The Green Shoots of 2020

By John Mauldin

Those who lived through the last financial crisis might may recall the Green Shoots episode. It drew laughs on March 15, 2009, shortly after the Federal Reserve fired its heaviest artillery and, we now know, launched the longest bull market in history.

Appearing on 60 Minutes, Fed Chair Ben Bernanke said the recession’s end was in sight because the Fed’s asset purchases were generating “green shoots.” They turned out to be slow-growing shoots. The US unemployment rate kept getting worse for seven more months (peaking in October), and needed five more years to get where it was when that recession began

Similarly, you can look around today’s economy and see green shoots here and there. As bad as things are—and make no mistake, they’re bad—we’ve regained some lost ground since the March/April depths. But the problem is in the “here and there” part Some parts of the economy are literally booming even as others are in a deep, dark depression.

That’s kind of where we are. If you are in the right spot, you see whole forests of green shoots. You might think they are growing everywhere. And in due course maybe they will, but for now, a significant number of people just have dirt.

Last June in A Recession Like No Other I described this recession’s disproportionately hard hit on the service sector. Most lost jobs came from industries built on personal contact, like restaurants and hotels. The outlook for those sectors remains grim. Sadly, the industry is overrepresented in the lower income brackets. But at the same time, some industries aren’t just surviving; they are thriving.

I want us to notice this because it’s important. The economy is dynamic. It is constantly moving in all directions. We once talked about “cyclical” stocks that outperform when the economy is expanding, and “non-cyclical” stocks that take the lead in recessions. Now the virus has redefined what the “cycle” looks like, so we have a new set of non-cyclical players. My last few letters were generally negative. Today I want to discuss why the economy will recover, how that will happen and what it will look like. It won’t look like 2019, but the recovery will have its own flavor as we fast-forward future industries I think that’s a good thing.

On Your Doorstep

As we all now know, respiratory viruses spread when people are in close proximity, sharing the same air. The best way to avoid infection is to avoid other people. 

Hence the urge, and in some places the requirement, to stay home as much as possible.

Yet even staying mostly home, people need supplies to sustain themselves. Furthermore, they continue wanting things that, while not strictly necessary, make life more comfortable. The problem is how to get those things without exposing yourself to crowds. The answer: have them delivered to you.

Sounds simple, but it’s economically profound. This year consumers suddenly and sharply increased their demand for home-delivered goods. For the most part, these aren’t new products. They are the same things people previously picked off store shelves. But now they want the goods brought to them. And, as it always does, the market is responding.

Amazon is the most obvious beneficiary. Its e-commerce platform and massive logistics network already dominated before the pandemic. Now they are in overdrive. So are the online arms of major bricks-and-mortar retailers. Even at the local level, stores are remodeling and reorganizing to provide curbside pickup.

All these changes come at a cost; smaller retailers often lack the scale or technology to provide what consumers now demand. That’s bad news for those business owners and their workers. But the same economic forces are creating new warehousing and shipping jobs to handle all this new demand. 

And it’s still not enough. From WSJ:

The primary reason for this year’s capacity shortage is that carriers already have been operating near maximum capacity for months as consumers stayed home, avoided stores and shopped online. The delivery surge has strained networks and led to longer processing and delivery times. Carriers can’t quickly boost capacity with new facilities as it often requires a multiyear planning process.

The carriers have imposed shipping limits on customers and added fees to offset the increased costs to staff up, secure protective equipment and other outlays during the pandemic. Pricing power has quickly shifted to the carriers, which are raising rates and being pickier about which shippers they want to do business with.

This is staggering to think about. In the middle of the deepest recession in generations, consumers are ordering so much stuff, shipping companies are raising prices and telling some retailers, “Sorry, we can’t do it.”

Yet, given where we are, it makes sense. Driving a truck around to drop off packages may seem like a simple job, and there are millions of workers available. But it’s also dangerous in a new way. Drivers have to come in contact with both packages and people. That limits the supply and raises its price. Plus, the companies don’t have an infinite number of vehicles, and they sometimes break.

The recession and recovery vary a lot. Some segments of the economy are in deep trouble. Others are booming at the same time. This confuses sentiment and adds to the uncertainty and apprehension so many feel.

Working from Home

If circumstances cause you to spend most of your time at home, you naturally want “home” to be safe and comfortable. That may be difficult to achieve if you live in a crowded city, where simply taking kids to the park is now an ordeal. But staying locked inside with them probably isn’t much better. Particularly if you also fear domestic violence.

Those simple realities are sparking a major migration. City dwellers (at least those who can afford it) are looking for suburban homes with yards, pools, garages and other conveniences. Some are moving further out, to rural areas. Corporations are enabling this with more flexible work-from-home arrangements, making it possible to live far from the office. In fact, many people are moving to new states because they can now work from anywhere.

Like the e-commerce boom, this demand surge is overwhelming supply. Real estate agents like to say “location is everything.” Now it’s “everything” in a new way no one expected. An easy commute is less important than being far enough out to be safe, but close enough to get your groceries delivered.

Existing homes in the right places with the right amenities are selling at high prices because their supply is so limited. Real estate tells us the supply of homes for sale is down to the lowest level since 1999. But never fear; entrepreneurs are responding as they always do. From CNBC:

US single-family homebuilding surged in September, cementing the housing market’s status as the star of the economic recovery, thanks to record-low interest rates and a migration to the suburbs and low-density areas as Americans seek more room for home offices and schooling.

The report from the Commerce Department on Tuesday reinforced expectations that the economy rebounded sharply in the third quarter after suffering its deepest contraction in at least 73 years in the second quarter. But the recovery from the Covid-19 recession has entered a period of uncertainty, with fiscal stimulus, which spurred the burst in activity last quarter, depleted.

Single-family homebuilding, the largest share of the housing market, jumped 8.5% to a rate of 1.108 million units last month. But starts for the volatile multi-family housing segment fell 16.3% to a pace of 307,000 units.

The drop in multi-family (apartments, condominiums) reflects both the move away from urban areas and this recession’s inequality. The lower-income and middle-income workers who tend to live in those places are taking the brunt of the pain. Many are behind on their rent already and in no position to move. Developers have little incentive to build more such properties.

That’s creating an odd dynamic, visible in this chart.

Chart: RSM

In the last two recessions, building permits and housing starts peaked before the economy turned down. And in the Great Recession they kept falling for years. 

This time, though, the prior uptrend seems to have resumed after a brief interruption, even though we are now 8 months into a confirmed recession.

This wouldn’t be happening in a normal recession. Job losses would be affecting the people who buy single-family homes and builders would be pulling back. Note also, the commercial construction business is in deep trouble even as housing booms, and for some of the same reasons. 

People want houses that let them work from home, but that also reduces demand for office space. New mall and hotel construction is pretty scarce, too. But it’s a boom time for skilled workers in the building trades. They are worth their weight in gold right now, and being paid accordingly.

I talked with demography guru Neil Howe this morning, to get his take on things. One thing that is changing is families are moving back together. He believes this is good as it gets families more involved with each other. 

I would note that moving to the suburbs allows you to have more room to work from home and maybe have an extra family member. That is partly why we are seeing a remarkable boom in home remodeling, too.

Healthy Robots

The items Amazon is shipping, and the materials used to build all those houses, don’t appear out of thin air. Someone, somewhere makes them. Yet the pandemic is affecting factory production, too.

It started back in January when China’s massive shutdowns made much of the world’s manufacturing capacity grind to a halt. Then the same happened elsewhere. Even if not ordered closed, companies found the new health precautions and staff shortages both raised costs and reduced output.

The answer to that dilemma is technology. Automation was already growing simply because paying human workers often costs more than machines that can do the same work. The pandemic made human workers not just more expensive but bigger liabilities, too. This increased the incentive to automate.

Meanwhile, new tasks have emerged that are uniquely suited to automation. You can send in a robot to disinfect a room without fear it will get infected itself. But first you need to have the robot, so demand for them is off the charts. 

From the Financial Times:

The pandemic is driving a shift in companies’ use of technology, both official statistics and business surveys suggest, making the automation and digitalisation industry one of the few winners from this year’s economic turbulence.

The spread of the virus “has accelerated the use of robotics and other technologies to take on tasks that are more fraught during the pandemic”, said Elisabeth Reynolds, executive director of the Massachusetts Institute of Technology’s task force on the work of the future. “It is fair to assume that some firms have learnt how to maintain their productivity with fewer workers and they will not unlearn what they have learnt.”

Note that last sentence. If a manufacturer can produce the same number of products with similar speed and quality but fewer human workers, then of course it will do so. 

And having made that shift, it will never go back. That’s why automation is booming and is likely to continue to grow in the future. Not just robots, but artificial intelligence, virtual reality, and a host of related areas. And that is reflected in stock prices.

This may be bad news for employment longer term. Employers who install automation will reduce hiring and eventually reduce headcount as well. This will come just as we have millions of unemployed human workers. 

And that is not even counting the coming automation of trucks and transportation. It was always going to be a problem but might have developed gradually enough to let everyone adapt. Now the process has accelerated and businesses are more willing to put technology to work.

But for the moment, recession or not, the robotics and industrial automation industries are booming. Together with e-commerce and homebuilding, they are “green shoots” in an otherwise wilted economy.

Another green shoot that is not obvious but will make a very big difference: 

We are seeing an increase for the first time in a long time of new business startups. I keep trying to emphasize over the last few months that the very entrepreneurs whose 100,000+ businesses had to be closed (with thousands more coming) won’t just sit on the porch. 

They have an entrepreneurial gene in their DNA that almost forces them to launch new businesses. They can’t help it. And we are seeing it in the data.

Below I’ll talk about a new business I’m launching. We’ve been working on it for a very long time. It will start with about a dozen jobs. And hopefully grow. 

My experience tells me that it will grow slower than I would like, although I always dream about someday planning a business that would be like Uber or Airbnb or Amazon, you know, where growth just seems to be exponential.

Most small businesses start small and grow slow. But some succeed, and they will create jobs that power the recovery.

Another interesting development: People are switching jobs and careers at an unprecedented level. USA Today has a fascinating story on people switching careers. When you realize your job will probably not come back, you adapt. We are finally seeing more people being willing to move outside their local areas to where the jobs are.

Source: USA Today

Are We There Yet? A Timeline for the Recovery

The Conference Board offers us three different recovery forecasts: upside, downside, and the base forecast. Note that in the base case forecast we would be back to January 2020 by October 2021. Color me skeptical. I do think, however, that what they call their “downside forecast” is more realistic. 

In that scenario we end 2021 almost back to January 2020.

Source: The Conference Board

Their methodology uses past performance to project future results, and I don’t think the past is relevant to this crisis. That being said, I think it would be completely unreasonable not to expect a recovery. This model gives us some idea of what we can expect. I think it will be a little slower as we really do have to completely rearrange much of our economy. That takes time.

In my conversation with Neil Howe, he said the trend is more people are doing things for each other and spending less money. If that continues, we will see less GDP growth. Simple illustration: If you find out that your friend can help you with your hair color and you can help her, you don’t visit the hair salon as much. Or neighbors helping each other with home repairs. Since no one is paid, it doesn’t add to GDP, even though the work was done.

This is critical to understand: Consumer behavior has changed more this year than any time since the Great Depression. That’s why we are not going back to 2019. So much has changed that we will be entering literally a new world.

The point is we will recover. The airline and hospitality industries will not look the same in 2022 as they did in 2019, but they will be there in a transformed state. Commercial real estate will be repriced as we continue to work more from home. It seems so ancient, but just three years ago we bought more food in restaurants than we made and ate in our homes. That certainly changed and will continue. Entrepreneurs will adjust.

Will we travel again? Will we eat out again? Will we go to mass sports events and concerts? Of course. It’ll just take a while (and a vaccine) to make people feel safe. And it will look different than it did in 2019. But that’s okay. The world has gone through numerous changes over the last few centuries and millennia and been better for the adaptations.

I sincerely hope that Congress can figure out how to pass a “recovery package” to help those individuals that still don’t have jobs and businesses that are barely hanging on. My base case becomes more pessimistic without that. That being said, my good friend Renè Aninao, who is truly wired into the relief package negotiations, believes it will happen this next week if not this weekend. 

Essentially, he tells me, the last disagreements being worked out are that Nancy Pelosi wants more money for New York and California and Trump wants bigger stimulus checks ($1,500 per person, $1,000 per child) than Pelosi would like to see. Much of the legislation has been written already. McConnell has most of the votes he needs to be comfortable (certainly not his majority) and as many as 50 House Republicans may vote in favor. If this bill passes, it would be fertilizer for the green shoots all over the economy. Let’s hope so.

Where Then Should I Invest?

Given all the volatility and uncertainty, successful investing is harder today than ever. I have been rethinking and actually reworking the ways that I can help you get from where we are today to the other side of The Great Reset. I am happy to announce I have found a simple way to access my best ideas and my network of relationships.

I have long worked with Steve Blumenthal of CMG Capital Management Group (CMG). In the last few years I closed my own investment advisory firm and moved to CMG, where I am chief economist and co-portfolio manager of the Mauldin portfolios platform. 

In addition, through my broker/dealer firm, Mauldin Securities, LLC, I’ve selected a broker/dealer, Amera Securities, LLC, (member FINRA/SIPC) to which I can refer you. 

The Amera representatives can show you various offerings like private fixed income and equity and other alternative investments. Steve Blumenthal and his CMG financial professionals are also registered with Amera Securities and will, if appropriate, introduce select ideas to you. So, while you are technically dealing with two firms, you are dealing with one professional who has access to both.

We have built what we call a “kitchen” where the ingredients are the numerous strategies and managers representing a wide variety of styles and opportunities, which we can blend into a portfolio to help you get a personalized portfolio tailored to your needs. 

That means we need to get to know you and your objectives. I am very comfortable with this team and their ability to help you. To find out more about what is in the Mauldin kitchen click here and find out how my network can help you achieve your goals. Do it now. (In this regard, I am president and a registered representative of Mauldin Securities, LLC, member FINRA and SIPC.)

Needing a Neurologist in Tulsa

The letter is already running on, but before I hit the send button, a personal request. My youngest son Trey has moved to Tulsa for a new job and to live closer to his sisters. He began to experience serious pain in his left arm and the local doctors were not really helping. I put Trey on the phone with Dr. Mike Roizen at the Cleveland Clinic, who upon hearing the symptoms said Trey should see a neurologist. The problem is his insurance company is in Texas and can’t or won’t cover it. Even paying cash, we can’t seem to find a neurologist available. So, we got him Oklahoma insurance but he can’t see even a primary care physician, and get a neurologist referral until December. He is in severe pain today. If you know a neurologist in Tulsa please write me at Thanks.

Have a great week!

Your hoping your personal green shoot is growing well analyst,

John Mauldin
Co-Founder, Mauldin Economics

A big splash

In a world mired in recession, China manages a V-shaped recovery

Its rebound is also starting to look more sustainable

One scene more than any other from China’s coronavirus recovery has caught the world’s attention: a giant pool party in August in Wuhan, the city where the pandemic began. Nearly four months after their 11-week lockdown, revellers were crammed together in waist-high water, jumping and shouting in exhilaration as a dj spun bass-heavy beats. 

The video went viral. It was a moment of pure release and a sign of how China is far ahead of most other countries in returning to normality (of a sort). Economic data are rarely as exciting as pool parties, but China’s latest gdp figures, released on October 19th, were, roughly speaking, the statistical equivalent of Wuhan’s aquatic festivities.

Officials reported that the economy expanded by 4.9% in the third quarter compared with a year earlier, just shy of its pre-pandemic pace. Whereas most other countries are mired in recession and grappling with a new wave of covid-19 cases, China has just about completed the upward leg of a v-shaped rebound. Analytically, its success is easy to explain. 

China got one crucial thing right. By almost stamping out the virus it was able to allow activity to resume with few restrictions. Schools are fully open, factories are humming and restaurants are buzzing. China is also lucky in one crucial way. It is better insulated from weak global demand than smaller peers such as New Zealand that have done a good job of containing the pandemic, too. 

Until vaccines are rolled out, others will struggle to match China’s feat.

Yet China’s headline resilience has masked an unbalanced recovery. Back in February, when the government began cautiously to relax its lockdown, it focused on reopening factories and launching infrastructure projects. It correctly reasoned that maintaining strict health protocols in factories and on construction sites, which can be managed as semi-closed environments, would be easier than in shopping malls or schools. 

On top of that, China’s meagre provisions for unemployment insurance meant that the millions of people who found themselves out of work had to cut back on spending. 

Early in its recovery, China’s economy was thus fuelled by factory production and investment. Capital formation—the category in gdp accounting that encompasses these endeavours—contributed five percentage points to growth in the second quarter, whereas consumption subtracted more than two percentage points. Back then that left China with a 3.2% year-on-year growth rate.

The latest data reflect a slightly more balanced recovery (see chart). The contribution to third-quarter growth from capital formation fell to less than three percentage points, in line with the pre-pandemic norm, as infrastructure spending tailed off. 

Consumption added nearly two percentage points, which was below its pre-pandemic heights but a big improvement—easily noticeable in the crowds that have returned to tourist sites, restaurants and shops. 

Trade was the cream on top. China’s share of global merchandise exports has risen to a record high during the pandemic. It received a boost by being the first manufacturing power to resume operations, in addition to being the world’s biggest producer of protective equipment, from masks to surgical gowns.

Whenever Chinese data look so rosy, it is natural to ask whether they are believable. In this case a range of non-gdp indicators, including other countries’ exports to China, lend credence to the picture of a robust rebound. The bigger worry is whether the recovery has been at the expense of efforts to rein in debt. 

The initial sharp economic slowdown followed by a government-directed boom in bank lending will push China’s debt-to-gdp ratio to about 275% this year, up by 25 percentage points. It will be the biggest annual increase since 2009 during the global financial crisis.

Yet China is far from alone. Governments around the world have run up huge tabs to lessen the economic fallout from the pandemic. With its growth back on track, China has a chance to tighten the spigots again. s&p, a credit-rating agency, notes that the country’s real lending rates (ie, adjusted for inflation) have recently climbed to a five-year high, a dampener on investment. 

If successful, China will confine irrational exuberance to pools. 

Can Amazon upend the luxury sector?

Ecommerce giant’s long-awaited foray will need to convince brands and consumers

Leila Abboud in Paris

    Amazon’s Luxury Stores is only available by invitation to Prime customers in the US

When Amazon expanded into US groceries and healthcare, the established players in the sector feared the arrival of a rich, tech-savvy disrupter. But when the ecommerce giant unveiled its long-awaited foray into luxury goods last month, the response was a collective shrug. 

Amazon opened its Luxury Stores as a separate space on its mobile app, which is available only in the US “by invitation” to subscribers to its Prime loyalty scheme. Instead of its usual utilitarian look, the app tries to conjure up a luxury ethos with a gold logo against a cream-coloured background. It was launched with an ad featuring British actress Cara Delevingne. 

But while industry executives were publicly polite, privately many mocked the launch for being late to the game and going live with only a single brand: dressmaker Oscar de la Renta.

Frederic Court, whose venture capital fund Felix Capital was an early backer of online fashion marketplace Farfetch, said Amazon would struggle to break into luxury’s exclusive club. 

“If they decide to have a real go, they may get somewhere given they have so much talent, capital, and logistics and delivery expertise,” said Mr Court. “But if you don’t have Gucci, Saint Laurent, Prada and Dior, then it’s hard to be a real destination for luxury shoppers. You need the brands you can find on Avenue Montaigne in Paris.” 

Luxury’s biggest groups LVMH, Kering and Hermès remain prominent refuseniks. Referring to online-only players, LVMH’s Bernard Arnault said at its annual results conference in January: “We’ve been asked several times to participate in these businesses, and I’ve always said no.” He said that his reservations are partly because of concerns counterfeiters use sites such as Amazon to sell fakes.

‘If you don’t have Gucci, Saint Laurent, Prada and Dior, then it’s hard to be a real destination for luxury shoppers,’ said Frederic Court of Felix Capital, an early backer of online fashion marketplace Farfetch © Bloomberg

Bruno Pavlovsky, the president of Chanel’s fashion division, told the Financial Times this week that the French luxury group “will not sell any fashion products” on Amazon, but did not rule out using it to sell beauty products as it does in China with Alibaba.

Since last month’s launch, Amazon has added more brands, including Joseph Altuzarra, a New York-based ready-to-wear designer, lingerie from La Perla, designer clothing from London’s Roland Mouret, and high-end beauty products from Clé de Peau. A spokesperson said more were on the way.

The question now is whether high-spending luxury customers will follow. Globally, Amazon has 150m Prime customers, who are accustomed to fast delivery of everything from cat food to shoes. Luxury Stores may get traction if it can attract even some of them.

Amazon’s move into luxury comes at an opportune moment: the Covid-19 pandemic has accelerated the transition to online shopping, even for €10,000 handbags.

With luxury sales expected to take three years to recover to pre-pandemic levels, big brands are more open than ever to selling online and many are seeking new ways to woo clients via messaging apps or email. While the lavish in-store experience will always be central to luxury, a period of online experimentation is afoot.

Meanwhile, after years of declining sales, the fallout from the coronavirus pandemic has finally killed off several US-based department stores, such as Lord & Taylor and Neiman Marcus. This has deprived independent fashion brands of their main distribution channel and some are scrambling for alternatives, including selling more via their own websites and online stores. Critics said Amazon’s Luxury Stores may face a reverse selection bias, where it is most likely to attract accessibly priced or struggling brands.

Ecommerce has momentum: by 2025, consultancy Bain & Company estimates that roughly one-third of luxury’s annual sales will be made online, up from 12 per cent of total sales of €281bn in 2019. The shift is being driven by millennials and customers in China — both the world’s most advanced ecommerce market and the fastest-growing market for luxury goods.

Amazon is entering luxury after years of expanding in mid-market fashion via acquisitions of online shoe seller Zappos and clothing outlet Shopbop. 

So far, it has given few details on its ambitions for Luxury Stores and declined an interview request. “Fashion is a priority for our customers and therefore a priority for us worldwide,” it said in an emailed statement. “We’re just at the beginning of what we expect to accomplish.”

Amazon’s pitch to brands is that it can help them create “innovative, content-driven tools” to engage with shoppers, such as its View in 360 button that allows people to visualise how a garment will look on various body types. 

In an attempt to allay fears about eroding the exclusivity of the online experience, the store will be walled off from the broader website. And most importantly, participating brands will control the design of their shop within the app, as well as being able to select what items are sold on there and at what price. 

This is known in the industry as a concession or marketplace model, and was adopted by Farfetch and Alibaba’s Tmall Luxury Pavilion.

It contrasts with the so-called wholesale model used by online retailers, department stores, and rival online seller Yoox Net-a- Porter. Those companies buy inventory from fashion brands, store it in their warehouses, and then can offer discounts if it does not sell at full price.

Luxury brands tend to prefer the concession model because it offers more control, less discounting, and ability to move inventory. But their ideal model is to sell directly on their own-branded websites where they do not have to give away any commission and do not dilute their brand equity, industry executives said. Customers can be drawn in by Instagram or TikTok posts from brands, or with well-placed links on Google searches for products. 

          Net-a-Porter’s ‘The Sporty Jacket’ campaign © AP

As one sector executive put it: “For fashion brands, wholesale is heroin and Farfetch is methadone. Everyone wants to get clean and sell directly.” 

Amazon may be betting that it can replicate the success that Alibaba’s Tmall has had in China. Initially, luxury brands mistrusted Alibaba as down-market and rife with counterfeits. But once it moved to a concession model with a separate safe space for luxury brands, many were won over. They now see Tmall as a key online gateway to Chinese customers. 

Amazon’s Luxury Store is entering a crowded field of multi-brand online retailers, and will compete with established companies such as Farfetch, Yoox Net-a-Porter, MatchesFashion and MyTheresa. Such sites have supplanted the roles once played by department stores and fashion magazines — namely discovering new designers, tracking what is in style, and giving inspiration about what to wear. 

Few of them have cracked profitability despite growing user bases, so they may eventually be forced to consolidate, said Claudia D’Arpizio, a consultant to the luxury industry at Bain. “Amazon can pose a real challenge to these etailers, as well as take share from physical department stores, which are already struggling,” she said.

José Neves, the founder and chief executive of Farfetch, said his company had a “strong competitive moat” against Amazon, namely its relationships with the biggest luxury brands honed over more than a decade. Farfetch sells some 3,500 brands on its site and 500 of them operate on the concession model to sell directly to customers.

“Luxury is an industry of relationships. Most true luxury brands are European and family run. For them the protection of brand equity is paramount,” said Mr Neves. 

“From the conversations we’ve had with them about Amazon, having another multi-brand store is not of strategic importance, and it could even be a losing proposition if it cannibalises existing channels.” 

For Amazon, the plan is that more brands follow Oscar de la Renta, which sees its partnership with the ecommerce giant as a good way to reach more customers and glean additional insights into their desires. 

“It’s a super challenging time right now with the pandemic,” said Alex Bolen, the chief executive of Oscar de la Renta. 

“It is all about learning. Amazon is going to help us become a better merchant.”

Additional reporting by Lauren Indvik in London

An End to the Chapter of Dictatorship’: Chileans Vote to Draft a New Constitution

Voters overwhelmingly approved a bid to scrap the charter inherited from Gen. Augusto Pinochet’s dictatorship, a move that could set a new course for the country.

By Pascale Bonnefoy

Voters in Santiago, Chile, cast ballots in a  constitutional referendum on Sunday.Credit...Martin Bernetti/Agence France-Presse — Getty Images

SANTIAGO, Chile — The protests started over a small hike in metro fares, then exploded into a broad reckoning over inequality that shook Chile for weeks. Hundreds of thousands of demonstrators poured into the streets, calling for sweeping change in their society, with higher wages and pensions, better health care and education.

The movement soon seized on a vehicle for their demands: Chile’s Constitution.

The existing charter, drafted without popular input during the military dictatorship of Gen. Augusto Pinochet and approved in a fraudulent plebiscite in 1980, was widely blamed for blocking change — and seen as a lingering link to a grim chapter in Chile’s history.

On Sunday, just over a year after the massive demonstrations swept the nation, Chileans voted to scrap the dictatorship-era document and write a new one — a process that could transform the politics of a country that has long been regarded as one of the most stable and prosperous in Latin America.

With 100 percent of the ballots counted, voters approved the referendum in a landslide victory, and 78 percent voted in favor of a new Constitution.

“This plebiscite is not the end; it is the beginning of a path we should all undertake together,” President Sebastián Piñera said in an address from the presidential palace.

“Until now, the Constitution has divided us,” he added. “As of today, we should all cooperate to make the new Constitution become one home for all of us.”

Until the protests last year, the idea of a new Constitution “wasn’t on anyone’s agenda,” said Lucía Dammert, a political scientist and board member of the research center Espacio Público. “The fact we are now discussing a new Constitution is a victory of the social movement.”

The vote, originally scheduled for April, was postponed as Chile went on lockdown during the pandemic. Now, with most of the capital, Santiago, and other areas gradually opening up, voter turnout was high.

Thousands of people flocked to the Plaza Italia in Santiago to celebrate on Sunday night, chanting, dancing, waving flags and setting off fireworks. Demonstrators unfurled banners addressed to Pinochet, with messages like “Goodbye, General,” and “Erasing your legacy will be our legacy.”

“Today, citizenship and democracy have prevailed, and peace has prevailed over violence,” Mr. Piñera said. “This is a victory for all Chileans.”

On Sunday morning, Chileans turned out in droves to participate. Throughout the country, voters in masks ringed block after block in calm, orderly lines.

Chileans waiting in line to vote. Turnout appeared to be high.Credit...Javier Torres/Agence France-Presse — Getty Images

After transitioning to democracy in 1990, Chile’s market-friendly business environment, framed in part by the Constitution, attracted foreign investment. The country grew consistently and saw poverty go down. 

But this came at the cost of an acute concentration of wealth and growing inequality. 

Last year, the United Nations Economic Commission for Latin America estimated that nearly a quarter of total income goes to 1 percent of Chile’s population.

To cover the high cost of living, Chileans are greatly indebted. The Central Bank found last year that on average nearly three-fourths of household income was used to pay debt. The public health care and education systems are in shambles, and meager pensions force most people of retirement age to continue working.

Amalia Gómez, 66, barely gets by on a $125 monthly pension and picks up seamstress jobs to compensate. She and many others like her see a new Constitution as a path to better lives and a more equitable country for future generations.

“Why not, if we are a country rich in minerals, fish, agriculture?” she said. “Why can’t we use those resources to our benefit, for our education and health?”

Sunday’s ballot asks voters whether they want a new Constitution, and who should draft it: a body of only newly elected representatives or a convention in which half of the delegates would be members of Congress.

Voters overwhelmingly opted for a newly elected constitutional convention, without automatic inclusion of Congress members. Elections will be held in April to choose the delegates, among whom there must be gender parity. Political factions are still negotiating whether to reserve seats for Indigenous delegates.

Chileans are now scheduled to vote in 2022 to approve or reject the Constitution the convention drafts.

As the nation geared up for voting, tensions were high.

After last year’s immense protests — known as the “estallido,” or explosion — rocked the country, the pandemic sent demonstrators home for much of 2020. Timid protests returned last month, leading to clashes between demonstrators and the police.

A giant protest last Oct. 25 in Santiago, the capital, was part of a movement seeking sweeping change in Chilean society, including better wages, pensions, health care and education.Credit...Tomas Munita for The New York Times

In one protest on Oct. 2, a police officer pushed a teenager off a bridge and into the bed of the Mapocho River in Santiago. The teenager survived with fractures, and the officer was charged with attempted murder and expelled from the force.

Last Sunday, tens of thousands flocked to the protests’ epicenter, Plaza Italia, to commemorate the anniversary of the uprising. The demonstration was largely peaceful, but late in the afternoon small groups set fire to two churches, including one used by the police for religious services.

Last year’s demonstrations often devolved into violence and were met with police brutality. The Public Prosecutor’s Office received 8,827 reports of human rights violations, including hundreds of complaints of permanent eye damage from rubber bullets; two people lost their sight completely.

By early last November, the clashes had left five people dead and nearly 1,800 wounded. Mr. Piñera was facing competing calls to deploy the armed forces to restore order — or to resign. Instead, he announced he was willing to open the process for a new Constitution — an idea that sharply divided his own party.

The 1980 Constitution has undergone several changes since it was drafted behind closed doors by a Pinochet-appointed commission. The most significant shift, in 2005, eliminated major authoritarian provisions.

Still, many Chileans saw Sunday’s vote as highly symbolic.

President Sebastián Piñera of Chile casting his vote in Santiago.Credit...Marcelo Segura/Agence France-Presse — Getty Images

It “means putting an end to the chapter of dictatorship,” said Hernán Becker, 58, a salesman who participated in a demonstration last Sunday. “Its origin is totally illegitimate: under military rule, with no freedom of expression, no freedom of assembly.”

Rewriting the charter will also allow greater flexibility for Chile to make the economic and policy changes demanded by protesters.

Under the current charter, new laws may be subjected to scrutiny by a constitutional tribunal, which has the final say on whether they pass muster. And laws that touch on education policy, political parties, the military, the electoral system, mining and reforming the Constitution, among other topics, require a supermajority for approval.

Several provisions make altering the free market model enacted under military rule nearly impossible, experts said.

“Chile’s Constitution is neoliberal in nature, and its basic role is to guarantee conditions for the free market, even in traditional social areas such as education, health and social security,” said Fernando Atria, a law professor specializing in constitutional matters. “What we need is a Constitution that guarantees social rights more than market conditions.”

While the proposal to write a new Constitution enjoys widespread support, opponents say it would be a mistake to scrap a charter that has been instrumental in Chile’s economic success.

“It guarantees freedom, protects individuals from the excesses of the state, ensures the protection of property and guarantees social rights,” said Gerardo Jofré, a businessman and one of the directors of the Independents for Rejection campaign.

“Those who are rebelling in Chile don’t want to change the Constitution, they want to change the model, and that is a monumental mistake.” 

Oxford Covid vaccine trials offer hope for elderly

Early results suggest group most vulnerable to serious illness and death could build immunity

Sarah Neville, Clive Cookson and Anna Gross in London 

The discovery that the vaccine being developed triggers protective antibodies and T-cells in older age groups has encouraged researchers © REUTERS

A vaccine considered a frontrunner in the race to protect the global population from Covid-19 has produced a robust immune response in elderly people, the group at highest risk from the disease, according to two people familiar with the finding.

The discovery that the vaccine being developed by the University of Oxford, in collaboration with AstraZeneca, triggers protective antibodies and T-cells in older age groups has encouraged researchers as they seek evidence that it will spare those in later life from serious illness or death from the virus.

Age has emerged as the principal risk factor for a severe bout of Covid-19. However, the immune system weakens with age, raising concerns that the very group that most needs the protection of a vaccine may generate the least effective response to one.

People aware of the results from so-called immunogenicity blood tests carried out on a subset of older participants say the findings echo data released in July that showed the vaccine generated “robust immune responses” in a group of healthy adults aged between 18 and 55.

The earlier findings showed that the vaccine induced two forms of human immune response — generating antibodies and T-cells — for at least 56 days, according to an analysis published in The Lancet.

Positive immunogenicity tests do not guarantee the vaccine will ultimately prove safe and effective in older people. That will not be known until full trial data for the age group has been analysed.

However, researchers have been encouraged by the latest development, details of which are shortly to be published in a clinical journal. The University of Oxford declined to comment.

Jonathan Ball, professor of virology at the University of Nottingham, said: “If what they’ve got is data that show the vaccine generates good immunity, as measured in the lab, in the age group over 55, and that also includes good responses in people who are even older than that, I think that’s a promising sign.”

He cautioned, however, that while good immunogenicity data would be encouraging “ultimately, it’s whether the vaccine protects against serious disease that’s crucial and we will only know that from phase 3 trials”. 

One person familiar with thinking in Whitehall suggested there was optimism that vaccination of priority groups such as NHS staff on the frontline of the fight against Covid-19 might be able to get under way as early as January.

However, one official played down that speedy timetable, suggesting there were considerable uncertainties, including the timing and robustness of results from phase 3 trials and whether approval could be secured from the UK regulator, the Medicines and Healthcare products Regulatory Agency.

Last Thursday Patrick Vallance, government chief scientific adviser, told a Downing Street news conference that while vaccine development was progressing well, “I remain of the view that the possibility of wider spread use of a vaccine isn’t going to be until spring of next year”.

The outcome of the trials is being closely watched around the world.

The US arm of the Oxford/AstraZeneca study was given the go-ahead to resume on Friday, having been halted since September 6 after a participant developed neurological symptoms.

Additional reporting by Jim Pickard

Today’s Travel Bookings May Be More Fiction Than Fact

Bookings are improving across the travel sector, but investors shouldn’t assume demand will translate to dollars

By Laura Forman

Passengers waited to board an American Airlines flight at Los Angeles International Airport on Oct. 1. / PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS

Future bookings are beginning to recover, buoying shares of some travel and leisure companies. 

But investors should ask themselves just how much of that is fantasy money versus real future revenue on which they can hang their hats.

Cruise operator Carnival CCL 0.51% said Thursday that bookings for the second half of next year are at the higher end of its historical ranges. At this stage of the coronavirus pandemic, that is “a compelling indication of the fundamental strength in demand” for its brand, according to Carnival.

But demand won’t always translate to revenue. Industrywide, relaxed change and cancellation policies are enabling cooped-up consumers desperate for an escape to plan a far-off vacation with little to no financial risk, giving them something to look forward to, even if they decide to call it off at the last minute.

Airlines have broadly done away with change fees, many through the end of the year, and others for the foreseeable future. Hotels have done much of the same, some even offering no fee cancellations. 

At all Marriott International hotels world-wide, for example, guests can now cancel or change reservations at no charge up to 24 hours before their arrival date for travel through Dec. 30. Hilton Worldwide Holdings was offering a similar policy for individual reservations made before Oct. 1.

Cruise lines have had to offer some of the most compelling incentives for travelers to book trips after having been shut down for most of the year. Royal Caribbean, for example, is offering its customers a 125% future credit for a cruise that is booked but then canceled because of future global sailing suspensions. 

A continuing survey by cruise-review site Cruise Critic found that, as of July 1, most cruise lines were offering credits of at least that value, with some adding extras such as future onboard credits. The message to consumers is: We are essentially prepared to pay you for the risk of booking a future cruise today.

For those who miss their annual travel fix, that kind of offer is difficult to turn down. Carnival said Thursday that approximately two-thirds of its global guests are repeat customers, translating to roughly eight million passengers a year. The company said the past eight months of sidelined business has created “a backlog of past guests…who really miss their cruise vacations and intend to return.” Indeed, it also said more than half of its bookings for next year are from brand loyalists.

After a steep selloff in February and March, Royal Caribbean shares have risen almost 90% over the past six months. Carnival’s shares have rebounded about 30% over the same period. 

Much of that recovery has been driven by news that demand for future cruises has held up despite canceled voyages, as evidenced by the percentage of customers opting for credits over refunds, as well as solid future booking trends.

Still, Cruise Critic’s survey found that many who have chosen future cruise credits haven’t rebooked. The survey found that 48% still were deciding whether to book another cruise, while 30% planned to book another cruise, but haven’t done so yet.

Industrywide, even if all passengers choose to rebook rather than cancel their travel plans, it is important to note that potential revenue could still decline. Carnival, for example, noted that prices for bookings in the second half of 2021 are down in the mid-single-digit range because of the yield impact of future cruise credits. 

Through some cruise operators, travelers can conceivably book a cruise today for late next year only to later move that cruise or have it postponed for one even later in 2022.

American Airlines Group President Robert Isom had it right when he said in September that, while bookings are gradually improving for his business, “it’s still too soon to tell” whether that is sustainable. 

It will be a long time before booked trips reliably set sail.

What’s Next for Real Estate Markets?

As the pandemic continues to upend how we live, work, and play, the future of residential and commercial markets remains very much in flux.

Charles Nathanson

The COVID crisis has thoroughly upended how people live, work, and shop. And this, in turn, has upended real estate markets.

Whether it’s tech workers abandoning dense urban cores for more space in the countryside, restauranteurs converting from dine-in to takeout, or companies suddenly going virtual while locked into an office lease, it’s clear that the ways we are using space—and the amount we’re willing to pay for it—are changing.

“The COVID crisis has led to a pretty big reallocation in the shares of goods that people spend money on,” says Charles Nathanson, an associate professor of finance at the Kellogg School.

“For a lot of people, it makes sense to dramatically increase the amount they are spending on the shelter because they’re spending so much more time at home,” he says. 

But, of course, the calculus looks quite different for companies renting office space for a workforce that may not be coming back anytime soon.

So what might we expect from residential and commercial real estate as we head into the year ahead?

“The key to the real estate markets now is knowing how temporary or permanent the effects of the pandemic are going to be,” says Nathanson.

Residential Sales Are a Bright Spot

When cities across the U.S. went into lockdown in early 2020, several things happened that ended up having a positive effect on housing sales.

First, people suddenly working from home became less dependent on living near their workplace, so they could consider buying beyond what they had previously considered a reasonable commute. Second, with whole families now cooped up at home, larger spaces—and yards—became more desirable. And third, many of those same people, in the absence of vacation and entertainment spending, have more money to invest in housing.

“There is a substitution effect, where all of a sudden people want way more residential space than they wanted six months ago,” Nathanson says. “So that’s why I think of why we may have situations where we see big house-price increases, even as a lot of people are losing their jobs.”

Still, despite the notable boost in demand, housing developers are taking a more wait-and-see approach. New-housing starts are up over historical averages, but this may be due more to developers playing catchup after a big dip during the spring and early summer lockdowns than to an enduring trend in new suburban housing.

“Building a house is a pretty long-term investment,” Nathanson says. “You don’t want to do that if this is all over in a year. Which is why, to me, this situation is so unique. There’s a huge short-term demand shift for where people want to live. But if it’s all going to revert in a year, then it won’t make sense to build new developments.”

Given the combination of higher demand and tighter inventory, Nathanson predicts that the residential housing market is likely to see prices continue to rise—and unlikely to experience the volatility of 2008–2010.

“Some people might lose their jobs and, they might not make payments, but in markets where prices are rising, they should be able to sell their house and pay back a lot of their mortgage. Or if the bank repossesses it, it won’t be as big of a financial hit to the bank because the offset value will not have fallen—so I wouldn’t be worried about a big foreclosure crisis,” Nathanson says, “or the ripple effects in neighborhoods when you have lots of vacant houses and it hurts property values.”

Rentals Will Fluctuate

While home sales are likely to remain robust, the residential rental market faces a more uncertain future, particularly as government support for renters—including eviction moratoria—begin to expire and the job market continues to lag.

“Rents are more about the here and now,” Nathanson says, making them more volatile in response to shorter-term uncertainty.

“We might see a lot of commercial property turning into residential housing. You already see it in those old factories that got turned into loft apartments. But you would just see way, way more of that.”

— Charles Nathanson

He notes that an uptick in move-outs and evictions, if owners can’t find renters to replace them, could put stress on the residential real estate markets.

So while building owners may want to take advantage in the near term, the fact that much of the rental stock is in cities—many of which are seeing an exodus—means that demand may eventually dry up. And if the U.S. sees another spike in unemployment, landlords may need to renegotiate leases with tenants—and mortgages with banks—to avoid foreclosures.

“If the uncertainty is longer lasting, you might see a very significant decline in economic activity in central cities,” Nathanson says, which could make residential rentals in those areas less attractive.

Commercial Real Estate Is Up for Grabs

The future looks most uncertain in the commercial real estate market, which has experienced a significant decline in economic activity.

“In commercial real estate, there are all these long-term financial obligations that are based on the assumption that the demand would continue, which … it just fell off a cliff this spring,” Nathanson says. “So now it’s a question of who’s going to take the loss.”

If, for example, a mom-and-pop clothing store that holds a 20-year lease on a storefront can’t open, it may reach out to the landlord to see if it can make partial payments instead. And rather than kick them out at a time when few other retailers may be looking to replace them, the landlord may renegotiate to at least collect something. In turn, the landlord may look to its own bank to adjust the terms of its mortgage.

If indications seem to point to a longer slog—perhaps a new normal where safety concerns or work-from-home habits make retail stores and office spaces less desirable—we are likely to see dramatic changes in the way commercial real estate is utilized. Landlords facing a radically altered long-term outlook for commercial real estate may opt for a “rip off the band-aid” approach.

“We might see a lot of commercial property turning into residential housing,” Nathanson says. “You already see it in those old factories that got turned into loft apartments. But you would just see way, way more of that.”

Or, if urban cores also become less attractive to residents, those same commercial properties might be converted into distribution centers for a delivery-centric commercial economy.

“You may have areas of huge office buildings that are now just giant Amazon warehouses, so they have tighter distribution networks,” Nathanson says. “If we all knew for sure this would last 20 years, my guess is we would start to see that immediately. But because we don’t, I think people are just waiting.”

With 1m dead, are we any better at treating Covid-19?

The survival rate for people suffering from coronavirus has improved but doctors still want more effective therapies

Hannah Kuchler

© AFP via Getty Images

Tending to Covid-19 patients in the early days of the pandemic, Leora Horwitz felt like a doctor from the 18th century, desperately trying to discover more about a new disease to learn how to stop people from dying.

“We couldn’t tell how quickly people were likely to deteriorate, what kinds of deterioration they would have . . . or when they were out of the woods,” says the clinician-researcher at NYU Langone, an academic medical centre in New York. “We had no idea.”

This week, the coronavirus pandemic hit a haunting milestone, with an official death toll of 1m worldwide — almost half of those in the US, India and Brazil. The rapid spread of the virus has triggered fears among some scientific and medical experts that millions more will die.

On Friday it was announced that Donald Trump, US president, had tested positive for the virus. Yet the death rate — how many people who have contracted coronavirus die — may be falling because of improved care, according to the World Health Organization. Countries grappling with a new surge in infections hope that doctors have grasped how to keep more patients alive. The global survival rate for people hospitalised with Covid-19 has increased from 66 per cent in March to 84 per cent in August, according to the International Severe Acute Respiratory and Emerging Infection Consortium.

Dr Horwitz says the contrast between New York’s wards in late March and today is like “night and day”. Even accounting for the demographic differences between the patients being treated at her hospital, she found their chances of survival were 22 percentage points higher in August than in March in research that has yet to be peer-reviewed.

‘Proning’, when a patient is turned on to their stomach, has proved an effective way to assist breathing for intensive care patients © John Moore/Getty

But some scientists remain sceptical about whether the death rate is actually falling, questioning the quality of the data. They argue that if it is coming down it has more to do with the rise in younger people getting sick.

“The biggest question that’s out there right now — or at least one of them is [whether] the mortality rate from Covid-19 is actually dropping, or is it just apparently dropping,” says Jonathan Slotkin, chief medical officer at Contigo Health, part of Premier, a group of over 4,000 US hospitals.

No ‘silver bullet’

David Battinelli, chief medical officer of Northwell Health, New York State's largest healthcare provider, says it is easy for people to forget how rapidly the city’s hospitals were flooded with patients.

“We went from zero in our health system to thousands hospitalised within 30 days [with] just about 1,000 patients in our intensive care units on ventilators. We had no effective treatment and almost an overwhelming number of patients,” he says, adding that many other systems were swamped.

The hospital staff tried using what drugs they could: antivirals, plasma from recovered patients and steroids. If a patient improved, he says doctors could be “easily convinced” that this was a cause and effect, though subsequent trials may show otherwise.

Donald Trump and his wife Melania have tested positive for the virus amid questions over the US president’s competence on controlling the spread of the pandemic © Luca Bruno/AP

The months since then have brought no blockbuster breakthroughs in drug treatments. Remdesivir is the only antiviral drug authorised in the US to treat Covid-19 yet its benefits are moderate: it can speed up a patient’s recovery but there is no evidence it has reduced deaths. The Recovery Trial, run by the University of Oxford, discovered the generic steroid dexamethasone lowered deaths in patients receiving respiratory support and has now been widely adopted globally.

“I think dexamethasone seems to [provide] the biggest benefit that we have right now,” says Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security in Baltimore.

Even without a “silver bullet” drug, Dr Horwitz believes there are “dramatic” differences in our understanding of Covid-19, especially the sheer havoc it can cause across the body, from the heart to the toes.

Patients can get diagnosed earlier and put on protocols based on what has been learned: when to give blood thinners, how to turn patients in a manoeuvre called “proning” — putting them on their stomach to improve oxygen intake — and when to hold off from pushing people on to ventilators too early.

Heather Pierce, senior director at the Association of American Medical Colleges, says these are “major steps forward”. “We don’t have a vaccine. And we don’t have a cure for Covid. But the more we understand . . . be it using novel therapies, techniques, or supportive [care], the more we can help save lives,” she says.

Many dispute the idea that the death rate is falling, putting any apparent improvement down to more testing © Go Nakamura/Getty

Outside hospital treatments, public health measures could be playing a major role in bringing the death rate down. In the US, about 40 per cent of deaths were linked to nursing homes, so measures to stop the spread inside those facilities are helping, says Dr Adalja.

The New England Journal of Medicine in September, published a commentary which suggested that mask-wearing could be reducing the severity of the disease. “For me that stands to reason,” says Dr Slotkin, “but I don’t think anybody can prove that it’s true.”

Others including Professor Sunetra Gupta, a theoretical epidemiologist at Oxford university, suggest that some regions may be reaching herd immunity at a much lower rate of infection than previously predicted. The theory is based on the idea that the virus appears to be much more likely to infect a subset of susceptible people — and that previous exposures to other coronaviruses may be protective for some. But Dr Battinelli dismisses this as “pure speculation”.

Testing difference

Many dispute the idea that the death rate is falling, putting any apparent improvement down to more testing uncovering more cases and the better underlying health of a new wave of younger patients.

Laureen Hill, chief operating officer of New York Presbyterian Hospital, believes it is very hard to separate the factors that could contribute to lower death rates. She has practised intensive care medicine for 30 years and says her staff followed the usual playbook for Covid-19, so there has not been dramatic changes in how they look after people.

Remdesivir is the only antiviral drug authorised in the US to treat Covid-19 yet its benefits are moderate © Gilead/Reuters

Instead, the difference between the rates of death in the early months and now may be down to a better understanding of how many people are infected. A death rate is the proportion of confirmed cases who die — so the count of confirmed cases is key. “Early on we weren’t testing nearly as many patients as we were today. So when you look at rates, that’s very much affected by the denominator, how many tests are there being done,” she says.

The data is patchy and poorly monitored in some countries and hard to compare across regions and borders. Even counting a death is sometimes not simple, especially if the patient had other diseases or died at home. Fatalities also occur weeks after an initial infection.

In the US, the Centers for Disease Control and Prevention has changed how it reports the Covid-19 death rate. In July the overall rate was 0.65 per cent. Now it breaks down the data by age with the most likely to die — the over 70s — having a 5.4 per cent death rate. Douglas Rothman, a professor at Yale School of Medicine, is adamant that, when accounting for the age of patients, death rates have not fallen at all. He calculates that the September US death rate was about 0.69 per cent.

The New England Journal of Medicine in September published a commentary suggesting that mask-wearing could be reducing the severity of the disease © Hector Retamal/AFP

In his own study in Arizona, one of the sunbelt states hit by a wave of Covid-19 infections in summer, he found that, when adjusted for age, the death rate for the population up until the end of July was about the same as the national estimate for the spring of 2020.

He accuses some doctors of “false optimism” and a “sunshine effect”, where they are inclined to focus on their successes, and argues there needs to be more independent research.

The people getting infected and hospitalised now tend to be younger, as the older or more vulnerable are more likely to take protective measures like social distancing. Yoko Furuya, New York Presbyterian’s medical director of infection prevention, says the younger population may obscure any medical advances.

“We’re seeing a major shift in epidemiology that may drown out some of the smaller changes that come from the treatments that we now learn are effective,” she says.

‘We don’t have drugs for viruses’

While Covid-19 cases are again rising in many European countries, and in more than half of US states, some doctors are hoping that new treatments will help save more lives.

Monoclonal antibody treatments could help patients even before they get to the hospital. Eli Lilly recently released positive phase 2 results, showing the treatment — artificially developed from the best performing antibodies from recovering Covid-19 patients — reduced the rate of hospitalisations.

“I’m cautiously excited about the promise of monoclonal antibodies, because preliminarily it looks like they may show some promise treating people who just have mild symptoms and it may help prevent them from getting sicker,” said Dr Furuya.

Dr Horwitz is less hopeful that researchers will discover an antiviral that could stop the virus from replicating.

“We don’t have drugs for viruses,” she says, adding there had only been two viruses that have been tackled successfully: Hepatitis C and HIV, which has been kept under control but not cured. “After 100 years, we don’t have a treatment for influenza that’s effective.”

In the US, about 40 per cent of deaths were linked to nursing homes, so measures to stop the spread inside those facilities are having an effect © Chris Ehrmann/AP

Surges risk bringing back the threat of higher death rates because of overwhelmed hospitals, especially if they are trying to cope with Covid-19 at the same time as seasonal flu — and possibly even in the same patient, as it is not yet known if the conditions can coexist.

A vaccine could make a significant dent in the Covid-19 infection rate — and, therefore, the absolute death figures. But even if a vaccine proves successful and is approved on an emergency basis in the next few weeks, it is unlikely to be widely available until next year.

It was unfathomable this time last year that a new virus could make doctors feel as lost as their ancestors were when wrangling with long subdued infectious diseases.

And yet Sars-Cov-2 has not only taken at least 1m lives, but is forecast to take many more. Models struggle to predict future deaths more than four weeks ahead — but the CDC says the average of about 44 models expects between 2,700 and 8,600 deaths in the week ending October 24 in the US. 

One model does try to foresee as far as the start of next year. The Institute of Health Metrics and Evaluation at the University of Washington predicts the death toll could hit 2.5m by January 1, a number that could be brought down to 1.8m with universal masking — or rise to 3.3m if restrictions are further eased, it says.

“This virus is not done killing people yet,” says Dr Adalja.