Coronavirus Geometric Progression Suggests 100,000 Infections in a Week

Mish

Bianco Research mapped out the geometric progression of coronavirus cases. We are on track for 100K in a week.

Jim Bianco shared some of his coronavirus research with me yesterday. I asked if he would make the article public.

Thanks to Bianco please consider Coronavirus Growth Rates and Market Reactions.

This is a guest post courtesy of Bianco Research

Summary

The growth in coronavirus infections has continued along a geometric progression for the last 12 days. Should it continue along this path, infection cases could approach 100,000 in a week.

Comments

The following charts were constructed from the daily update from the National Health Commission of the People’s Republic of China.

The blue line in the chart below shows the actual number of reported coronavirus cases stands at 4,515 as of January 27.

The orange line is a simple progression that assumes a 53% increase in the cases every day. Or, one person infects 2 to 2.5 people. So it is a simple multiplier, nothing more. This is known as R0 (R-Naught), or the infection rate. Note the chart is a log scale.

The reported number of infections perfectly track this simple multiplier. This is how viral inflections growth, along a geometric path.

If this track is not altered, the number of reported cases will top 16,000 by Friday.

To many, such a geometric progression is alarming (see the tweet immediately above).

As the orange line shows, this type of growth rate would suggest 80,000+ infections next Monday and 138 million by February 20.

Is this growth rate possible? Over the near-term yes.

The National Health Commission of the People’s Republic of China offers another statistic, the number of people in quarantine suspected of having the coronavirus. As of January 27, over 44,000 are quarantined. Many of these people will unfortunately be reported as infected.

To be absolutely clear, this is NOT a prediction that 100 million people will be infected by Feb 20. Rather, this has been its growth rate for the last 12 days. A vaccine, mutation or successful quarantine/isolation could help reduce this growth rate.

Market Implications

Mongolia and North Korea have already closed their border with China. Hong Kong is restricting its border. As cases continue to emerge in Japan and outside of Asia, calls will grow for the Chinese to engage in drastic action to stop its spread.

This potentially means Chinese businesses will halt, flights will stop (see the plunge in crude oil on oversupply worries) and the global supply chain will grind to a halt. This could have enormous economic consequences for global growth.

While not overlooking the human tragedy, the markets have the difficult task of pricing an event that has a small chance of being devastating to global growth, but a more likely outcome of being contained. Yesterday’s selloff in stocks was likely a response to the fact that this virus has continued to grow at a geometric pace thus far. In trying to quantify the market impact, perhaps these charts offer one way to gauge the severity of this virus in the days ahead.

End Guest Post

Here is another link echoing Bianco's market concerns.

Thanks to Jim Bianco for these charts. He has a couple more including one on death rates that I did not copy.

Click on this link for a Free Trial to Bianco Research.

Mike "Mish" Shedlock

Comments (51)
No. 1-11
CautiousObserver
CautiousObserver

"Yesterday’s selloff in stocks was likely a response to the fact that this virus has continued to grow at a geometric pace thus far."

Or not. Today the markets gained most of that loss back as if none of this will be a problem economically. I have a difficult time understanding how quarantining 50 million people in China for several weeks will not have a significant adverse economic impact, but it would be easy to get the impression from today's market that none of this is significant.

abend237-04
abend237-04

If I were a Coronavirus field marshal, I'd attack by attempting to jump the animal/human genome barrier in a wild meat market in the most populous region during their annual period of maximum travel.

I'm sure we're the thinking life form, and our AIDS, SARS, Coronavirus defeats are just bad luck...

Carl_R
Carl_R

I posted in the article on doubling every 6 days that it seemed to be growing 57% a day, but i only went back 4 days. 53% or 57%, it will double much faster than every 6 days, which would only be 12% a day.

wootendw
wootendw

The latest:

This is the real reason to fear the coronavirus. It may be a weapon designed to kill millions.

Alanki
Alanki

Great, isnt the big market crash what Mish and readers have been waiting like, forever..

Alanki
Alanki

What, only 4000+ on 1/27? Wasnt there a previous post that says there were like over 100000 patients just one or two days ago? whatever happened to that number, fake news peddling?

ksdude69
ksdude69

Parabolic virus charts. Not good. What's this minimum talk? They closed the iphone maker down! LOL. Not to mention almost everything else we get from them. Walmart could look like an empty warehouse if this crap keeps up. Not that it matters, but i'm getting too old for this crap and really not in the mood for it.

Maximus_Minimus
Maximus_Minimus

The thing I despise most is that this epidemic will warrant a 500 point cut in the central banking rates, to flush out the most stubborn cash hoarders. To the ordinary folks this economic mayhem will be blamed on corona virus.

It is deeply unjust to the virus.

Casual_Observer
Casual_Observer

nCoV may be reason to cut rates closer to zero again in the coming month depending on what happens. Yesterday on Marketplace, it was shown that the Boeing 737 Max issue already will cut 0.4% from first quarter GDP.

bradw2k
bradw2k

I doubt the accuracy and openness of infection reporting to believe that that blue line reflects reality.

moyerdere2
moyerdere2

Reports of rioting in china now. People don't riot because of the normal flu. China is under reporting the number of deaths and cases, either on purpose or because they can't keep up. Both cases and number of deaths are much higher than being reported. That said, deaths and infected continue to grow. China has a major problem. I still seeing people comparing the x number of deaths from the corona virus to the number of deaths from the yearly flu. They are missing the point. Mongolia closed border with china. Flights are being cancelled. This doesn't happen because of the flu. Watch what is being done, not the number of deaths or cases being reported. 59 million people are being Quarantined. This is for something that is not even close to as deadly as the flu? Think people.


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