by Brian DeChesare Comments (25)

Coronavirus (COVID-19) Updates: What Happened in 2020, and What Might Happen Next

Coronavirus Updates 2020

If it feels like an entire year just flew by and you can’t remember a single thing from that past year, you are not alone.

When you are stuck inside, only interacting with people virtually, nothing “sticks.”

I wrote a lot about the pandemic in the first half of this year – everything from my initial gut reaction to the bailouts to possible canceled internships to virtual university classes and virtual internships.

I am pretty tired of the topic by now, but quite a lot has changed since those early months, so I wanted to publish an update and cover the following points:

  • How my views have changed since the outbreak started in March, and why I’m skeptical of the “measures” taken by governments to contain the virus.
  • Why I don’t think much will necessarily change next year, even with the approval of vaccines.
  • What to expect in the job market next year, and a few quick thoughts on the financial markets.
  • Some positives that might emerge from this crisis.
  • And my biggest takeaway of the year.

Pandemic? What Pandemic?

When this crisis began in March, I assumed that China was lying about the death rate and that the virus was far more dangerous than they claimed.

Therefore, I favored a more cautious approach, and I thought that the initial lockdowns made sense for a short period – at least until we learned more about the problem.

Since that time, the data has shown that the virus is not that dangerous for most people.

Even if you buy into the “official numbers,” 1.6 million deaths in the past year – out of tens or hundreds of millions of infections – is not that much.

For reference, in a normal year, 50-60 million people worldwide die from natural causes.

Sorry, but this is not the Black Death (which killed 50-60% of the population) or even the 1918 Spanish flu. It’s not even close.

And before you leave an angry comment: yes, I understand that some healthy people get the virus and do not recover even after many months, but that segment represents 2.3% of the infected population.

I’m not saying that governments should have ignored it, but I am saying that they erred by underreacting in the beginning and then overreacting and overreaching.

They acted as if the virus was the only problem in the world and that it had to be eliminated no matter the cost – even if it meant destroying their economies and causing more long-term health problems (missed surgeries, diagnoses, etc.).

Lockdowns… Masks… Cancellation of Real Life… When Will It End?

I’ve been in Europe for most of this year, in a country where the mask compliance rate is ~99% and where the government imposed a strict lockdown in the beginning.

Despite all that, we still had a second wave with rising cases and deaths, followed by a return to lower levels now.

In theory, masks should dramatically reduce infection rates.

But in real life, I don’t think they work as well as the “experts” claim.

The best data point here is that after cities and states imposed mask mandates, infection rates kept rising. For more on this one, check out some of the compliance rate data for U.S. cities here.

If 95%+ compliance in major cities doesn’t work, what will work? Is there a massive difference between 95% and 100% compliance? Is that even a serious argument?

I’m not necessarily “against” masks, and they probably helped to some extent, but it’s difficult to look at the seriously and argue that they served as the holy grail.

But there’s a more fundamental reason why I’m skeptical of these measures: politicians and government officials aren’t taking their own restrictions seriously, and, in many cases, they’ve been issuing contradictory restrictions.

For example:

  • Steve Adler, the mayor of Austin, traveled to Mexico… as he filmed a video telling everyone else to “stay at home.”
  • Gavin Newsom, the governor of California, went to a dinner party at the French Laundry after he had warned everyone else “not to gather in groups.”
  • Los Angeles banned outdoor gatherings/dining and closed playgrounds… even though all the evidence shows that people are much better off outdoors rather than indoors.

If this virus were incredibly dangerous, why would politicians be risking their lives by traveling and attending crowded events? Hint: They wouldn’t.

I don’t have a detailed 25-point plan for what governments should have done differently, but a more targeted approach would have been a good start.

Instead of lockdowns, focus on testing, and instead of telling everyone to avoid real life, protect nursing homes and other areas with vulnerable populations.

When this is over, my guess is that the results will have more to do with each country’s population and climate than any government policy.

For example, the U.S. and Africa are alike in that they both have terrible healthcare systems and infrastructure.

But the population in Africa is much younger, there are fewer nursing homes, hardly anyone is fat (compared with a ~40% obesity rate in the U.S.), and the weather is warm.

Unsurprisingly, death rates there have been very low.

Will Anything Change Next Year? What About the Vaccines?

Unfortunately, I’m not sure much will change until the virus burns itself out.

People have been very enthusiastic about the vaccines announced by companies like Pfizer and Moderna, but:

  1. I don’t think huge percentages of the population will line up to get these vaccines right away, and most governments cannot “force” people to take them.
  2. There are huge challenges with distributing and administering them to millions/billions of people.
  3. If cases and deaths have fallen by the spring next year (simply due to warmer weather), there will be even less enthusiasm for vaccines.
  4. Oh, and we have no idea if there are any “side effects” or potential risks – especially since these vaccines have been rushed out the door.

Yes, if they work as intended without causing major problems, the health situation will improve sometime next year.

But many of the other negatives that came with this crisis – the destroyed job market, the massive power governments have assumed, and central banks’ spiral into insanity – will persist even once the virus is gone.

The Economy and Job Market

There have been widespread reports that banks hired fewer summer interns than normal for 2021, which makes sense: why hire many interns when the environment is so uncertain?

But even outside of investment banking, the job market everywhere else seems to be terrible.

Even supposedly “hot” sectors within technology at the start of 2020, like AI, have seen plummeting job postings.

Even if the health situation improves next year, the job market will likely take years to recover.

It’s also worth noting that tens of millions of jobs worldwide in the tourism and hospitality sectors are unlikely ever to return.

Now that companies have realized that videoconferencing works and saves time and money, business travel will almost certainly remain at permanently lower levels.

Many small businesses have also been crushed, and they account for nearly 50% of employed people in the U.S.

“OK,” you say, “but I am going to work in finance or tech or some other field that has held up pretty well. Why should I care?”

The issue is that even if your specific industry is “OK” for now, everything in the broader economy is linked – so there will be spillover effects.

For example, if a city dependent on tourism loses most of its tax revenue from tourists, you can expect to start paying higher sales and income taxes there.

At the minimum, I would expect the following:

  • Higher Taxes – Take a look at what’s happening in Argentina, where they’re making the “super-rich” cover the costs of the crisis with a new wealth tax. Expect higher federal and state income taxes, higher property taxes, new wealth taxes, higher capital gains taxes, and so on.
  • Massive Deficits – Expect politicians to propose student loan forgiveness, rent/mortgage cancellation, and even more bailouts. These policies will balloon the deficits and eventually lead to inflation, currency devaluation, social uprisings, or a mix of all three.
  • Higher Regulatory Burdens – Expect governments to keep the ridiculous restrictions they’ve already imposed because they’ve learned that no one is willing to stand up to them. You’ll see “virus-free certifications” and similar red tape added to the burden of offline businesses in the future.

My main concern here is that these changes will create a vicious cycle.

Business activity and tax revenue are way down, so governments will impose higher taxes and send more “stimulus” money to people.

Then, they’ll introduce more regulations because of “health concerns.”

As a result, it will become more difficult for companies to hire people, and the job market will get even worse.

Tax revenue will fall again, and governments will keep repeating this process until nothing is left.

Central Banks and the Financial Markets

I think this image sums up what to expect for the financial markets next year:

Central Banks 2021
In short, turn on that printing press and get ready to print, print, and print some more.

Virtually all central banks are “dealing with” the crisis by expanding the money supply as quickly as possible.

The problem is that, as in physics, for every action, there is an equal and opposite reaction.

When central banks “expand the money supply,” that money has to go somewhere.

Since 2008, the new money has gone primarily to the wealthy class, which is why financial assets, rare artwork, and luxury goods have increased in price at astonishing rates.

If you believe the CPI numbers, there hasn’t been much inflation in the “real economy” – but that could easily change if governments start distributing more cash to normal people.

Either way, prices are going up because the money supply is expanding far more quickly than the overall economy.

The only questions are “Which set(s) of prices?” and “By how much?”

Even though the S&P 500 is already at ridiculous nosebleed levels, I could see it going even higher because of the constant money printing.

Stocks like Tesla that have defied all logic could keep going up because nothing has to make sense in a bubble.

Precious metals will also rise, but prices there also depend on real interest rates.

People compare this current bubble to 1999 or 2000, but there is a key difference: back then, 10-year U.S. Treasury yields were at ~6%.

Therefore, it’s not surprising that the dot-com bubble burst: investors could sell all their tech startup holdings and earn 6%, “risk-free,” in another asset class.

Today, high interest rates exist only in emerging and frontier markets – and those rates are certainly not on “risk-free” assets – so a similar crash seems unlikely.

What will cause this madness to end?

I think this question comes down to rates.

As soon as something happens to force up interest rates – a war or regional conflict, a change in the reserve currency, vaccine failures, or another health crisis – stocks will sell off.

I would also expect precious metals to sell off a bit in that scenario, but it depends on whether or not inflation also rises along with nominal rates.

If you think this seems implausible, remember that in 1980, most people thought that interest rates would stay high forever and that stocks were terrible investments.

The Glass is Half Full: A Few Positive Trends

I don’t want to be completely pessimistic here, so I’ll also note a few positive trends from this year.

First, remote work has become the norm in many industries, and while it’s not realistic or desirable everywhere, it is nice to have that as an option.

Ironically, remote work has been terrible in the finance industry because bankers are now working all day, every day, from their tiny apartments.

As burnout rates increase, banks will probably end the experiment and ask more staff to return to the office for at least part of the week.

Another positive trend is that the university system in the U.S. is likely to collapse or change dramatically.

I view this trend as a positive because the system is currently broken.

Students graduate with massive debt and no job prospects, and universities are never liable because debt repayment is the student’s responsibility.

But with falling enrollment everywhere, many private, expensive schools will have to shut down, and others will be forced to accept more students at lower tuition rates.

Finally, with the Big Tech companies gaining even more dominance this year, it looks like the U.S. government might be ready to take serious action against them.

I believe they should all be broken up and that doing so would improve life for consumers, employees, and other businesses.

Such breakups might even be good for these companies’ shareholders when you think about what divisions like AWS might be worth as separate, independent entities.

Final Thoughts and My Biggest Takeaway of 2020

In short, while the health situation may improve next year, the after-effects of all the “measures” taken by governments and central banks will be with us for years, if not decades.

And outside of a few less-affected industries, it will probably take multiple years for jobs to recover.

This year, some people were surprised at how many people followed the lockdown and mask orders, while others were surprised at the protests, and others were surprised at the debates over “the science.”

My biggest takeaway, though, is that most people don’t care about others at all.

This was especially the case with various friends, acquaintances, and former co-workers who attended top universities and were relatively unaffected by the pandemic.

For example, a few months ago, I reluctantly agreed to catch up with a distant acquaintance in this category.

This individual has done fairly well: annual compensation in the $200K to $300K range with fairly cushy hours at a tech company, and he did not suffer at all because his job has been partially remote from the beginning.

He spent most of the call complaining that his career “wasn’t going anywhere” and then explained that he hasn’t left his house in months because “the virus would instantly kill him” if he did that.

NOTE: This person is also in his mid-30s, is in good shape, and has no chronic conditions.

At this point, I wanted to end the call and immediately say, “Um, you do realize you’re in a better position than 99.9% of the world’s population, correct? What if you had a job requiring your physical presence, and you lost everything due to the lockdowns? Are you aware that you’re complaining about nonsense?”

But I let him ramble on and stayed silent as I continued playing a mobile game and Googling for tips on a difficult boss fight in another game I was playing.

This incident sums up 2020 quite well: a lot of complaining, panicking, overreacting, and failing to care about anyone else.

Oh, and games. Lots of games.

M&I - Brian

About the Author

Brian DeChesare is the Founder of Mergers & Inquisitions and Breaking Into Wall Street. In his spare time, he enjoys memorizing obscure Excel functions, editing resumes, obsessing over TV shows, traveling like a drug dealer, and defeating Sauron.

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  1. Brilliant article. So pleased to reason and evidence are still present despite the mainstream narrative / agenda re lockdowns.

  2. It will be interesting to see how the *total* death count from this year compares to prior years (I think the official name for the statistic is “excess fatality rate”).

    Looks like Michael Burry was right!

    One thing you forgot in your summary: people *pretending* to care about others.

    1. Yeah, I think the excess fatality rate will be higher, but it won’t be clear whether that’s from actual covid deaths or lockdown deaths.

      My experience is that most people stopped even pretending to care about others this year, but it might be happening somewhere…

  3. Great read Brian.

    One thing though what made you come to the conclusion that warm weather would help COVID go away? I remember that argument being made around February but the first big wave of covid came in the summertime for US and other countries with warm weather like Southern Europe. I agree that Africa has not had such a bad time because of their young population and better general health than Americans (also less crowded metropolitan areas?) but I’m still hesitant to believe that weather is a big factor. Do you have any sources for this? Otherwise I generally agree with your points and again thanks for the great article.

    1. I wouldn’t say it’s a “conclusion,” just an educated guess based on the fact that respiratory diseases tend to be worse in the cold weather (look at the flu, cold, or similar past viruses). Europe was actually a lot better in the summer, with cases down to low levels in most countries. But it’s hard to say whether that was because of the weather, the strict lockdowns in the spring + masks, or some combination of those.

  4. Avatar
    Nafees ul haq

    Brilliant read. Do you think its a good time to do a full time MBA and target the job market for roles in 2022(internships)/2023(Full time).

    1. Thanks. Potentially, yes, but the problem is that everyone else had the same idea about MBAs, so applications are apparently at an all-time high this year. If you’re competitive at the top schools and have a good rationale for going, sure, you might as well.

      1. I would much rather go down the tech track (software engineering + data science) if you have the mettle. With the exception of equity research, I don’t like the sort of jobs (IB Associate, corporate development, business admin-ish types etc.) that MBAs are meant to prep you for.

  5. Hi Brian, I like these detailed articles that you have published. Here in Singapore, things are being managed much better, however I am still unsure what other implications the state of affairs in the US would have on the economic conditions over in South-East Asia. Do you have any ideas what sort of spillover effects, apart from reduced tourism, business travel, foreign investments, and bewildering currency fluctuations between SGD & USD that will occur in due course due to QE infinity and beyond?

    I like your section about people’s general level of selfishness (I am guilty of it myself, to some extent, and have a similar education background to said acquaintance anyway), and have complained along similar lines haha!

    1. I haven’t followed SE Asia closely enough to say with much certainty, but I expect Singapore to be fine because of its close links to China. Also, isn’t the SGD up against the USD around 10% since March? If the economy remains fine and the central bank there prints less, relative to GDP, than the Fed and ECB, I think it will be fine. Just compare the Singapore M2 money supply to the US one:

      I don’t think any part of the world is in great shape right now, but I would much rather be in Singapore or elsewhere in SE Asia rather than the US or even Europe (I’m only here because of life circumstances).

      1. Indeed, the Singapore government has had to tap into their monetary reserves to help businesses, but have been frugal about it, unlike the Fed!
        Singapore does have close ties with China indeed, but is still militarily dependent on the US (they have military bases here –, just like in Japan)

        Supply of SGD has gone up by around 10% relative to the start of this year, whereas for USD it is over 20% – over 2x the percentage increase in SGD’s supply. The SGD per USD rate is around 1.335 right now, which is around 7% stronger compared to the peak of around 1.43, but only around 2% to 3% stronger relative to the rates in 2018 – 2019.
        When are you planning to come over to Singapore? It would be nice to catch up over coffee someday.

        1. Interesting, did not know all the numbers. I used to visit Singapore once every 1-2 years, but with the current situation, who knows when that will ever happen again. I’m hoping that travel restrictions will ease sometime within the next decade.

  6. Excellent write-up as always, Brian.

    I am curious to know what game you were playing on mobile while your friend was rambling and what was the game you were googling for tips on the boss fight? Any other games you like / recommend? It is also worth mentioning that the highly anticipated Cyberpunk 2077 just came out today and it looks like it could be fun – do you plan to check it out at some point?

    1. Thanks. On mobile, I like Clash of Clans and Clash Royale. I was Googling for tips on the Operator fight in The Witcher 2 (incredibly hard on the highest difficulties if you try to beat him legitimately). I mostly play RPGs because I like the story elements, and this year, I’ve gone retro and been playing mostly older games that I missed over the past 10 or so years.

      I liked the entire Witcher and Mass Effect series and NieR: Automata. My favorites were probably Witcher 3 (shocking, I know) and Mass Effect 2.

      I will get Cyberpunk 2077 at some point, but currently it seems to be incredibly buggy, so I’m going to wait a few months for it to get patched. I’m thinking of playing Dragon Quest XI in the meantime, but a little reluctant to start another 100-hour game that will take months to finish.

  7. Hi Brian,

    Good roundup. I agree a lot about the original lockdowns. The government (especially like the US where citizen-government trust is relatively low) had one chance to enact sensible measures that people would follow. People were willing to lockdown for two weeks. Most businesses, with some government aid, could survive that. But thats when the politicians became lazy and thought lockdowns were the only solution as opposed to the easy solution.

    I dont see any major taxes being passed on the Federal level for the US. Democrats got smoked in the House and Senate races (compared to expectations). They dont have the margin to enact serious tax increase/policy reform. I would bet you see some action at the state level in states like Illinois, Cali, and New York where Democrats hold large margin in state office. The exodus from those states have already well begun and I’d bet they continue.

    The biggest risk from this virus isnt the virus’s symptoms or any long term effects from the vaccine, the biggest risk is the Federal Reserve and other central banks destroying currencies and setting us up for major problems. They are playing with fire surrounded by gasoline and not only that, but with Yellen appointed to Treasury , the printing machine is going to be going 24/7 soon. Sooner or later, the middle class has to see that the most powerful people in America are those that never have to win an election.

    I agree with your positives about remote work. Most managers have seen the light that most employees spending 5 days in the office is nuts. Hopefully next, the next step is 4 day workweeks. I also agree about the colleges in America. They are no longer worth it unless you go to a reasonable school for a STEM major or even a major with a technical skill like nursing or accounting. Even then, you sometimes need post graduate certifications. Public colleges should be forced to cut their admin staff down to early 2000 levels, cut the number of majors offered by getting rid of the useless majors, and having 4 year pricing for all students. College shouldnt be a death sentence for some people.

    Appreciate your views throughout the year. Agreed with a lot, disagreed with others. Have a good holiday and New Years.

    1. Thanks. Yeah, people were willing to follow lockdowns once… for a limited period… but not multiple times with no end in sight. I definitely think state tax increase are more likely than federal ones, which is why I’m considering “relocating” (my mailing address) to Florida.

      Yup, Yellen is going to be a disaster. Can’t even imagine what the deficits will look like. I really do hope universities are forced to change their ways. But who knows, sometimes broken systems go on indefinitely.

  8. I do agree with the points you’ve made, Brian. A great article!
    Oddly enough, in the section where you mentioned the wealth tax in Argentina, we have a UK wealth tax commission that sprung up in April this year. The report of the commission wants the implementation of a one-off/Covid tax but there were more grey areas than anything else. Call me pessimistic or cynical but I see further issues with slapping taxes left, right and centre simply because governments and central banks have gone a bit mad with spending. Last but not least, injecting cash to prop up zombie companies that don’t create value among other things is rather ill-thought.
    Keep the insightful content coming! Thanks

    1. Thanks. Yeah, it will be interesting to see what happens with taxes and zombie companies. I think the key question is how long all of this can last before we hit an actual breaking point. I keep saying, “Not that long,” but then the world goes on anyway.

  9. Hi Brian- thanks for an amazing article as usual. I was wondering if you think ib internships in large cities like NYC/SF will be fully virtual again even with estimates that most of the US population who wants a vaccine will have one by summertime? I know tech went fully virtual but I cannot imagine doing IB hours completely alone from a city sublet.

    1. Thanks. I doubt that internships will be fully virtual again, but some banks may shorten internships or make them partially virtual. I don’t think it works for internships, and I don’t think banks want to repeat this “experiment” next year.

  10. Love the article Brian! I had one question about recruiting for FT roles next year- even in regular years, FT recruiting for IB NYC is a shot in the dark; is it even worth the effort this time around?

    1. Thanks. I think it’s too early to see whether or not FT recruiting will be worthwhile next year, but I would say, “Maybe if the situation improves significantly and people are actually back at their offices by then.” I think it’s way too difficult to do all the required networking and interviewing online.

  11. Brilliant article Brian. I always appreciate the insight.

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