Baltic Dry Index. 582 -21 Brent Crude 27.19 Spot Gold 1601
Covid-19 Pandemic finally
underway, according to the WHO, at long last!
Coronavirus Cases 26/3/20
World 488,421 Deaths 22,071 (Maybe.)
The invisible hand describes
the unintended social benefits of an individual's self-interested actions, a
concept that was first introduced by Adam Smith in The Theory
of Moral Sentiments, written in 1759, invoking it in reference
to income distribution.
Today,
that stock market exit rally versus the
rising global reality of the coronavirus crisis.
In
the USA, fast becoming the epicentre of the global pandemic according to the
World Health Organisation, things are now so bad, whatever the official
statistics say, that hospitals are now debating “DO-NOT-RESUSITATE” orders for
the over 60s.
In
effect, killing off the sick of the baby boom generation, greatly lowering
future unfunded state pension liabilities, but that’s probably just a
coincidence.
Less
dramatically, mortgage defaults are rising as is global unemployment. Real
estate deals are collapsing. Corporate debt downgrades are rising, as past
business model assumptions turn out to be wrong.
Though
all the global helicopter money packages, now in the process of implementation,
will help. They take time to put into practise, don’t reach everybody affected,
rarely cover all losses, and in no way replicate Adam Smith’s “invisible hand”
of capitalism’s benefits.
Below,
things still going from bad to worse in the real world.
China's factories reopen, only to fire workers as virus shreds global trade
March 26, 2020 /
5:40 AM
BEIJING
(Reuters) - Shi Xiaomin, who used to export suits and blazers by the thousands
to South Korea, the Netherlands and the United States, was luckier than many
other Chinese factory owners.
When his factory in the eastern city of Wenzhou reopened last month
after an extended shutdown due to the coronavirus outbreak, the local
government sent a bus to a nearby province to ferry back more than 20 of his
stranded workers. Staff with cars volunteered to fetch colleagues.
Shi’s optimism was short-lived.
In the past week, requests to cancel orders or delay shipments from his
European and U.S. clients have flooded in.
Early in the outbreak, China imposed tough travel restrictions and
factory suspensions to curb the spread of the virus, squeezing labour supplies
and sending exporters scrambling to fulfil orders.
Now the reverse is now happening - overseas orders are being scrapped as
the pandemic ravages the economies of China’s trading partners.
“The unprecedented shutdown of normal economic activity across Europe,
the U.S. and a growing number of emerging markets is certain to cause a
dramatic contraction in Chinese exports, probably in the range of a 20-45%
year-on-year drop in the second quarter,” said Thomas Gatley, senior analyst at
research firm Gavekal Dragonomics.
Shi said his fabric supplier in hard-hit Italy suspended operations on
Sunday, meaning no fresh raw materials from May. His stockpile of fabric will last
until the end of April.
Shi said he would slow production and might suspend all output soon if
business does not improve.
He also told the 50-odd workers who have yet to return from Hubei
province, the epicentre of the outbreak in China, to find jobs elsewhere.
More
Singapore flags deep recession as
coronavirus shrinks economy in first quarter
March 26, 2020 /
1:35 AM
SINGAPORE
(Reuters) - Singapore’s economy suffered its biggest contraction in a decade in
the first quarter, data showed on Thursday, as the coronavirus pandemic
prompted the city-state to cut its full-year GDP forecast and plan for a deep
recession.
The grim data is likely to reinforce fears that global activity will
sharply contract in the first half of the year. Singapore is one of the world’s
most open economies and one of the first to report growth data since the virus
spread from China at the start of the year.
The economy of the Asian financial and trading hub shrank 2.2% in the
first quarter from a year earlier, preliminary readings from the Ministry of
Trade and Industry showed.
That marked the biggest drop since the 2009 financial crisis and was
below economists’ expectations for a 1.5% decline. On a quarterly basis, gross
domestic product (GDP) shrank 10.6%, the lowest since 2010 and well below
expectations for a 6.3% decline.
more.
Hospitals consider universal do-not-resuscitate orders for coronavirus patients
Worry that ‘all hands’ responses may expose doctors and nurses to infection prompts debate about prioritizing the needs of the many over the one
Ariana
Eunjung Cha March 25, 2020
Hospitals on the front lines of the pandemic are engaged in
a heated private debate over a calculation few have encountered in their
lifetimes — how to weigh the “save at all costs” approach to resuscitating a
dying patient against the real danger of exposing doctors and nurses to the
contagion of coronavirus.
The conversations are driven by the
realization that the risk to staff amid dwindling stores of protective
equipment — such as masks, gowns and gloves — may be too great to justify the
conventional response when a patient “codes,” and their heart or breathing
stops.
Northwestern Memorial Hospital in
Chicago has been discussing a universal do-not-resuscitate policy for infected
patients, regardless of the wishes of the patient or their family members — a
wrenching decision to prioritize the lives of the many over the one.
Richard Wunderink, one of
Northwestern’s intensive-care medical directors, said hospital administrators
have asked Illinois Gov. J.B. Pritzker for help in clarifying state law and
whether it permits the policy shift.
“It’s a major concern for everyone,”
he said. “This is something about which we have had lots of communication with
families, and I think they are very aware of the grave circumstances.”
Officials at George Washington
University Hospital in the District say they have had similar conversations,
but for now will continue to resuscitate covid-19 patients using modified
procedures, such as putting plastic sheeting over the patient to create a
barrier. The University of Washington Medical Center in Seattle, one of the
country’s major hot spots for infections, is dealing with the problem by severely
limiting the number of responders to a contagious patient in cardiac or
respiratory arrest.
----Lewis Kaplan, president of the Society of Critical Care Medicine and a University of Pennsylvania surgeon, described how colleagues at different institutions are sharing draft policies to address their changed reality.
“We are now on crisis footing,” he said. “What you take as first-come,
first-served, no-holds-barred, everything-that-is-available-should-be-applied
medicine is not where we are. We are now facing some difficult choices in how
we apply medical resources — including staff.”
More
New Orleans emerges as next coronavirus epicentre, threatening rest of South
March 25, 2020 /
6:24 PM
(Reuters)
- New Orleans is on track to become the next coronavirus epicentre in the
United States, dimming hopes that less densely populated and warmer-climate
cities would escape the worst of the pandemic, and that summer months could see
it wane.
The plight of New Orleans - with the world’s highest growth rate in
coronavirus cases - also raises fears that the city may become a powerful
catalyst in spreading the virus across the south of the country. Authorities
have warned the number of cases in New Orleans could overwhelm its hospitals by
April 4.
New Orleans is the biggest city in Louisiana, the state with the
third-highest case load of coronavirus in the United States on a per capita
basis after the major epicentres of New York and Washington.
The growth rate in Louisiana tops all others, according to a University
of Louisiana at Lafayette analysis of global data, with the number of cases
rising by 30% in the 24 hours before noon on Wednesday. On Tuesday, U.S.
President Donald Trump issued a major federal disaster declaration for the
state, freeing federal funds and resources.
Some 70% of Louisiana’s 1,795 confirmed cases to date are in the New
Orleans metro area.
The culprit for the rapid spread of coronavirus in the Big Easy? Some
blame Carnival.
“Mardi Gras was the perfect storm, it provided the perfect conditions
for the spread of this virus,” said Dr. Rebekah Gee, who until January was the
Health Secretary for Louisiana and now heads up Louisiana State University’s
health care services division.
She noted that Fat Tuesday fell on Feb. 25, when the virus was already
in the United States but before the Centers for Disease Control and Prevention
and national leaders had raised the alarm with the American public.
“New Orleans had its normal level of celebration, which involved people
congregating in large crowds and some 1.4 million tourists,” Gee said. “We
shared drink cups. We shared each other’s space in the crowds. People were in
close contact catching beads. It is now clear that people also caught
coronavirus.”
Gee said that the explosive growth rate of the coronavirus in the
Mississippi River port city means “it’s on the trajectory to become the
epicentre for the outbreak in the United States.”
More
Japan considering stimulus package worth 10% of GDP - Nikkei
March 25, 2020 /
9:46 AM
TOKYO (Reuters) - Japan’s government is considering a fiscal stimulus
package worth roughly 10% of the country’s nominal gross domestic product (GDP)
to combat the economic impact of the coronavirus outbreak, the Nikkei newspaper
said on Wednesday.
The package, worth more than 56 trillion yen (421.4 billion pounds),
will include cash payouts to households, the paper said without citing sources.
SoftBank Dumps Moody’s After a Two-Notch Downgrade
Credit-rating firm cuts Japanese tech giant further into speculative territory; questions group’s plan to repurchase shares and debt
Moody’s questioned the “unexpected
size and apparent urgency” of SoftBank’s plan, which proposes up to $41
billion in asset sales to fund repurchases of stocks and bonds.
SoftBank said Wednesday that there was no rationale for such a large downgrade and that the action “will cause substantial misunderstanding among investors.”
SoftBank’s rating was already
considered noninvestment grade, or junk, before Wednesday’s downgrade. Moody’s
cut, to Ba3 from Ba1, won’t force any bond redemptions or affect its loans, a
SoftBank spokesperson said.
The tit-for-tat highlights the
conflict of interest underlying credit ratings, since companies pay to be rated
and can dump rating firms that don’t give them scores they like. It also
suggests how high the stakes are for SoftBank, which is pulling out the stops
to raise its share price, which had halved since February, and bolster its
balance sheet, weighed down by $70 billion in stand-alone debt.
SoftBank, best known for the
aggressive bets it made through its $100 billion Vision Fund, has also lost the
confidence of investors following the
multibillion-dollar bailout of one of its biggest investments, the
parent of office-share company WeWork. SoftBank has halted fundraising for a
successor to the Vision Fund, substantially slowed the pace of its investments
and is selling
up to a fifth of its of assets—chiefly a stake in Chinese e-commerce
company Alibaba
Group Holding Ltd. that is currently
worth more than $120 billion—to fund the share and debt buybacks.
More
$815 million Manhattan office-tower deal collapses
Published: March
24, 2020 at 11:47 p.m. ET
Real-estate giant SL Green Realty Corp.'s agreement to sell the former
New York Daily News headquarters for $815 million has collapsed after the
buyer's financing pulled out, according to people familiar with the matter.
New York property investor Jacob Chetrit signed a contract in the fall
to buy the 37-story building on East 42nd Street, which was the newspaper's
headquarters for many years and was even featured in a Superman movie as the
headquarters of the fictional Daily Planet.
After Mr. Chetrit's main lender, Deutsche Bank AG, backed out this
month, Mr. Chetrit called off the purchase, these people said.
The sale's demise is a blow to SL Green, the office landlord whose
shares have plunged more than 40% this month and which was counting on the
proceeds during a difficult period for real-estate owners. Its unraveling is
the latest sign that the spread of the coronavirus is roiling financial
markets.
Financing property deals has become increasingly difficult. The market
for commercial mortgage-backed securities, a key source of funding for property
investors, is frozen.
Mr. Chetrit and his partners were in advanced discussions with Deutsche
Bank for a mortgage to finance the acquisition, according to people familiar
with the matter. The loan would be packaged into commercial mortgage-backed
securities. But the German lender recently backed out of the deal amid turmoil
in debt and bond markets.
Mr. Chetrit could not be reached for comment.
SL Green's
president confirmed that the transaction was off and noted that the firm
retained Mr. Chetrit's deposit, which people familiar with the matter say
totaled $35 million.
More
Finally today, a Dutch bank “gold” scam ends. Shame about their clients who thought they owned and paid for real gold, not paper gold, for all those years. What Mugs.
ABN Amro Abandons 106 Year Physical Gold Business, Clients Forced To Sell
by Tyler Durden Wed, 03/25/2020 - 08:22
Seven
years ago - to the day - Dutch megabank ABN Amro changed its precious
metals custodian rules to "no longer allow physical
delivery."Have no fear, they reassuringly added, your account will be settled at the bid or offer price in the 'market' and "you need to do nothing" as "we have your investments in precious metals."
Changes in the handling of orders in bullion
On 1 April 2013,. ABN AMRO to another custodian for the precious metals gold, silver, platinum and palladium...
...
You need do nothing. We ensure that we have your investments in precious metals now the new way to handle and administer.
At the time, we wondered if this was the canary in the coalmine of potential physical shortages in the precious metals markets. Soon after we saw notable selling pressure in the gold markets with Spot (physical) selling leading futures lower...
At the time it was unclear who the "other custodian" was but
we now know ABN Amro transferred the precious metal trade to the Swiss bank
UBS.
Crucually, however, at UBS, it was not possible for customers to
actually request the gold or silver.
Which brings us to today's news from Trouw.nl, that ABN Amro customers will no longer be able to put their money into physical gold, silver or platinum.
The bank will discontinue these three investment products next Friday.
Customers will have to sell their positions before April 1. If that does not happen, ABN Amro will do this for them at the prevailing price.
The driver for this decision appears to new EU regulations as Trouw explains:
Because the physical delivery of precious metals is not possible, a precious metal purchased through ABN Amro is not a “direct investment”.
Because it is a complex product, ABN Amro must comply with additional regulations.
Those rules for European financial markets have been tightened.
The cancellation of these accounts by ABN Amro brings to an end a history that goes back to the establishment of the Hollandsche Bank Unie (HBU) in 1914, writes gold trading company Aunexum in retrospect.
Interestingly, as this news breaks, spot gold prices are lagging futures as they both are bid...
With the gold market "breaking down," as we detailed earlier, amid a record surge in demand for physical gold but also a near shut down in supply as the most productive gold refiners, those located in the southern Swiss town of Ticina, namely Valcambi, Pamp and Argor-Heraeus, now appear to be offline indefinitely; we wonder if the timeliness of ABN's decision is more about avoiding the potential blowback from their ultimate fiduciary duty over clients' precious metals investments.
Let's just hope, for the 2000 or so private-banking accounts at ABN (and custodied at UBS) that the Swiss bank can get its hands on some of that 'deliverable' before time runs out...
Which anyone who has been to APMEX or any other gold seller in the past few days, has discovered - may not be as easy to source as they hope:
Alan Schwartz, CEO Bear Stearns, March 12, 2008.
Bust March 16, 2008.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, how bad will the US downturn be? Some of America’s top
astrologers give it their best shot.
John Kenneth Galbraith
Economists See U.S. Facing Worst-Ever Quarterly Contraction
Reade Pickert Mar 24 2020, 3:50 AM Mar 25 2020, 4:23 AM
(Bloomberg)
-- Economists say the U.S. is entering a sharp recession, with some projecting
gross domestic product is headed for its worst drop in quarterly records back
to 1947. Containing the outbreak has forced the world’s largest economy to a
sudden stop, shuttering businesses that are in turn poised to cut millions of
jobs. Gross domestic product estimates range widely, but most economists
Estimates, of
course, are evolving quickly as the deadly path of the outbreak shifts by the
hour, and some can soon be overtaken by events. Here are some of the latest,
with GDP expressed as the quarterly change, seasonally adjusted annual rate:
TD Securities
(March 23)
GDP: -3% (Q1),
-25% (Q2) Q2 unemployment rate: 7.4% “The crisis is producing a dramatic policy
response -- fiscal and monetary. Even so, a severe recession looks inevitable.”
Morgan Stanley (March 22)
Morgan Stanley (March 22)
GDP: -2.4% (Q1),
-30.1% (Q2) Q2 unemployment rate: 12.8% “With disruptions to economic activity
becoming greater, we now expect this contraction in economic activity to be
even deeper.”
Bank of America (March 20)
Bank of America (March 20)
GDP: +0.5% (Q1),
-12% (Q2) Q2 unemployment rate: 6% “We are officially declaring that the
economy has fallen into a recession...On a monthly basis, we assume the trough is
in April with a very slow return to growth thereafter with the economy feeling
somewhat more normal by July.”
Bloomberg Economics (March 20)
Bloomberg Economics (March 20)
GDP: +0.5% (Q1),
-9% (Q2) Q2 unemployment rate: 6.5% “The Covid-19 lockdown means a hard stop
for the U.S. economy. The second quarter will bring a contraction rivaling the
steepest in history, and surpassing the worst period of the financial crisis.”
Link to note: GDP Facing 9% Contraction, Rivaling Worst Ever
Citigroup (March 20)
Citigroup (March 20)
GDP: -0.5% (Q1),
-12% (Q2) Q2 unemployment rate: 6.4% (Q2) “Beneath the extreme Q2 slowdown/Q3
re-acceleration dynamics a moderate 2001-style recession to be playing out.”
Credit Suisse (March 20)
Credit Suisse (March 20)
GDP: -1.5% (Q1),
-12% (Q2) Q2 unemployment rate: 8% “Economic data in the near future will be
not just bad, but unrecognizable.”
Goldman Sachs (March 20)
Goldman Sachs (March 20)
GDP: -6% (Q1),
-24% (Q2) Q2 unemployment rate: 6.6% “We expect declines in services
consumption, manufacturing activity, and building investment to lower the level
of GDP in April by nearly 10%, a drag that we expect to fade only gradually in
later months.”
more
more
If
economists could manage to get themselves thought of as humble, competent
people on a level with dentists, that would be splendid.
John Maynard Keynes
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards.
New material developed could help clean energy revolution
Date:
March 23, 2020
Source:
Aalto University
Summary:
Researchers developed a promising graphene-carbon nanotube catalyst, giving
them better control over hugely important chemical reactions for producing
green technology and clean energy.
Fuel cells and water electrolyzers that are cheap and efficient will
form the cornerstone of a hydrogen fuel based economy, which is one of the most
promising clean and sustainable alternatives to fossil fuels. These devices
rely on materials called electrocatalysts to work, so the development of
efficient and low-cost catalysts is essential to make hydrogen fuel a viable
alternative. Researchers at Aalto university have developed a new catalyst
material to improve these technologies.
The oxygen reduction reaction (ORR) and oxygen evolution reaction (OER)
are the most important electrochemical reactions that limit the efficiencies of
hydrogen fuel cells (for powering vehicles and power generation), water
electrolyzers (for clean hydrogen production), and high-capacity metal-air
batteries. Physicists and chemists at Aalto collaborating with researchers at
CNRS France, and Vienna in Austria have developed a new catalyst that drive
these reactions more efficiently than other bifunctional catalysts currently
available. The researchers also found that the electrocatalytic activity of
their new catalyst can be significantly altered depending on choice of the
material on which the catalyst was deposited.
"We want to replace traditional expensive and scarce catalysts
based on precious metals like platinum and iridium with highly active and
stable alternatives composed of cheap and earth-abundant elements such as
transition metals, carbon and nitrogen." says Dr Mohammad Tavakkoli, the
researcher at Aalto who led the work and wrote the paper.
In collaboration with CNRS the team produced a highly porous
graphene-carbon nanotube hybrid and doped it with single atoms of other
elements known to make good catalysts. Graphene and carbon nanotube (CNT) are
the one?atom?thick two- and one?dimensional allotropes of carbon, respectively,
which have attracted tremendous interest in both academia and industry due to
their outstanding properties compared more traditional materials. They
developed an easy and scalable method to grow these nanomaterials at the same
time, combining their properties in a single product. "We are one of the
leading teams in the world for the scalable synthesis of double-walled carbon
nanotubes. The innovation here was to modify our fabrication process to prepare
these unique samples," said Dr Emmanuel Flahut, research director at CNRS.
More
Every
generation imagines itself to be more intelligent than the one that went before
it, and wiser than the one that comes after it.
George Orwell.
The Monthly Coppock Indicators finished February
DJIA: 25,409 +75 Down. NASDAQ: 8,567 +171 Up.
SP500: 2,954 +133 Up.
In current circumstances,
this is no time to be blindly following technical signals. Given the
severity of the still growing coronavirus crisis, I wouldn’t follow technical
signals in what I think will turn into the first depression since the 1930s.
Barring a miracle recovery in all three markets, the monthly Coppock indicators
are heading for a reversal at the month-end.
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