Mar 12

Today’s News 12th March 2020

  • "Bracing For Impact" – China Shock To Strike Germany's Largest Port In Days, As Trade Volumes Collapse 40%
    “Bracing For Impact” – China Shock To Strike Germany’s Largest Port In Days, As Trade Volumes Collapse 40%

    The worst-case coronavirus scenario is now being realized for German ports, as collapsing trade volumes from China could push Europe’s largest economy into recession. 

    For the last three weeks, global markets have been obsessed with economic paralysis that is quickly spreading across Asia, Europe, and the Americas. An economic shock combined with a virus outbreak is what triggered a macro matters moment for investors, who sold first and are asking questions later, as it appears a global trade recession could be on the horizon. 

    The port of Hamburg, Germany’s largest trading hub, reported a 40% plunge in trade volumes for February. The weakness was a combination of the Chinese New Year festivities and the onset of economic shocks triggered by the virus shutting down two-thirds of China’s economy.

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    Axel Mattern, CEO of the Port of Hamburg Marketing, told Reuters that German ports are bracing for a continuation of declining trade volumes in the days and weeks ahead. The cause of this weakness is purely coronavirus disruptions that caused China’s economy to collapse. 

    “We’re currently bracing for the impact. It will hit us with full force from mid-March,” Mattern said, adding that “the entire supply chains have been thrown completely off balance…we expect container volumes to drop sharply due to the coronavirus.” 

    What’s troubling is that at least a quarter of Hamburg’s trade volumes in 2019 originated from China. This could suggest that Germany’s economy is highly exposed to foreign shocks, with limited buffers to cushion the blow. 

    “And this period of weakness has now been extended due to the coronavirus – and there is no end in sight. Nobody can say how long this weak phase will last,” Mattern said.

    The trade and supply chain shock is expected to tilt Germany into recession for the first half of the year. Chancellor Angela Merkel is running out of options on how to stimulate the economy.

    Merkel has signaled that she is ‘open’ to suspending Germany’s ‘zero-deficit rule’ – better known as the ‘debt break’ – to bolster the fight against the coronavirus.

    The shock was not a black swan, but rather a black bat in Wuhan, which is turning out to be one of the biggest economic shocks in decades to strike the global economy. Now the shock has infected global supply chains and traveling towards Western countries. 

    We noted last week that the Port of Los Angeles, the busiest seaport not only in the US but in the entire Western hemisphere, is also bracing for a “substantial hit” in trade volumes from China.

    Mattern pointed out bright spots are developing in China as some businesses have increased output but far away from full capacity. 

    “What we hear from on site in Shanghai is that there are first signs of normalisation. In Shanghai, more than 50% of employees now go to work. But then again, this also shows that we’re still a long way from normal and a ‘business as usual’.”

    German Economy Minister Peter Altmaier said the shock is expected to hit Germany’s industrial sector over the next few weeks.

    Shipping giant Maersk warned last month that containerized flows across the world would likely stay muted in the first half. 

    “As factories in China are closed for longer than usual in connection with the Chinese New Year as a result of the COVID-19, we expect a weak start of the year,” Maersk warned. 

    Reuters noted that the decline in trade volume between China and Germany has led to a shipping container shortage in the country.

    “I have just spoken to an important customer from the greater Hamburg area. They just can’t get hold of containers anymore,” Mattern said. “If you currently want to ship a container, you have to expect higher prices.”

    Duisburg, Europe’s biggest inland port, has warned rail volumes from China have been reduced, and will likely remain in a slump for the first half.

    To sum up, the bat shock from Wuhan has taken a little more than a month to reach Europe and could start hitting Germany’s industrial base this week, if not next. This all suggests that twin shocks are about to strike Europe’s largest economy, one being an industrial shock from China, and the other being a demand shock in services, as tens of millions of people in Europe avoid public areas as virus cases and deaths erupt on the continent. Europe is the new China; its economy is set to crash. 

     


    Tyler Durden

    Thu, 03/12/2020 – 02:45

  • 30,000 US Soldiers Arrive In Europe Without Masks
    30,000 US Soldiers Arrive In Europe Without Masks

    Authored by Manlio Dinucci via VoltaireNet.org,

    The United States are demonstrating their power by organising the largest transfer of their troops in Europe on the occasion of the Defender Europe 20 exercises. This country, which only a few years ago sacrificed its soldiers without warning in its nuclear tests, is taking no precautions for its soldiers faced with the coronavirus epidemic.

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    The United States have raised the alert for the corona virus in Italy to level 3 – (« avoid non-essential travel »), and taken it to level 4 for Lombardy and Veneto (« do not travel »), the same level as for China. The airline companies American Airlines and Delta Air Lines have cancelled all their flights between New York and Milan. US citizens who are travelling to Germany, Poland and other European countries are at alert level 2, and must take « increased precautions ».

    But there is a category of US citizens which is exempt from these standards : the 20,000 soldiers who have begun to arrive from the United States to the ports and airports of Europe for the Defender Europe 20 exercises, the greatest deployment of US troops in Europe in the last 25 years. With those who are already present, approximately 30,000 US soldiers will be participating in the execises in April and May, alongside 7,000 others from the 17 member countries and partners of NATO, including Italy.

    The first armoured unit arrived from the port of Savannah, USA at Bremerhaven in Germany. A total of 20,000 pieces of military equipment are arriving from the USA at six European ports (in Belgium, Holland, Germany, Latvia and Estonia). 13,000 others are provided by the stocks that were pre-positioned by the US Army Europe, mainly in Germany, Holland and Belgium.

    These operations, explains the US Army Europe, « require the participation of tens of thousands of soldiers, military personnel and civilians from numerous nations ». At the same time, the majority of the contingent of 20,000 soldiers arrive from the USA, landing at seven European airports. Among this number are 6,000 from the National Guard of 15 States : including Arizona, Florida, Montana, New York and Virginia. At the start of the exercise in April – explains the US Army Europe – the 30,000 US soldiers « will deploy throughout the European region » in order to « protect Europe from any potential threat », with a clear reference to the « Russian menace ». General Tod Wolters – who commands US forces as well as the NATO forces in Europe, as Supreme Allied Commander – assures that the European Union, NATO and the United States European Command, have worked together to improve the infrastructures ». This will allow military convoys to move quickly along the 4,000 kilometres of transit routes.

    Tens of thousands of soldiers will cross the frontiers to perform exercises in ten countries. In Poland, US soldiers will arrive in twelve training areas, equipped with approximately 2,500 vehicles. US paratroopers from the 173rd Brigade based in Venetia, and Italians from the Brigade Folgore based in Tuscany, will go to Latvia for a joint launching exercise.

    Defender Europe 20 is being carried out in order to « increase the capacity of deploying a major combat force in Europe from the United States ». It is taking place according to times and procedures which make it practically impossible to submit tens of thousands of soldiers to the sanitary standards set up to deal with the coronavirus, and prevent their contact with local inhabitants during their rest periods. Furthermore, the US Army Europe Rock Band will be giving a series of free concerts in Germany, Poland and Latvia, which are sure to attract a large public.

    The 30,000 US soldiers, who will « deploy throughout the European region », are thus exempt from the preventative standards set up to deal with the coronavirus crisis which, on the other hand, do apply to civilians. The assurance given by the US Army Europe suffices : « we have the coronavirus under surveillance » and « our forces are in good health ».

    At the same time, no-one is considering the environmental impact of a military exercise of this scale. US Abrams tanks will be taking part – each of them weighs 70 tonnes, with armour-plating made of depleted uranium, and consumes 400 litres of fuel for 100 kilometres, producing heavy pollution in order to achieve maximum power.

    In this situation, what is the reaction of the European Union and national authorities, and what is the WHO doing about it? They are covering their faces with masks, not only to cover their mouths and noses, but also their eyes.


    Tyler Durden

    Thu, 03/12/2020 – 02:00

  • The Moral Panic About Capitalism Threatens American Potential
    The Moral Panic About Capitalism Threatens American Potential

    Authored by Joseph Sorrentino via HumanEvents.com,

    We need to trust in the free enterprise system – now more than ever…

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    According to Alexandra Ocasio Cortez, “No one ever makes a billion dollars. You take a billion dollars.” At least, that’s what the Representative from New York recently argued at a Martin Luther King, Jr. Day event in Harlem.

    Speaking hypothetically about billionaires making widgets, she added: “You didn’t make those widgets. You sat on a couch while thousands of people were paid modern-day slave wages, and in some cases real modern-day slavery.” According to AOC, the mechanisms of capitalism not only allow, they mandate theft. In her view, business success is synonymous with the mass exploitation of labor.

    AOC is far from alone. Many leading Democrats have condemned the wealthy and blamed them for nearly all modern-day plights–a tactic that has proved useful at arousing populist anger on the campaign trail. It appears to be working, and not just in places or with demographics we would expect. A recent CBS News poll revealed that Texas Democratic primary voters view capitalism (in comparison to Socialism) even less favorably than California Democratic primary voters.

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    The rhetoric and debates coming out of the left—and, at times, even the right—have fixated on how much to tax wealth, instead of how to help create wealth. With Andrew Yang’s exit from the Democratic primary, we lost one of the few candidates who talked openly about declining entrepreneurship and the importance of business creation as an antidote to economic decline.

    And it’s not just the politicians that have scapegoated capitalism. Plastered across our newspapers, there are headlines like, “Capitalism is in crisis,” “Capitalism is failing,” or “Capitalism, as we know it, is dead.” (The latter was most recently expressed in a New York Times editorial by billionaire Salesforce CEO, Marc Benioff, who amassed his considerable wealth thanks to … capitalism).

    This consistent bombardment is not only reshaping political discourse but impacting how young Americans view the future. At a time when global competition is heating up, and America’s innovation boom from decades past has slowed, the need to inspire faith in free markets has never been more urgent.

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    THE STARTUP DEFICIT

    A recent YouGov poll revealed that nearly half of all millennials and gen-Xers hold an unfavorable view of capitalism. The same poll also found that more than 70 percent of millennials would, if given the opportunity, vote for a socialist candidate. According to a recent poll from Gallup, less than half of young Americans—45 percent—view capitalism positively. “This represents a 12-point decline in young adults’ positive views of capitalism in just the past two years and a marked shift since 2010, when 68 percent viewed it positively,” notes Gallup.

    This ideological shift comes at a perilous time. The world is in retreat from the failures of globalization, and, as resurgent nationalism takes hold in its place, cooperation between economies is morphing into fierce competition. For evidence of this, one need look no further than the recent fiery exchanges between the UK and the EU over Brexit terms. It is becoming clear that a nation’s economic strength, more so than military power, will determine standing in the world order. And America is no exception.

    Unfortunately, entrepreneurship and innovation have been steadily declining in the U.S. for years. We have fewer high-growth firms, especially in high-tech sectors, and those firms that do achieve high growth have been creating fewer jobs. According to economist Tyler Cowen, “These days Americans are less likely to switch jobs, less likely to move around the country, and, on a given day, less likely to go outside the house at all […] the economy is more ossified, more controlled, and growing at lower rates.”

    Regardless of how you assess it, all indicators point to a downward trend. Measured as the ratio of new firms to total firms, entrepreneurship in the U.S. declined by around 50% between 1978 and 2011. Meanwhile, people working for big firms (those employing more than 250 people) rose from 51% to 57% of the overall workforce, and the average firm size increased from 20 to 24 people over the same period. These are indicators that people have grown more risk-averse and are increasingly reluctant to trade off stability to start something new—something called the startup deficit.

    Several measures also indicate that entrepreneurs are less innovative. The ratio of patents to GDP in the US is declining, and the cost of patenting is increasing. The age of inventors, and when they registered their first patent, are on the rise— signaling an increasing barrier to entry for the young and cash-strapped. Plus, as economist Nicholas Bloom and his co-authors have found, “research productivity for the aggregate US economy has declined by a factor of 41 since the 1930s, an average decrease of more than 5% per year.”

    It’s easy not to focus on these metrics when we’ve recently been showered with positive news about the economy. But the startup deficit means lower productivity, and less wealth creation over the long term. This is a trajectory that is certain to see us displaced from atop the world’s leader-board.

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    TRADING IN AMERICA’S ECONOMIC FUTURE … FOR VOTES

    As far as policies are concerned, the solutions are reasonably straightforward: break up monopolies, improve competition, allow markets to work better, and (perhaps most importantly), incentivize the young and ambitious to take risks, lots of them. As financier and author Nicholas Nassim Taleb notes: “the reason free markets work is because they allow people to be lucky, thanks to aggressive trial and error.”

    That trial and error is the backbone to a healthy and growing economy. Entrepreneurs discover unmet needs in society and fill them with new goods or services. They take risks without certainty of reward. They improve on existing technologies and invent whole new ones—the iPhone AOC uses to vilify billionaires on Twitter among them. And in difficult economic times, entrepreneurs help create new jobs and find unique ways to provide society with the goods and services they desire.

    Policy can only take us so far. This is why we also need a shift at the level of political rhetoric.

    At a time when we should be relentlessly focused on stimulating business creation, our would-be future innovators are learning that to be a successful entrepreneur is akin to being a modern-day slave driver. They learn that to take the risk to start a business, or to pursue material wealth, is to start down a road that inevitably leads to a life of immorality.

    We’re in desperate need of a different dialogue. As Warren A. Stephens notes:

    “By virtue of living in the United States, we are all capitalists … I hope for a day when young people no longer reject that concept but revel in it. As a country, we need to reclaim our pride in capitalism and remember that the markets have the greatest power when they are free, and that free markets empower one and all, not just the few and the select.”

    Leaders and politicians have a choice: continue to denigrate examples of financial and entrepreneurial success for short term political gain—or leverage them as powerful tools for inspiration. America’s economic potential hangs in the balance.


    Tyler Durden

    Wed, 03/11/2020 – 23:45

  • US Issues Global Level 3 Health Advisory: Reconsider Travel Abroad
    US Issues Global Level 3 Health Advisory: Reconsider Travel Abroad

    Following President Trump’s decision to ban all travel from Europe to the US for 30 days, The State Department has issued a Level 3 Global Health Advisory, urging Americans to reconsider travel abroad:

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    Global Level 3 Health Advisory – Reconsider Travel

    The Department of State advises U.S. citizens to reconsider travel abroad due to the global impact of COVID-19.  

    Many areas throughout the world are now experiencing COVID-19 outbreaks and taking action that may limit traveler mobility, including quarantines and border restrictions. 

    Even countries, jurisdictions, or areas where cases have not been reported may restrict travel without notice.

    For the latest information regarding COVID-19, please visit the Centers for Disease Control and Prevention’s (CDC) website.

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    This is one step away from an official travel ban.

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    This is escalating very quickly.


    Tyler Durden

    Wed, 03/11/2020 – 23:26

  • 22 Year Old FX Trader Pleads Guilty To Fraud He Started While In His Teens
    22 Year Old FX Trader Pleads Guilty To Fraud He Started While In His Teens

    22 year old FX trader Kevin Perry has pleaded guilty to defrauding his investors in an FX scam that started when he was just a teenager.

    A release from the U.S. Attorney’s Office in the Northern District of Georgia on Friday said that “Perry led investors to believe that his investment company, Lucrative Pips, was successfully earning substantial profits by investing in the foreign currency (or “forex”) market.”

    He told investors’ that their initial investments were secure from loss, but his company was never even registered as a commodity pool operator with the Commodity Futures Trading Commission, the Department of Justice said in their complaint. 

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    He falsified historical returns that he represented to investors while turning around and using investor cash to enrich himself or pay off his other investors. He also falsely promised an undercover agent that an investment of $10,000 would return a profit of $19,000 to $25,000 per month.

    U.S. Attorney Byung J. Pak said: “Clients that invested with Perry’s company were assured they were secure from loss. Actually, Perry was enriching himself and paying off other investors.  We encourage citizens to be cautious with investments, and to remember that if it sounds too good to be true, it probably is.”

    Chris Hacker, Special Agent in Charge of FBI Atlanta said: “This guilty plea will be little solace to the victims who lost their savings because of Perry’s personal greed. The FBI is determined to root out and prosecute anyone who undermines investor confidence at the expense of innocent victims.” 

     


    Tyler Durden

    Wed, 03/11/2020 – 23:25

  • Banking Crisis Imminent? Companies Scramble To Draw Down Revolvers
    Banking Crisis Imminent? Companies Scramble To Draw Down Revolvers

    Earlier today, we reported that Boeing shocked the investing community when it announced that due to “market turmoil”, it would immediately draw down on its full $13.825 revolving credit facility, an unprecedented move for a company Boeing’s size and valuation, and one which was some took as an indication of how frail Boeing’s liquidity state was, ostensibly confirmed by Boeing’s surging default odds measured by its 5Y CDS.

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    We disagreed: after all, why would Boeing rush to draw attention to its own funding challenges by fully drawing on its revolver when it knew full well that it had access to the money, safe and sound, located at its syndicate banks…  unless of course Boeing was in fact worried about the viability of said banks. AS a result, we said that the real reason Boeing did what it did was simple, especially to those who recall what happened in 2008 all too well: Boeing is worried that banks will pull their committed funding, which in turn means that Boeing appears to be worried that a 2008-style financial crisis is imminent, and is shoring up all the liquidity it can, so as not to remain at the mercy of its banks which may refuse to extend it credit at any one moment if their own liquidity is threatened.

    Which is why we also concluded that now that Boeing, “one of America’s most valuable companies, has shown which way the wind blows, expect thousands of less creditworthy companies to follow suit as they scramble to cash in on every dollar in available revolver funding before the banks pull it.“

    We had to wait just a few hours for this prediction to come true, because later on Wednesday, Bloomberg reported that two of the world’s biggest PE firms, Blackstone and Carlyle, have told their portfolio companies to immediately do what Boeing did earlier in the day: “Do whatever it takes to stave off a credit crunch”, which as in the case of Boeing, is a polite way of saying: your banks may pull their liquidity (i.e., fail), so get whatever cash you can now when you can, and not when you have to.

    According to the report, the dozens if not hundreds of businesses – all smaller than Boeing of course – controlled by the PE titans are joining a growing wave of corporations drawing down bank credit lines to help prevent any liquidity shortfalls amid signs of mounting stress in markets. At Blackstone, which has weathered a variety of crises in its 35 years, the focus is on sectors hurt by the coronavirus, such as the hospitality industry, as well as energy firms facing a slump in oil prices.

    At Carlyle the measures aren’t quite as widespread yet, although the firm has been having broad discussions with management teams at portfolio companies and recommended drawing credit lines in certain instances, with the “decisions are based on industries, regions and other factors.”

    Beside Boeing, Blackstone and Carlyle, other companies which announced plans to drawdown on their full revolver were Hilton Worldwide and Wynn Resorts, all reflecting the uncertainty coursing through corporate America as the US economy hurtles into recession.

    Think of it, as companies lining up at their favorite ATM machine to pull all the money that is in the account. It works until suddenly it doesn’t.

    And here is Bloomberg confirming, through clenched teeth, what we said earlier: “A sudden and sustained increase in companies tapping credit lines could eventually strain banks if conditions become so dire that borrowers won’t be able to meet their obligations.“

    See, it’s not market conditions, but a loss of faith in the banking sector, and the reason why it was so difficult for Bloomberg to admit it is that while toilet paper runs do not lead to a collapse of the financial system, fiat paper runs to, and all that would take for those to begin is a loss of faith in the US banking system…. just like that exhibited by Boeing and some of the smartest financial professionals in the world.

    The big irony of course, is that by pulling down on revolvers en masse, US companies can trigger just the liquidity crunch they are seeking to protect themselves again, because as we noted earlier, liquidity in the US financial sector is already dismal and getting worse with every passing day, hence today’s latest expansion to the Fed’s repo cailities among a surging FRA/OIS spread.

     

    As Bloomberg explains, “lenders offer revolving credit lines to strengthen relationships with companies and don’t typically intend for them to be drawn upon en masse.”

    In normal times, revolvers serve as the corporate equivalent of credit cards, giving companies room to borrow as needed and repay when shortfalls ease. Under normal circumstances, the lines are seldom maxed out. Extensive use can be seen as a harbinger of distress.”

    The fact that everyone is drawing down on their revolver, however, shows three things:

    1. these are not normal circumstances
    2. the US financial situation is on the verge of distress, and
    3. they remember what happened in 2008, when one bank after another collapsed the availability on their revolver to troubled companies and sectors, and this time it will be the banks left with holding the short stick.

    That said, oil and natural gas companies are under particular focus as they tend to suffer a spike in funding stress when prices fall, because their credit lines are periodically updated based on market prices, motivating companies to tap them early.

    But why Boeing? The company’s cash flow is one of the most stable in the world… except of course when a global viral pandemic and its ongoing 737 MAX fiasco has sent its cash flow plunging to the most negative levels in decades.

    Meanwhile, Blackstone’s private equity operation is the firm’s largest business by assets, at $183 billion, of which energy accounts for almost 10% of the total portfolio.

    Blackstone won’t be the last as rival private equity firms – many of which have purchased shale companies in recent years funded with staggering levels of junk debt – also are weighing similar actions.

    “From an economic perspective, the virus has created dislocation in the market and fear among the people,” Blackstone co-founder Stephen Schwarzman said in an interview in Mumbai last week. “Once that starts, one has to find the impact of negative consequences. But the turbulence can also have an upside for firms with a war chest, he said.

    “It creates a substantial opportunity to buy assets and give credit.” Or, in the case of Blackstone’s portfolio companies, to take it.


    Tyler Durden

    Wed, 03/11/2020 – 22:57

  • 9 Years Later – How Fukushima Changed Japan's Energy Mix
    9 Years Later – How Fukushima Changed Japan’s Energy Mix

    The March 11, 2011, Fukushima nuclear incident in Japan made international headlines for months, but it also changed Japanese attitudes towards nuclear energy. As Statista’s Katharina Buchholz notes, after a devastating tsunami hit Japan on March 11, 2011, emergency generators cooling the Fukushima nuclear power plant gave out and caused a total of three nuclear meltdowns, explosions and the release of radioactive material into the surrounding areas.

    Before the incident, the Japanese had been known as steadfast supporters of nuclear energy, taking previous nuclear catastrophes at Three Mile Island (USA) or Chernobyl (Ukraine) in stride. But a meltdown on their own soil changed the minds of many citizens and kicked the anti-nuclear power movement into gear.

    After mass protests, the Japanese government under then Prime Minister Yoshihiko announced plans to make Japan nuclear free by 2030 and not to rebuild any of the damaged reactors. New Prime Minister Shinzo Abe has since tried to change the nation’s mind about nuclear energy by highlighting that the technology is indeed carbon neutral and well suited to reach emission goals.

    Infographic: How Fukushima Changed Japan's Energy Mix | Statista

    You will find more infographics at Statista

    Despite one reactor restart at Sendai power plant in Southern Japan in 2015, nuclear energy has almost vanished from Japanese electricity generation. In 2018 (latest available), only 6 percent of energy generated in Japan came from nuclear power plants. Coal and natural gas picked up most of the slack, but renewable sources, mainly solar energy, also grew after 2011.


    Tyler Durden

    Wed, 03/11/2020 – 22:45

  • US Prosecutors Seeking Legal "Options" Against Epstein "Co-Conspirator" Prince Andrew
    US Prosecutors Seeking Legal “Options” Against Epstein “Co-Conspirator” Prince Andrew

    Authored by John Vibes via TheMindUnleashed.com,

    The FBI has spent months trying to get an interview with Prince Andrew about his relationship with Jeffrey Epstein, but investigators have had no luck getting him to speak on the record about the case.

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    New York prosecutors told the press this week that the prince has “completely shut the door” on cooperating with authorities. They are now considering what further legal action can be taken.

    Andrew continues to deny any wrongdoing or knowledge of Epstein’s many crimes, despite a growing body of evidence indicating that he was involved.

    Manhattan Attorney Geoffrey Berman described the prince as a “co-conspirator.”

    “Contrary to Prince Andrew’s very public offer to cooperate with our investigation into Epstein’s co-conspirators, an offer that was conveyed via press release, Prince Andrew has now completely shut the door on voluntary cooperation and our office is considering its options,” Berman said, according to the Guardian.

    Andrew has previously promised to help investigators with the case, but has since removed himself from public life. He has also refused requests for interviews that investigators have sent him.

    When asked about the recent statement from New York prosecutors, a spokesperson for the palace told the Guardian, “The issue is being dealt with by the Duke of York’s legal team.”

    Virginia Giuffre, one of the many girls trafficked by Jeffrey Epstein, has become one of his most outspoken victims. She has also accused the prince of raping her while she was underage. Giuffre has appeared on dozens of interviews with broadcasters around the world to share her story.

    Andrew has made no public comments on the matter since promising to speak with investigators after his BBC interview where he made numerous claims that were later exposed as lies.

    Most notably, the prince claimed that he never met Giuffre or even heard the name before. A leak of private emails where he mentioned Virginia Giuffre surfaced just days after the interview, proving his claims false.

    During his BBC interview, Prince Andrew claimed that he was at a Pizza Express in Woking on the night Giuffre says he raped her after the pair visited a nightclub together. However, eyewitnesses have now come forward to support Giuffre’s claims about being at the club with him on the evening in question.

    Andrew was also found in the flight logs of Epstein’s notorious private airplane, booked on flights that went to his property in the Virgin Islands, where the Attorney General for the territory has claimed that Epstein “held underage girls captive” as recently as 2018.


    Tyler Durden

    Wed, 03/11/2020 – 22:25

  • Trump Bans All Travel From Europe For 30 Days; Tom Hanks Infected; NBA Suspends Season: Live Updates
    Trump Bans All Travel From Europe For 30 Days; Tom Hanks Infected; NBA Suspends Season: Live Updates

    Summary:

    • WHO declares Covid-19 is a pandemic
    • President Trump declares a travel ban from all European countries (not UK)
    • Tom Hanks, wife announce they have the Coronavirus
    • NBA suspends all games until further notice
    • Utah Jazz player Rudy Gobert has tested positive for coronavirus.
    • LA confirms first death
    • Seattle schools close for two weeks
    • Italy closes stores
    • MGM says guest at Vegas’s ‘The Mirage’ tested positive
    • Denmark closes schools, will send ‘non-critical’ public employees home to work
    • New Jersey case total climbs to 23
    • Juve player Daniele Rugani
    • DC Mayor declares public health emergency
    • Congressional doctor says up to
    • Cuomo confirms 39 new cases in NY, raising total to 212
    • First death in Indonesia
    • Confirmed cases in France top 2,000
    • Washington State to ban events over 200
    • Details of cruiseline industry’s ‘health and safety proposal’ leak
    • ‘Waffle House’ employee in Atlanta confirmed
    • UK reports 7th death
    • Chicago cancels St. Paddy’s Day parade
    • NY sends in National Guard
    • IADB cancels meeting in Colombia as virus spreads across Latin America
    • Mnuchin says first part of virus stimulus plan will be ready in 2 days
    • Utah reportedly planning to shut public college and university campuses
    • Dr. Fauci warns virus 10x more deadly than flu and could infect millions if not handled early
    • Australia passes A$18 billion stimulus package
    • Seoul says 99 cases tied to call center
    • FEMA evacuates Atlanta office over coronavirus scare
    • 3 Boeing workers test positie
    • Washington DC advises cancellation or postponement of all gatherings with more than 1,000 people
    • Harvard to prorate room and board for students
    • US cases surpass 1,000
    • UK Health Minister catches virus
    • Ireland, Bulgaria, Sweden report first deaths
    • Connecticut declares state of emergency
    • UK total hits 456 following largest daily jump on record (83 new cases)
    • Global cases pass 120,000
    • South Korea reports new outbreak in call center
    • Japan reportedly planning to declare state of emergency

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    Update (2130ET): Tom Hanks and his wife, Rita Wilson, have tested positive for the coronavirus during a trip to Australia, he said in a Wednesday Instagram post.

    Hello, folks. Rita and I are down here in Australia. We felt a bit tired, like we had colds, and some body aches. Rita had some chills that came and went. Slight fevers too. To play things right, as is needed in the world right now, we were tested for the Coronavirus, and were found to be positive.

    Well, now. What to do next? The Medical Officials have protocols that must be followed. We Hanks’ will be tested, observed, and isolated for as long as public health and safety requires. Not much more to it than a one-day-at-a-time approach, no?

    We’ll keep the world posted and updated.

    Take care of yourselves!
    Hanx!

    In separate news, Utah Jazz All-Star Rudy Gobert tested positive for coronavirus; “sources say Gobert is feeling good, strong and stable — and was feeling strong enough to play tonight.” The NBA’s reaction was instant: the game Gobert was playing in was canceled, and both the Jazz and the Oklahoma City Thunder teams and lockerrooms are currently quarantined. Nobody has left Chesapeake Arena.

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    Moments later the NBA announced it would suspend the season until further notice.

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    Update (2110ET): President Trump has ordered a complete travel ban from European nations for the next 30 days (beginning at midnight on Friday). The ban does not include the United Kingdom. Speaking from the Oval Office, Trump called the coronavirus a “horrible infection” and said he was addressing the nation to talk about the “unprecedented response to the coronavirus outbreak.”

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    While Trump initially announced that the ban would also include “trade and cargo”, a subsequent clarification from the White House, perhaps upon seeing the market’s reaction, made it clear that Trump misspoke, and the ban does not apply to goods and trade.

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    Additionally, Trump laid out his plans for taking emergency action to provide relief for those suffering financial hardship due to the virus.

    The President also said health insurance companies had agreed to waive all co-payments for coronavirus treatments and extend insurance coverage to cover coronavirus treatments.

    *  *  *

    Update (1950ET): As states around the country mull whether to follow Washington and shutter their schools, we’ve received a reader tip claiming that Utah Gov Gary Herbert will announce on Thursday at 9 am MT that the state is shutting down all its public campuses of higher education. A press release will follow. The official date and duration is not know at this time.

    Again, that’s according to an as-yet-unconfirmed tip, so treat it accordingly.

    Of course, if this is accurate, that’s just another ~20,000 college kids about to go on an extended, cut-rate spring break.

    *  *  *

    Update (1937ET): Seoul has just confirmed that 99 cases have now been tied to an outbreak at a call center in Seoul’s Guro district, one of the busiest and most crowded parts of town. Low paid workers commuting from far away helped pass the infection along their route, creating another outbreak just as South Korea was getting the outbreak in the city of Daegu under contol.

    Seoul Mayor Park Won-soon made the announcement early Thursday in Seoul. It’s unclear whether these constitute new, or already counted cases.

    Australia just announced a A$17.7 billion stimulus package to bolster its economy against the fallout from the virus, joining what’s becoming a growing list of developed countries that have acted more quickly than the White House to address that aspect of the crisis.

    To be sure, the Trump administration deserves credit for swiftly working out a compromise with Democrats to pass an $8.3 billion spending package that increases funding for the CDC, FDA and the other agencies within DHHS, dole out money to the states, buy vaccines when they’re available and $1.25 billion for “international activities.”

    *  *  *

    Update (1820ET): Juventus, a football club based in Turin, a city in Piedmont situated just outside Italy’s initial exclusion zone, just confirmed that center-back Daniele Rugani has tested positive for the coronavirus, though it’s not yet clear who.

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    This is the first time a Serie A football club has confirmed that one of its top players has been infected.

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    And suddenly, it seems clear that Italian soccer’s plan to ban fans at league contests is truly inadequate.

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    Immediately, most fans thoughts probably turned to Cristiano Ronaldo, the club’s star player.

    Earlier in the US, Texas reported that a toddler was among its latest batch of confirmed cases for Covid-19. Another characteristic that differentiates Covid-19 from the flu is that young children are also at risk.

    *   *  *

    Update (1650ET): Italy has confirmed that it will order all stores in the country that sell items other than medicine and food to close. Factories can continue working, but all restaurants and bars must close as well. The prime minister stressed that there is “no need for a run on supermarkets.”

    Watch Conte’s address live:

    *  *  *

    Update (1635ET): NJ Governor and former Goldmanite Phil Murphy just announced 8 more cases in the state, bringing its total to 23. The state has also confirmed its first case of “community spread”.

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    Watch the rest of the press conference below courtesy of 10 Philly:

    https://nbcphiladelphia.com/portableplayer/?CID=1:12:2322701&videoID=1709781059679&origin=nbcphiladelphia.com&fullWidth=y

     

    https://nbcphiladelphia.com/portableplayer/?CID=1:12:2322701&videoID=1709781059679&origin=nbcphiladelphia.com&fullWidth=y

    In other news, the NCAA’s annual “March Madness” basketball tournament games in Ohio will be played in front of empty crowds, with only essential staff present and “limited family attendance,” NCAA President Mark Emmert said in a statement:

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    Effectively cancelling dozens of live basketball games is just one ore huge blow to consumption at a very testy time. Though we suspect millions will still tune in from home.

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    Sports games are being cancelled around the globe: Italian soccer made a similar determination earlier.

    *  *  *

    Update (1625ET): Washington DC Mayor Muriel Bowser has declared a public health emergency in order to access emergency funds to help her city combat the crisis.

    Watch the rest of today’s live update below:

    https://platform.twitter.com/widgets.js

    *  *  *

    Update (1535ET): MGM Resorts said a female guest at the Mirage, one of its Las Vegas casinos, has tested positive for the coronavirus. The woman, who visited the city for an event featuring many bold-faced names recently, is from New York. The news comes after the company announced plans to shut down its buffets at seven of its resorts in Las Vegas.

    The company said it’s tracing contacts that the patient might have had, and is in the process of doing a “deep clean” of the room.

    *  *  *

    Update (1522ET): LA County health officials announced on Wednesday that one of their patients had succumbed to the virus, marking the second death in California from the virus and the first in LA County, a local TV station reports. They also announced another 6 confirmed cases, bringing the county total to 27.

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    County health officials announced the unfortunate news during a press update:

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    The victim was a woman over the age of 60 who died after contracting the virus, according to County Health Director Dr. Barbara Ferrer. The woman, who has not been publicly identified, was visiting Los Angeles County and had underlying health conditions.

    As one observer noted about Ferrer during the press conference…

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    Meanwhile, the CDC’s Dr. Nancy Messonnier is delivering her daily update:

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    In a first for major cities, the Seattle Times just reported that all Seattle schools will close on Friday for “a minimum of two weeks” to thwart the virus’s spread. The reporters cited a copy of an email sent to school administrators.

    The decision was reportedly made after “conferring” with county and school officials. Inslee earlier urged all schools in the state to prepare for having students finish their studies for the year online.

    On Wednesday, two schools in Seattle were already closed due to virus exposure fears.

    The email instructs principals to treat the closure as if they were going on spring break, and lists some guidance for going forward.

    “We know you do not have time to do everything and we trust that you will do your best given the circumstances,” the email said.

    The announcement comes after the district’s early move to stay open in an effort to make sure children don’t suddenly see a loss in services.

    NY Gov. Cuomo said earlier that the state would do everything it could to avoid shutting NYC schools (NYC schools rarely close, due to the fact that many students who are on subsidized lunch wouldn’t eat without school).

    Further north in Denmark, officials announced that all schools and universities in the country would be closed until further notice.

    And additionally, one twitter user just tallied up a breakdown of all the cases confirmed in Italy:

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    *  *  *

    Update (1445ET): The UK has just reported its 7th death, another elderly patient, according to media reports.

    In other news, the House Oversight Committee meeting where Dr. Fauci and Dr. Redfield were answering questions won’t resume until tomorrow.

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    *  *  *

    Update (1430ET): France has just announced roughly 500 new coronavirus infections, and more than a dozen more deaths, bringing the total above 2,000.

    • FRANCE CONFIRMS 2281 CORONAVIRUS CASES, 48 DEATHS AS OF WED.

    *  *  *

    Update (1410ET): During his Wednesday press conference, Cuomo confirmed that the state had succeeded in contracting with 28 private labs to speed up coronavirus tests. He also confirmed 39 new cases in NY, bringing the state total to 212, adding that “numbers will continue to go up dramatically.”

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    Meanwhile, CNBC’s Eamon Javers reported that President Trump is considering an emergency declaration for all of the US under the “Stafford Act”, which would open up more federal money via FEMA

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    This would put FEMA “fully in the fight” against the virus.

    In other news, just a few days after confirming that it had reopened nearly all of its stores on mainland China, Apple said Wednesday that all stores in Italy would be closed “until further notice.”

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    Boeing employees saw more bad news on Wednesday as the troubled aerospace maker said Wednesday that it would halt hiring until further notice.

    Meanwhile, in Senegal, officials reported their 5th case of the virus as it continues its creep across Latin America and Africa.

    *  *  *

    Update (1350ET): As we previewed earlier, Washington State Gov. Jay Inslee has announced plans to ban gatherings with 250 people or more in the counties worst affected by the virus in his state, CNBC reports. The counties include: King, Snohomish and Pierce.

    In addition, he’s asking all school districts to prepare for online instruction, and closures that might last “longer than initially thought”.

    Just minutes after Inslee’s announcement, San Francisco health officials announced they would ban public and private events with 1,000 people or more to slow the spread of the new coronavirus there.

    “We know that this order is disruptive, but it is an important step to support public health,” San Francisco Mayor London Breed said in a statement. “We know cancelling these events is a challenge for everyone and we’ve been talking with venues and event organizers about the need to protect public health.” She said she spoke with the Warriors NBA team and “they are in support of our efforts.”

    Washington State is the hardest-hit in the country, with more than 267 confirmed cases across the state with 258 of those concentrated between the three counties, according to the state health commission.

    Even more alarming: Seattle-area officials announced late Tuesday that residents or employees of 10 long-term care facilities have been infected.

    Last month, Inslee declared a state of emergency to free up funding for communities combating the outbreak.

    *  *  *

    Update (1330ET): Politico reports that President Trump is looking into making an Oval Office address, presumably to share the details from his stimulus “plan”.

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    Meanwhile, USAToday has published the details from a proposal delivered to the White House about how they can update health and safety measures to stop employees from getting infected. Stocks dropped on news of the details from the plan, which hadn’t been previously disclosed since the industry delivered the proposal to the White House after a meeting yesterday.

    • CRUISE LINE INDUSTRY PROPOSES PLAN TO WHITE HOUSE THAT WOULD BAR PEOPLE AGE 70 AND OLDER FROM BOARDING SHIPS WITHOUT A DOCTOR’S NOTE

    The proposal reportedly includes barring entry to anyone over the age of 70, or with an underlying condition, unless a doctor’s note is supplied.

    *  *  *

    Update (1315ET): One day after recording its largest increase in deaths on record, Italy has reported yet another 30%+ increase in deaths, bringing its death toll to 827 from 631. They also reported a record-breaking 2,000+ new cases on Wednesday.

    • ITALY DEATH TOLL FROM CORONAVIRUS OUTBREAK RISES TO 827 FROM 631 ON TUESDAY – OFFICIAL
    • ITALY CORONAVIRUS DEATHS JUMP 31% TO 827
    • TOTAL NUMBER OF CONFIRMED CASES OF CORONAVIRUS IN ITALY RISES TO 12,462 FROM 10,149 ON TUESDAY – OFFICIAL

    Though the jump in deaths reported yesterday (168) was larger in terms of percentage (36% vs. 31%), today’s increase is larger by the numbers.

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    In other news, Norway bans indoor events with more than 500 people. Russia earlier said it would ban most flights between Russia and Italy, Germany, Spain and France. Meanwhile, Washington State has confirmed plans to ban large events.

    *  *  *

    Update (1350ET): Follow the WHO’s major admission just a few minutes ago, which took the air out of a modest market rally as stocks moved off their session lows, we suspect that Wednesday will be remembered as a critical day in the development of the outbreak outside Asia.

    We’ve heard no shortage of alarming predictions today – remember earlier when Merkel said up to 70% of Germans might catch the virus, or Dr. Fauci’s warning that “millions” of Americans could contract it if the US doesn’t act quickly – and Axios has just brought us one more: It reports, citing two sources briefing on the meeting, that Congress’ in-house doctor told Capitol Hill staffers at a close-door meeting this week that he expects 75-150 million people in the US,  roughly one-third of the country, to contract the coronavirus.

    And here’s Axios telling us “why it matters”:

    Why it matters: That estimate, which is in line with other projections from health experts, underscores the potential seriousness of this outbreak even as the White House has been downplaying its severity in an attempt to keep public panic at bay.

    Dr. Brian Monahan, the attending physician of the U.S. Congress, told Senate chiefs of staff, staff directors, administrative managers and chief clerks from both parties on Tuesday that they should prepare for the worst, and offered advice on how to remain healthy.

    He added that 80% of people who contract the virus will ultimately be fine.

    As Axios also reminds us, statistical modeling from Harvard epidemiologist Marc Lipsitch, have said that somewhere between 20% and 60% of adults worldwide might catch the virus.

    During an interview with CNBC following the declaration from the WHO,

    “The epidemic is always further ahead than what you perceive at the moment,” Dr. Scott Gottlieb said.

    It’s possible that we have thousands of cases here possibly tens of thousands,” Dr. Gottlieb said.

    In other news, Reuters reports that the White House is weighing travel bans against Italians and other Europeans.

    *  *  *

    Update (1230ET): With WHO’s major funding partner China perhaps having turned the corner, WHO Chief Tedros has finally decided to declare Covid-19 a Pandemic…

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    Full Tedros Transcript:

    In the past two weeks, the number of cases of #COVID19 outside 🇨🇳 has increased 13-fold & the number of affected countries has tripled.

    There are now more than 118,000 cases in 114 countries, & 4,291 people have lost their lives.

    Thousands more are fighting for their lives in hospitals.

    In the days and weeks ahead, we expect to see the number of #COVID19 cases, the number of deaths, and the number of affected countries climb even higher

    WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction

    We have therefore made the assessment that #COVID19 can be characterized as a pandemic

    Pandemic is not a word to use lightly or carelessly. It is a word that, if misused, can cause unreasonable fear, or unjustified acceptance that the fight is over, leading to unnecessary suffering and death

    Describing the situation as a pandemic does not change WHO’s assessment of the threat posed by this coronavirus. It doesn’t change what WHO is doing, and it doesn’t change what countries should do”

    We have never before seen a pandemic sparked by a coronavirus. And we have never before seen a pandemic that can be controlled at the same time.

    WHO has been in full response mode since we were notified of the first cases.

    We have called every day for countries to take urgent and aggressive action.

    We have rung the alarm bell loud and clear

    As I said on Monday, just looking at the number of COVID19 cases and the number of countries affected does not tell the full story

    Of the 118,000 COVID19 cases reported globally in 114 countries, more than 90 percent of cases are in just four countries, and two of those have significantly declining epidemics

    81 countries have not reported any COVID19 cases, and 57 countries have reported 10 cases or less.

     

    We cannot say this loudly enough, or clearly enough, or often enough: all countries can still change the course of this pandemic”

    If countries detect, test, treat, isolate, trace, and mobilize their people in the response, those with a handful of COVID19 cases can prevent those cases becoming clusters, and those clusters becoming community transmission

    Even those countries with community transmission or large clusters can turn the tide on this coronavirus.

    Several countries have demonstrated that this virus can be suppressed and controlled.

    The challenge for many countries who are now dealing with large COVID19 clusters or community transmission is not whether they can do the same – it’s whether they will.

    Some countries are struggling with a lack of capacity. Some countries are struggling with a lack of resources. Some countries are struggling with a lack of resolve.

    We are grateful for the measures being taken in Iran, Italy and South Korea to slow the virus and control their COVID19 epidemics.

    We know that these measures are taking a heavy toll on societies and economies, just as they did in China.

    All countries must strike a fine balance between protecting health, minimizing economic & social disruption & respecting human rights

    WHO’s mandate is public health. But we’re working with many partners across all sectors to mitigate the social and economic consequences of this COVID19 pandemic

    This is not just a public health crisis, it is a crisis that will touch every sector – so every sector and every individual must be involved in the fight

    I have said from the beginning that countries must take a whole-of-government, whole-of-society approach, built around a comprehensive strategy to prevent infections, save lives and minimize impact

    Let me summarize it in 4 key areas.

    1. Prepare and be ready.

    2. Detect, protect and treat.

    3. Reduce transmission.

    4. Innovate and learn”

    I remind all countries that we are calling on you to (1):

    • activate & scale up your emergency response mechanisms

    • communicate with your people about the risks & how they can protect themselves

    • find, isolate, test & treat every #COVID19 case & trace every contact”

    I remind all countries that we are calling on you to (2):

    • ready your hospitals

    • protect and train your #healthworkers

    • let’s all look out for each other”

    There’s been so much attention on one word.

    Let me give you some other words that matter much more, & that are much more actionable:

    Prevention. Preparedness. Public health. Political leadership.

    And most of all, People”

    “We’re in this together, to do the right things with calm and protect the citizens of the world. It’s doable”

    And just like that – $425 million dollars worth of pandemic bonds all got trggered.

    *  *  *

    Update (1220ET): Three Boeing workers have tested positive for the virus, the company said. Though Boeing offered few details, we suspect the employees are probably based in Washington State, where Boeing builds its planes.

    In Washington DC, authorities are recommending the cancellation or postponement of all “non-essential” gatherings over 1,000.

    As students leave campuses around the country either heading back home or hunkering down finish their classes on line, Harvard just announced that it would “pro-rate” students’ room and board.

    *  *  *

    Update (1220ET): With the committee in charge of the Tokyo Olympic Games reportedly planning to suggest that the games be delayed, more images of the coronavirus fears’ impact on international travel are circulating online. Check out this.

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    *  *  *

    Update (1200ET): The CDC has released its latest batch of “confirmed” US figures: 29 deaths, 987 cases and cases confirmed in 39 states as of 10 pm last night.

    • U.S. CDC – 39 STATES HAVE REPORTED CASES AS OF MARCH 10 AT 4 PM ET VS PREVIOUS REPORT OF 36 STATES
    • U.S. CDC – 29 TOTAL DEATHS DUE TO NEW CORONAVIRUS AS OF MARCH 10 AT 4 PM ET VS 25 DEATHS AS OF PREVIOUS REPORT
    • U.S. CDC REPORTS ITS COUNT OF 987 CASES OF NEW CORONAVIRUS AS OF MARCH 10 AT 4 PM ET, VS PREVIOUS REPORT OF 696 CASES

    Around the world, the virus has produced many “isn’t it ironic?” moments, and we just got another in the US when FEMA announced that it would close its Atlanta office after an employee was exposed to the virus.

    • FEMA ATLANTA OFFICE CLOSED AFTER EMPLOYEE EXPOSED TO VIRUS

    Over in the UK, a total of 456 people have tested positive for coronavirus in the UK as of 9am on Wednesday, up from 373 at the same point on Tuesday, the Department of Health said. The jump of 83 new cases is the largest daily jump yet, following the previous ‘largest daily increase’ by only a few days.

    Six have died in the UK and tested positive for the virus. Over in Ireland, authorities reported their first death on Wednesday. A 66-year-old Bulgarian woman also succumbed to the virus in the Balkan state, marking the first death there as well.

    After the UK Health Minister Nadine Dorries tested positive for the virus, and started showing symptoms on Thursday, the same day she attended an event with the prime minister. Though the UK has elected to keep parliament open, Dorries and a Labour lawmaker who may have been exposed via a meeting with Dorries have decided to self-quarantine.

    UK Chief Medical Officer Catherine Calderwood stressed that “we are still in the containment phase” despite an increased number of Covid-19 cases.

    She said: “We have identified the first case of community transmission in Scotland which is unrelated to contact or travel. This was identified through our enhanced surveillance scheme.

    Sweden has reported its first death from the coronavirus today, with a hospital in Stockholm saying an elderly patient had died in intensive care. Belgium has reported its first three deaths, with 314 cases of coronavirus. Ivory Coast has confirmed its first case of coronavirus, a 45-year-old Ivorian man who had recently travelled to Italy, the health ministry said in a statement. Denmark confirmed a batch of new cases, raising its total to 442.

    While Washington State is apparently planning to ban all events with over 250 people, Washington DC has advised citizens to avoid such gatherings.

    Last night, Connecticut Gov. Ned Lamont declares a state of emergency, joining a growing list of other states to do the same.

    *  *  *

    Update (1150ET): Rencap’s Charlie Robertson points out that it took 5 days since the first indication of human-to-human transmission happening at a wide scale in the US, and if our numbers track Germany’s, we should have 3,000 cases confirmed by Friday, and 6,000 by Monday.

    Though that rate could double if many new clusters are discovered.

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    *  *  *

    Update (1100ET): With another day of non-stop breaking news headlines about the outbreak as it spreads across the US, Europe and Latin America, we’ve been having troubled keeping up.

    Switzerland reported 148 new cases of coronavirus on Wednesday, with 645 cases in total, 58 cases in Zürich and 78 cases in Geneva.

    Indonesia, an Asian nation that didn’t report its first case until more than a month after the global outbreak began reported its first death linked to the virus on Wednesday as well.

    National Guard troops have been deployed to a Health Department command post in New Rochelle. Chicago has followed San Francisco and cancelled its St. Patrick’s Day Parade. In NYC, schools will not close, but parent-teacher conferences will be held via phone.

    An employee at a ‘Waffle House’ in Metro Atlanta (Cherokee County) has tested positive for the virus, raising fears about a mass outbreak in Georgia. The store has been closed and 12 employees are quarantining and will continue for a few more days.

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    The Inter-American Development Bank postponed its annual meeting in Colombia, which had been scheduled for next week, over coronavirus fears as the virus spreads across Latin America. The Washington-based bank, the top development institution dedicated to Latin America and the Caribbean, announced the decision with Colombian President Ivan Duque on Tuesday evening.

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    With transports and financials leading equities lower on Wednesday, Treasury Secretary Mnuchin, who testified to Congress on Wednesday tried to offer some reassuring details about the White House plan, which remains very much in the ‘brainstorm’ phase. Still, Mnuchin insisted that Trump is standing by the payroll tax holiday to put more money in the hands of workers. The Treasury is also hoping to delay tax payments and leave $200 billion of “temporary liquidity” in the hands of Americans.

    Mnuchin said the White House hopes to strike a deal on the first part of the virus stimulus plan within the next 48 hours. His testimony follows rumors about the administration offering a potential ‘bailout’ to the American shale energy industry. Other stimulus actions will take “a week or two” he added.

    Importantly, the Treasury Secretary also insisted that no market interventions are being planned (so no PPT?). 

    In remarks on Tuesday, CDC Director Robert Redfield said that America had lost valuable time tracking the virus; some regions now can merely try to cope with its spread rather than stop it. And during testimony on Wednesday, Dr. Fauci said that when it comes to the outbreak in the US, “the worst is yet to come” because the virus is “10x more lethal than the seasonal flu”.

    If the US doesn’t handle the virus outbreak correctly, “many, many millions of people” will get the virus, he said.

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    Remember to wash your hands, folks.

    *  *  *

    The global coronavirus outbreak has hit a new milestone: It surpassed 120,000 cases overnight. For anybody who’s still bothering to keep track, that’s 15x the number of cases from the SARS outbreak, which continued for nearly a year before it finally petered out.

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    In the US, the coronavirus outbreak has reached a grim new milestone. Thanks to the administration’s scramble to bring dozens of private and public labs on-line for testing across the country, the CDC has managed to confirm more than 1,000 cases of the virus. In the Westchester County town of New Rochelle, the epicenter of the outbreak in New York State, and the largest on the east coast, woke up to a 1-mile exclusion zone and national guard soldiers in the streets.

    The town now looks like a “ghost town” according to several reports.

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    As the number of cases topped 1,000, the number of deaths has also climbed: Officially, there are 31 deaths and 1,039 confirmed cases, according to the Washington Post, which is significantly more than the number confirmed by Dr. Anthony Fauci during last night’s press conference.

    Across the US, Washington State’s King County remains the epicenter of America’s worst outbreak, with 273 cases . New York is No. 2 with 176 (13 additional cases have just been announced). After hinting about ‘mandatory measures’ last night that set tongues wagging about the possibility of Italy-style travel restrictions, Washington Gov. Jay Inslee is reportedly planning to announce a plan to…ban all events with more than 250 people, according to MyNorthwest.

    At a press conference scheduled for Wednesday at 10:15 a.m., it is expected that Gov. Jay Inslee along with regional leaders and city mayors could announce a ban on large gatherings and events of 250 people or more in at least three counties. Any ban would affect upcoming sporting events in the area, including a home game for the XFL’s Seattle Dragons on Sunday.

    Inslee has been hinting at this for the past week as a possible preemptive move to curb the spread of coronavirus. Over the weekend, he stated that his office was considering enacting “mandatory measures” in the days ahead.

    Monday night on MSBNC, the Washington governor spoke to Rachel Maddow, admitting that soon, the state was “going to have to make some hard decisions.”

    He further elaborated on that point during a Tuesday press conference, when he cited the need to “look forward ahead of the curve in Washington state.”

    “We need to look at what is coming, not just what is here today,” he detailed, estimating that given limits on testing capacity, experts have told him there could be at least 1,000 untested coronavirus cases across the state.

    So much for ‘hard decisions’….

    This immense build up, only to announce restrictions that are only ‘slightly’ more comprehensive than the milquetoast event bans embraced by Germany, France, Switzerland and others, brings to mind a tweet we noticed earlier highlighting the sometimes unintended consequences that half-measures can create.

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    On the east coast, the State of New York is asking businesses to voluntarily consider having employees work two shifts as well as allowing telework, Gov. Andrew Cuomo said in an interview with CNN, the network that employs his brother, where he has been making near-daily appearances in addition to his daily press conferences.

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    Gov. Inslee

    “This is about reducing the density,” Cuomo said. “The spread is not going to stop on its own.”

    He also announced 20 new cases of virus, bringing total in state to about 193, with most of the new cases diagnosed in New Rochelle, where the virus has clearly been circulating for weeks.

    There have been reports that Democrats are pushing for a national emergency declaration which would trigger  tens of billions of dollars in funding from FEMA to help with the containment effort, and possibly to help grappled with the economic fallout from the outbreak.

    Despite a few notable screwups lately (including a collapsed ad hoc quarantine that left roughly one dozen dead and many trapped in the rubble for days, Beijing continues to insist that it is winning the war against the virus, and while the true scope of China’s outbreak might never be known for sure (some have estimated 1 million cases throughout China), officials did report a slight rise in cases on Wednesday which they blamed on ‘imports from abroad.’

    Officials reported 24 additional cases of coronavirus and 22 additional deaths on March 10, compared with 19 additional cases and 17 additional deaths on March 9, bringing the total number of cases in mainland China to 80,778 and death toll at 3,158. China’s Hubei province said it will mandate a return to work according to different levels of risk in an orderly manner, adding that key areas of the Wuhan economy will be allowed to return.

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    After 11 days of falling case numbers, South Korea reported 242 additional coronavirus cases early Wednesday, bringing its total to 7,555, and 6 additional deaths, increasing the death toll to 60, reversing a streak of declines that had convinced many that Korea’s outbreak had ended.

    The South has made remarkable progress in fighting the outbreak, however, a new mass infection incident has popped up that is jeopardizing the government’s widely praised response. Earlier, South Korean authorities told Reuters that they had tested hundreds of staff at a Seoul call center where the disease broke out this week. 13 of the infected workers at the Seoul call center used public transportation to commute, leading to at least 90 other people who had close contact with them being infected. Of the 90 cases mentioned earlier, 62 were in Seoul, and all were located near a public transportation hub connecting Seoul with Incheon and other major cities, via which the virus spread.

    The spread has even made it into the armed forces, raising new fears about an outbreak in tightly packed barracks.

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    Elsewhere, Japan is reportedly planning to declare a state of emergency due to the coronavirus outbreak after the number of domestic cases rose by the largest daily number yet, with 59 new cases bringing the total to 1,278, while the total death toll has climbed to 19 and there were 427 discharged from hospital on Tuesday.

    Italy’s total coronavirus cases rose to 10,149, from 9172, and the death toll increased to 631 yesterday from 463 in its largest daily jump yet.


    Tyler Durden

    Wed, 03/11/2020 – 22:10

  • Nasdaq Futures Limit-Down, Crude Crashes After Trump Announces EU Travel Ban
    Nasdaq Futures Limit-Down, Crude Crashes After Trump Announces EU Travel Ban

    Shortly after President Trump began his address to the nation, enacting a full travel ban from European nations for the next 30 days, the markets started to get upset.

    • S&P 500, Nasdaq and Dow futures fall 4-4.5%

    • Both Brent and WTI futures down more than 6%

    • Nikkei 225 drops 4.5%, Australia’s benchmark slumped 5% to confirm bear market status

    • Main China stock indexes all fall at least 1%

    • Kospi, Hang Seng, Taiex slide 3% or more

    • Treasury 10-year yields decline 14 bps to 0.73%

    • AUD/USD falls 0.3%, EUR/USD jumps 0.4%

    • Malaysia, Korea, Philippine currencies all retreat 0.5%; Mexican peso tumbles more than 1%

    Dow futures are down over 1000 points…

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    Japan’s Nikkei 225 is down over 350 points…

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    Nasdaq futures are limit down…

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    S&P is close to its 2,601 limit down…

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    And for the cash open tomorrow:

    • 7% limit down (RTH only) : 2546.50

    • 13% limit down (RTH only) : 2382.00

    • 20% limit down (RTH only) : 2190.00

    10Y Treasury yields are down 15bps…

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    The Euro is strengthening against the dollar…

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    WTI Crude is collapsing, hitting a $30 handle

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    European Stoxx 50 futures are down 7.3%

    It appears Trump did not offer enough detail and immediacy to appease the market’s need for funds to stop the collapse. Additionally, the uncertainty over the impact on European supply chains is also weighing on markets.

    The market is now demanding 90bps of rate-cuts for next week’s FOMC…

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    Chris Martenson and John Rubino explain why the virus is the catalyst not the cause of the crash…

    For years, Peak Prosperity has been raising a loud warning of the ‘Everything Bubble’ that the world’s central banks have blown in global asset prices.

    Over that time, we’ve debated with hundreds of economic experts on what will be the trigger to “pop” this mania.

    Well, now we’re finding out.

    The economic damage being wrought worldwide by the coronavirus is the black swan the system never saw coming. Trade is being strangled, and the necessary productivity needed to support that massive increase in global debt that has been taken on over the past decade is just not there.

    Bankruptcies are set to ripple across industries like wildfire. Mass layoffs will return with a vengeance. For certain industries — like travel, hospitality, and the shale oil drillers — this will be an extinction-level event for many players.

    As ugly as the swift -20% drop in markets from from February’s highs has been, this is just the start of the reckoning, folks.

    Additionally, As El-Erian notes, the NBA suspension is really bring the fear home…

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    Tyler Durden

    Wed, 03/11/2020 – 22:08

  • Stock Buybacks Crash Just As Markets Need Them Most
    Stock Buybacks Crash Just As Markets Need Them Most

    At the start of January, when the market euphoria was at an all time high, the blow off top meltup was raging and an army of millennial Robinhood daytraders was about to be unleashed (only to be crucified at the end of February), we first warned our readers that “Institutions, Retail And Algos Are Now All-In, Just As Buybacks Tumble.” In the markets, nobody noticed and the warning fell on deaf ears as the relentless melt up, which we called for what it was, namely a clear “distribution” from smart to dumb money – continued. 

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    Exactly two months and one bear market later, the first in 11 years, they finally noticed, with Bloomberg today writing that US companies, which until now were quite happy to sell some BBB-rated bonds and use the proceeds to buy stocks to prop up their stock price, have stepped back from repurchasing their shares even before the coronavirus outbreak (something we made quite clear in January).

    Using a calculation by the permabulls over at Birinyi, Bloomberg reports that companies have announced $122 billion of share repurchases in January and February, which as we warned was the lowest in years and down 46% from a year ago for the biggest drop to start a year since 2009.

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    The numbers above fail to capture the crash in markets the followed the acute phase of Coronavirus pandemic, as well as the most recent oil plunge that has caused a plunge in oil prices and hammered all junk-bond funded companies. As such, Bloomberg’s reporters correctly point out that the “reduction underlines a concern that will get bigger should the virus inaugurate an age of prudence among corporate treasurers. Luxuries such as share repurchases, while showing signs of picking up amid the rout, are easy to cut when cash preservation and creditworthiness become the priorities.“

    Which is not to say that companies do not buyback their stock when markets tumble: indeed during prior corrections, repurchases may have prevented equity losses from snowballing. For example, in the middle of the sell-off in May 2019, repurchases by BofA’s corporate clients surged 23% for the eighth-busiest week in a decade. The market bottomed on the first day of June. During the route in February 2018, the rebound in stocks came in a week when Goldman Sachs’s corporate-trading desk saw the most buyback orders ever.

    This time however, with a global recession over the corner, it may be different. Indeed, with companies now rushing to draw down on revolvers in a liquidity procurement panic, the last thing they will be spending money on ahead of the recession is buybacks. In fact, one can argue that the main reason why we are now in a bear market and on the verge of a recession is because of companies such as Boeing, which until recently spent billions on buybacks; companies which are now drawing down on their revolvers.

    “If they’re forced to use that for other areas of the business, you’ll lose some of that key support in the market,” said Mike Stritch, chief investment officer for BMO Wealth Management. “That’s a key underpinning for the stock market, and you do worry you’re going to see some companies folding up on this.”

    That the disappearance of buybacks is a problem is an understatement: as we reported recently for the past decade, the only source of buying have been companies themselves, repurchasing their stock.

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    Ironically, while companies should have stopped repurchasing their stock a long time ago, buyback appetite remained strong in recent weeks, and in the final week of February, when the S&P 500 tumbled the most since 2008, Goldman’s corporate clients snapped up their own shares at the fastest rate in two years, with volume running at 2.3 times the average in 2019. Unfortunately, it now appears they used up much of their dry powder just as stocks were about to take another leg lower. 

    In a perfect world, companies should maximize their buybacks at the lows and halt them at the highs, yet in the real world the opposite happens, even if there are plenty of experts who will tell you what “should” happen, experts such as Don Townswick, director of equity strategies at Conning, who told Bloomberg that “when your stock price is undervalued, buybacks become more attractive. At these levels in the marketplace, smart management is looking at this and thinking, ‘This is the time to actually realize those buybacks. We’re buying our stock 15% below where we thought it was.’”

    Ah yes, but what Don is forgetting is that the bulk of buybacks in recent years was debt-funded, and unfortunately right now credit markets are slammed shut which means that companies have to rely on their own cashflow generation and cash balances to fund management’s favorite stock option boosting activity. There is just one problem: as we first reported last year, corporate America’s cash is draining at the fastest rate in decades, with balances at S&P 500 companies excluding financial firms plunging 15% in the past 12 months.

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    What’s worse is that the market now appears to be frontrunning the inability of companies to prop up their own stock prices, and is punishing those companies that have relied the most on buybacks. As Bloomberg notes, while the whole market is down more than 11% this year through yesterday, the S&P 500 Buyback Index that tracks stocks with the highest payout ratio has fared far worse, falling 19% this year.

    Almost as if traders know that the golden goose, that propped up the market on so many occasions in the past, is now dead.


    Tyler Durden

    Wed, 03/11/2020 – 22:05

  • End Of Growth: Does Covid-19 Herald An Era Of Decline?
    End Of Growth: Does Covid-19 Herald An Era Of Decline?

    Authored by Chris Hamilton via Econimica blog,

    I’m going to suggest that the Coronavirus is more a window or a marker that separates what will be seen as the end of an era and the beginning of another.  Corona-virus is serious, global, and appears it will cause significant death and disruption. 

    But Coronavirus itself isn’t the problem (no more than Spanish Flu was in 1918/1919).  There is likely to be 9 to 18 months of global pandemic with large scale loss of life, but after the pandemic, things are more likely to return to “normal”.  And it’s the discussion of what is the “normal” we have seen over the past 7 decades versus the current and coming decades that I hope to spur.

    To begin, the chart below shows the annual change in the under 60 year old US population (green line) versus annual change in 60+ year old US population (yellow line).  Also shown is annual US federal deficit split between public debt (red columns) and Intragovernmental (IG…blue columns representing Social Security, etc.), and lastly the federal funds rate (black line).  Simply, as population growth of the working age population slowed, first large scale legal and illegal immigration was utilized to maintain economic and financial growth. 

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    However, since 2008, working age population growth has rapidly decelerated and immigration slowed…and in their place have come interest rate cuts to zero and accompanying massive debt (I show federal debt below, but corporate debt has also binged of the nearly free money to buy their own stock and pay dividends).  2019 was the first year in US history the working-age population declined…and of course all net population growth now comes among the elderly.  The elderly who, on average, earn/spend half as much, are highly credit averse, and prefer to pay down existing mortgages and debt.

    Changing gears but still tangentially, the weekly change in Federal Reserve holdings of US Treasury bonds (yellow columns) and the impact of that purchasing on the Wilshire 5000 (red line representing all publicly traded US equities).  Look again at the chart above of the fast decelerating growth of potential employees, potential consumers, potential stock purchasers among the working-age.  Consider the mandatory selling of the elderly…and then…

    Consider the rationale and relationship for the Fed’s “activism”.

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    Broadening out to show the weekly change in Federal Reserve held mortgage backed securities (MBS…blue columns), Treasuries (yellow columns), and again the Wilshire 5000 (red line).

    Again, consider the Fed’s motivation and the relationship of Fed buying and asset prices sky-rocketing.

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    Next, perhaps also worthy of some discussion is the Fed’s experiment to control interest rates via interest paid on excess reserves (IOER).  Just a reminder, prior to ’08, banks collectively held literally a few billion in excess reserves but in the ’09 GFC, the Fed stuffed them with excess reserves.  The excess reserves peaked just prior to the end of QE and began precipitously declining years prior to any balance sheet reductions by the Fed.  However, during that intermediate period while the Fed was raising the Federal Funds Rate, the Fed also raised the interest paid to the largest banks on those trillions in excess reserves.  Despite the fast rising, Fed sponsored, risk-free returns for lending no money, excess reserves plummeted.  What is so fascinating is that when the Fed felt compelled to begin cutting the FFR (and the IOER’s), reducing the returns on those excess reserves…the Fed also restarted QE (or “Not-QE”) and magically bank excess reserves ceased declining and began rising!?!  An increase in excess of $400 billion in Fed held Treasuries has coincided with a nearly $250 billion increase in excess reserves?!?

    However, despite the $1.5 trillion in excess reserves, banks (and others) are oversubscribing Fed repo auctions at record levels…perhaps this is worthy of some discussion?

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    Next, consider the Fed’s holdings of US Treasuries by durations and the resultant impact on the spread of the 10 year Treasury minus the 2 year Treasury.  Prior to the GFC, the Fed conducted their policy rather banker like, in a rather boring fashion.  However, since the GFC, the Fed is spastically dumping one duration while pouring into another.

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    And a focus on the Fed’s holdings of short term US Treasury bills versus the yield on the 3 month Treasury bill.  Check out the action on the far right…and perhaps this is discussion worthy?  The Fed is currently buying every duration, but more than anything, is sucking up bills at an unprecedented rate?!? Uhhh!

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    Global

    But now widen out and put all this into a global scope.  If we look at annual global working-age population growth (black dashed line below) split among the 1st world (blue line), Asia (excluding East Asia), and Africa (red line)…the picture of what is happening in the US makes a little more sense. 

    The working-age population of the 1st world begins a secular decline as of 2020.  For those curious, the 1st world below is collectively including all of the Western Hemisphere, Europe, Oceania, Russia and Eastern Europe, plus East Asia (China, Japan, S/N Korea)).  The 1st world consumes 75% of all commodities, has over 80% of the income, and consumes even more of the global exports…this is the population that takes out over 90% of the credit.  And as for Africa and Asia (excluding East Asia), they are totally reliant on the first world growth to export their cheap labor, cheap commodities, and finished goods.  Without growth in the first world consumer base, these 2nd and 3rd world nations haven’t an oar in the water.

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    And all this was before any inclusion of a likely pandemic.  Now, disruption and dislocation is likely on top of 1st world working age depopulation.  Discuss.


    Tyler Durden

    Wed, 03/11/2020 – 21:45

  • "Straight Up Racist": AOC Slams People For Not 'Patroning' Chinese Restaurants Due To Coronavirus
    “Straight Up Racist”: AOC Slams People For Not ‘Patroning’ Chinese Restaurants Due To Coronavirus

    Rep. Alexandria Ocasio-Cortez (D-NY) lashed out at ‘straight up racists’ for not ‘patroning’ Chinese restaurants.

    “Honestly, it sounds almost so silly to say, but there’s a lot of restaurants that are feeling the pain of racism, where people are literally not patroning Chinese restaurants, they’re not patroning Asian restaurants because of just straight-up racism around the coronavirus,” she said on Instagram Live on Tuesday.

    Watch:

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    As Fox News notes, social media users were quick to call out AOC for trivializing actual racism.

    “Honestly though, Alexandria. Can we at least try to reserve the term racism for things that are actually evil and racist?” said congressional candidate Luke Edison Negron.

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    If everything is racist, nothing is racist?

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    Tyler Durden

    Wed, 03/11/2020 – 21:25

  • Stocks Puke Into Bear Market As US Financial Conditions Crash Most 'Since Lehman'
    Stocks Puke Into Bear Market As US Financial Conditions Crash Most ‘Since Lehman’

    Today the stench of a desperate liquidity scramble as The Dollar rallied while Stocks, Bonds, Bitcoin, Crude, and Gold were all dumped.

    The Fed ramped up its liquidity bailout facility to a stunning $175 billion per day and still the market kept collapsing…

    The Dow and S&P crash into a bear market…erasing most of the Trump rally…

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    This is the fastest drawdown from a peak into bear market in history, and worst start to a year since 2009…

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    Source: Bloomberg

    US Financial Conditions are tightening massively…

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    Source: Bloomberg

    Crashing at the fastest pace since Lehman… (NOTE – the sudden drop is reminiscent of the first moments of crisis in August 2007)

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    Source: Bloomberg

    With a massive dollar shortage evident…

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    Source: Bloomberg

    Forcing The Fed to puke liquidity into the markets…

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    Source: Bloomberg

    Which is perhaps why the market is now demanding 82bps of rate-cuts next week by The Fed…

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    Source: Bloomberg

    Today was a bloodbath in US equities with Small Caps and The Dow hammered hardest…

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    Dow Futures show the week’s carnage best – just make sure to check the scale, these are simply massive swings…

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    And on the week, Small Caps are down almost 13%…

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    The Dow was the biggest underperformer because Boeing stock crashed today, but it was the CDS that is more worrying…

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    Source: Bloomberg

    Virus-related travel and leisure sectors were hammered…

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    Source: Bloomberg

    Bank stocks were clubbed like a baby seal today, now down a stunning 10-16% on the week alone!

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    Source: Bloomberg

    VIX surged back above 50 today…

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    As Bloomberg details, the historic oil-market collapse that’s dragging down shares of the biggest Western explorers is swelling yields on investor payouts. The elite cohort of large international drillers known as the supermajors – Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., Total SA and BP Plc – now are churning out bloated yields that dwarf those paid by the broader S&P 500 Index.

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    Source: Bloomberg

    Credit markets are collapsing with HY spreads smashing wider…

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    Source: Bloomberg

    And IG spreads are exploding in the US…

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    Source: Bloomberg

    Treasuries were very mixed today with the short-end rallying (2Y -5bps) and long-end selling off (30Y +5bps)…

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    Source: Bloomberg

    10Y Yields pushed back above the pre-weekend plunge levels…

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    Source: Bloomberg

    The Dollar rallied today as everything as was sold – suggesting a massive scramble for liquidity…

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    Source: Bloomberg

    Rather notably, Developed Market FX is now trading with a higher vol than Emerging Market FX…

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    Source: Bloomberg

    Cryptos continued to slide lower, with Ethereum hammered today…

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    Source: Bloomberg

    Bitcoin was battered back below $8000…

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    Source: Bloomberg

    Ethereum plunged back below $200…

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    Source: Bloomberg

    Commodities were all lower today…

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    Source: Bloomberg

    WTI’s hopeful rally ended today with prices back to a $32 handle…

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    Gold was sold today too alongside bonds, bitcoin, and stocks…

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    And for a sense of just how much oil has crashed, the number of barrels that an ounce of gold can buy is exploding…

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    Source: Bloomberg

    Finally, Bloomberg notes that investors are piling into gold day-after-day as concerns escalate about the impact of the coronavirus, markets gyrate, and rate-cut expectations jump. Holdings in bullion-backed exchange-traded funds expanded 55 tons in the three days to Tuesday, with increases seen both on days when S&P 500 Indexsank, as well as posting gains. The tally stands at a fresh record, and year-to-date inflows already total more than half of the 323.4 tons added in 2019.

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    Source: Bloomberg

    This week is the worst for a stock/bond portfolio since Lehman…

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    Source: Bloomberg

    And investors have swung from “Extreme Greed” to “Extreme Fear” at the fastest pace on record…

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    Tyler Durden

    Wed, 03/11/2020 – 21:05

  • Islamic Scholar Who Said Coronavirus Was "Allah's Punishment" Gets Coronavirus
    Islamic Scholar Who Said Coronavirus Was “Allah’s Punishment” Gets Coronavirus

    Authored by Paul Joseph Watson via Summit News,

    An Islamic scholar who said the coronavirus was “Allah’s punishment” for China’s treatment of Muslims now has coronavirus.

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    How ironic.

    Back in February, Hadi Al-Modarresi, who is based in Iran, said that the coronavirus outbreak was “undoubtedly an act of Allah that is divine punishment against the Chinese for their treatment, mockery, and disrespect towards Muslims and Islam,” reported MEMRI-TV.

    “It is obvious that the spread of this virus is an act of Allah. How do we know this? The spread of the coronavirus began in China, an ancient and vast country, the population of which makes up one seventh of humanity,” said Al-Modarresi.

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    “More than a billion people live in that country. The authorities in that country are tyrannical and they laid siege to more than a million Muslims and placed them under house arrest. The journalists in that country began to mock the niqab of Muslim women and they forced Muslim men to eat pork and drink wine. Allah sent a disease upon them and this disease laid siege to 40 million [Chinese people]. The same niqab that they mocked has been forced upon them, both men and women, by Allah, by means of the state authorities and officials,” he added.

    It is now being reported that Al-Modarresi has contracted coronavirus, meaning that Allah must obviously be punishing him for wrongdoing.

    The scholar tweeted to his almost 1 million followers with a prayer to Muhammad and the revelation that “The health of His Eminence is in a marked improvement.”

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    He also tweeted an image of himself wearing a surgical mask.

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    Twitter users reacted with little in the way of sympathy.

    “Allah 0 – coronavirus 1,” remarked one.

    “He shows a great capacity for convoluted reasoning. Of course it is all based on 7th century logic,” added another.

    *  *  *

    My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.


    Tyler Durden

    Wed, 03/11/2020 – 21:05

  • Watch Live: President Trump Addresses The Nation About Covid-19 Crisis Plans
    Watch Live: President Trump Addresses The Nation About Covid-19 Crisis Plans

    Having ‘ummed’ and ‘ahhed’ for a few days, it appears the crash of the stock market has President Trump taking this virus seriously. Having failed to deliver any specifics this week on his “very substantial relief” package, Trump tweeted that he will deliver a statement on Wednesday night regarding the coronavirus as the administration mulls how to address the fast-growing health crisis.

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    The president told reporters during a meeting with banking executives that the statement would involve both health and economic measures being taken to combat the virus, though he would not specify what they would be.

    Trump tweeted several times Tuesday afternoon about the coronavirus, saying he is “fully prepared to use the full power of the Federal Government to deal with” the disease.

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    He later tweeted “The Media should view this as a time of unity and strength. We have a common enemy, actually, an enemy of the World, the CoronaVirus. We must beat it as quickly and safely as possible. There is nothing more important to me than the life & safety of the United States!”

    As The Hill reports,  White House aides have been negotiating with lawmakers on legislation to address the economic fallout of the spreading virus, which has rattled markets and sparked concerns among workers who may not have paid sick leave or the ability to work remotely.

    The administration is also said to be considering a national emergency declaration to free up additional resources to fight the coronavirus, which the World Health Organization (WHO) on Tuesday declared a global pandemic. Additional travel restrictions are also said to be on the table.

    Watch Live (his address is due to begin at 2100ET):


    Tyler Durden

    Wed, 03/11/2020 – 20:45

  • Traders React To The Death Of The Longest Bull Market In History
    Traders React To The Death Of The Longest Bull Market In History

    After a record 11-year, 357% surge off the March 6th, 2009 lows, The Dow Jones Industrial Average’s longest bull-run in history came to an end today (two days after its 11th birthday) with its first 20% – bear market – drop.

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    In fact, the 19-day collapse is the fastest peak-to-bear-market crash in the history of the stock market.

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    Asset-gatherers, commission-rakers, strategists, analysts, talking heads, and freshly minted gurus (well it always goes up right?) are out en masse to lament the death of the bull (and of course to look for the next dip-buying opportunity): (via Bloomberg)

    Quincy Krosby, chief market strategist at Prudential Financial Inc., where she started working in 2009. Prior to that, she was with Hartford Financial Services Group Inc.:

    “Did I see it coming this far? No. Throughout the past 11 years, the market has had a lot of dips, and always the Federal Reserve came to the rescue. There were 5% dips, there were 10% drops, and then there were periods where the dips were bigger. Right now, the Fed is not enough, central bank action is not enough. There is a pyramid of uncertainty right now. It’s a man-versus-virus story, but that’s not the only concern.”

    Ian Winer is currently an advisory board member at Bellator Asset Management. He ran a long/short portfolio at Galleon Group when the financial crisis hit. In the meantime, he’s worked at Nomura and Wedbush.:

    “When Lehman Brothers came under, the next day we came in, we didn’t have any portfolio, it has just vanished. I didn’t believe we’d bounce back the way we did, at all. I completely under-appreciated the liquidity that the central bank has been pouring into the market and how powerful of a force that would be. I was still scarred — and even to these days, there’s an element of me that still has a hard time believing in this bull market, having seen the devastation the financial crisis has caused. It’s still hard not to have it at the back of people’s minds, even after all this time in the rally. There’s a level of skepticism that entered into people’s minds — people of my age, Gen X, who never quite recovered. A rally since 2009 speaks volumes about what the Central bank’s liquidity injection was able to accomplish. The actual prices in the stock market, the real estate market and other speculative markets have been propped up, which has created an asset bubble that will eventually burst.”

    Jeff Mills is chief investment officer of Bryn Mawr Trust. Over the past decade, he spent time at PNC Financial Services and joined Bryn Mawr in 2019:

    “In terms of mood and sentiment, it’s textbook. In markets, stability breeds instability. As we got a Phase 1 trade deal, as Brexit was resolved, as the Fed promised to keep rates low, all risks seemed to melt away. Stability in markets causes the perfectly rational behavior of investors taking more risk. That additional risk taking sows the seeds of instability. Just as people are most optimistic, just as the market seems least likely to fall, it does. So the swing from very optimistic to fear, in my opinion, is not unusual. What is a bit unusual is the catalyst and the speed of the move lower. I think that has exacerbated the mood swing.”

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    Marvin Loh is a senior global macro strategist for State Street. In 2008, he was at Oppenheimer covering finance companies:

    “If you were in growth, in the Faang names, it has been tremendous. The amount of wealth that was created just by being in the market was tremendous. If you were lucky enough to have been in the growth sectors or, even better, in the tech names that drove it, it’s just been unprecedented. One thing I found interesting is just how much more — the fact that growth out-performed value by so much for such a long period of time and it wasn’t shared to the same degree globally. U.S. markets outperformed the rest of the world. That shows how unique it was from that perspective and why it was able to power on for so long.”

    Doug Ramsey is chief investment officer at Leuthold Group. He’s lived through the 1987 crash and the tech bust. He joined Leuthold in 2005:

    “It was the most hated bull market — people said that early on. I think in the middle of the decade people go on board. Certainly in the last year they became believers,” he said. “I’d also call the whole decade the steroids era because of all the help out of the Federal Reserve. I think it certainly did get a lot of help from the Federal Reserve. This was the steroids era of the stock market — the Fed propped it up.”

    Linda Zhang is the chief executive officer at Purview Investments. When the bull market started in March 2009, Zhang worked as a portfolio manager for global multi-asset mutual funds at MFS Investment Management. Zhang worked at BlackRock when the financial crisis hit:

    “This bull market will go down in history as the one that nobody believed would last this long. A lot of people have been hurt because their retirement money disappeared. Most of us had no idea in 2005 and 2006 what type of pain the financial markets are about to go through. What destroyed us in 2008 was over-leverage. What brought to where we are in 2020 is too much hope, sky-high valuations.”

    Rich Weiss, chief investment officer of multi-asset strategies at American Century Investments in Mountain View, California:

    “This bull market is very atypical in terms of duration. If you look at the last couple of years, growth hasn’t been stellar: anywhere around the world. Real economic growth is hovering around 2%, which is respectable, but certainly not bull market growth. This particularly bull market, low interest rates are arguably the primary driver.”

    Peter Tchir, head of macro strategy at Academy Securities LLC:

    “So many of the rules that were put in place were supposed to help small companies, and yet it’s the big ones that have benefited, on the banking side in particular. That’s made it more certain that policy makers need to make sure banks do well, and central banks will react more aggressively because of it.”

    Dean Curnutt, chief executive officer of Macro Risk Advisors:

    “We got here because of unusual, potentially unprecedented circumstances and because a strongly held consensus baked into market prices has been shattered,” he said. “Volatility that has remained so low for so long undeniably dictated positioning and forced investors to contemplate whether markets had experienced permanent, structural change. The sharpness of this adjustment, then, is the result of the collision of crowded trades implemented during exceptionally quiet times with a bona-fide turning point in the business cycle.”

    However, we give the last word to former Dallas Fed President Richard Fisher who prophetically mused last week:

    “Does The Fed really want to have a put every time the market gets nervous? …Coming off all-time highs, does it make sense for The Fed to bail the markets out every single time… creating a trap?”

    “The Fed has created this dependency and there’s an entire generation of money-managers who weren’t around in ’74, ’87, the end of the ’90s, and even 2007-2009.. and have only seen a one-way street… of course they’re nervous.“

    “The question is – do you want to feed that hunger? Keep applying that opioid of cheap and abundant money?“

    the market is dependent on Fed largesse… and we made it that way…

    …but we have to consider, through a statement rather than an action, that we must wean the market off its dependency on a Fed put.”

    Perhaps, just perhaps, the market carnage is all happening for ‘your’ own good.


    Tyler Durden

    Wed, 03/11/2020 – 20:25

  • CME To Close Chicago Trading Floor On Friday The 13th
    CME To Close Chicago Trading Floor On Friday The 13th

    Slowly but surely, the paralysis that has gripped virtually every corner of the global economy is spreading toward the beating heart of the world’s capital markets, and according to a notice posted late on Wednesday by the Chicago Mercantile Exchange, starting Friday the 13th the world’s biggest derivatives marketplace will become a ghost town – well, more so even than usual, since the CME already replaced most humans with algos and computers – as it closes its Chicago trading floor indefinitely “as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals.”

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    Better days

    The CME notice is below:

    CME Group today announced it will close its Chicago trading floor as of the close of business Friday, March 13, 2020, as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals. All products will continue to trade on CME Globex as they do today.

    No coronavirus cases have been reported on the trading floor or in the Chicago Board of Trade building. The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available.  The company’s headquarters at 20 S. Wacker Drive will remain open.

    The trading floor community will receive an additional q&a tomorrow related to the execution of certain floor products, procedures and protocols and other floor-related practices.

    Expect all other cash, future and derivatives exchanges to follow in the CME’s footsteps, as the world’s professional traders no longer welcome in their place of business, scramble for office space in their parents’ basement.

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    Before the machines took over.


    Tyler Durden

    Wed, 03/11/2020 – 20:05

  • "We've Moved Beyond The Disaster Stage & Are Approaching Catastrophe…"
    “We’ve Moved Beyond The Disaster Stage & Are Approaching Catastrophe…”

    Authored by Anthony Mueller via The Mises Institute,

    [In the second part of this interview, Brazilian journalist André de Godoy speaks with Antony Mueller about the relationship between credit and money, the inflationary process, and its relation to the real economy. How will the current debt binge end? What comes after Quantitative Easing?]

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    André de Godoy: Ludwig von Mises mentions in his books that credit expansion is one of the causes of the inflation beyond the monetary expansion. What are the similarities and differences between those two phenomena?

    Antony Mueller: Money comes into circulation through the channel of credit. Commercial banks get a loan from the central bank and provide loans to consumers, business, and government. Thus, there are two sources of credit creation and two basic types of money: central bank money and depository money. The modern monetary system is a pure credit system based on fiat money without a physical backing such as gold, for example. Governments left the gold standard with the beginning of World War I and they never returned to it. Nowadays, the government through its central bank can create as much money as it wants.

    Godoy: What exactly is the relationship between credit and money?

    Mueller: While fiat money is based on credit, not all money impacts on the economy. For example, commercial banks can borrow money from the central bank and not use it for loans but deposit it in their accounts at the central bank. Then more central bank money does not mean more commercial credit for the investors and consumers in the economy. Also, more money that comes into the economy does not necessarily mean more demand because the holders of money may slow down the frequency of transaction–the so-called velocity of money. When the economic agents spend less and hold their money assets for longer period of time, the velocity of circulation of money slows. Therefore, it is wrong to postulate that more money means more credit and that more money always means more spending. That was the false assumption of the monetarists.

    Godoy: Concerning the exchange rate policy, how can the variations of the exchange rate lead to inflation?

    Mueller: In the long run, the exchange rate reflects the purchasing power parity. In the short run, however, significant deviations happen because of policy intervention and because the central banks manipulate the interest rate. One intervention leads to the next, and finally everything gets messed up. For example, when the governments try to stimulate their economies through extra deficit spending, the interest rate should rise because of inflationary expectations, yet the central bank may counter this and keep the monetary interest artificially below its natural rate. In this case, smart money leaves the country and the currency devalues. When, as it is often the case with developing countries and emerging economies, the import elasticity is low, the quantity of the imports will not fall very much even when the price of the imports in domestic currency rises as a consequence of the exchange rate devaluation. This then may ignite price inflation at home and then, in turn, even more money tends to leave the country. In its desperation, government then typically feels forced to manipulate the exchange rate or to impose capital controls. In the end, the mess is so great that the stimulus experiment backfires and instead of the intended economic expansion, the country suffers a foreign exchange crisis along with an economic contraction or even a collapse.

    Godoy: Inflation is a subject that often shows up in the news, but the causes of the inflation do not get as much attention as its consequences. What are the causes of inflation and how do the factors interact?

    Mueller: Let us first make it clear that the term “inflation” suffers from a false use. The exact meaning of inflation is the expansion of the money supply. To say that “inflation rose” makes no sense because the term inflation refers to a volume, the monetary volume, which can expand (inflate) or contract (deflate). When I talk about the price level, I prefer the term “price inflation” to differentiate the fall and rise of the price level from the inflation that takes place with the expansion and contraction of the money supply. Additionally, Austrian economics stresses that the relationship between monetary expansion and the price level does not work in a mechanical way.

    Godoy: Could you explain the process?

    Mueller: To put the problem as simply as possible, one may say that price inflation happens when spending grows faster than the production. An excess of spending over production results when the money supply expands and when business, consumers, and government borrow to spend more. The discrepancy between the demand and the supply of goods and services leads to rising prices. Price inflation may also happen without the expansion of the money supply when a so-called supply shock happens and the supply of goods contracts. Then prices rise because the volume of goods has shrunk while the money supply has not changed. In order to understand inflation, one must keep various factors in mind: the process of how money enters the economy beginning with the central banks and the credit policy of the commercial banks, the rates of change of the money supply, of the credit volume, and of the velocity of transaction, as well as the nominal aggregate spending compared to the real supply of goods and services. The economics of inflation is not an easy topic.

    Godoy: When the government expands the monetary base but the commercial banks do not put the excess money into circulation, money in the hands of the public does not increase. Does this mean that in this case there will be no increase of prices and reduction of the purchasing power?

    Mueller: Yes, that is how it works. In the end, the outcome depends on human action. Human action takes place in time and therefore expectations matter. Inflationary expectations feed on themselves and likewise do deflationary expectations. That is why both processes, once they gain momentum, are so hard to control. If we had a sound monetary system, expectations would be relatively stable. Yet we have a state-run fiat monetary system with fractional reserve. Such a monetary system is not only very volatile but prone to prolonged phases of credit expansion and credit contraction. These big cycles can cover decades. We have been experiencing such an expansionary cycle in the industrialized countries since the end of the link of the US dollar to gold in the 1970s.

    Godoy: Can this cycle end?

    Mueller: This current cycle has been long overdue to turn into a contraction. Yet all major central banks have been fighting like mad against the trend. In Japan, the futile fight began already in the 1990s, in the United States it started at the beginning of the new millennium. Since the European debt crisis about ten years ago, the European Central Bank has also joined in. Thus, what we observe today is a desperate fight against deflation.

    Godoy: How does the unitary decrease in the money value happen under a fiat system?

    Mueller: Under the gold standard or a similar system with a strong anchor that moors the money supply, there will be fluctuation of the money supply in the short run. In the long run, prices will tend to fall as productivity increases. Expectations do not get out of whack, because inflation and deflation cannot deviate disproportionately. Yet under a fiat monetary system, inflation and deflation can take on excessive proportions. I fear that the ketchup parable of inflation holds up. You shake and hit the bottom of the ketchup bottle, but nothing comes out. Suddenly, the ketchup splashes onto your plate, on the table and on your shirt in a burst. It is the same with money inflation. The central banks push and shake, and no price inflation appears, until it suddenly comes as a massive burst of price increases and as hyperinflation. The analogy holds also for what comes after it. Whereas the ketchup sauce pours out of the bottle in a splash, it takes a lot of work and a long time to get the excess sauce back into the bottle. In fact, a full redoing will be impossible. Under a fiat monetary system, it is not only inflation that comes suddenly as a splash but also deflation. Under a fiat system, a monetary contraction is malicious, because it will typically show up out of the blue and play havoc with the business of the economic agents.

    Godoy: As a final question, please let me ask you for your outlook for the US American economy compared to Brazil’s.

    Mueller: The two economies are in very different stages of the business cycle. Brazil is still in a slump that began five years ago which brought with it an unemployment rate of over ten percent (and the rate still lingers above this mark), while the United States is officially at full employment. The question is when Brazil may recover and if the United States economy will tank. First to Brazil: Since January 1, 2019, Brazil has a new government which is different from its predecessors, as it has a strong promarket profile. Confidence is on the rise, and in this respect it is only a question of time when the Brazilian economy will recover. However, there are two risks: firstly, that inflation may come back to haunt Brazil when the recovery gets stronger and secondly, what will happen if the international economic environment continues to weaken and Brazil’s major trading partners, including China, enter into a recession.

    Godoy: How about the United States?

    Mueller: The policymakers have fabricated a gigantic balloon that has taken us atop a pyramid. We know that this situation is unsustainable, but we do not know to which side the balloon will fall. The American central bank has tried several times to deflate the balloon but blinked as soon as the stock market started to wobble. Like fiscal policy, monetary policy has painted itself into a corner: fiscal policy with too much public debt and monetary policy with too much private sector debt. Austrian economists have always warned that such policies of excessive credit creation will end in a disaster. I suspect that we have moved beyond the disaster stage and are approaching a catastrophe, which hopefully will serve as a wake-up call and alert the public and the policymakers about the need to reform the monetary system.


    Tyler Durden

    Wed, 03/11/2020 – 19:45

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