History's Lessons for Our Post-Virus Future

virus news today. The United Kingdom reported fewer than one thousand new cases for the first time since it went into lockdown in late March. The government said there were fifteen deaths related to coronavirus, the lowest since March fifteen. However, in the US, cases continue to spike in a number of states. One of those states is Florida, where new infections rose again on Monday and deaths increased as well. On a rolling seven day basis, Florida's new cases reached

nearly twenty three thousand, their highest level ever. China suspended poultry imports from a Tyson Foods plant where hundreds of employees tested positive for COVID. Nineteen. Chinese officials announced Sunday that customs will seize all products from Tyson's Springdale, Arkansas plant that arrive at the country's ports. The move is a potential new threat to meat plants across the world

that have seen disruptions because of the virus. In the US, hundreds of meat packing plant workers have become ill and dozens have died. There's also been a recent uptake and infections at facilities in Brazil and Germany. Finally, news about two new drugs being developed to treat COVID nineteen. Indian company Glenmark Pharmaceutical was approved to manufacture and sell a coronavirus treatment called FabiFlu or favy peeravie for mild to

moderate virus patients. The news sent the company's stock up as much as it's the highest single day rise ever, and drug maker Gilead is screening volunteers for phase one trials of an inhaled formulation of its remdsevere drug. The treatment would be administered via a nebulizer, which is potentially easier to use outside of the hospital. Ramdsevere has already been cleared by the US Food and Drug Administration for

emergency use with COVID nineteen patients. The next wave of clinical development will study rem desevere for treatment earlier in the zas and now for today's main story. As soon as the coronavirus became a pandemic, people began making parallels to the Spanish flu outbreak of night and reaching even further back to the Black Death of the Middle Ages.

It makes sense past pandemics maybe our only reference point for whole populations being stricken with illness, but they can also tell us a lot about how economies recover after pandemics. We may no longer be dealing with schillings or feudal lords, but a surprising number of things are similar about what happened to finances during and after those outbreaks. Here's a clip from Bloomberg's excellent Odd Lots podcast where hosts Tracy Allaway and Joe Wisenthal go deep on what makes markets

and economies tick. They to Jamie Catherwood, an associate at O'Shaughnessy Asset Management. His expertise is in finance history, and he talked about what we can learn about our economic recovery from decades and even centuries old diseases. Is there one moment in history that is the most relevant to

our current situation. There are some interesting trends in both today and the Spanish Flu that are similar, and one that I found really interesting was just there is a paper that talked about the Amazon effects that occurred in the Spanish Flu, which sounds crazy, but um, we've all talked about how kind of Sears was the original Amazon, and there was evidence, I think is in a Federal Reserve paper that showed on a monthly basis during the second wave that was in the fall, which is the

worst of the three waves, that the sales and business activity first Year's Rowbook and Montgomer Reward, which had mail order catalogs increased in the worst months of the Spanish Flu when more places were shut and kind of lockdown was taking place. Just like today, everyone orders from Amazon

while they're kind of hunkered down at home. But what was interesting is that then after the kind of reopening started to occur, some some retailers, not all obviously, reported that the kind of bounce back after the reopening made up for more than like the sales from when their business had to be shut down. So that was kind of interesting. We got the retail sales for May and

they came in way better than expected. So as long as we're talking about the pent up demand equivalent of the Spanish flu, this month's retail sales report would bear out once again a sort of similarity. And it's interesting to see kind of today and in the Spanish flu, the different industries and types of retailers that did well

and which ones didn't. Like today, Zoom and other companies like that, Clorox stock was rocketing for a while, but in Spanish flu, mattress sales actually increased something ridiculous like or something because bed rest was such a commonly prescribed like chair by doctors for people who had symptoms. So

I'm curious, and you've touched on this already. But once the Spanish flu sort of fell away, once the pandemic ended, did we see the economy bounced back, corporate profits bounced back and make up the lost income that had occurred during the outbreak, or was there sort of a permanent

hit two output. From what I've read, the effect of the Spanish flu was pronounced, but it was over the short term, and then there was a fairly quick back, but also you have to keep in mind of how much that was due to the Spanish flu and how much was due to the war ending. But bounce back was kind of short lived in itself because in you then had a recession. I do want to go slightly further back and talk about um, the Middle Ages, the

Black Death aka the Great Plague. A lot of people have been looking at that one and talking about the labor market, what might happen to wages and inflation, And I've seen different theories on this. So one explanation says that after the Great Death, so many people died that there was a shortage of labor and wages eventually went up.

But I've heard other people say that one of the reasons wages went up is basically a bunch of the peasants revolted and sort of violently forced better earnings for themselves. What have you learned so far, Jamie, Like, what do your readings tell you on that topic? And so if you survived, then in terms of the Black Death, everything came up peasants like it was a great time to

be a peasant. And after the Black Death because like you mentioned, as you mentioned there there is a lot of disagreement, but from what I've read, there seems to be a agreement that there was a rise in wages after the Black Death because, as you mentioned, so many people died, and to put some numbers around it, the estimates are between seventeen and twenty eight million Europeans because

so many people had died. What happened was that suddenly all these lords who had previously seen over these manner systems where the peasants were working the land and the lord would collect rent um views from the peasants, they suddenly faced this problem where they had all this land, but suddenly now there weren't as many peasants to work

until the land. So the peasants were able to demand higher wages, and also they had the ability to kind of shop around their services to other lords, which previously wouldn't have been the case. But because every lord was so desperate to hire people to work their land that if the lord a peasant was currently working for it didn't offer them better working conditions, living conditions, and wages, then they could just go to another lord who would

be willing to offer them those um conditions. But overall, the estimates are that wages rose between twenty and from the thirteen forties to the thirteen sixties, again pretty pronounced.

But one thing that was a counter to this rise in nominal wages was there was a pretty substantial rise in inflation because the gold and silver supply remain constant, but the amount of people decimated, so there was just a higher ratio of gold and silver per capita, So much of those kind of nominal weekly wage gains were

offset by this inflation. But there was obviously a lot of There are a lot of upset lords because they didn't want to deal with these peasants who were suddenly cocky and knew that they had kind of had leverage

in this situation. And there are all of these lords who were complaining about peasants who would barely do any work, like they would make a huge fuss about being asked to do anything, and if they did do jobs that they were doing haphazardly because they just knew that the lord wouldn't be able to find a replacement for them. So the lords tried to lobby the UK authorities to do something about this problem, and what ended up happening

was the government put out two statutes. Both were aimed at pertailing wages, and they both stipulated that wages for peasants had to be set at pre play levels. So there's no interest rate policy or anything, but there's definitely statutes put in place to try and prevent the wage

growth from spiraling out of control. What type of things would you look forward from history or what kind of questions do you still have as a student of history in terms of how how the post coronavirus period will transplant.

I think that like many of us, I am looking to see whether this kind of recent uptick in cases in some of the states that reopened is going to be something more lasting, or whether it's a brief uptick, because there are a lot of papers and examples from the Spanish flu that are very reminiscent of today where there was business owners protesting about not being able to

operate their businesses and open up their shops. But also it'll be interesting to see what I think is in the next maybe crisis or crash, what people's expectations are in terms of monetary policy and the sill stimulus based on what's happened this time around, Because it's one of those things where now that the door has been opened. What it seems radical this time might become the expectation

the next time around. You know, everyone is seeing these charts and stories of remember the second wave of the Spanish flu was worse than the first. But was there anybody in night saying, oh, remember, you know what happened the second wave of x or is the awareness of the concept, a sec of a second wave, something that makes this unique and thus maybe a reason to think that history won't play out because when you when you can observe something and when you can describe something, usually

don't really get the same as last time. I think, well they might, it might not have been like the second wave, exact phrasing. They're definitely people who were advocating for continued to kind of lockdown in quarantine because they're aware that people continuing to go out and temblean crowds would only caused the blue to linger around longer. But it is interesting and related to your point is that one reason to be more optimistic for today is the media was not going to report on bad news like

this like Spanish flow. I mean, World War one is going on. But back to your point is the fact that today is the opposite where literally all we read about is coronavirus, right, and so everyone is gonna be more cognizant of the risks involved in how and where we can do things to prevent the continued spread of the virus. So that is definitely one major reason to be optimistic is there's much broader knowledge of how to stop the spread. That was Joe Wisenthal and Tracy Allaway

in conversation with Jamie Catherine Point. You can hear the full interview with Jamie this week's episode of Odd Lots and That's our show today. For coverage of the outbreak from one bureaus around the world, visit Bloomberg dot com slash coronavirus and if you like the show, please leave us a review and a rating on Apple Podcasts or Spotify. It's the best way to help more listeners find our global reporting. The Prognosis Daily edition is produced by top

foreheads Jordan Gospore, Magnus Hendrickson and me Laura Carlson. Today's main story was reported by Joe Wisenthal and Tracy Galloway. Original music by Leo Sidrin. Our editors are Rick Shine and Francesca Levi. Francesco Levi is Bloomberg's head of podcasts. Thanks for listening.