Baltic Dry Index. 661 -04 Brent Crude 19.09
Spot Gold 1698
Coronavirus Cases 28/4/20
World 3,065,176
Deaths 211,531
Need is not demand. Effective economic demand requires not merely need but corresponding purchasing power.
Henry Hazlitt
We are in week one
of the great global restart, make that weak one of the great global restart. Restarting, it turns out isn’t going to be easy.
But even if we
could easily overcome broken manufacturing supply chains, an ongoing oil supply
glut, a broken meat supply system, massive and still rising global
unemployment, there’s still a gigantic problem left unaddressed, missing
demand.
If we suddenly restart
building cars, trucks, planes and trains, who is going to buy them? If we
suddenly reopen bars, cafes, hotels and motels, ritzy five star restaurants,
plus all our darkened theatres, who is going to buy all the products, or fill
up all the bars through to darkened
theatres?
At present there
would be very few takers, not enough for most of the restarted businesses to be
profitable. Restarting without a confident spending and buying public probably
just leads to a massive wave of bankruptcy filings.
Below, our very
different world since January 2020.
Asia Stocks Trade Mixed After U.S. Rally; Oil Down: Markets Wrap
By Andreea Papuc
Stocks
were mixed in Asia on Tuesday and U.S. futures dipped after a modest rally on
Wall Street overnight. Crude oil extended sharp losses from Monday.
Shares slipped in Japan and South Korea. Australia turned lower and Hong
Kong climbed. Chinese stocks fluctuated after a report the country would ease
some initial public offering rules. S&P 500 futures retreated after the
index closed at its highest since March 10. West Texas oil futures in New York
slumped below $11 a barrel amid a glut of crude and selling by the biggest oil
exchange-traded-fund. Treasury yields held Monday’s gains and the dollar edged
up. Gold dropped.
“What’s very important is not to get overly comfortable with the pace of the equity markets in the last few weeks,” George Toubia, chief investment director at Westpac Private Wealth, said at a briefing in Sydney. “Given the market has run up a fair bit in the last few weeks, this is an environment to be far more selective.”
More
The ‘Great Repression’ is here and it will make past downturns look tame, economist says
Published: April 27, 2020 at 2:50
p.m. ET
The economic aftermath of the 2008 financial crisis was so
tepid it was referred to as the “Great Recession.” In the wake of the
coronavirus catastrophe, investors need to brace for the “Great Repression,”
which may be even uglier than the downturn of a decade ago.That’s the takeaway from an analysis out Monday from economist David Rosenberg. Rosenberg is often considered a “perma-bear,” but that’s not entirely fair. He’s had his optimistic spurts.
This just isn’t one of them.
Read:No, China’s economy hasn’t gotten better. The implications could be more serious than investors realize
In the “base case” for the U.S. economy, published by his firm, Rosenberg Research, the economy “reopens” in May, in a staggered approach across industries and regions. There are “periodic setbacks in terms of COVID-19 case counts…sufficient to make people less comfortable and confident about spending then they did prior to the crisis. A vaccine is not developed in this forecast, but treatment that alleviates the worst respiratory symptoms” is developed within the next six months, he writes.
What does that mean for the economy and financial markets?
A 30% contraction in real gross domestic product in the second quarter, negative year-over-year consumer price growth for 5 quarters, and an unemployment rate of 14.2% by the end of 2020, averaging 13% throughout 2021.
----Stocks hit bottom in the second quarter, with the S&P 500 SPX, +1.47% at 2,000, then start a “slow recovery.” But it’s meager: the index averages only 2,600 throughout 2021. Put another way, Rosenberg assumes stocks sink 30% in the coming months, then spend most of the next 18 months grinding higher to valuations about 10% lower than today’s levels.
Rosenberg also lays out a “best case,” which depends on a vaccine or treatment emerging in the next six to 12 months. That outlook includes an unemployment rate averaging about 9% for the next two years, a stock-market bottom of 2,500 for the S&P 500 in Q2, and a cyclical low of 29 basis points for the 10-year note in 2021.
The “worst-case” scenario is grim. It involves no vaccine, no treatment,
and a second wave coronavirus outbreak next winter that severely saps business
and household confidence. In this outlook, the jobless rate hits 20% — and
averages 17.5% through 2021.
Outright deflation takes hold. “Think about what years of no pricing
power is going to do to those corporate cash flows in the future,” Rosenberg
writes. “Even government intervention is capable of suffering from the laws of
diminishing demand. Japan is a classic template.”
More
David Calhoun tells plane maker’s shareholders he doesn’t expect air travel to return to 2019 levels for two or three years
By
Andrew Tangel and Doug Cameron
Air traffic may not bounce back for two or three years, Boeing Co. Chief Executive David Calhoun said, outlining the tough outlook for global aviation to the plane maker’s shareholders on Monday.
“The health crisis is unlike
anything we have ever experienced,” Mr. Calhoun said at the annual meeting. “It
will be years before this returns to pre-pandemic levels.”
Mr. Calhoun laid out the
coronavirus pandemic’s toll on the industry: Global airline revenues
are set to drop by $314 billion this year. In the U.S., more than 2,800 planes
are idled. Passenger demand is down 95% from last year.
“We are in an unpredictable and
fast-changing environment, and it is difficult to estimate when the situation
will stabilize,” he added. “But when it does, the commercial market will be
smaller and our customers’ needs will be different.”
Mr. Calhoun offered few specifics about production cuts or planned job cuts, leaving more details for Wednesday, when Boeing reports first-quarter results. Boeing has been weighing production cuts and layoffs and has recently been considering a plan to cut its workforce by about 10%.
To save cash, Boeing has suspended
its dividend, and Mr. Calhoun said Monday that it wouldn’t resume
paying one for some years. The plane maker will need to borrow again this year,
and it will need to repay that debt over the next three to five years, he said.
The Chicago aerospace giant’s
customers have been canceling and deferring plane orders,
intensifying financial strains stemming from the 737 MAX debacle
following the global grounding of that aircraft after two fatal crashes took
346 lives.
Mr. Calhoun’s remarks come as his
counterpart Guillaume Faury, CEO of Boeing rival Airbus SE, said the European
plane maker was bleeding cash and needed to cut costs and jobs.
More
China's industrial profits sank 34.9% in March
Published: April 26, 2020 at 10:58 p.m. ET
BEIJING--China's industrial profits fell at a slower pace in March, but
the near 35% decline reflects the disruptions caused by the virus pandemic, as
the world's second-largest economy struggles to recover.
China's industrial profits declined 34.9% in March from a year earlier,
compared with a 38.3% drop in the first two months, the National Bureau of
Statistics said Monday.
Profits of Chinese industrial firms dropped 36.7% in the first quarter
from a year earlier, the statistics bureau said.
Despite the improvement in March, demand for industrial products hasn't
fully recovered, with profit decline of industrial enterprises still steep and
the profit situation challenging, said Zhang Weihua, an economist with the
statistics bureau.
In the first three months of 2020, China's state-owned enterprises
posted a 45.5% on year decline in profits, while private firms reported a 29.5%
fall. "Decline of private companies' profits narrowed," he said.
Factory-gate prices for the automobile, electronics, chemical and
electrical machinery sectors all declined, falling between 47% and 80.2%, and
weighing on profits for these sectors, the bureau said.
Big restart proves elusive as suppliers wrestle with restrictions, safety worries
Alexa St. John April 26, 2020
For one fleeting moment last week, it looked as if the North American
auto industry was about to come back to life.
It did not.
Tesla, eager to recapture its recent sales momentum, attempted to
restart its U.S. supply chain of Midwestern parts makers, including a Faurecia
injection molding plant in Saline, Mich., 50 miles from Detroit.
But in a scenario that captures just how confounding and dangerous the
global COVID-19 crisis is, Faurecia's factory workers balked at being called
back, saying it appeared to some of them that they were being pressed into
action despite unanswered questions about their safety from the coronavirus
upon returning to plants.
"None of us wants to go back because we think that it's not safe
yet," a Faurecia plant employee who asked to remain anonymous told Automotive
News. "We don't want to be the guinea pigs."
It is the supreme question of the moment.
Parts manufacturers, automakers, truckers and materials producers are
desperately eager to resume building cars and trucks. But given the industry's
complicated network of companies and vendors sprawled across the continent —
and around the world — how?
"I don't think there's answers for all the questions that are out
there right now," said Ray Scott, CEO of Lear Corp., the automotive
seating and electronics supplier with 2019 sales of $19.8 billion and 161,000
employees worldwide.
"You know, even though we feel that we can create the safest
environment, no one is absolutely 100 percent protected if we don't follow the
protocols and adjust," Scott said during an Automotive News podcast
last week. "We have to create different situations and protocols within
those facilities. And in some cases, that may require us thinking about our
plant layout. ... That may require an enormous amount of protective equipment
and different policies and practices within those plants."
More
Finally,
one experts view on what comes next.
Expert who called the 2008 crisis says the signal to sell stocks is coming soon
Published: April 27, 2020 at 7:29 a.m. ET
----In our call of the day, former Goldman
Sachs hedge-fund manager Raoul Pal said the dollar was the world’s “biggest
problem” and that the signal to sell equities was coming soon.
He said the narrative that the Fed printing money would causes a dollar
collapse was “very wrong.”
The chief executive of Global Macro Investor, who predicted the 2008
financial crisis, said: “You see the biggest problem the world faces is the
dollar. We are in a viscous doom loop where slowing growth causes the dollar to
rise, which causes slower growth, which causes the dollar to rise, as all
borrowers play musical chairs to get access to the dollar to service debts.
“Dollar swap lines, QE, jawboning, etc. have done nothing to stop this,”
he added in a post on Twitter.
He
said no printing of money — by the Federal Reserve — would solve what he
described as a “structural” problem. “All attempts to create more money to
solve the dollar standard issue tend to devalue all fiat versus gold. Gold is
rallying on debt deflation probabilities.”
This
year alone has been a blood bath of currencies versus the USD.
“My
guess is that the next debt deflation signal will come when bonds begin to
price in negative interest rates. That day is coming soon... and that will be
the signal to sell equities and the insolvency phase will begin.”
More
Covid-19 Corner
Though
hopefully, we are passing the peak of new cases, at least of the first
SARS-CoV-2 outbreak, this section will continue until it becomes unneeded.
Coronavirus detected on particles of air pollution
Exclusive: Scientists examine whether this route enables infections at longer distances
Fri 24 Apr 2020 14.29 BST
Coronavirus has been detected on particles of air pollution by scientists investigating whether this could enable it to be carried over longer distances and increase the number of people infected.
The work is preliminary and it is not yet known if the virus remains viable on pollution particles and in sufficient quantity to cause disease.
The Italian scientists used standard techniques to collect outdoor air pollution samples at one urban and one industrial site in Bergamo province and identified a gene highly specific to Covid-19 in multiple samples. The detection was confirmed by blind testing at an independent laboratory.
Leonardo Setti at the University of Bologna in Italy, who led the work, said it was important to investigate if the virus could be carried more widely by air pollution.
“I am a scientist and I am worried when I don’t know,” he said. “If we know, we can find a solution. But if we don’t know, we can only suffer the consequences.”
Two other research groups have suggested air pollution particles could help coronavirus travel further in the air.
A statistical analysis by Setti’s team suggests higher levels of particle pollution could explain higher rates of infection in parts of northern Italy before a lockdown was imposed, an idea supported by another preliminary analysis. The region is one of the most polluted in Europe.
Neither of the studies by Setti’s team have been peer-reviewed and therefore have not been endorsed by independent scientists. But experts agree their proposal is plausible and requires investigation.
Previous studies have shown that air pollution particles do harbour microbes and that pollution is likely to have carried the viruses causing bird flu, measles and foot-and-mouth disease over considerable distances.
The potential role of air pollution particles is linked to the broader question of how the coronavirus is transmitted. Large virus-laden droplets from infected people’s coughs and sneezes fall to the ground within a metre or two. But much smaller droplets, less than 5 microns in diameter, can remain in the air for minutes to hours and travel further.
More
https://www.theguardian.com/environment/2020/apr/24/coronavirus-detected-particles-air-pollution
COVID-19 can be spread by building ventilation, say Canadian researchers working on an HVAC fix
Tom Blackwell
April 26, 2020 4:30 PM EDT
The outbreak of COVID-19 at a restaurant in the southern Chinese city of Guangzhou was a puzzle.
The suspected index patient was a visitor from the coronavirus’s epicentre in Wuhan. But the eight other customers who later tested positive were not sitting close enough for droplet transmission, and most of the patrons and staff avoided infection altogether.
A team of local scientists eventually came to an eye-opening conclusion about the episode: tiny particles of virus had hitched a ride on currents created by the eatery’s air-conditioning.
That runs counter to the prevailing view that the novel coronavirus is transmitted only by heavier “droplets.” But for a group of civil engineers at the University of Alberta, the finding was no surprise. In their world, they say, it’s well known that building ventilation systems are efficient disseminators of viruses and other pathogens, and they believe the COVID-19 bug is no exception.
Aided by a $440,000 federal-government grant, they’re now working on ways that buildings could change their HVAC set-ups to curb the risk of infection, what the researchers call a “non-pharmaceutical” intervention against the disease.
----The engineers’ belief in the importance of building ventilation as a transmitter of the COVID-19 virus is not universally held.
The World Health Organization and other public-health bodies, citing the science to date, say the pathogen is spread almost entirely by droplets, heavier particles emitted mostly when infected people cough or sneeze, and which fall down within a short distance. Hence the two-metre rule for social distancing, and the emphasis on washing hands after touching surfaces where virus may have alighted.
“The HVAC systems in most non-medical buildings play only a small role in infectious disease transmission, including COVID-19,” argued the American Society of Heating, Refrigerating, and Air-Conditioning Engineers last month.
----But Chinese and Australian air-quality experts, citing in part the experience with SARS, another coronavirus, argued in a paper earlier this month that as droplets from an infected person start to evaporate, the resulting smaller particles can indeed become airborne.
They point to evidence that passengers confined to their cabins on cruise ships like the Diamond Princess may have been infected through the vessels’ air ducts.
“It is highly likely that the SARS-CoV-2 virus also spreads by air,” they conclude, urging “all possible” action in response, including modifications to ventilation systems. “We predict that … failure to immediately recognize and acknowledge the importance of airborne transmission and to take adequate actions against it will result in additional cases.”
More
https://nationalpost.com/health/covid-19-likely-spread-by-building-ventilation-say-canadian-researchers-working-on-an-hvac-fix
We Still Don’t Know How the Coronavirus Is Killing Us
Over the last few weeks, the country has managed to stabilize the spread of the coronavirus sufficiently enough to begin debating when and in what ways to “reopen,” and to normalize, against all moral logic, the horrifying and ongoing death toll — thousands of Americans dying each day, in multiples of 9/11 every week now with the virus seemingly “under control.” The death rate is no longer accelerating, but holding steady, which is apparently the point at which an onrushing terror can begin fading into background noise. Meanwhile, the disease itself appears to be shape-shifting before our eyes.
In an acute column
published April 13, the New York Times’ Charlie
Warzel listed 48 basic questions that remain unanswered about the coronavirus
and what must be done to protect ourselves against it, from how deadly it is to
how many people caught it and shrugged it off to how long immunity to the
disease lasts after infection (if any time at all). “Despite the relentless,
heroic work of doctors and scientists around the world,” he wrote, “there’s so
much we don’t know.” The 48 questions he listed, he was careful to point out,
did not represent a comprehensive list. And those are just the coronavirus’s
“known unknowns.”
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.
Diagnostic biosensor quickly detects SARS-CoV-2 from nasopharyngeal swabs
Date:
April 20, 2020
Source:
American Chemical Society
Summary:
Researchers have developed a field-effect transistor-based biosensor that
detects SARS-CoV-2 in nasopharyngeal swabs from patients with COVID-19, in less
than one minute.
According to many experts, early diagnosis and management are critical
for slowing the spread of SARS-CoV-2, the new coronavirus that causes COVID-19.
Therefore, the race is on to develop diagnostic tests for the virus that are
faster, easier and more accurate than existing ones. Now, researchers reporting
in ACS Nano have developed a field-effect transistor-based biosensor
that detects SARS-CoV-2 in nasopharyngeal swabs from patients with COVID-19, in
less than one minute.
Currently, most diagnostic tests for COVID-19 rely on a technique called
real-time reverse transcription-polymerase chain reaction (RT-PCR), which
amplifies SARS-CoV-2 RNA from patient swabs so that tiny amounts of the virus
can be detected. However, the method takes at least 3 hours, including a step
to prepare the viral RNA for analysis. Edmond Changkyun Park, Seung Il Kim and
colleagues wanted to develop a faster diagnostic test that could analyze
patient samples directly from a tube of buffer containing the swabs, without
any sample preparation steps.
The team based their test on a field-effect transistor -- a sheet of
graphene with high electronic conductivity. The researchers attached antibodies
against the SARS-CoV-2 spike protein to the graphene. When they added either
purified spike protein or cultured SARS-CoV-2 virus to the sensor, binding to
the antibody caused a change in the electrical current. Next, the team tested
the technique on nasopharyngeal swabs collected from patients with COVID-19 or
healthy controls. Without any sample preparation, the sensor could discriminate
between samples from sick and healthy patients.
The new test was about 2-4
times less sensitive than RT-PCR, but different materials could be explored to
improve the signal-to-noise ratio, the researchers say.
The authors acknowledge funding from the National Research Council of
Science and Technology funded by the Ministry of Science and ICT, Korea and the
Korea Health Technology R&D Project through the Korea Health Industry
Development Institute funded by the Ministry of Health & Welfare, Korea.
Consumption is the sole end and purpose of all
production; and the interest of the producer ought to be attended to, only so
far as it may be necessary for promoting that of the consumer.
Adam Smith, The
Wealth Of Nations, 1776.
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.
No comments:
Post a Comment