Wednesday, 8 April 2020

Bear Market Rally Ends. Hopium Dies.


Baltic Dry Index. 596 -08 Brent Crude 32.69 Spot Gold 1651

Coronavirus Cases 08/4/20 World 1,435,222 Deaths 82,259

COVID-19 Resource Centre

Latest Content COVID-19 Archive

To assist health workers and researchers working under challenging conditions to bring this outbreak to a close, The Lancet has created a Coronavirus Resource Centre. This resource brings together new 2019 novel coronavirus disease (COVID-19) content from across The Lancet journals as it is published. All of our COVID-19 content is free to access.


"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

Well it was fun while it lasted, but bear market rallies never last. They can’t last until the underlying economic pain and destruction has run its full course.

At present, we are only in the beginning of the global economic pain and destruction. We haven’t seen anything yet.

Still to come, more unemployment, a tidal wave of bankruptcies, landlord tenant disputes, a real estate implosion, a collapse in the velocity of money.

Deflation, and if the central banksters and bent politicians misplay their hand, a great global inflation and social disorder, as broken supply chains and a lack of farm workers leads to food and goods shortages, chased by an avalanche of trillions of newly created fiat money out of thin air

Below, when harsh reality returns.

Asian markets mostly lower on worries about pandemic damage


Published: April 8, 2020 at 12:07 a.m. ET
Asian shares were mostly lower, gyrating in early Wednesday trading amid uncertainty over the coronavirus outbreak, which continues to claim more lives around the world.

Japan’s Nikkei 225 NIK, 1.14% inched up 0.4% in morning trading. Australia’s S&P/ASX 200 XJO, 0.42% was down 0.2%, while South Korea’s Kospi 180721, 0.14% lost nearly 0.5%. Hong Kong’s Hang Seng HSI, -0.98% fell 1%, while the Shanghai Composite SHCOMP, -0.32% dipped 0.3%.
The rally on Wall Street suddenly vanished in a market dominated by sharp swings responding to the ups and downs of the news about the pandemic. 

“The recent risk rally faded quickly despite recent stimulus efforts from both monetary and fiscal authorities, with market players coming to terms with the unabated rise in fatalities as the virus continues to spread,” Prakash Sakpal and Nicholas Mapa, economists at ING, said in a report.

In Asia, Japan’s state of emergency kicked in, focused on seven urban areas, including Tokyo, with strong government requests for people to stay home and restaurants and stores to close for a month. However, there were scant signs of any change in behavior during the morning rush hour.

The S&P 500 SPX, -0.16% dipped 0.2% to 2,659.41 after erasing a surge of 3.5% earlier in the day. The market’s gains faded as the price of U.S. crude oil abruptly flipped from a gain to a steep loss of more than 9%.

Even though economists say a punishing recession is inevitable, some investors have begun to look ahead to when a peak in new infections would offer some clarity about how long the downturn may last and how deep it will be.
More
https://www.marketwatch.com/story/asian-markets-mostly-lower-on-worries-about-pandemic-damage-2020-04-08?mod=mw_latestnews



NEW YORK (AP) — New York state reported 731 new COVID-19 deaths Tuesday, its biggest jump since the start of the outbreak, dampening some of the cautious optimism officials have expressed about efforts to stop the spread of the virus.

The state’s death toll grew to 5,489.

The alarming surge in deaths comes as new hospital admissions have dropped on average over several days, a possible harbinger of the outbreak finally leveling off. Cuomo said the death tally is a “lagging indicator” that reflects the loss of critically ill people hospitalized earlier.

“That’s 731 people who we lost. Behind every one of those numbers is an individual. There’s a family, there’s a mother, there’s a father, there’s a sister, there’s a brother. So a lot of pain again today for many New Yorkers,” Cuomo said at a briefing at the state Capitol.

The state has been recording more than 500 deaths a day since late last week. The number of confirmed cases — which does not include infected people who have not been tested — is close to 139,000 statewide.

----A crew member of a Navy hospital ship sent to New York City for the coronavirus outbreak has tested positive for the disease.

The USNS Comfort crew member tested positive Monday and was being isolated, the Navy said in a prepared statement. The positive test will not affect the hospital ship’s mission to receive patients, according to the Navy.

The Comfort has treated relatively few non-COVID-19 patients since arriving in the city last week. But President Donald Trump said Monday he’d allow coronavirus patients aboard the ship.

The Pentagon said the ship and a military medical hospital constructed inside a nearby Manhattan convention center now have a total of 110 patients — a negligible number in a city where regular hospitals are overwhelmed with thousands of sick people.
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April 8, 2020 / 3:31 AM
BEIJING (Reuters) - Japanese automaker Nissan (7201.T) said on Wednesday its sales in China fell 44.9% from a year earlier to 73,297 units in March, as the coronavirus epidemic continues to hit the world’s biggest car market.

Nissan, which has a joint venture with Hubei-based Dongfeng Motor (0489.HK), said it sees “signs of recovery in the market”, according to a statement.

Rival Toyota’s (7203.T) China sales dropped 15.9% year-on-year in March while Honda’s (7267.T) fell 50.8%.


April 8, 2020 / 4:47 AM
(Reuters) - Tesla Inc (TSLA.O) told employees on Tuesday it would furlough all non-essential workers and implement salary cuts during a shut down of its U.S. production facilities because of the coronavirus outbreak.

Tesla said it planned to resume normal operations on May 4, barring any significant changes, according to an email sent to U.S. employees by in-house counsel Valerie Capers Workman, which was viewed by Reuters.

The company, which suspended production at its San Francisco Bay Area vehicle and New York solar roof tile factories on March 24, said in the email the decisions were part of a broader effort to manage costs and achieve long-term plans.

Tesla did not immediately respond to a request for comment.

The coronavirus pandemic has slashed U.S. demand for cars and forced several other automakers to furlough U.S. workers.

Pay for salaried Tesla employees will be reduced beginning on April 13 and cuts will remain in place until the end of the second quarter, the email said.

In the United States, workers’ pay will be cut by 10%, directors’ salaries by 20% and vice presidents’ salaries by 30%. Comparable reductions will be implemented abroad.

Employees who cannot work from home and have not been assigned to critical work onsite factories will be furloughed, with workers maintaining their healthcare benefits until production resumes, the email said.
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April 7, 2020 / 2:07 PM
LONDON (Reuters) - Global airlines cannot afford to refund cancelled flights because of the coronavirus crisis, said the head of the industry’s representative body IATA, and carriers are issuing vouchers instead as they conserve cash to survive.

“The key element for us is to avoid running out of cash so refunding the cancelled ticket for us is almost unbearable financially speaking,” IATA Director General Alexandre De Juniac told an online news conference on Tuesday.

Airlines have been criticised by consumer groups for breaking rules over providing refunds within set time limits.

IATA also said that one-third of global airline employees have either been furloughed or lost their jobs.


Published: April 7, 2020 at 9:52 a.m. ET
The federal government’s Paycheck Protection Program offering $350 billion in loans to small businesses has attracted widespread interest, but it’s also raised plenty of questions from both borrowers and lenders.

The program was created by the $2.2 trillion stimulus bill that, among other things, is trying to throw a lifeline to small businesses that need money now, before the coronavirus outbreak permanently closes their doors.

The Paycheck Protection Program is meant get working capital to small businesses and enable them to keep staff on their payrolls. The loans are potentially forgivable and the application process formally kicked off last week.

Businesses have already applied for more than $1.8 billion in loans, Treasury Secretary Steven Mnuchin said Friday on Twitter TWTR, 6.057%. President Donald Trump said he would ask Congress for more money if the earmarked $350 billion ran out.

But banks have said they need more clarity on the rules for the program, and business owners told MarketWatch they’re confused by the loan conditions.

The National Federation of Independent Business, a trade association for small businesses, said the program has had a rocky rollout.

“We are hearing from far too many small businesses, [Friday], that they are being shut out of the Paycheck Protection Program forgivable loan program,” NFIB President Brad Close said in a statement. “Small businesses make up half of our economy and employ nearly half of all workers, but this has the potential to be the last straw for many small businesses and their employees.”

“There are still so many questions that still have to be answered and clarified, as far as business operations,” said Holly Wade, NFIB’s director of research. “We have basic parameters. We’re hearing from members with specific situations and because situations are so specific, it’s difficult.”

Here’s a look at what business owners need to know about the Paycheck Protection Program.
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Bills become out of reach as coronavirus forces companies to close and customers to stay at home

Will Parker April 3, 2020 4:26 pm ET
About half of U.S. small businesses haven’t paid their full rent or mortgage yet this month as a result of the coronavirus pandemic, a new survey suggests.

In the poll, conducted on Thursday and Friday by Alignable, a small business social networking company, about 30% of the more than 1,000 respondents reported making no rent or mortgage payment in April, while 20% said they had made only a partial payment.

The remaining half reported paying their entire rent on time. Only a quarter of respondents said their landlord or bank offered a reduction or deferral on what they owed. The survey was of companies with up to 50 employees, including retail, restaurant, auto-repair and other small businesses.

The preliminary findings illustrate the crisis affecting small businesses and how their troubles could set off a financial chain reaction that could inflict heavy damage on landlords and lenders across the U.S.

“I think this shows the time-sensitive need for the policy response to get liquidity in the hands of small businesses,” said Michael Feroli, chief U.S. economist at JPMorgan. “Half of all small businesses have only 15 days or less worth of cash buffers, and with shelter-in-place orders likely to persist they will need to replace lost revenue in a hurry.”

 



David Rosenberg  April 7, 2020 12:23 PM EDT

From my lens, what we are seeing unfold this week in equities is a classic bear market rally. It is not the start of a new bull market. This run-up is purely speculative, nothing fundamental behind it, and we can see that volumes have been way below average, which tells you that there is not a very high conviction level — nor should there be.

What we have experienced in the past six weeks is not a correction. We are in a full-fledged bear market, and these episodes can easily last a year (or more) and there are always sharp and short rallies along the way. Indeed, we have seen a seven per cent surge in the S&P 500 just six other times in the past seven decades and they all occurred at times of severe stress. Two such moves happened this cycle (March 13 and March 24), three in the 2008-09 vicious bear market and one other time, which was the surge following the October 1987 crash.

I should add that it is always a tad strange when you get a surge like we had on Monday and the one sector that you want to own in a recession, utilities, soars nearly eight per cent, emerging as one of the leaders and not even needing the helping hand of lower U.S. Treasury yields. And when the two leading stocks are Carnival Corp. and Boeing Co., you know this is little more than a glorified short-covering bounce.

---- I’m less bearish, but far from bullish. The recession now seems to be short and severe, but there is no V-shaped recovery, either. Any re-opening of the economy promises to be gradual and limited to stores and malls. Nobody is going into big crowds, events or airports any time soon. At the same time, we have to respect what the markets are signalling to us. We had absolutely horrific claims and jobs reports last week. Claims were twice what the consensus had penned in and payrolls were seven times worse. We’re going to find out next month that the unemployment rate in April gapped up to 13 per cent, about where it was in 1931 — the worst ever in the modern era was November and December in 1982 at 10.8 per cent. At the same time, Jim Bullard, head of the Federal Reserve Bank of St. Louis, came out last week with a forecast of a 32-per-cent peak in the unemployment rate, and you’ll see that means 47 million jobs lost when you go on the Fed bank’s website.
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Covid-19 Corner

Today, a new use for an old idea. British ingenuity at work. Bring on Brexit.

Australia opts for hydroxychloroquine and chloroquine. I seem to remember reading something about it working best with a zinc supplement, and when given early. They can’t be used with patients with certain heart conditions but all doctors already know that.

Necessity is the mother of all inventions, goes the old saying.

Modern iron lung designed to address ventilator shortage

David Szondy April 06, 2020
British engineers are developing a modern version of the Negative Pressure Ventilator (NPV), more popularly known as the "iron lung," to provide COVID-19 patients under the care of the NHS with a simple, inexpensive alternative to ventilators.

One of the resources that is in critically short supply for treating COVID-19 patients in need of respiratory support is ventilators. They help to support breathing in people whose lungs have been heavily affected by the virus, but these machines face a number of problems.

The most obvious difficulty is that ventilators are in short supply across the world as health authorities scramble to secure enough to meet the current and estimated demand as the pandemic spreads. They are also complex, expensive, require monitoring by trained personnel, and are dangerous to use on even healthy people because they require the patient to be intubated and sedated, and sometimes even paralyzed.

Such Intermittent Positive Pressure Ventilators (IPPV), as they are formally known, work by means of positive pressure. That is, they pump air or oxygen directly into the lungs as a way to help a patient breathe. The iron lung is essentially the opposite.

First suggested in the 17th century, an iron lung, in its classic form, is a large, airtight cylindrical chamber big enough to hold a person, whose head sticks out at one end through a special collar. Inside the chamber is a diaphragm hooked to an electric motor. As the motor turns, it operates a crank that causes the diaphragm to expand and contract. As it does so, the volume inside the chamber becomes larger and smaller, causing the air pressure to rise and fall. This causes the patient's chest to expand and contract, allowing them to breathe even if they are totally paralyzed.

Such iron lungs were a common sight in hospitals and even private homes during the height of the polio epidemics of the 20th century, though they have since been superseded by more sophisticated machines. But COVID-19 might give them a new lease on life.

The product of the University of Warwick, Marshall Aerospace & Defence Group, the Imperial NHS Trust, the Royal National Throat Nose and Ear hospital, and teams of citizen scientists, medical clinicians, academics, manufacturers, and engineers, the new NPV device, called the "exovent," has already reached the prototype stage and will be tested at two intensive care clinics in the UK.

Unlike ventilators, the exovent doesn't require intubation and is much simpler in design and operation. According to the consortium responsible for its design, patients can remain awake, take medications, eat and drink, and talk to their loved ones on the phone. In addition, the machine improves heart efficiency by 25 percent over conventional ventilators, which can adversely affect cardiac functions.

The developers also say that the exovent can be used in regular wards, which frees up ICU beds for more serious cases. Enclosing only the thorax, the machine does not use compressed air or oxygen, has only a few moving parts, and the components are readily available. The design is also adaptable for individual patients.

It's estimated that, once approved, 5,000 exovents could be manufactured a week in the UK.

"We are delighted to be working with exovent to help scale up their non-invasive ventilator from prototype to volume manufacturing," says Margot James, Executive Chair, Warwick Manufacturing Group (WMG), University of Warwick. "Our engineers and researchers are collaborating with the exovent team on the design, engineering, component sourcing and assembly of the ventilator. I am extremely proud of the unstinting and dedicated efforts of our research team, led by Archie MacPherson at WMG, and glad that we are able to apply our expertise to this important project."

Sources: University of Warwick, Marshall Aerospace & Defence Group

Controversial drug hydroxychloroquine to be given to coronavirus patients in Australia

Infectious diseases experts urge caution amid concerns about anti-malarial’s possible side-effects
Tue 7 Apr 2020 08.16 BST

A controversial anti-malaria drug will be given to Australian Covid-19 patients in hospitals outside of clinical trials, the federal government confirmed, after the therapeutic goods registration requirements for two drugs were waived to allow them to be imported to and stockpiled in Australia.

The drugs, hydroxychloroquine and chloroquine, are being explored in clinical trials around the world for their potential as a coronavirus treatment to ease symptoms, or as a preventative drug to stop people being overcome with the infection. Trials are exploring use of the drugs on their own as well as in combination with others.

But clinicians have warned that hydroxychloroquine can cause severe and even life-threatening side-effects, and have cautioned against using it for conditions for which it has not been tested. It is a proven treatment for malaria and for some autoimmune conditions.
More
https://www.theguardian.com/world/2020/apr/07/controversial-malaria-drug-hydroxychloroquine-to-be-given-to-coronavirus-patients-in-australia

Malaria Drug Helps Virus Patients Improve, in Small Study

A group of moderately ill people were given hydroxychloroquine, which appeared to ease their symptoms quickly, but more research is needed.
April 1, 2020.

The malaria drug hydroxychloroquine helped to speed the recovery of a small number of patients who were mildly ill from the coronavirus, doctors in China reported this week.

Cough, fever and pneumonia went away faster, and the disease seemed less likely to turn severe in people who received hydroxychloroquine than in a comparison group not given the drug. The authors of the report said that the medication was promising, but that more research was needed to clarify how it might work in treating coronavirus disease and to determine the best way to use it.
more


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.

World's Largest Offshore Wind Farm: Dogger Bank

Sarah Moore
Work is set to start on a new project this year that will see the construction of what will be the world's largest offshore wind farm. Soon, Britain's homes will be powered by 853 ft-tall turbines, making them the largest offshore wind farm turbines in the world. They will generate clean energy as the powerful offshore winds turn their 351 ft blades.

The project that is being developed by SSE and Norway's Equinor will see a fleet of futuristic wind turbines built over three years on an artificial island in the North Sea, known as Dogger Bank, just 130 km from Yorkshire, off the UK's east coast.

A total of 4.5 million homes will be able to reap the benefits of the project's generation of clean energy, with a single turbine having the capacity to generate power for 16,000 homes.

The Dogger Bank Wind Farm Capacity

The Hornsea One project, which is set to open in 2020, will produce 1.2 GW in energy generated by turbines, making it the world's largest offshore wind farm. However, the Dogger Bank Wind Farm will overtake this once it opens in 2023 with a capacity of 3.6 GW. Rather than competing with one another, the projects will be part of a wider plan to help the UK meet its renewable energy and carbon footprint targets.

The UK's Carbon Emission Targets

In 2019, a monumental step forward in the UK's efforts to become carbon neutral was achieved, with statistics revealing that more of the country's energy was produced by renewable sources than it was fossil fuels in the third quarter of 2019. The UK government has set a target to reduce all emissions to "net zero" by 2050.

Of the country's renewable energy sources, wind power is currently the most significant, with 20% of the UK's total electricity being generated by this sector. The increase in wind power capacity over recent years has been attributed as a significant cause of the country being able to use more renewables than fossil fuels.

How Will the Dogger Bank Project Impact the UK's Renewable Energy Targets?

The opening of Dogger Bank will significantly increase the UK's renewable energy capacity further and help the country to make the switch to renewables by ensuring renewable energy production is more efficient and cost-effective than fossil fuels.
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Alan Schwartz, CEO Bear Stearns, March 12, 2008. Bust March 16, 2008.

The Monthly Coppock Indicators finished March

DJIA: 21,917 +45 Down. NASDAQ: 7,700 +149 Down. SP500: 2,585 +38 Down.

The NASDAQ and S&P have joined the DJIA in down. All three monthly slow indexes have collapsed.

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