirus was a public health emergency.
February 2, 2020: I tweet that people are starting to use the word “pandemic” to describe the coronavirus and say: “I take zero pleasure in this but I think a serious wake up call is coming for some asset managers. And is long overdue. Just my opinion.”. The World Health Organization doesn’t declare the coronavirus a pandemic for another 38 days.
February 2, 2020: I wrote an article called “The One Number That Could Reveal A Chinese Coronavirus Cover-Up”, stressing that we must look at data outside of China to determine whether the data we get from inside China is truthful or not.
“As a reminder, despite the government saying that the risks of outbreak are low outside of China, I’ll remind readers that it costs nothing to take extra precautions,” I said at the time. 6 weeks later, grocery stores in the United States would be cleaned out.
February 9, 2020: I called out hypocrisy from the World Health Organization for, eight days after their press conference, coming out and saying that we may “only be seeing the tip of the iceberg” regarding the coronavirus.
February 20, 2020: With the Dow at 29,296, I again warned there was a “wake up call for those ignoring virus impact coming”, that the market was underpricing risk due to the virus and that “pain is coming”. The Dow would drop more than 30% in coming weeks to a 52-week low of 18,213.
February 22, 2020: Weeks before our country acknowledged that we needed social distancing or active countermeasures to combat the virus, I wrote an article called “The Time Is Right Now: Why The U.S. Must Act Decisively To Confront The Coronavirus”.
“I am today suggesting that the government act swiftly and extraordinarily decisively to respond to this virus right now, by preparing the healthcare system and citizens of this country, before it gets out of control,” I said. “The first cases in major U.S. cities will grind the U.S. economy to a halt,” I predicted.
February 29, 2020: In a Periscope live video stream, I was critical of President Trump’s first press conference on the novel coronavirus, where he said the U.S. had 15 cases and that the number was “going to zero”.
In terms of analysis, which I see as only being valuable if you are well ahead of the curve, this is what I brought to the table in January and February.
With the same idea in mind – being ahead of the curve and looking forward – what I want to present today is a potential explanation for the United States far surpassing any other nation in its amount of novel coronavirus cases. This has been the headline over the last 48 hours, with many people shaming the United States as efforts in containing the virus due to our numbers look comparatively poor to the rest of the world.
No doubt, you have seen charts like these:
And no doubt, you have seen headlines like this one, from March 26, posted in the New York Times:
While the United States was certainly slow on the uptake in dealing with the virus, every health professional in the nation is now focused on the same problem and we are officially all on board to do everything that we can to try to limit and prevent the spread of the virus.
What I want to focus on now is the notion that this problem is spiraling out of control in the United States and that China has had it totally under control. The optics of this assessment could be exactly what China wants: the U.S. looks like they are behind the rest of the world while China has things so under control, they can offer aid to neighboring countries. But what if the game was rigged in a manner that forced the U.S. to respond as slowly as we did?
On the Chinese side, it would be very simple to make this happen. The only thing the Chinese government would need to do is manipulate the infection/death numbers coming out of the country and hope the rest of the world trusts them.
I wrote in my February 2, 2020 article that I was extraordinarily skeptical of the numbers coming out of China, not only because of my experience analyzing China in the past, but also because the draconian measures that the country was taking. Quarantining hundreds of millions of people, for example, seemed to stand at odds with the infection and death numbers we were being given from the country.
My worries several months ago were that the infection numbers coming out of China were much larger, and/or the virus was deadlier than we thought it may have been. This is why on Februrary 2, 2020, I urged people to look closely at the data outside of China, claiming again that I was skeptical of the numbers.
The good news is that the virus has been examined by health professionals outside of China and my once-worst case scenario regarding how fatal the virus truly is appears to be off the table. But the one notion that isn’t off the table, that we still continue to take at face value, is the number of infections and deaths coming out of China. U.S. media, like Bloomberg, continues to take China’s word on their numbers, writing on March 18 that China’s virus cases have “reached zero”.
Several days ago, I spoke with a Chinese national friend of mine who I have known and worked with for more than five years. His contention was that the Chinese government knew about the virus well before December 2019 and months before the rest of the world knew about it. He said he believed that the initial response was to try and cover it up before eventually having to acknowledge it on a global scale. This would gel with my understanding of how important optics are to the Chinese government.
My friend, who has friends and family in Hubei province, assured me that my concerns about the numbers being understated were warranted and told me he was of the opinion that there were far more cases in China than the country was letting on.
So, before we go slamming the United States for posting such a large number of infections relative to the rest of the world, let’s consider some things.
We already know that the coronavirus was around in China as far back as November 17, 2019. Between November and mid-January, there was a barrage of nonstop daily international flights to and from major airports in China, to and from other major international airports around the world. In essence, before major travel restrictions were put into place and before we knew what we know now about the virus, it was likely just spreading around the world as quickly as humanly possible between November and February.
Ergo, it is very possible that the rest of the world, including nations like Italy and the United States, began to see an aggressive expansion of coronavirus cases as far back as December. And since nobody knew about it then, and people continued on their normal course of business, the virus likely spread exponentially throughout these countries.
Today, I want to ask whether it is possible that the Chinese government knew this was taking place as far back as December and, after being forced to admit globally that the virus was prevalent in China, decided to downplay their own numbers in a concerted effort to eventually shift the narrative to other countries irresponsibly handling the virus?
Certainly, we have seen the CCP’s mouthpiece in the Global Times make these types of insinuations over the last month. “US cities such as New York are now the most risky places in the world,” China’s state-run media boasted on March 24. The Twitter account for the Global Times has focused almost exclusively on the outbreak in the U.S. over the last several weeks, with no mention of reports out of China that the virus continues to persist in Wuhan, despite claims of re-opening the country.
They also don’t even mention China’s numbers when tracking the virus around the globe:
I want to remind our nation that it is extraordinarily vital to remember that so many models and so many analyses – in addition to so many potential constructive timelines of how this all took place, are still reliant on the Chinese government numbers being taken at face value. In my opinion, we absolutely cannot trust these numbers and all information coming out of China needs to be verified by the United States government independently.
Additionally, as we know from today’s now-viral video of senior adviser to the Director General of World Health Organisation appearing to purposefully avoid critical questions about China surrounding Taiwan, the WHO’s urge to protect China should also be examined critically.
This isn’t the only instance that has given me pause about the WHO, in addition to the aforementioned January 30, 2020 press conference.
For example, on January 14, 2020, the World Health Organization came out and said that “preliminary investigations conducted by the Chinese authorities have found no clear evidence of human-to-human transmission of the novel coronavirus in Wuhan.”
To say that the World Health Organization was proven wrong would be a severe understatement.
Yet what is obviously warranted criticism of the WHO has been pushed back on by China’s state run media, who calls it a “clumsy trick of the U.S. to fabricate rumors, like a thief crying”.
Listen, I’m not saying it’s a definite, but I’m saying we absolutely have to entertain the idea that we are simply being played. At this point, anything else is bordering somewhere between naive and criminally negligent, with history to eventually determine.
As I’ve said in previous pieces, I believe I have a feel for the ethos of the Chinese government a little bit more than the average American based on the work that I’ve done in the past. It is a sad theory and one that may shock many unknowing Americans, but I simply would not put it past China for them to have instituted a lockdown while putting out severely understated numbers in order to eventually be able to shift the blame and responsibility off of their country to other major countries.
The reality, in my opinion, is that the virus is already here, has been running rampant for months and that the testing we’re doing now is only revealing cases that have occurring for a while. After all, there have been reports about people getting mysterious types of pneumonia in Italy as far back as November 2019.
And so before we go shaming the United States and praising both the WHO and China, I believe it is important for us to consider this possible sequence of events while looking back on how the coronavirus pandemic unfolded.
Let’s also not forget that ubiquitous testing and truthful reporting of these numbers is the ethically honest and morally right thing to do, which should give you a sense of pride in the work the United States is doing, even as case numbers rise. We are uncovering the raw data that we need, in this country, to do our best to understand, gauge and combat the problem directly. And we’re being upfront with our citizens and the world about the numbers.
As I said in a tweet this morning, I am confident that over the course of time, and through a long arduous process of subpoenas and investigations, we will eventually find out the truth.
But the focus now remains on finding a therapeutic and developing a vaccine. In time, however, everything that has taken place over the last five months will objectively and truthfully come to light.
I only ask that you hold reservation on which country is doing an effective job until such time. Now, the focus should remain on global unity and compassion to help our fellow man.
God bless you all and be safe.