It is almost too good to believe. The days go by and there is still little evidence that the omicron wave in South Africa is leading to a concomitant surge in severe illness.
Professor Francois Balloux, director of the UCL Genetics Institute, says we cannot rule out the “highly optimistic scenario” of a late-epidemic mutation that is extremely contagious, displaces delta, but does less harm.
If we are “a bit lucky”, he says, the replication rate of the virus in host cells proves slower than the delta variant, leading to less hospitalisation and death.
If we are “really lucky”, it also replicates preferentially in mucosa cells of the upper airways, rather than in organs such as the lungs and the kidneys where it does greatest damage. This would be the answer to our prayers.
Laymen cannot usefully judge the 30-odd mutations in the omicron spike protein, but we can all see that asymptomatic infections are spreading like wildfire across the world, and can therefore draw the first, tentative, investible conclusions.
Goldman Sachs has gamed four omicron outcomes: “severe downside”, “downside”, “false alarm”, and a surprise “upside”. These scenarios have starkly different implications for asset prices and macroeconomic policy over the next year. Get it wrong at your cost.
You can already see this tension playing out in wild moves on global bourses, or in oil prices, with each snippet of fresh information.
Markets have taken a fresh beating this morning on warnings from Moderna that it is “not going to be good” for the existing vaccines. But if the disease is indeed milder, a slippage in antibody protection levels may not matter, and we still have T-cell memory as the next line of defence.
For the sake of argument – as a Gedankenexperiment – I assume that the benign picture from South Africa holds up over the winter and that we will land at the optimistic end of the Goldman spectrum.
The picture for markets is “bad” in the immediate sense that jumpy, snake-bitten governments will shutter parts of the economy as a precaution.
Cross-border travel is already paralysed. But I doubt it will last long and it is in any case a small fraction of global GDP. In other respects, business has learned to cope brilliantly with the pandemic.
It is “good” to the extent that it brings this ordeal to a rapid climax and pulls forward the day when we can dismantle the suffocating architecture of perma-testing, flight curbs, vaccine passports, forced isolation, and state intrusion in people’s lives.
Scientists will know in a couple of weeks whether omicron has a lower case fatality rate than delta.
They flag two obvious grounds for caution: viral infections tend to start with mild disease; and past waves show that young people tend to catch Covid first before it spreads up the age ladder.
The original cohort of patients breezing through surgeries in Johannesburg with little more than a headache may be a trick of the time sequence.
