Baltic Dry Index. 612 -11 Brent Crude 28.34 Spot Gold 1511
Covid-19 Pandemic finally
underway, according to the WHO, at long last!
Coronavirus Cases 18/3/20
World 202,276 Deaths 8,012 (Maybe.)
Economists
are about as useful as astrologers in predicting the future (and, like
astrologers, they never let failure on one occasion diminish certitude on the
next).
Arthur
Schlesinger, Jr.
This is getting
tedious. Every time I hear a helicopter approaching now, I rush outside with a large bin liner, but
so far no money has been dropped in my direction. I hope when they do start dropping helicopter
money, they remember to use the 5, 10 and 20 Pound notes, and aren’t cheapskates
just dropping large dangerous bags of steel
one Pound coins.
It is the start of
helicopter money. Governments everywhere have started announcing bailout plans
for everyone and everything, to undo the collapsing global economy due to the
coronavirus panic.
Call me old
fashioned, a dinosaur from a pre-historic age, but I doubt any government can
live up to all the brave hype. Going all
in, for a full Soviet Union monetary policy is unlikely to work in the current pandemic
disaster.
For one thing,
printing unlimited money, or its electronic modern version, will devalue
eventually all existing money, with dire consequences for most unconnected to
the increasingly dodgy central banks.
For another, the
electronic printing standard, is only a very short term gamble at best. A nation state, with its own fiat currency, might
get away with monetary inflation for a short time, but as a “whatever it takes”
long term policy, it probably ends in the death of all fiat currency.
Below, welcome to the
brave new world of helicopter money. Be sure to get yours first while it still
has spending power.
"When a President does it,
that means that it is not illegal."
President Richard M. Nixon.
Asian markets gain after Trump promises economic stimulus to offset outbreak
Published: March 18, 2020 at 12:05 a.m. ET
Major Asian stock markets were higher Wednesday after Wall Street
rebounded on President Donald Trump’s promise of aid to get the U.S. economy
through the coronavirus outbreak.
Benchmarks in Shanghai, Tokyo and Hong Kong all advanced. Australia’s
main index fell 5% and smaller Asian markets were mixed.
The White House proposal could approach $1 trillion in spending to ward
off the pressure of business closures to contain the virus. The Federal Reserve
announced more measures to keep financial markets operating.
On Wall Street, the benchmark S&P 500 index rose by an unusually
wide daily margin of 6%, regaining just under half of the previous day’s
history-making loss. Professional investors expect more big daily swings in
both directions until the spreading virus is brought under control.
Treasury Secretary Steven Mnuchin said Trump wants to send checks to
Americans in the next two weeks to help support them while more parts of the
economy come closer to shutting down.
The proposal would include $250 billion for small businesses and $50 billion for airlines.
The measures are a good start but investors need to see the number of infections slow before markets can find a bottom, analysts said. The number of new cases reported in China, where the virus emerged in December, is declining but infections in the United States, Europe and elsewhere are increasing.
“The wash-up has been some signs of green shoots of risk appetite emerging, and some further concerning aspects,” said Chris Weston of Pepperstone Group in a report. “I am not going to call a bottom in the risk story by any means.”
The Shanghai Composite Index SHCOMP, -0.19% rose 1.3% and the Nikkei 225 NIK, -0.59% in Tokyo gained 1.6%. Hong Kong’s Hang Seng HSI, -1.25% added 0.3%.
Those three markets account for the bulk of the region’s stock value.
More
Global powers unleash trillions of dollars to stem spiraling coronavirus crisis
March 17, 2020 /
4:25 PM
WASHINGTON/LONDON
(Reuters) - The world’s richest nations prepared more costly measures on
Tuesday to combat the global fallout of the coronavirus that has infected tens
of thousands of people, triggered social restrictions unseen since World War
Two and sent economies spinning toward recession.
With the highly contagious respiratory disease that originated in China
racing across the world to infect more than 196,000 people so far, governments
on every continent have implemented draconian containment measures from halting
travel to stopping sporting events and religious gatherings.
While the main aim is to avoid deaths - currently at over 7,800 - global
powers were also focusing on how to limit the inevitably devastating economic
impact.
---- Budget forecasters said the scale of borrowing needed might resemble the vast amount of debt taken on during the 1939-1945 war against Nazi Germany.
“Now is not a time to be squeamish about public sector debt,” Robert Chote, head of the Office for Budget Responsibility, which provides independent analysis of the UK’s public finances, told lawmakers.
Underlining how the crisis has shaken even the most august of institutions, Britain’s Church of England suspended services while 93-year-old Queen Elizabeth was to move from Buckingham Place to Windsor Castle outside London, where she and her sister, Margaret, were sent for safety during the blitz of London in World War Two.
France is to pump 45 billion euros ($50 billion) of crisis measures into its economy to help companies and workers, with output expected to contract 1% this year.
“I have always defended financial rigor in peacetime so that France does not have to skimp on its budget in times of war,” Budget Minister Gerald Darmanin was quoted as saying by financial daily Les Echos.
The European Union eased its rules to allow companies to receive state grants up to 500,000 euros ($551,000) or guarantees on bank loans to ensure liquidity.
But even with the promised cash splurges, world stock markets and oil prices were unable to shake off their coronavirus nightmare after Wall Street on Monday saw its worst rout since the Black Monday crash of 1987.
The Philippines was the first country to close markets, while Europe - now the epicenter of the pandemic - saw airline and travel stocks plunge another 7%.
More
UK unveils £330 billion lifeline for firms hit by coronavirus
March 17, 2020 /
7:27 AM
LONDON
(Reuters) - Britain said it would launch a 330 billion-pound lifeline of loan
guarantees and provide a further 20 billion pounds in tax cuts, grants and
other help for businesses facing the risk of collapse from the spread of
coronavirus.
Chancellor of the Exchequer Rishi Sunak again pledged to do “whatever it
takes” to help retailers, bars and airports and other firms, many of which are
reeling from a near-shutdown of business.
“This is not a time for ideology and orthodoxy,” Sunak said on Tuesday,
speaking alongside Prime Minister Boris Johnson. “This is a time to be bold, a
time for courage.”
Britain, criticised by some scientists for moving too slowly to check
the spread of the virus, ramped up its response on Monday when it told people
to avoid pubs, clubs, restaurants, cinemas and theatres.
On Tuesday, it announced plans to cancel routine surgery for three
months to focus the health service on the coronavirus and courts in England and
Wales dealing with serious crimes will not start trials likely to last for more
than three days.
“We must act like any war-time government and do whatever it takes to
support our economy,” Johnson said.
The coronavirus death toll in Britain rose by 16 to 71.
Sunak described Tuesday’s package of measures as unprecedented, although
Britain issued guarantees of around 1 trillion pounds during the global
financial crisis.
The Institute for Fiscal Studies, a think-tank, said Sunak would need to
“come back with more” and Allan Monks, a JP Morgan economist, said excluding
the loan guarantees, the size of Britain’s stimulus measures for this year was
“likely to look small compared to the economic shock underway.”
Sunak said he was including all retail,
hospitality and leisure businesses in the suspension of a property tax,
alongside the new loan guarantee programme which was equivalent to 15% of
British economic output.
More
Below,
the reality of a modern, interconnected, debt fuelled, fiat money, global
economy
closing down. I doubt governments
can keep up with the pace of closure, nor stay for the duration of the global
closedown.
This
is not a global economy like the “Black Monday” stock market crash of 1987. Nor
is this a global economy similar to the Lehman crash and Great Recession of
2008-2009. Then the rest of the world economy was relatively thriving with
people going on about their everyday lives.
Ideal conditions for a “V” recession and recovery.
Right
now we are busy closing down everything that hasn’t already closed down. Millions are about to start losing their
jobs, savings, and lifestyle.
Worse,
corporations are loaded up with over a decade of unrepayable debt. Much of it
used to do stock buybacks simply to inflate the stock price to trigger the
stock options of the greedy top officers running the corporations.
The
central banksters fuelled the “everything bubble” that coronavirus just burst.
Humpty Dumpty simply can’t be put back together again, but that won’t stop them
trying. I think we are headed into a “L” recession, if not worse.
My
best guess is that the coronavirus crisis continues on out to March next year,
when by then, hopefully we have a vaccine, better drugs, and the rise of some
herd immunity.
Stocks
remain a sell into rallies. Modern money now needs to find a home in tangible
assets.
"Under capitalism man exploits man; under socialism the
reverse is true."
Polish proverb under communism.
Nevada orders casinos and other non-essential businesses to close amid outbreak
Published: March 17, 2020 at
10:05 p.m. ET
LAS VEGAS — Every gaming device in one of the world’s
gambling meccas must be turned off by Wednesday, Nevada’s governor said in
announcing a monthlong, statewide closure of non-essential businesses amid the
outbreak of the new coronavirus. Bars, movie theaters and gyms should also close by noon Wednesday and restaurants should shutter their dining rooms and only offer takeout or delivery in order to stem the spread of the new coronavirus, said Gov. Steve Sisolak.
“Today it’s clear additional steps must be taken immediately in order to slow the spread of this deadly virus in our state,” Sisolak said at a news conference in Las Vegas. “We absolutely must take this step for every Nevadan’s health and safety. Please, please take this seriously. … Please stay home for Nevada. “
The order from Democrat Steve Sisolak Tuesday night follows similar moves by more than 10 other governors as states scramble to mitigate the risk of exposure to COVID-19.
Sisolak’s order gave thousands of businesses in the tourism capital less than a day to prepare. Though a number of casinos started to close their doors this week, the governor’s sweeping order shutters Nevada’s main industry, anchored by glitzy casinos lining the Las Vegas Strip.
The closures are part of federal guidance recommending social distancing. President Donald Trump has urged Americans to follow sweeping guidelines for the next few weeks, including for older residents to stay home and for all people to avoid gatherings of more than 10 as well as restaurants and bars.
Sisolak’s order comes after many casinos in Las Vegas moved to shut their doors entirely and the mayor of city said she hoped bars and restaurants would be able to stay open.
“My hope is that private industry rises to the top, that they’re allowed to stay open and take care of these families that are paycheck to paycheck,” Mayor Carolyn Goodman told the Las Vegas Review-Journal.
The mayor of Reno had issued an order similar to Sisolak Monday night, telling many of those non-essential businesses to close in that city starting Friday at 5 p.m. Mayor Hillary Schieve initially included casinos but rescinded that, allowing gambling operations to continue.
Nevada has reported more than 50 cases of the virus so far. For most people, the new coronavirus causes mild or moderate symptoms such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia.
In Las Vegas, MGM Resorts International MGM, -6.82% and Wynn Resorts WYNN, -0.76% announced earlier in the week they planned to close their properties. Tuesday morning, three more casino resorts joined in.
The MGM casino closures of 13 properties included the Bellagio and its famous fountain show in front, which often draws a crowd to watch the fountains shooting as high 460 feet into the air, choreographed to lights and music.
The Hoover Dam, near the Arizona border and another Nevada tourist attraction, is temporarily closing to visitors “because of the nature of the structure and an inability to implement social distancing standards recommended by the” CDC, according to a statement.
With businesses closing and tourism expected to drop off, the state is
forecasting a financial hit, but how big is unknown.
In Nevada, gambling taxes are second only to sales taxes as a percentage
of the state’s annual budget. The leisure and hospitality industry directly
employs one of every four workers in the state and has an economic output of
about $68 billion in Nevada, according to the Nevada Resort Association.
More
Volkswagen starts shutting down production in Europe in face of coronavirus
March 17, 2020 /
6:21 AM
FRANKFURT
(Reuters) - Volkswagen Group (VOWG_p.DE) will
suspend production this week at plants in Italy, Portugal, Slovakia and Spain
and is preparing to shut down the rest of its factories across Europe due to
the spread of coronavirus, its CEO said on Tuesday.
The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati,
Lamborghini, Porsche, Seat and Skoda brands, said the uncertainty about the
fallout from the pandemic meant it was impossible to give any forecasts for its
performance this year.
Volkswagen’s powerful works council has concluded it’s not possible for
workers at its plants to maintain a safe distance from one another to prevent
contagion and recommended a suspension of production from Friday.
“Given the present significant deterioration in the sales situation and
the heightened uncertainty regarding parts supplies to our plants, production
is to be suspended in the near future at factories operated by group brands,”
Chief Executive Herbert Diess said on Tuesday.
Production will be halted at VW’s Spanish plants, in Setubal in
Portugal, Bratislava in Slovakia and at the Lamborghini and Ducati plants in
Italy before the end of this week, Diess said.
Most of its other German and European factories will prepare to suspend
production, probably for two to three weeks, VW said.
“2020 will be a very difficult year. The
corona pandemic presents us with unknown operational and financial challenges.
At the same time, there are concerns about sustained economic impacts,” Diess
said.
More
German investor morale crashes on coronavirus fears, economy on 'red alert'
March 17, 2020 /
10:32 AM
BERLIN (Reuters) - The mood among German investors slumped in March to
levels last seen in the 2008 financial crisis due to alarm about the impact of
the coronavirus outbreak, a survey showed on Tuesday.
The ZEW research institute said its monthly survey showed economic sentiment
among investors collapsed to -49.5 from 8.7 in February. Economists had
expected a drop to -26.4.
“The economy is on red alert,” said ZEW President Achim Wambach in a
statement, adding financial experts expect the economy to shrink in the first quarter
and think a contraction is also very likely in the second quarter.
A separate gauge measuring investors’ assessment of the economy’s
current conditions decreased to -43.1 from -15.7. Analysts had forecast a
reading of -30.0.
Renault temporarily halts operations in Spain
Published: March
17, 2020 at 3:50 a.m. ET
Renault
SA will temporarily halt its industrial operations in Spain after the
government there declared a state of emergency due to the spread of the
coronavirus pandemic.
The stop will last for the duration of the state of emergency, the
French car maker said Tuesday, adding that "a temporary employment
regulation plan has been drawn up."
The company said it expects activity to restart quickly after the crisis
is over.
Truckmaker Volvo to temporarily halt production at plants in Gothenburg, Ghent
March 17, 2020 /
1:38 PM
STOCKHOLM (Reuters) - Swedish truckmaker AB Volvo (VOLVb.ST) has decided to
temporarily halt production at its plants in Tuve, Gothenburg and Ghent,
Belgium due to the impact of the coronavirus outbreak, a spokesman said on
Tuesday. The news comes after Volvo late on Monday said the virus outbreak may lead to a material negative financial impact from mid-March, citing possible supply chain disruptions and workforce shortages in production.
---- Eliasson said
production would stop for 15 days or until further notice.
More
'Single biggest shock': Airlines, airports battle coronavirus cash crunch
March 16, 2020 /
11:34 PM / Updated 3 hours ago
SYDNEY
(Reuters) - As Boeing and other U.S. aviation companies angle for billions in
assistance, airlines and airport operators globally are suspending dividends,
selling airplanes and flying cargo on passenger jets amid plunging demand
caused by the pandemic.
Boeing Co (BA.N) confirmed it is in talks with senior White House officials and congressional leaders about short-term assistance for the entire U.S. aviation sector, including suppliers, airlines and airports.
U.S. airlines and cargo carriers have said they are seeking at least $58 billion in loans and grants along with additional tax changes, while airports have sought $10 billion (8.16 billion pounds). European airlines have also stepped up calls for emergency government aid.
“It’s now fair to call this the single biggest shock that global aviation has ever experienced,” Qantas Airways Ltd (QAN.AX) Chief Executive Alan Joyce said in a memo to the airline’s 30,000 staff on Tuesday.
Joyce has worked in the industry for more than 30 years, including during the 9/11 attacks, and led Qantas through the global financial crisis in 2008-2009.
The Australian carrier announced plans to cut international capacity by 90% and domestic capacity by 60% until at least the end of May, grounding the equivalent of 150 planes in response to new travel restrictions.
“Our goal is to protect as many jobs as possible and to make sure we remain strong enough to ride this out,” Joyce told staff in the memo seen by Reuters.
New Zealand’s Auckland International Airport Ltd (AIA.NZ) said it would scrap its interim dividend on top of cost-cutting measures that include a hiring freeze and a halt to discretionary spending.
Air New Zealand Ltd (AIR.NZ) announced on Monday it would cut capacity to Australia by 80% from March 30 to June 30 after both countries said over the weekend that all travellers would need to self-isolate for 14 days after arrival.
Australian airports are set to lose more than A$500 million (250.04 million pounds) in take-off and landing fees this year as capacity plunges, the Australian Airports Association said.
---- Hong Kong’s Cathay Pacific Airways Ltd (0293.HK) said on Monday it had agreed a $703.8 million deal with lessor BOC Aviation Ltd (2588.HK) to sell and lease back six Boeing Co (BA.N) 777-300ER airplanes to raise much-needed cash.
The carrier, one of the earliest and hardest hit by the outbreak due to its proximity to mainland China, said its full-service airlines, Cathay Pacific and Cathay Dragon, had made an unaudited loss of HK$2 billion ($257.5 million) in the month of February alone.
---- The only bright spot for the airline is the cargo market, where rates are surging as a result of the loss of capacity in the belly of passenger aircraft as those flights are cut.
Cathay Pacific and Korean Air Lines Co Ltd (003490.KS) are both flying some planes without passengers to transport cargo due to high demand.
Qantas said it would use some domestic passenger aircraft for freight-only flights to replace lost capacity from regular scheduled services and its fleet of freighters would continue to be fully utilised.
Freight Investor Services on Monday reported a surge in prices across all Asia-Pacific routes. “2020 is fast becoming year of the freighter,” it told clients.
Airbus to pause production in France, Spain
Published: March
17, 2020 at 3:19 a.m. ET
Airbus SE said Tuesday that it is temporarily suspending production and
assembly activities at its French and Spanish sites for the next four days.
The European plane maker said the decision would allow it to evaluate
and apply hygiene, cleaning and self-distancing measures in a bid to tackle the
spread of coronavirus.
"These measures will be implemented locally in coordination with
the social partners," the company said. "Airbus is also working
together with its customers and suppliers to minimize the impact of this
decision on their operations."
UK industry body says most companies not insured for coronavirus closures
March 17, 2020 /
10:57 AM
LONDON (Reuters) - Most companies in Britain don’t have cover for
closures due to the coronavirus epidemic, Britain’s Association of British
Insurers said on Tuesday.
Britain’s government recommended on Monday that people avoid
restaurants, bars and clubs, and work from home where possible, but stopped
short of ordering the businesses to shut their doors.
“Irrespective of whether or not the government order closure
of a business, the vast majority of firms won’t have purchased cover that will
enable them to claim on their insurance to compensate for their business being
closed by the coronavirus,” the ABI said in a statement.
Standard business interruption cover purchased by most companies does
not include forced closure by authorities.
“A small minority of typically larger firms might have purchased an
extension to their cover for closure due to any infectious disease,” the ABI
said.
“In this instance an enforced closure could help them make the claim,
but this will depend on the precise nature of the cover they have purchased so
they should check with their insurer or broker to see if they are
covered.”
"The
London Banker Henry Fauntleroy forged to keep his bank solvent. He was executed
for it in 1824."
Charles
P. Kindleberger, Manias, Panics and Crashes.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled
over.
Today, more bad news from China.
Study finds COVID-19 spread in China fueled by “stealth transmission”
Rich Haridy March
16, 2020
A
new study published in the journal Science has tracked the spread of the
novel coronavirus, SARS-CoV2, across China in January concluding 86 percent of
early infections were undocumented. The researchers suggest a “radical
increase” in identification of undocumented cases is vital to slow the spread.
The study, from scientists at Columbia University, Imperial College
London, UC Davis and the University of Hong Kong, used a computer model to
simulate the spatiotemporal spread of the virus based on reported cases in 375
Chinese cites between January 10 and 23. The model ultimately showed the total
spread of the virus throughout China in January could not be explained by just
accounting for confirmed cases. In fact, the model suggests 86 percent of
infections across that period of time went undocumented.
“The explosion of COVID-19 cases in China was largely driven by
individuals with mild, limited, or no symptoms who went undetected,” says
Jeffrey Shaman, from Columbia University Mailman School and co-author on the
new study. “Depending on their contagiousness and numbers, undetected cases can
expose a far greater portion of the population to virus than would otherwise
occur. We find for COVID-19 in China these undetected infected individuals are
numerous and contagious. These stealth transmissions will continue to present a
major challenge to the containment of this outbreak going forward.”
The study found these undocumented cases were not as contagious as
confirmed cases, with estimates suggesting they were only around half as
contagious. However, the study did report these milder undocumented cases were most
likely responsible for causing 79 percent of the subsequent documented cases.
A secondary simulation tracking infections from the 24th of January to the 8th of February, following China’s implementation of strict control measures, showed a significant reduction in undocumented cases. This affirms the importance of social distancing and broad testing across the entire community.
“Heightened awareness of the outbreak, increased use of personal protective measures, and travel restriction have helped reduce the overall force of infection; however, it is unclear whether this reduction will be sufficient to fully stem the virus spread,” says Shaman.
This is not the first study to suggest a large volume of COVID-19 cases have gone undetected. An Imperial College London study from February estimated two-thirds of all cases worldwide may have gone undetected. And, although this does imply a large number of people may contract COVID-19 and only suffer mild, or even imperceptible symptoms, it also makes the virus’ spread incredibly difficult to control and track.
In
the latest media briefing from the World Health Organization, WHO Director
General Tedros Adhanom Ghebreyesus reiterates the two most important things
right now are for every individual to practice social distancing, and for
countries to expand testing as widely as possible. Testing broadly was the key
message from Director General Tedros in this briefing, and on two occasions he
repeated the mantra, "test, test, test!"
more
Sobering COVID-19 study prompted Britain to toughen its approach
March 17, 2020 /
9:50 AM
LONDON
(Reuters) - A piece of research that helped convince the British government to
impose more stringent measures to contain COVID-19 painted a worst case picture
of hundreds of thousands of deaths and a health service overwhelmed with
severely sick patients.
In a sharp toughening of Britain’s approach to the outbreak on Monday,
Prime Minister Boris Johnson closed down social life in the world’s fifth
largest economy and advised those over 70 with underlying health problems to
isolate.
The projection study, by a team led by Neil Ferguson, a professor of
mathematical biology at Imperial College London, used new data gathered from
Italy, where the infectious disease epidemic has surged in recent weeks.
Comparing the potential impact of the COVID-19 disease epidemic with the
devastating flu outbreak of 1918, Ferguson’s team said that with no mitigating
measures at all, the outbreak could have caused more than half a million deaths
in Britain and 2.2 million in the United States.
Even with the government’s previous plan to control the outbreak - which
involved home isolation of suspect cases but did not include restrictions on
wider society - could have resulted in 250,000 people dying “and health
systems...being overwhelmed many times over,” the study said.
With the measures outlined - including extreme social distancing and
advice to avoid clubs, pubs and theatres - the epidemic’s curve and peak could
be flattened, the scientists said.
“This is going to place huge pressure on us as a society, and
economically,” said Azra Ghani, a professor of infectious disease epidemiology
at Imperial who co-led the work with Ferguson.
This study helped change the British government’s position, according to
those involved with the decision.
More
How one expert sees the coronavirus pandemic playing out over the next week, next month and next year
Published: March 16, 2020 at 3:30 p.m. ET
‘1 - worse than today. 2 - much worse than today. 3 - hard to predict.
that’s why we need to take this seriously now.’
That’s how Joshua Sharfstein, a former top FDA official and current
Johns Hopkins professor, answered this question during an “Ask Me Anything”
session on Reddit Monday: “Can you describe how you see the world situation: 1
— In one week? 2 — In one month?3 — In one year?”
More
"Too bad ninety percent of the
politicians give the other ten percent a bad reputation."
Henry Kissinger.
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?
Solar power has been growing for decades. Then coronavirus rocked the market.
As the coronavirus outbreak rages on, renewable energy is taking a hit. Factory shutdowns in China have disrupted global supply chains for wind turbines and solar panels, with consequences for clean energy progress this year around the world.The spread of COVID-19, now declared a pandemic by the World Health Organization, is expected to slow solar energy’s rate of growth for the first time since the 1980s. On Monday, two major solar panel manufacturers that supply the U.S. utility market, JinkoSolar Holding Co. and Canadian Solar Inc., both saw their stock prices fall by double digits. Bloomberg New Energy Finance, a research firm, previously predicted that global solar energy capacity would grow by 121 to 152 gigawatts this year, but on Friday, the group issued a new report dialing back its prediction to just 108 to 143 Gigawatts.
Disruption in supply is only part of the equation. The new report predicts that as policymakers and businesses focus on short-term stimulus packages to help the economy, energy infrastructure investments and planning will temporarily go by the wayside. This has already happened in Germany, where a scheduled government meeting to resolve questions over the future of renewable energy on Thursday was used instead to plan for the coronavirus. According to the Bloomberg analysis, these trends will slow battery demand and result in lower-than-expected returns on investments in wind.
In the U.S., the utility-scale wind and solar markets are dealing with uncertainty in their supply chains. Utility-scale wind developers have received “force majeure” notices from wind turbine suppliers in Asia who cannot fulfill their contract obligations in time. The term refers to a common clause in contracts that gives companies some leeway in the case of extreme disruptions, like wars, natural disasters, and pandemics. The delay jeopardizes wind projects that were banking on taking advantage of the wind production tax credit, which expires at the end of this year.
Meanwhile, major U.S. solar developers that can’t get their hands on enough panels are issuing their own “force majeure” notices to utilities. Invenergy and NextEra Energy, the developers of the first two utility-scale solar farms in the state of Wisconsin, both cited the clause in late February and warned of delays to the projects. Now NextEra claims its 150 megawatt solar farm is back on track, while Invenergy’s 300 megawatt project is still up in the air.
“I think you’re going to see a lot of force majeure claims under the coronavirus, up and down the supply chain,” Sheldon Kimber, CEO and co-founder of utility-scale clean energy developer Intersect Power, told Greentech Media.
Factories
in China are reportedly starting up
operations again, but the ripple effects of the short-term
disruption strengthen the case for local manufacturing of renewable energy
equipment, according to the
Bloomberg analysis. If there’s any silver lining in this story, it’s that
governments may now have an opportunity to do just that. Fatih Birol, Executive
Director of the International Energy Agency, encouraged
governments that are planning stimulus packages in the wake of the pandemic to
prioritize green investments and capitalize on the downturn in oil
prices to phase out fossil fuels.
An economist’s guess is liable to be just
as good as anybody else’s.
Will Rogers.
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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