Baltic Dry Index. 569 -13 Brent Crude 26.59 Spot Gold 1627
Covid-19 Pandemic finally
underway, according to the WHO, at long last!
Coronavirus Cases 27/3/20
World 537,810 Deaths 24,144 (Maybe.)
"There is no means of avoiding the final collapse of a
boom brought about by credit expansion. The alternative is only whether the
crisis should come sooner as the result of voluntary abandonment of further
credit expansion, or later as a final and total catastrophe of the currency
system involved."
Ludwig
von Mises
While it’s all fun
and games in America’s rigged stock markets, in the real economy no amount of
rigging can avoid a growing unemployment disaster.
“Some economists think job losses could surge to 20 million or even higher. The St. Louis Federal Reserve estimated a whopping 67 million jobs are at high risk of unemployment.”
If the St. Louis Federal Reserve estimate was off by 50 percent, at 33 million jobs at risk, the USA faces a dire, deep, recession if not a depression.
Nor is the downturn confined to just North America. We have a widespread global recession underway, now getting aggravated by about half the world’s population undergoing lockdowns.
Worse the USA shot to the top of the list for new coronavirus infections yesterday, with no sign of any let up.
To this old dinosaur market watcher since 1968, any stock market rallies are a time to be exiting stocks, not a time to be trying to catch falling swords.
If the St. Louis Federal Reserve job loss estimate comes anywhere close, I would expect US social stability to undergo a massive test.
Below, it doesn’t get much worse than this, but it probably will.
Millions more U.S. jobs at risk of being lost as coronavirus crisis deepens
Published: March 26, 2020 at
10:13 p.m. ET
If a record 3.3 million jobless claims in
just one week comes as a shock, the next month is likely to tell an even
grimmer tale: Tens of millions of jobs are at stake of disappearing, at least
temporarily.The spike in new applications for unemployment benefits last week didn’t even reveal the full cost of the early efforts to stop the spread of the coronavirus. Some states such as New York, New Jersey and California underreported the number of initial jobless claims. A flood of applications overwhelmed the small staffs who handle the applications and caused government computer systems to crash.
The delayed applications will show up next week, when the number of new jobless claims nationwide could go even higher, perhaps to 4.5 million or 5 million.
Read:Mnuchin says jobless claims data is not relevant. Here’s his explanation
With many states struggling “to process the tidal wave of claims, last week’s data will not have captured the full extent of the damage,” said Andrew Hunter, U.S. economist at Capital Economics.
Estimates of how many jobs will be lost over the next few months are all over the map, but the most conservative forecasts put the number at 10 million in March and April.
How bad is that? The U.S. lost a total of 8.6 million jobs in the entire 2007-’09 Great Recession.
The $2 trillion financial-aid package from Washington will help, namely by offering tax incentives and forgivable loans to businesses that retain their workers.
But the package also expanded unemployment compensation to make potentially millions of Americans who would not have qualified in the past eligible for the first time, such as freelancers and independent contractors like Uber drivers. That could drive jobless claims even higher.
Whatever the case, the longer the crisis goes on, the more jobs that will be lost. Some economists think job losses could surge to 20 million or even higher. The St. Louis Federal Reserve estimated a whopping 67 million jobs are at high risk of unemployment.
More
New York Gov. Cuomo says ‘we’re still on the way up the mountain’ when it comes to coronavirus cases
Published: March 26, 2020 at 4:45 a.m. ET
Gov. Andrew Cuomo said early signs show social distancing is helping.
“The evidence suggests that the density control measures may be
working,” Cuomo said at a news conference on Wednesday. The number of
hospitalizations, which on Sunday were doubling every two days, are now
doubling nearly every five days.
And he pointed out that Westchester County, which had the first cases of
the virus in New York, has seen a significant slowdown in the number of new
infections.
“In Westchester we have dramatically slowed what was an exponential increase,”
he said
But he said New York City is still in a dire situation: “We’re still on
the way up the mountain.”
Meanwhile, on Tuesday, the White House advised anyone traveling through
or from New York City, the epicenter of the coronavirus outbreak in the U.S.,
to put themselves into self-quarantine for 14 days.
Dr. Deborah Birx, the White House’s coronavirus response coordinator and
a public health expert, expressed concern that infected New Yorkers, many of
whom have fled the city, might exacerbate the disease in less hard-hit areas.
“Everybody who was in New York should be self-quarantining for the next
14 days to ensure that the virus doesn’t spread to others, no matter where they
have gone, whether it’s Florida, North Carolina, or out to the far, far reaches
of Long Island,” Birx said.
Her comments followed a more forceful order from Florida Gov. Ron
DeSantis mandating that anyone who travels from the tri-state area of New York,
New Jersey or Connecticut go into self isolation for two weeks.
As of Wednesday, 17,856 people in New York City had tested positive for
Covid-19, the new coronavirus, and 199 had died.
Remote, especially seasonal, communities, such as Cape Cod in
Massachusetts or the Hamptons in New York, are likely feeling uneasy as they witness
an influx of people looking for refuge from dense urban areas, said Dr. Cheryl
Healton, dean of New York University’s School of Public Health. Many of these
communities have limited emergency medical capacity and only a few intensive
care beds.
“They are only scaled for full-time residents,” Healton said. That would
be a problem in the event of an outbreak, which would quickly overwhelm the
local health system.
More
French economy at about 65 percent of normal levels due to coronavirus outbreak
Issued on: 26/03/2020 - 10:29
INSEE gave the first picture of the impact
of the nationwide lockdown as it published its monthly business confidence
index, which saw its biggest single drop since records began in 1980.The index fell to 95 points from 105 points in February with even steeper declines seen in the services and retail sectors, INSEE said.
The French government has prepared a 45 billion euro ($49.1 billion) package – 2% of GDP – of crisis measures made up mainly of deferred taxes and payroll charges for companies, and payments to companies who put workers on reduced schedules.
Additionally, the government is guaranteeing up to 300 billion euros – 15% of GDP – of corporate borrowing from commercial banks to keep credit flowing to the economy.
INSEE said it was too early to try to forecast how deep the downturn
would be, but it estimated that each month of confinement would reduce economic
activity by 12 percentage points on a quarterly basis and 3 percentage points
on an annual basis.
With vast swathes of the economy in lockdown, the government estimated
last week in an emergency update to the budget law that the economy would contract
1% this year, instead of the 1.3% growth it had previously forecast.
However, Finance Minister Bruno Le Maire has since warned that the downturn was likely to be much worse, comparing it to the Great Depression of 1929.
https://www.france24.com/en/20200326-french-economy-at-about-65-percent-of-normal-levels-due-to-coronavirus-breakout
Japan February factory output seen cooling, retail sales down for fifth month as virus hit deepens: Reuters poll
March 27, 2020 /
5:22 AM
TOKYO (Reuters) - Japan’s factory output likely slowed in
February and retail sales dropped for a fifth straight month, a Reuters poll
showed on Friday, as the coronavirus outbreak took an increasing toll on
businesses and consumers.
Japan has recorded 2,113 cases of the virus and 57 deaths so far as the
disease races across the world, prompting the Bank of Japan to expand stimulus
while the government works to nail down a support package that sources say will
total at least $137 billion.
While the stimulus likely won’t prevent the world’s third-largest
economy from sliding into recession, analysts say it could keep businesses
afloat until global demand begins to recover.
Industrial output is expected to have inched up 0.1% in February from
the previous month, the poll of 15 analysts showed, after a revised 1.0% gain
in January.
“Domestic production activities probably didn’t go as planned due to
supply chain disruptions triggered by the coronavirus outbreak,” said Takeshi
Minami, chief economist at Norinchukin Research Institute.
“We expect factory output will fall 5% in March from the previous month
and 2.0% in April on worries that declines in global demand will last longer
due to the virus impact.”
Next week’s data also include retail sales, which are expected to fall
1.2% fall in February from a year earlier, following a 0.4% slip in January.
“Retail sales for March will likely drop further not only in the service
industry but also consumptions on other goods as the government called for
people to refrain from going out to prevent the spread of the coronavirus,”
said Kenta Maruyama, economist at Mitsubishi UFJ Research and Consulting.
Morehttps://uk.reuters.com/article/us-japan-economy-output/japan-february-factory-output-seen-cooling-retail-sales-down-for-fifth-month-as-virus-hit-deepens-reuters-poll-idUKKBN21E0GZ
China's industrial firms post steepest fall in profits in a decade
March 27, 2020 /
1:57 AM
BEIJING (Reuters) - Profits at China’s industrial firms
slumped in the first two months of the year to their lowest in at least a
decade, with the mining, manufacturing and power sectors all seeing sharp
falls, as a virus epidemic battered China’s economy.
Profits earned by Chinese industrial firms in the first two months
dropped 38.3% from a year earlier to 410.7 billion yuan (47.63 billion pounds),
worsening from a 6.3% fall seen in December last year, the National Bureau of
Statistics (NBS) data showed. It marked the steepest decline in data going back
to 2010.
The reading combines the results for January and February to exclude
distortions caused by the week-long Lunar New Year.
The outbreak escalated just as many businesses were closing for the long
holiday break in late January, and widespread restrictions on transportation
and personal travel, as well as mass quarantine, delayed their reopening for
weeks.
The decline in profits points to lingering trouble for the manufacturing
sector, which is wrestling with fallout from the health crisis that has
severely hurt output. Most analysts now expect a contraction in gross domestic
product in the first quarter.
Industrial production and sales fell sharply amid epidemic control
efforts, while the costs of labour and depreciation continued to put pressure
on companies, a statistics bureau official said in a statement published
alongside the data.
Profits for the automobiles, electrical equipment, chemicals and
electronics industries saw some of the steepest declines, with those for the
latter falling 87%.
Morehttps://uk.reuters.com/article/uk-china-economy-industrial-profits/chinas-industrial-firms-post-steepest-fall-in-profits-in-a-decade-idUKKBN21E06D?il=0
Coronavirus to cut UK car output by over 15%, more if crisis lasts months - trade body
March 27, 2020 /
12:21 AM
LONDON (Reuters) - The coronavirus outbreak will cut
British car output by more than 15% this year and the drop could be even bigger
if closed factories have to stay shut for months, an industry body said on
Friday, urging the government to do more.The sector, Britain’s biggest exporter of goods, employs more than 800,000 people with Jaguar Land Rover (TAMO.NS) and Nissan (7201.T) building over half of the country’s cars at factories in central and northern England.
The outbreak has closed plants and it remains unclear when they will be able to open as the government scrambles to limit the pandemic.
Full-year output was already expected to dip slightly to 1.27 million this year but will now fall to 1.06 million, assuming Britain secures a zero-tariff deal with the EU due to kick in on Jan. 1, said the Society of Motor Manufacturers and Traders (SMMT).
“The impact could be far more severe if the crisis, and therefore shutdowns, were to last for months instead of weeks,” it said.
More
https://uk.reuters.com/article/uk-health-coronavirus-britain-autos/coronavirus-to-cut-uk-car-output-by-over-15-more-if-crisis-lasts-months-trade-body-idUKKBN21E00T
Global smartphone sales fell 14% in February as coronvirus spread - Counterpoint
March 26, 2020 /
5:20 AM
SHANGHAI (Reuters) - Global smartphone sales tumbled 14% in February as
the coronavirus spread in China and overseas, Counterpoint Research said on Thursday,
a likely harbinger of more declines as outbreaks worsen in many parts of the
world.
The outbreak prompted Apple Inc and other smartphone makers to shut
their China stores in February and government data suggests Apple sold less
than 500,000 smartphones in the mainland Chinese market during the month..
China, which saw sales drop 38% in February from a year earlier, is now
showing signs of recovery with many stores re-opening in mid-March.
There are also signs of recovery in South Korea, but for other parts of
the world, “the worst is yet to come,” said Jean Park, a senior analyst at
Counterpoint.
Smartphone makers are facing new supply chain disruptions as more
countries impose lockdown orders. On Tuesday, Foxconn, one of Apple’s key
suppliers, said it would suspend operations in India in compliance with
government orders.
Ford's debt gets downgraded to junk by S&P
Published: March 25, 2020 at 5:18 p.m. ET
S&P Global Ratings late Wednesday
downgraded Ford Motor Co. F,
+8.88% debt to junk, saying the auto maker's credit metrics
and "competitive position" were already borderline for an
investment-grade rating before the coronavirus outbreak, "and the expected
downturn in light-vehicle demand made it unlikely that Ford would maintain the
required metrics."
Ford's debt was downgraded to BB+ from
BBB-. The outlook was negative, which reflects the 50% chance that S&P
could lower the rating on Ford "on account of longer-than-expected plant
shutdowns or a potential economic recession leading to negative cash flow generation,
eroding liquidity, and higher debt leverage," the ratings agency said.
Shares of Ford fell 3.5% in the extended session Wednesday after ending the
regular trading day up 9%.
India's coronavirus cases tick up despite immense lockdown
March 26, 2020 /
8:30 AM /
NEW DELHI (Reuters) - Three more
people infected with coronavirus died overnight in India as the government
sought on Thursday to improve basic services to 1.3 billion people locked
indoors to slow the spread of the disease.
Streets were silent across India’s cities and towns on the second day of
a three-week, 24 hour shutdown as people heeded Prime Minister Narendra Modi’s
call not to step out of homes except in emergencies or to buy food and other
necessities.
Lines of people, wearing masks and some with gloves, could be seen
outside small neighbourhood shops in Delhi and Mumbai, among other cities.
Trucks were stranded at state borders and public transport was
withdrawn. Police have strictly enforced the lockdown even though Modi said
essential services would be maintained.
---- The health ministry said the number of cases of coronavirus had risen to 649, of which 13 had died.
The numbers are still small compared with those in China, Italy and
Spain, but health experts have warned that the world’s second most populous
country faces a tidal wave of infections if tough steps are not taken.
Dr. Mike Ryan, the WHO’s top emergencies expert, told a Geneva news
conference that with the lockdown in place, India had a window of opportunity
to expand testing, surveillance and quarantine facilities and said its success
with eliminating polio was an example.
---- The number of cases rose to 1,102 in neighbouring Pakistan with eight deaths, with most cases in Sindh province that is under a lockdown. But infections in Punjab, the most populous province, are picking up now, government data showed.
On Wednesday, Pakistan said it was seeking a fresh $1.4 billion loan
from the International Monetary Fund (IMF) to help it deal with the economic
slowdown from the coronavirus.
Pakistan is already on a three-year rescue package that began last year
as the country of 208 million people wrestles with a balance-of-payments
crisis.
More
South Korea pleads with residents to stay in isolation, U.S. military reports new coronavirus cases
March 27, 2020 /
1:36 AM
SEOUL (Reuters) - Authorities in South
Korea pleaded with residents on Friday to stay indoors and avoid large
gatherings as new coronavirus cases hovered close to 100 per day, including
multiple people working on an American military base in the country.
South Korea reported 91 new coronavirus cases on Friday, taking the
national tally to 9,332, the Korea Centers for Disease Control and Prevention
said.
The country has reported similar daily numbers for the past two weeks,
down from a high of over 900 in late February.
The government has sought to convince a restless public that several
more weeks of social distancing and self-isolation may be needed to allow
health authorities to tamp down the smaller but still steady stream of new
cases.
---- The U.S. military command this week also
moved to try to restrict the movements of roughly 28,500 American troops
stationed in South Korea.
On Friday United States Forces Korea (USFK) reported that an American
contractor had tested positive, the third case to be confirmed this week among
Americans working at the sprawling Camp Humphreys, which hosts the headquarters
of the U.S. military command in South Korea.
Late on Thursday an American soldier stationed at the camp south of
Seoul tested positive, as did another American contractor also working there
earlier this week.
That makes 12 people - including two soldiers - related to USFK to test
positive.
Officials are seeking to trace the patients’ previous movements,
including the soldier, who was at work and other locations at Camp Humphreys as
late as the day she tested positive.
USFK declared a public health emergency, which gives commanders more
authority to ensure “total force compliance” with regulations aimed at stopping
the spread of the disease by restricting the movements of not only troops, but
also their families, as well as other civilians who work on the bases.
More
"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."
Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, rising concern over global food supply chains.
Fresh produce in Europe set to be more scarce as coronavirus strikes
March 26, 2020 /
9:10 AM
NAIROBI/LONDON
(Reuters) - Fresh fruit and vegetables will become increasingly scarce in
Europe, suppliers warn, as the coronavirus pandemic hampers the global movement
of produce and of the people needed to gather crops.
Governments are looking at ways to ease any shortage, including “green
lanes” to allow fresh produce to move quickly across EU borders, recruiting a
“shadow army” of harvesters and loosening travel rules for migrant workers.
While Europe’s supermarkets say they are still getting most produce,
supply pressures are building at source, including in Africa, a key provider of
fresh goods, and within Europe.
Stores that are already dealing with hoarding by customers may struggle
to keep shelves stocked.
In Kenya, a major supplier of green beans and peas to Europe, half of
the workers in the sector have been sent home on mandatory leave because of the
industry’s inability to ship orders, even as demand from European retailers
surge.
“Their (European) stocks are being depleted by the
day,” said Okisegere Ojepat, chief executive of the Fresh Produce
Consortium of Kenya which groups over 200 growers and exporters.
Shipments from another key supplier, South Africa, are becoming more
challenging with the country set to begin a 21-day lockdown this week.
“We were in reasonably good shape until earlier this week but now things
are becoming very difficult,” said Hans Muylaert-Gelein, Managing Director at
Fruits Unlimited, a South Africa-based company that exports fruits and
vegetables to the UK.
“More and more flights are being grounded so I expect there are going to
be big disruptions.”
Those planes that are flying are charging more. Operators have tripled
the price per kilo of produce to $3 (2.53 pounds) in the past two weeks, said
Hosea Machuki, head of the Fresh Produce Exporters Association of Kenya
representing 117 growers and exporters.
Western supply chains are buckling as problems ranging from a shortage
of truck drivers to restrictions on seafarers hit the smooth flow of goods,
freight logistics operators say.
Even longer-lasting produce like citrus fruit, which is normally transported by sea, could be stranded because of the shortage of containers linked to China’s shutdown, said Muylaert-Gelein.
“Oranges and lemons, the old ambassadors of Vitamin C, are in high demand. Also roots, carrots, cabbages, anything that has health properties people have stocked up on,” he told Reuters.
NOT ENOUGH WORKERS
A shortage of migrant workers also threatens to disrupt production in several top European suppliers including Spain, the biggest exporter of fruit and vegetables in the EU.Some 16,000 Moroccan seasonal workers, mostly women, were expected to arrive in the Huelva region in Spain to pick strawberries and red fruits under an agreement between the two countries.
Less than half had made it by March 12, as Morocco closed its borders to passenger traffic, said Abdelmounaïm Madani, head of the Moroccan job promotion agency ANAPEC. The country’s lockdown is due to last until April 20.
More
Joseph J. Cassano, a
former A.I.G. executive, August 2007, on Credit Default Swaps that wiped out
A.I.G in 2008.
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.
No
technology update today. Today the alternate view to mine on the economy, from
someone who got the Great Recession right and in advance. I can only hope he’s
right and I’m wrong.
But
if he’s right and I’m wrong, the best buy in the world right now is fully paid
up physical gold and silver.
Rosenberg: Silver linings and why a depression may now be averted
At first, I was of the view that the hole being driven into the economy
by the spreading virus and the national lockdown was going to be far too big for
policymakers to fill. All the more so in an environment where corporate balance
sheets were stretched to the max and an unprecedented volume of business sector
debt needing to be refinanced through the remainder of the year.
But the fiscal proposals being rolled out day after day since last week
have been absolutely over the top. The legislation working its way through
Congress literally floods the economy with an extraordinary amount of cash — it
would direct US$1,200 to most adults and US$500 for most children — at a time
when the Fed’s balance sheet has become totally open-ended.
The contentious issue with the Democrats is the proposed US$500-billion
funding program for loans and loan guarantees (opposition because the Treasury
Department would have broad discretion over who receives the money). The bill
also provides for US$150-billion to states and cities, US$130 for hospitals and
there would be an additional US$350-billion in loan guarantees for small
businesses to help them avoid layoffs, and many of those loans could be
forgiven if firms meet certain metrics. The government is basically saying to
the business sector that so long as you pay your rent and wages and maintain
your staff, you will be made good. Not every business gets saved here, but most
will.
And then there is the Fed acting not just as a liquidity provider on a
major scale, but now as the lender of first and last resort. The Fed has done
more in the past month than it did in most of the first year of the Great
Financial Crisis.
There actually is a chance, just based on the numbers alone, that all of
this infusion of money into the economy helps stem the recession in its tracks
in the second quarter, and blaze the trail for a sharp recovery, believe it or
not.
Just as everyone, even the bulls, have thrown in the towel on the
V-shaped recovery, maybe that now becomes the big surprise. The long-term
ramifications of all this fiscal and monetary largesse are unknown, but that
problem is for future taxpayers to worry about. This is not just an income and
debt transfer on an epic scale, but also a generational transfer — at least Gen
X will now join the Baby Boomers on the “most hated list” by the Millennials
and Gen Z crowd who will end up paying for all this.
More
Another
weekend with half the world under lockdown, what could possibly go wrong? Have
a great weekend everyone, try to stay at least 6 feet away from anyone coughing
or sneezing.
“Fiat-money! Let the State 'create' money, and make the poor
rich, and free them from the bonds of the capitalists! How foolish to forego
the opportunity of making everybody rich, and consequently happy, that the
State's right to create money gives it! How wrong to forego it simply because
this would run counter to the interests of the rich! How wicked of the
economists to assert that it is not within the power of the State to create
wealth by means of the printing press!-
Ludwig von Mises, The Theory of Money and Credit
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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