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Are we about to enter the biggest slowdown any of us may ever have seen?

Peter Wolf

Peter Wolf03-27-2020 01:05

  • 1.  Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 03-19-2020 09:34
    Presuming that this pandemic is brought under control quickly - and let's hope that it is - are we as consultants about to see the biggest slowdown in our lifetime of consulting? 

    Most estimates indicate the pandemic could last for 12-18 months.

    Our customers in many industries are ( or about to be )  virtually shut down. Some may not yet be feeling the impact because perhaps they are working backlogs. Anything in travel and leisure ( as well as their suppliers), oil and gas ( goodbye boom towns ) and retail are going to be hard hit. This will likely ripple through real estate and many other areas that we wouldn't ordinarily consider.

    Get ready for the possibility of a prolonged slowdown as remaining customers ( those who don't merge or go out of business)  defer upgrades and third-party integrations. I can't say there won't be a boom time as we emerge from this situation but that time may be some way in the future ( which nobody is good at predicting ).

    The hardest hit is going to be hourly billing. Expect customers to put the breaks on that.  The next hardest hit are projects ( upgrades, ISV integrations ) and finally the attrition from companies that go out of business or are acquired ( my experience is that this usually involves a switch off Sage 100).

    .02




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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 2.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 03-27-2020 01:05
    Edited by Peter Wolf 03-27-2020 01:53


  • 3.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 03-31-2020 07:00
    I received an email from my state CPA society they are furloughing employees.

    Multiply this by all similar orgs who rely on life events.

    We are in for a lengthy 2020.

    PS - except for extreme cases - companies are going to furlough consultant spending before they furlough employees.





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    Wayne Schulz - Schulz Consulting - 860-516-8990
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  • 4.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 03-31-2020 08:31
    Some customers are experiencing big increases in business due to the pandemic.   I hope the companies experiencing sales increases will increase consulting services, and help offset those companies experiencing a downturn.  Also, let's pray the changes in the economy and business climate is a temporary 6 - 12 month anomaly.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 5.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 03-31-2020 08:35
    It seems China is ramping up production.  If China starts manufacturing many US companies will be able to fill orders again, helping profitability and re-calling laid off workers.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 6.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:20
    Edited by Mark Chinsky 04-02-2020 11:21

    Nothings going to happen until the mandated shutdowns end.  There will be no (non critical) warehouses open and no retailers selling anything and online only does so much.

    Plus with such uncertainty and skyrocketing unemployment, consumers and businesses will be in a cash preservation mode so they will only be buying essential goods.

    Even if you are lucky enough to have a secure job through this, you'll likely hold off on non-essential purchases and places where you would have spent the money (restaurants, bars, car dealerships etc) are all shut down.

    I've been saying from day one, the 'cure' can't be worse than the disease.

    Currently my back of the napkin math says there are about 30 people now unemployed (and probably 15 more with big pay cuts) for every person who has tested positive.  Of those that test positive, about 15% need the hospital.  Of those that test positive about .5% will die.  Of those that die, based on Italy's data, 99% have underlying conditions and/or are old.  Meaning, coldly, they wouldn't have that many more years left even if the virus didn't hit.

    So at some point, someone, (who will be called the heartless devil) is going to have to make a tough call and determine what a year of life is actually worth.  Because if it were worth 'infinite' money, we w0uld already have banned cars, alcohol, built a wall on our southern border to stop the 60k/drug deaths per year, planes, trains, and virtually any other activity that could get you killed.

    But we don't, as a free society has risks, some of us will die, most of us live vastly longer than if we didn't have a free society with technological improvements.

    What % unemployment is 'ok' to combat this virus because as we 'social distance', 2/3 of the world's population is NOT.  Somewhere there are people fighting wars who are not 'social distancing' as they kill each other and this virus, is out and is unlikely to be irradicated to 'zero' since a huge percentage of people who have it don't even know it and show no symptoms.  And as we've seen, it only takes one person to 'change the world' by eating and undercooked bat...



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    Mark Chinsky
    Clients First Business Solutions
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  • 7.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:40
    @Mark Chinsky not everyone who has underlying conditions only has a year left to live. My brother has asthma with only about 60% lung capacity. If he gets it, he probably won't survive. He is in his early sixties. How many others are out there like him who have an 'underlying condition' but could live many, many more years if they don't get the virus? Calculate that on the back of your napkin.....

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    Therese Logeais, Technology Integrators
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  • 8.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:47
    That's a fair point, and every life is precious, both those we know and those we don't know.  The question is, societally, how precious.

    We lose 60,000 people in many flu seasons in the US and that is with a vaccine of which some don't take it, and others take it but still get the flu because its impossible to know which strain for sure will be dominant.  And the flu tends to kill a much larger age bracket including young children.  If we shut down our entire economy and locked ourselves in our homes for 10 years, we could save 600,000 lives.  Should we?

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    Mark Chinsky
    Clients First Business Solutions
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  • 9.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:51

    I think the better solution would be to voluntarily lock down those that are in the 'high risk' group which is a relatively small percentage of the working age population.  If they sign off that they don't want to be locked down, they are on their own.  If they agree, they will have their basic necessities taken care of if they don't have a current source of income to handle it.  If they are the few that have underlying conditions but are still making a decent income, then we come up with some type of special disability plan for them if they can't work from home.

    This would do vastly less damage to the economy, cost a ton less than what is likely to be at least a 50% increase in our national debt accumulated since our founding, and will likely save almost as many lives as locking us all down under threat of arrest.

    Then when we develop a decent treatment and/or vaccine which is likely in 6 to 9 months, they can rejoin society



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    Mark Chinsky
    Clients First Business Solutions
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  • 10.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:10
    We live in too much of an integrated society for that to work.  If you basically want to destroy the world's health care system, that is the choice.  This is not a bad flu season.  If you get in a car accident now, you may not be able to get emergency care because hospitals are overloaded.  Normal healthy people including doctors and nurses are dying, not just people with compromised immune systems.
    The economy will be badly affected with or without the isolation orders, but with them more lives can be saved.  If you go with the "herd immunity" strategy, you are going to overwhelm with long term damage to the health care sector, killing off a significant portion of the population (with the associated mental health impact on survivors) and have a massive wave of people on sick leave while they (hopefully) recover.
    The current strategy being adopted worldwide does elongate the impact on our lifestyle, but it decreases the severity of that impact.  I consider myself about as fiscally conservative as a Canadian can get (with our public health system), but even I recognize values higher than radical capitalism.
    "The cure can't be worse than the disease" is true, but when thinking about the alternatives, the costs there are not easy to calculate and they are not all financial.

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    Kevin Moyes
    Technical Systems Analyst
    Munjal White Consulting Co.
    Toronto ON
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  • 11.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:20

    Kevin, what percent of unemployment is 'too much'?  What CFR is ok to open the economy versus destroy the economy?

    I would bet other than those who are basically retired here just make some 'extra cash' by consulting, the rest of those that have 'real businesses with employees' can't weather this  for more than a total shut down period of 2 months and even then, all their cash reserves will be wiped and their employees and them will be taking very large pay cuts.  The stimulus kicks the can down the road a bit, thank god, but we have to get back up and running



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    Mark Chinsky
    Clients First Business Solutions
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  • 12.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:24
    What is the purpose of employment?
    • To get things done (benefit of the work).
    • Provide income to pay for things (compensation).
    The economic balances will be affected either way.  Less things get done, but the most important things are not stopping.  Compensation is largely about wealth distribution and governments taking on more debt to keep people alive... well... there are worse things we could be paying for.

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    Kevin Moyes
    Technical Systems Analyst
    Munjal White Consulting Co.
    Toronto ON
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  • 13.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:52

    First off, I'm not sure where you are getting your data sets. " Of those that test positive about .5% will die." is not accurate. In Italy, we are seeing 10% of people tested dying. Overall, the fatalities to tested is hovering around 5%, not .5%.

    Either way, the data is incomplete and sketchy so we won't know true numbers for awhile.

    Putting that aside, this isn't just a matter of which % of coronavirus infected people die off - whether they are old or sick already and I guess in some people's minds, disposable because of that - the hospitals will be clogged with caring for those people.

    Healthcare workers WILL get the virus. A percent of those people WILL die. They already are.

    People needing routine treatment will be denied. Cancer treatments, dialysis, broken bones, flu, etc. A decent percent of those people WILL die. People without COVID-19 in heavy zones are already dying with otherwise treatable symptoms.

    There is a balance here. It's to be found by:

    1. Contain and control the current infection and enforce stay-at-home until this is under control.

    2. Develop faster testing protocol and the procedure to track back new infections.

    3. Remove stay-at-home for certain sectors and use the procedures from 2 above to immediately squash new infections.

    4. Wait for a vaccine.

    That's the only way to move forward. Any other model results in losing 1 - 5% of the country's population. That's going to impact the economy too with a heavy psychological cost. 



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    Peter Wolf
    Azamba Consulting Group
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  • 14.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 11:58
    5.  Ensure your bat meat is cooked medium well to well done.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 15.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:15
    Edited by Mark Chinsky 04-02-2020 12:16

    Doug,

    Believe it or not, these idiots are still doing this:

    https://www.dailymail.co.uk/news/article-7920573/Revolting-footage-shows-Chinese-woman-eating-bat-scientists-link-coronavirus-animal.html

    And I won't gross people out of the videos of the eating and killing dogs and cats that still goes on in China.



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    Mark Chinsky
    Clients First Business Solutions
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  • 16.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:22
    Whoa.  I consider myself open minded when it comes to trying new food, but that's a NOPE.  It is unbelievable that after having to spend two months in quarantine someone would still be eating the suspected cause.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 17.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:09

    Sorry, I mispoke on deathrate.

    From Todays stats on www.worldometers.info/coronavirus FOR THE US.
    Total Cases 226,378, Deaths, 5334.  That's 2.3%

    Now the reality is the total cases is probably 2-4x higher than this since a large portion of people are asymptomatic or can't get a test.  My wife's ex husband was sick 2 weeks ago, had the symptoms, and is sitting at Day 11 after getting tested by Quest and still hasn't gotten the results so he's not counted.

    That means the 'denominator' is likely much larger and that will bring the CFR (Case Fatality Rate) down significantly.  Heck, My wife and  I was sick with a bad cough for 3 weeks in February when hardly anyone was talking about this and I might have had it.  Both she and I are O- and they say that group suffers the least effects.

    When we get past the worst, they will likely do much bigger statistical testing of healthy people looking for the anti-bodies and will find out what the real case rate was.  That being said, it will still likely be higher than the flu, but is it high enough to annihilate our economy for years?   The flu CFR has been as high as .6%   If Covid 19 was 1% should we shut down the economy?  Is the number 1.5%?  2%?  I'm not god, but just saying there is a number that represents 'acceptable risk' for a society to function.

    WHat if after the population studies we find out Covid's CFR was less than 1%?  Was this worth it? (what we have today is about 10% of the economic severity we are going to see if this shut down lasts past april).  The Fed predicts unemployment as high as 32%, which is vastly worse than the Great Depression.

    I agree with most of your points, but what is the definition of 'until this is under control'?  Let's say we are getting 10k new cases per day and it gets down to 1k cases per day.  THen we lift the order, businesses open, and people start getting infected again because it only took 1 person with the virus to create what we have today.  Then do we go back on lock down and print another 4 to 6 Trillion dollars out of thin air?

    A vaccine won't be here until at least late september.  The economy will be 6 feet under by then as we literally have almost NO economy currently.

    My solution is the only way to save lives and prevent the collapse of the US and world economy.



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    Mark Chinsky
    Clients First Business Solutions
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  • 18.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:18

    It won't be under control until the hospitals and morgues are no longer being filled.

    It will continue to drag out until people follow protocol and get the message.

    Once we have it contained, we will need to follow the steps I outlined or IT ALL STARTS OVER.



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    Peter Wolf
    Azamba Consulting Group
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  • 19.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:15
    Peter is right. When testing becomes widespread we can start opening things up a bit. At the rate I see things going, this is likely end of May.

    Even then the deaths will continue. The official estimate of 160k+/- will be spread out over many months, but 1/4 to 1/2 of them will happen in the next 2 months. We have 10mm now on unemployment, and there is no data-driven reason to think it will stop at 20mm.

    The secondary effects of this will be a major disruption for months; a corporate debt bubble has developed over the past couple years, and losing all this income will put those loans at risk  We all hope it doesn't result in a replay of the 2008 debt-crash. Other countries around the world are in worse shape, and IMF is now saying we have a significant risk of a major worldwide recession as a result. There won't be a magical "v" recovery starting in June. 

    I'm usually a glass-half-full guy. But this looks grim all the way around.

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    Jerry Norman
    VP, 90 Minds
    Smartbridge Partners
    512.419.1444 x112
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  • 20.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 12:17
    2008 is childs play if companies can't get back on line by early may

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    Mark Chinsky
    Clients First Business Solutions
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  • 21.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 14:38

    Yes - 2008 will seem like a joke. If this isn't managed carefully, we will see a worldwide Depression. It's possible there is nothing we can do to prevent it because even if the USA smooths over the hit to the economy, most businesses have worldwide customer bases and supply chains. We will be impacted by other countries too.

    The focus on the numbers and fatality percents are pointless because the data is a moving target and depends on standardized reporting protocol and sufficient testing. From a worldwide perspective, there is no standardization and insufficient testing. 

    That's why the real indicators needs to be "how bad are the hospitals doing right now?" 

    Even that is completely regional-based. Some people drive by their hospital and say "this whole thing is a freaking joke about nothing" and others see a warzone with semis being used to store dead bodies because morgues are overflowing.

    We can cross our fingers and hope that once this first wave is done, we are in the clear. I don't see any evidence that won't be the case. But I also don't see evidence it will be the case. COVID-19 has already mutated and there are reports of at least seven strains in the wild. What that means is we could cure a strain to see it mutate where the cure doesn't treat it any longer. 

    There is any easy solution to all this but it exposes the fact that money is an arbitrary designation. 

    Until that happens, the longer people keep saying "oh, it's only two more weeks" and setting false hopes, the longer this will last and cause frustration.

    Maybe this isn't a marathon but it's not a sprint either. We - and our governments around the world - should be looking at this as a 12 - 18 month long pandemic. Solve for that. Stop wasting time and energy trying to solve for "how fast can we get people back to work?" because that problem will make worse long-term problems.



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    Peter Wolf
    Azamba Consulting Group
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  • 22.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 14:45
    Maybe we need a production manager to allocate sick people to hospitals with available space.

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 23.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 14:56

    I know that is somewhat tongue in cheek but do we really think someone in metro NYC can be re-routed easily to a better hospital that isn't far away?

    My guess is that some of the overflow issues in surrounding states are because the smarter / wealthier folks are already going to neighboring hospitals.

    Chicago is setting up a unique model to allow for non-COVID patients to get treatment at different locations. I believe NYC is also doing this with the new medical ship.

    It's happening. Also need to reduce number of cases too. 



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    Peter Wolf
    Azamba Consulting Group
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  • 24.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 15:07

    It's funny because I was also thinking the same thing when I'm hearing how NY is demanding X respirators 'just in case', in other words they want to build inventory stores (which should have been done long before this crisis but that's another discussion), while someone somewhere else might die because none are available.

    This whole thing is really just an MRP problem where we need a proper forecast of what the patient load will be ('sales forecast), then then the first level bom would be materials (masks, gloves, gowns), resources (doctors, nurses and available beds) and equipment (respirators).

    Any good multi-site ERP solution should be able to take that data, along with known shipping times etc, and much more efficiently juggle this situation than the bickering going back and fourth between certain governors and the federal govt..  

    It's also the kind of problem good AI programmers at Google should be able to solve



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    Mark Chinsky
    Clients First Business Solutions
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  • 25.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 15:53
    Edited by Doug Higgs 04-02-2020 15:53
    Maybe someone in metro NYC cannot be re-routed easily to a hospital with more capacity, because it may be too late for NYC.  However, this may be possible, indeed necessary, in other areas of NY and the rest of the US.  It's not about just managing hospital resources but statewide and nationwide people, production, inventory and asset management.  As Mark mentioned, a massive MRP issue including HCM, supply chain, fixed assets, and capacity planning.   Too bad there wasn't some more foresight (understatement of the century).

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    Doug Higgs
    Midwest Commerce Solutions, Inc
    (312) 315-0960
    Assistant to the Traveling Secretary
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  • 26.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 16:15

    I think the key is to hope for the best but plan for the worst. 

    Right now, we've seen many around the world and even here in the US, there's been a lot of hope for the best.

    I stand by my assessment. The only way forward is to assume this is here for the next twelve to eighteen months and solve for that.

    Let's stop pretending it's gone in a few weeks because our actions will / should be a lot different if it's here for twelve to eighteen more months. We can take more of a measured approach to ramping up containment protocols, manufacturing and securing equipment and tests, creating healthcare strategies (like Doug suggested with routing but other things as well), and planning for a post-Phase I release of people back into the work environment. 



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    Peter Wolf
    Azamba Consulting Group
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  • 27.  RE: Are we about to enter the biggest slowdown any of us may ever have seen?

    Posted 04-02-2020 18:52
    Edited by Dan Burleson 04-02-2020 18:54
    Voluntary lock downs won't flatten the curve and the lesson the demand for respirators. What will the shortage of respirators do to those outside the groups of the aged and those with underlying conditions? Will this be a world where asthma is a death sentence and my wife's damaged immune system also. Docs will be having to make impossible decisions. How did we get here? Deforestation is one suspect to the rise in Covid viruses and yes, I'll say it, climate change too. This Forbes article quotes Scientific American regarding the release of viruses cause by bats disturbed by deforestation. Perhaps Darwinism is the natural cure for not believing in science or unwillingness to shelter in place, unfortunately many innocents would be lost also. Good luck to all and please be mindful.

    "Deforestation and the sale of live wild animals or bushmeat, such as bats and monkeys, make the emergence of new viruses inevitable," Berkley wrote in Scientific American in early February, "while population growth, dense urbanization and human migration make their spread easier."

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    Dan Burleson
    Software Consultant
    Connex Software
    Corvallis OR
    541-224-6642
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