How Football Spread Coronavirus Across Italy and Spain (w/ Lenore Elle Hawkins)
ED HARRISON: I want to go way back to what brought you over to Italy and your journey that came there in Tematica and so forth, just to give viewers on Real Vision a sense of who you are and why you're in the old countries that is big. LENORE HAWKINS: Yeah, very much the old country. Well, I was in-- before I came here, and I still have a base in San Diego, but it was in 2012. I got an opportunity to join a family office that was fairly newly formed. It's a family that had sold a couple businesses and were in the billions and they've built a family office and a friend of mine from business school, who's our Chief Investment Officer and was struggling dealing with only Italians when an awful lot of the investments that the family were getting involved with involved partnership with Americans, with American hedge funds or so on, and they also just needed to know not just how they worked, but just to think how they think and he also wanted to create a family office it was a little bit more of a hybrid between your more traditional European and the more American. I took the leap. It was a time in my life where I was ready for a change. I took that leap and came to Italy, and I was able to keep my job with Tematica, a chief investment strategist there. I was able to keep that work going. At the time, I was doing some other stuff that's similar, just a different company. I was able to keep that work and found that was really actually very helpful and augmented my perspective because instead of being just in the US and trying to have an international viewpoint on things because if you're talking to macro, you have to be able to appreciate what's going on all over the world, I actually got to be in meetings with major players on the international stage, making big decisions, seeing what's going on out there, like involved in say, an Italian bank that's really struggling and so hearing what's going on with the ECB, things like that really gave me a better flavor for it, because it's one thing if you read about it, it's another thing if you're living it entirely. ED HARRISON: Yeah, without a doubt. Of course, that goes back to you're living it, so to speak right now in terms of in Italy. Before we had this interview, we spoke on the telephone about that too. You told me the story of when you found out that they were moving to the extreme lockdown that you actually want to run. Tell that story. I thought that was interesting. LENORE HAWKINS: Yeah, it was. They put us on a lockdown over a weekend and then I guess like, two weeks later, I'm out going for a run. At this point, it went-- it was amazing. Within a couple of weeks, it went from where you didn't see anybody acting differently, like everything was normal. Within a couple of weeks, it went from that to where everybody outside is wearing a mask, people are staying really far away from each other. It's that look when you see someone where it's high, we're in this together, we're all commiserating, but at the same time, I'd really appreciate it if you stay far away. I'm out on a run and I'm by myself, rode far away from everyone. The police actually pulled me over and told me that I had to go back and at that point, we're allowed to be more than 200 meters from home. 200 meters, what are you going to do? That day, everything really changed. That was two weeks ago, it got really bad and now, at night, you really don't-- we can't really be outside. There's so many police and military cruising the streets, which is just a such a bizarre thing. You're imprisoned and being patrolled by police and army and you haven't done anything wrong. ED HARRISON: That is bizarre. Are they taking precautions in terms of like they have the masks and when they come up to you and so forth? LENORE HAWKINS: Oh, yeah, they're completely masked up, gloves and everything. What I think probably the most disturbing thing is when you go to the grocery store, first you have to stand in line for hours, literally, because we're only letting a few people in at a time. If there's like 20 people trying to go to the grocery store, it's going to take a very long time, and you can't go together. People have to go just one person. You stand in these lines that are like six, seven feet apart from one another, and then the guy who's at the entrance to the grocery store, he's literally in a complete hazmat suit, with goggles and the mask and everything and they take your temperature as you approach the door. Before they'll even let you in, they're checking your temperature. Then when you get in, there's employees of the grocery store, fully hazmat suited out with the goggles and the glasses and the masks and everything, and they are following everyone around all like three people in a massive grocery store. Everywhere you go, they're scrubbing right behind and spraying and disinfecting everywhere you go. It is-- I don't know how we ever forget this, how it doesn't permanently change the way we all live. The US is going to be facing this soon, New York is already dealing with it. ED HARRISON: When we spoke, it was probably a week ago or so, and we hadn't gotten to that point in the United States but the numbers of cases per day in the US are now the most, your trajectory is actually flattening. Talk about flattening the curve, the stuff that you're doing now, it sounds like that's having a measured impact. LENORE HAWKINS: We went into the lockdown because the thing, the measure that you really need to watch is called the R naught. That's basically the rate of contagion. If you have an R naught of two, then that means on average, every person who has the virus is going to give it to two people. You can understand, if you have an R naught of one, you're going to have the percent of the population that has it is not going to accelerate. If you have an above one, that's a big problem, because you're going to get more and more of the population having it. We had an R naught of about 2.3 to 2.7 right when they did the lockdown. Right now, a little over four, like four weeks in, our R naught is down to about I think about 1.2. They're estimating that it's going to be 0.7 by Easter. That's when they can start to open up things. A couple interesting things that we've seen here though, and you were saying that our case counts. Our peak net new cases was March 21st. That was Little like two and a half weeks in, we had the peak number of new cases, and ever since then, we've been going down. It's not been like a solid consistent every single day down but on average, it continues to keep dropping. That's great. The number of deaths, now the deaths also rolled over. That took a little bit longer, it's about a week later before the deaths really started to roll over. There's some good signs there as well. Some interesting data that recently has been released is looking at the total number of deaths in Italy in 2020, compared to each of the past five years. What they've found is that for every COVID death, you had an extra 1.5 to 1.8 additional deaths beyond what you normally have every year and the population of Italy hasn't changed so dramatically so you should be seeing right roughly the same deaths year after year. Say, if you have like 100 COVID deaths, for every 100 COVID deaths, there was an additional 50 to 80 deaths beyond what you would see in a typical year. That's across all of Italy. If you go into Bergamo, which was the hardest hit, for every 100 deaths, you had an additional 220 deaths that are above what you would normally see. What that is telling us is that it's probably a combo of these that there are some additional deaths that aren't being coded to a COVID death. For example, somebody passes away at home and they don't swab after the person has passed away so that they can identify this as a COVID debt. Also, what we're probably seeing and this was the big concern is also that massive stress that gets put on the medical care here and that's what really pushed the lockdown because you run out of hospital beds, and everybody in the States is seeing this now with what's going on in New York, you're seeing it in Spain. Spain's just getting crushed under this. For a little perspective on this to just to point out-- because we did run into a huge problem with hospital beds here in Italy and with ventilators, people have been hearing about that. Just so that people don't think it's that Italy has some inferior medical system, there are 3.2 hospital beds in Italy for every thousand person, people. 3.2 beds for every thousand. The United States has 2.7, and if we're looking at doctors, Italy has 4.1 doctors for every thousand persons, whereas the US has 2.7 so 4.1 to 2.7. It's not that Italy is just underfunded in the healthcare sector. ED HARRISON: Interesting. When you when you mentioned Spain and Bergamo, it immediately made me think of when we were talking, you talked about a Champions League match that was what you might call a super spreader. The Mardi Gras of Italy. I think it was Adelanto against Valencia and tell me what do people ascertained about that match and why that matters? LENORE HAWKINS: We'd all heard about South Korea had that, I think it's Patient 31, the super spreader who was at a church function and just got a ton of people sick from that one event. Well, people were asking why did Italy get hit so hard? Then why did Spain get hit so hard following that? It's a little strange part is because Italy has some fairly close ties with actually, with Wuhan. You have direct flights from Wuhan to Milan, but that didn't really explain this explosion that we saw here. What they think is that there was a very similar event to the South Korea super spreader, where we had that soccer tournament between a team from Bergamo, Adelanto, and a team from Spain, Valencia. Now, the game was just too big of a game and so many people went to watch it. They couldn't host it in Bergamo, so it was held in Milan. You see, you have this huge match in Milan, tons of people at it. I think that there were enough people who are sick at that game that you ended up having this huge spread of the virus. Because everybody comes to see the games, there's like 10s of thousands of people. Then they go back to Spain and they go back to Bergamo, which explains why Bergamo got hit so much harder than anybody else.