Illustration: Sarah Grillo/Axios

At a time of crisis, we tend to crave certainty — the one thing we have less of than ever.

The big picture: The markets, of course, are full of uncertainty. Record-high volatility (just look at the oil price today) indicates that price discovery is breaking down.

  • No one has a clue what may or may not be "priced in" to the market in terms of how the virus is going to progress or how the economy is going to behave.
  • Some forecasters see second-quarter earnings declining by 10%; others see a decline of 120%. And we're already in the second quarter!

The virus comes with even bigger error bars. (I could be totally wrong, for instance, about our future willingness to mingle.)

  • The number of undetected cases, the fatality rate, how likely asymptomatic individuals transmit the virus, how dangerous it is to touch an infected surface or to pass within 6 feet of others, how family members in close quarters don't get infected, how long the incubation period is, whether recovery implies immunity and for how long, whether the virus is seasonal — all these and many more basic facts remain unknown.
  • Social questions have even bigger unknowns. What is the correct public-health strategy? How strict should lockdowns be? Should wearing masks be encouraged or mandated? Do masks remind people not to touch their face or make them touch their face more? How much certainty should national authorities evince, given the unknowns?
  • National infection rates are equally unknown. The 95% confidence interval for the proportion of Swedes infected by the virus is 0.8% to 8.4%; in Spain, the number infected is estimated to be somewhere between 1.8 million and 19 million.

Why it matters: It's unnatural to live with such uncertainty, so we all cobble together our own set of beliefs about what is true. Then, because we all have different beliefs, finding common ground becomes very hard.

  • Weisberg's Law states that "Any Jew more religious than you are is mentally insane, while any Jew less religious is a self-hater."
  • Something similar can be said about virus paranoia. Everybody more paranoid than you has gone way overboard, while everybody less paranoid is not only putting themselves at risk but is acting in a deeply socially irresponsible manner.

The bottom line: The virus is eroding the shared norms and beliefs that underpin both markets and societies. The consequences are unforeseeable, but unlikely to be good.

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