Mar 13

Today’s News 13th March 2020

  • Erdogan Blasts "Nazi" Greeks For Denying' Refugees' Access To Europe
    Erdogan Blasts “Nazi” Greeks For Denying’ Refugees’ Access To Europe

    Turkish President Recep Tayyip Erdogan said Wednesday that he would continue to flood migrants and refugees into Europe until European officials satisfied his demands, reported France 24. 

    Erdogan said Greece’s treatment of migrants and refugees at the Greece–Turkey border is comparable to Nazi atrocities. 

    “There is no difference between what the Nazis did and those images from the Greek border,” Erdogan said.

    “Until all Turkey’s expectations, including free movement … updating of the customs union and financial assistance, are tangibly met, we will continue the practice on our borders,” he told his AKP parliamentary group. 

    Turkish authorities over the last month have been facilitating refugee and migrant flows towards the border with Greece as Erdogan has made good on his promise to ‘open the gates.’ Erdogan views this move as a means to destabilize European governments and their economies in hopes Brussels would submit to his demands, including, more recently, greater assistance with the Syrian conflict.

    Ankara has openly said its strategy is to push migrants from Syria to the European border and make sure they do not return. Turkey deployed 1,000 special operations police officers along the 124 mile stretch of the border to make sure migrants stay in Greece. 

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    A video earlier this week showed Turkish special operations police using an armored vehicle with a rope to pull down a border fence, in an attempt to flood Greece with migrants. The outcome, however, was unsuccessful but outlined Ankara’s dangerous attempt to unleash migrant hell on Europe. 

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    Greece has shut its border with Turkey to avoid a migrant rush at the port of entries. Parts of its border with Turkey have been militarized; in anticipation, a crisis could soon develop as tens of thousands of people are awaiting entry. 

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    Turkish Interior Minister Suleyman Soylu was quoted last weekend as saying the next wave of migrants to flood Europe could reach one million, which would lead to a collapse of European governments and economies.

    Turkey’s Communications Directorate Fahrettin Altun criticized Greek authorities last week over the “ill-treatment of refugees.”

    Erdogan said Greek border guards have “opened fire on innocent people, exposing them to all kinds of inhumane treatment … [It] is barbarism in the full sense of the word.” 

    He added that “with the warming of the weather in the spring, the influx of irregular migrants heading to Europe will not be limited to Greece but spread all over the Mediterranean.” 

    Turkey has approximately 4 million refugees within its borders, many of which are from Syria, as even more are expected to flood into the country as the situation in Idlib, Syria, continues to deteriorate. 

    As warmer weather approaches, tens of thousands of migrants and refugees are lining up along the Greece–Turkey border, with hundreds of thousands of others shortly behind them, is only a matter of time before a breach is seen, as increased migrant flows into Europe could be imminent. 

    And to make matters worse, this all comes at a time when coronavirus is spreading like wildfire across the European continent. A migrant crisis and a pandemic could be what destroys Europe. 


    Tyler Durden

    Fri, 03/13/2020 – 02:45

  • The MH17 Show Trial Isn't About Justice Or Closure, But Information Warfare
    The MH17 Show Trial Isn’t About Justice Or Closure, But Information Warfare

    Authored by Andrew Korybko via Off-Guardian.org,

    The MH17 tragedy is back in the news after the start of this case’s show trial in the Netherlands, which isn’t about bringing the alleged perpetrators to justice or helping the victims’ families find closure, but waging information warfare against Russia in an attempt to “conclusively” pin the blame for this crime on its supposed proxies in Eastern Ukraine so as to ruin President Putin’s international reputation once and for all.

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    The world is once again talking about the MH17 tragedy after the start of this case’s show trial in the Netherlands, where four of the alleged perpetrators are being accused of murder. It’s unlikely that they’ll appear before the court, so the entire process is more about show than substance.

    In case the reader doesn’t remember exactly what happened on that fateful summer day on 17 July, 2014, the author recommends that they review his most recent analysis on the issue from earlier this year titled “Latest MH17 Documentary By SBU Whistleblower Shares Some Shocking Truths”, which covers what he believes to be the most convincing version of events that transpired immediately before, during, and after the passenger jet was shot down over Eastern Ukraine.

    In short, the conventional narrative that the Russian-aligned rebels there were responsible is debunked as a convenient cover-up for masking Kiev’s culpability, which in turn also makes that government’s Western backers — and not Russia — indirectly responsible. It’s therefore understandable that a lot of powerful forces are invested in making their manufactured version of the “truth” the “official” one, hence the show trial, which is nothing more than an attempt to “conclusively” pin the blame for this crime on Russia and its supposed proxies in Eastern Ukraine.

    Before going any further, it needs to be said that victims’ families have every right to be upset about what happened, and that everyone should respect their right to draw their own conclusions about what took place even if one doesn’t ultimately agree with them. The author doesn’t believe that Russia or the Eastern Ukrainian rebels were responsible, but acknowledges that some of the victims’ families think differently, especially after some of them staged a silent protest outside of the Russian Embassy in The Hague over the weekend.

    Nobody should criticize the victims’ families and thus make this all the more harder for them to deal with, but there’s also nothing wrong with talking about how their reaction to this tragedy is being exploited by those who are relying upon it to convince others that their interpretation of events is the only correct one.

    Politicizing the suffering of innocent people is wrong no matter who does it or why, which is why it’s morally reprehensible that others are taking advantage of them under the guise of “giving them a voice” in order to push their narrative onto the broader public. The ongoing trial isn’t about bringing the alleged perpetrators to justice or helping the victim’s families find closure, but waging information warfare against Russia, the purpose of which is to ruin its international reputation and that of its leader once and for all.

    President Putin is generally despised by the West but loved by the non-West because of his domestic and foreign policy successes over the past 20 years, which greatly contributed to bringing the emerging Multipolar World Order about. Even his detractors recognize that he’s an epochal figure whose legacy will certainly be studied for generations to come by people all across the world, they just regard Russia’s return to international prominence as being detrimental to their countries’ zero-sum interests.

    Nevertheless, they also wisely understand that soft power is more important than ever before in today’s interconnected, globalized world, especially after the information-communication technology revolution of the early 2000s, so they have a driving motivation to defame the Russian leader any chance they get.

    Regrettably, the MH17 tragedy is cynically seen as the “perfect opportunity” to ruin his legacy by forever associating him with what happened even though he played no role in those events whatsoever, nor did his countrymen. All that’s important to the “perception managers” who manufactured this weaponized narrative is that the lingering suspicion of President Putin’s possible involvement “credibly” exists, which explains the infowar importance of the ongoing show trial for supposedly “confirming” that.

    Back to the show trial itself, it’s predictable that the accused will probably be found “guilty” for the aforementioned political reasons of pinning the blame for that tragedy entirely on Russia and the Eastern Ukrainian rebels so as to deflect from the “inconvenient” facts that have since come to light implicating Kiev and its Western backers, which was explained in the author’s analysis that he cited in the opening paragraph of this article.

    The overall soft power impact of this seemingly inevitable conclusion will likely be minimal, however, seeing as how most people have already made up their minds about who was really responsible. Those who are convinced that Russia played a role will feel “vindicated” by the anticipated verdict, while those who have remained skeptical this entire time could use the newfound attention to this case to share the “inconvenient” evidence that was just touched upon with others.

    The takeaway from all this “legal” drama is that tragedies will almost always be politicized for information warfare purposes, especially if the case can remotely be made that Russia or any of the West’s other geopolitical rivals might have had even an indirect role in whatever it is that transpired, so these countries should brace themselves to expect more such show trials in the future and take steps to ensure that their side of the story is heard by as many people as possible.


    Tyler Durden

    Fri, 03/13/2020 – 02:00

  • When Will Authorities 'Lockdown' America (& How Long Will Quarentine Last)? Here's What The Patterns Show Us
    When Will Authorities ‘Lockdown’ America (& How Long Will Quarentine Last)? Here’s What The Patterns Show Us

    Authored by Daisy Luther via The Organic Prepper blog,

    Yesterday the World Health Organization officially declared Covid-19 a pandemic (like we didn’t already know this.) As well, President Trump addressed the nation, closing American borders to all flights from Europe and announcing some ways he intends to help the people of the United States financially.

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    In unofficial terms, this is sh#t getting real.

    Things are going to get worse – possibly much worse – before they get better. Illness completely aside, this will cause financial problems that many folks will feel for years after the pandemic is over.

    The biggest question people are asking now is, “When?”

    When will the US begin to see measures being taken to lockdown areas or put people into quarantine? What would that lockdown look like? How long will quarantines last?

    We can look at how this has gone in other countries to get a general idea of the pattern. Of course, we’re Americans and we do things differently. Our geography is quite different as is our population density. So this isn’t an exact science. We’re looking at patterns to predict (not in a crystal ball kind of way but an analysis kind of way) what could happen here.

    Here’s how things have gone in Italy and China.

    We can still learn a lot from observing the patterns of the breakdowns there.

    The United States is probably closer culturally to Italy and other European countries than we are to China. For example, Italy is far more concerned about human rights than China. However, geographically, we’re a lot more similar to China than we are to Italy. China has 9.3 million square kilometers and the United States has 9.1 million square kilometers. Meanwhile, Italy is 301,340 square kilometers.

    Both of these things play a role in the spread of the virus and containment efforts.

    What about China? Well, I don’t trust the numbers and information coming out of China to include them in this model by very much, but note that the situation of which we’re aware has been going on for about 8 weeks. The first cases of a mystery illness were heard of when Dr. Li Wenliang, who later died of the coronavirus, blew the whistle on China on December 30, 2019.

    To our knowledge, the quarantines began in Wuhan on January 22. So from the first patients to the initial lockdowns was 23 days. From the date the first noted illness became public to now has been 73 days. From the date of the first quarantines in Wuhan until now has been 51 days. Although the quarantine has been loosened, there are still serious restrictions on movement in China. The country may or may not be getting back to normal, depending on who you believe. If they are not getting back to normal, then this 7-week window is inaccurate.

    Back to Europe. Italy, specifically.

    On about the 20th of February, three cases of Covid-19 were confirmed in Northern Italy. Officials acted quickly to lock the area down but unfortunately, their quick actions weren’t enough. What began as a lockdown of a few villages in the Lombardy region in northern Italy on the 21st spread to a nationwide lockdown on March 9th.

    From the first patients to local lockdowns was one day. From the first patients to the entire country being quarantined was 22 days. In just 22 days, the virus had spread to such a degree that an entire country has suspended mortgage payments, stopped all non-essential movement, and ceased business. Their medical system is so overwhelmed that they are forced to choose who to save and many people over 65 are not even assessed as the hospitals reserve their resources and space for those who have a higher chance of survival.

    Less than a month ago, everything was normal in Italy. Tourists were making wishes at Trevi Fountain, people were enjoying sunny days having coffee with friends on a cafe patio, and businesses were thriving.

    As of yesterday, Italy had 12,462 cases of Covid-19 and the death toll leapt from 196 to 827. In a day. Everything has been ordered closed except food stores and pharmacies.

    This is how fast things can go.

    And Italy is currently on day 25 since the first 3 cases were diagnosed. If it took China at least 50 days of quarantine, then Italy is potentially halfway through the worst of this outbreak.

    Countries across Europe are slamming their borders shut in an effort to contain the virus. Whether they’ve acted soon enough remains to be seen.

    Where is the United States in all this?

    The first case of Covid-19 was diagnosed in the United States on January 22nd in Snohomish County, Washington. Incidentally, that was the same day the city of Wuhan went into lockdown.

    We have already had some small regional lockdowns and people in quarantine after traveling, but the quarantining of large groups of people has not yet occurred in the US. YET. We are on day 50 since the initial case was diagnosed in the United States. However, the first case of community spread was on February 26, and this may be a more important marker than the first case in a country the size of ours. “Community spread” means the illness was not contracted through traceable means, like a family member with the virus or travel history to places where the illness was running rampant. So if we’re counting from the first day of community spread, the US is on day 15.

    If massive lockdowns are occurring on about day 22-23 in other countries, that means we may have 7-8 days before we see major lockdowns and quarantines here. That would put us at March 19th or 20th. We may see some early lockdowns of cities or regions where the virus is rapidly spreading like Seattle and New York City. The lockdowns in other countries expanded in about a week to encompass greater geographic areas and larger numbers of people. This would put us at approximately March 26-27th.

    Now keep in mind, this is not engraved in stone. I don’t trust our numbers any more than I trusted China’s because the testing protocols have been nothing short of disastrous. First, faulty tests were sent out to health departments across the country and then the criteria for being tested was so narrow that many cases were likely overlooked. It took one person who caught the virus through community spread 10 days to be tested because she didn’t fit the criteria.

    The US might still manage to get a handle on this outbreak and contain it. A successful treatment regimen could be discovered. But if you’re looking for a general idea of when we may see lockdowns and quarantines, this pattern seems to be repeating itself and possibly speeding up.

    This chart shows how far behind Italy other countries are in the grand scheme of this outbreak. Based on this chart we are 11.5 days behind Italy, who instituted their country-wide quarantine three days ago. If this chart is correct, we’d be looking at massive quarantines on approximately the 20th as opposed to the more gradual schedule used by China.

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    Graph by Professor Mark Handley, at University College London (Image: Twitter)

    How long are quarantines lasting?

    If the information coming out of China is accurate, their period of extensive lockdown has lasted 7-8 weeks. Italy is right at the midpoint of that, at 3.5 weeks and the situation appears to be nowhere near under control.

    Based on this, I would expect a quarantine or lockdown in the US to last for up to 2-3 months. There are lots of variables, of course, but this would be a good general guide for getting supplies.

    • This article can help you figure out what you need for a period of quarantine
    • This book (which was banned by Amazon) is an even more thorough guide
    • To get a free quarantine checklist, sign up here for my newsletter.
    • If supplies are short where you live, this article can help you figure out some alternatives.

    I have to stress that whether you are personally concerned about getting the coronavirus or not, a mandatory quarantine will still affect you and you’ll want to be prepared. Otherwise, those folks you made fun of for buying toilet paper will be laughing at you for using the pages of a phonebook to wipe.

    So what’s going to happen?

    It’s impossible to predict exactly how the coronavirus is going to affect the United States. Americans are far more independence-minded that folks in China and much less likely to cooperate with draconian containment measures. At the same time, healthcare here is outrageously expensive for those of us who are uninsured, which up until this point may have caused many people to skip medical treatment or diagnosis, potentially spreading the virus faster.

    However, as of today, March 12, a number of universities across the country are shutting down classes until April. Workplaces are taking more thorough sanitation measures. Large gatherings, conferences, and conventions are being canceled. The NBA has canceled the rest of the season, the MLB has canceled spring training, and NCAA tournaments have also been canceled. (source) Last night, President Trump announced the suspension of air traffic from the EU much to the outrage of Europe, and today he said that suspension of domestic travel is also a possibility. (source)

    We know there is community spread in New York, Washington state, and now potentially Houston, Texas. Containment efforts thus far have failed.

    While we aren’t in lockdown yet, anyone who is paying attention can see that we’re certainly headed in that direction.

    There are some things that could change this. If we begin having a lot more positive cases in clusters, it could accelerate the timeline. On the other hand, if the growth in the number of cases slows down, it would show that containment efforts are working and it might never get as far as government-mandated quarantines.

    Either way, if you aren’t prepared, I would strongly recommend you put some plans in place.

    It’s time to make some decisions.

    While again, I must stress, we don’t know for sure what will happen, it’s time to make some decisions just in case.

    • Where do you want to be during a quarantine or lockdown?
    • When will you stop going to work or sending the kids to school?
    • Do you have enough supplies to see you through 7-8 weeks or longer?

    Use this guide to get prepared for the possibility of a Covid-19 lockdown.

    You’re the only person who can answer these questions for yourself and your family. But you should probably answer them soon, or the decisions will most likely be made for you.


    Tyler Durden

    Fri, 03/13/2020 – 00:05

  • Seattle Running Dangerously Low On Protective Gear Amid Largest Outbreak In Country
    Seattle Running Dangerously Low On Protective Gear Amid Largest Outbreak In Country

    Seattle is running out of protective gear for first responders and medical facilities as COVID-19 continues to spread in the hardest-hit region in the country, and they are days to week away from running out if they don’t receive new supplies from a national stockpile.

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    Mayor Jenny Durkan (D) told The Hill  that according to current estimates, there are over 1,100 people in the greater Seattle area who are infected with the coronavirus. Of note, there have been 397 confirmed cases in Washington State, of which 29 have died and one person has recovered.

    Those who become sick enough to need hospitalization are already stretching health systems as city, county and state officials scramble to build capacity. Many people who become ill call 911, putting a premium on personal protective gear that police and fire fighters must don and doff each time they come into contact with someone who might be symptomatic.
     
    “There’s some critical things that we will need very quickly. We have made it clear on what those are. Testing still remains the number one issue. Capacity has increased, but it has not increased to meet the demand or the need,” Durkan told The Hill. “The national stockpile of personal protective equipment, face masks, face shields, gloves — we will run out if we don’t get replenishments soon.” -The Hill

    Despite the dire situation with supplies, Dugan showered praise on state and federal officials, including Vice President Mike Pence following his visit to the Seattle area last week. Early on in the outbreak, she said Pence successfully helped her office resolve a problem early in the outbreak.

    That said, testing constraints have proven frustrating.

    “The thing that has hamstrung us the most and still we are continuing to catch up because of the lack of testing,” said Durkan. “It’s been very difficult to know how much mitigation and government regulation there has to be because we didn’t know what the scope of the problem was.”

    “No one has made any secret that at the beginning of this there were some real stumbles at the CDC. But the line-to-line communication between the city and CDC is working really well,” she added.

    Seattle officials began preparing for coronavirus in January following its outbreak in Wuhan, China – holding cabinet-level exercises to plan for the city’s response. Around that time, a man in his 30s from Snohmish County north of Seattle boarded a flight from Wuhan back home – the first known American case of the virus.

    Genetic testing from the man and other similar cases revealed that COVID-19 had been circulating undetected for weeks, according to the report.

    “It came upon us much more quickly than anyone anticipated,” said Durkan.

    Durkan stood alongside Gov. Jay Inslee (D) on Wednesday as Inslee announced restrictions on all gatherings of more than 250 people in King, Pierce and Snohomish counties, the three Washington State counties hit hardest by the virus. Later on Wednesday, Seattle’s public school district said it would close schools for two weeks. The system was still figuring out details for how some of its 52,000 students would be cared for, especially those who depend on it for free and reduced price lunches.
     
    The number of cases in Washington State have doubled every six or seven days for the past several weeks, Durkan said. In a worst-case scenario, the Seattle area could be overrun by 70,000 cases in six weeks.
     
    “When you hear those numbers and look at those models, it makes it pretty easy to make the decision to take some pretty significant steps,” she said. -The Hill

    According to the report, the virus has already hit Seattle’s economy hard – which will ‘likely fall disproportionately on low-income workers and small businesses that depend on foot traffic.” 

    Large corporations and institutions such as Amazon, Microsoft and the University of Washington have all ordered workers to work from home – leaving coffee shops, barber shops, restaurants and other similar businesses dying on the vine.

    Durkan’s administration plans to help businesses impacted by the virus by delaying business and operating taxes and increasing funding to a small business stabilization fund.

    “Our small businesses, our employees, minimum-wage workers, low wage workers, gig economy workers, those are the most vulnerable part” of the city’s economy, said Durkan. “Small businesses provide about 200,000 jobs in Seattle. The biggest part of our economic sector in terms of jobs. That’s like four Amazons.”


    Tyler Durden

    Thu, 03/12/2020 – 23:45

  • If You're Close To The Scene Of A Crime, Police Can Demand Google Hand Over Your Data
    If You’re Close To The Scene Of A Crime, Police Can Demand Google Hand Over Your Data

    Authored by Aaron Kesel via TheMindUnleashed.com,

    The Gainesville Police Department suspected an innocent man was involved in a burglary so naturally they requested that Google give them all of his location data.

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    Google’s legal investigations support team wrote to Zachary McCoy telling him that local police were demanding information related to his Google account. Google replied and said it would release the data unless McCoy went to court and tried to block the request, NBC reported.

    The man then searched his case number on the Gainesville Police Department website where he found a one-page report on the burglary of an elderly woman’s home ten months earlier on March 29, 2009. Unfortunately for McCoy, the crime occurred less than a mile from the home that he shared with his two roommates.

    Caleb Kenyon, McCoy’s lawyer, said he was subject of a “geofence warrant.” A geofence warrant is essentially a virtual dragnet over crime scenes where police request to sweep up Google location data drawn from users’ GPS, Bluetooth, Wi-Fi, and cellular connections from everyone who is near a crime scene.

    From this blanket of surveillance law enforcement then try to figure out which phones may be tied to suspects or possible witnesses. According to journalist Tony Webster, “Law enforcement officials say it’s a promising new technique.”

    “A reverse location search warrant differs from a traditional search warrant in that it doesn’t identify a suspect and establish probable cause to ask for evidence of a suspect’s crimes. Instead, it asks for information about everyone in an area at a certain time, working backwards to identify a suspect.”

    McCoy used an exercise-tracking app, RunKeeper, to record his rides. The app relied on his phone’s location services, that were then fed to Google. He looked up his route on the day of the burglary and saw that he had passed the victim’s house three times within an hour, part of his frequent loops through his neighborhood.

    “It was a nightmare scenario,” McCoy recalled.

    “I was using an app to see how many miles I rode my bike and now it was putting me at the scene of the crime. And I was the lead suspect.”

    McCoy ended up fighting back and winning, resulting in the police dropping their warrant request with the help of his lawyer.

    But this isn’t the first time a blanket surveillance warrant has been used, last year in New York law enforcement used a “geofence warrant” against the Proud Boys, a group of pro-Trump rightwing extremists after they allegedly beat up four leftist protesters, believed to be associated with Antifa, outside an Upper East Side event. The four protesters refused to cooperate with police, and authorities were unable to identify them.

    As part of their attempt to find their identities, prosecutors sent Google a warrant for phone records near the conflict. However, they ended up collecting multiple innocent people around the area under their dragnet as well, even though they had nothing to do with the crime. Exactly like what happened with McCoy.

    And in just one year, 22 Google reverse location search warrants were issued in the state of Minnesota alone.

    This type of warrant has privacy and civil liberties advocates concerned. They’re noting that the search has constitutional issues due to protections from unreasonable searches. However, police argue the information alone is not enough to justify charging someone with a crime. But in another case in Arizona, a man was mistakenly arrested and jailed for a murder he didn’t commit, which was largely based on Google data received from a geofence warrant.

    “Normally we think of the judiciary as being the overseer, but as the technology has gotten more complex, courts have had a harder and harder time playing that role,” said Jennifer Granick, surveillance and cybersecurity counsel at the American Civil Liberties Union about another case of using geofence surveillance. “We’re depending on companies to be the intermediary between people and the government.”


    Tyler Durden

    Thu, 03/12/2020 – 23:25

  • Caterpillar Machine Sales Plunge Most In Three Years As Pandemic Paralyzes Heavy Industries
    Caterpillar Machine Sales Plunge Most In Three Years As Pandemic Paralyzes Heavy Industries

    Just in case the world needed yet another confirmation the world’s manufacturing industries, primarily construction and mining, are grinding to a halt, it got one late on Thursday when Caterpillar reported that in February its global machine sales suffered their biggest drop since December 2016.

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    The report, which covers the first full month when the coronavirus pandemic paralyzed China’s economy and was rapidly spreading across the rest of the world “underlines how the coronavirus outbreak is putting a drag on the industries that Caterpillar supplies” according to Bloomberg. While the North American region posted another double digit drop, declining from -11% in January to -12% in February, it was Asia that was hit the hardest, tumbling from a modest, -2% drop in January to a whopping -17% in February, the biggest decline in four years.

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    As Bloomberg further notes, the downbeat mood in the heavy manufacturing industry permeated ConExpo, the largest construction convention in North America. In remarks at the Las Vegas gathering this week, which surprisingly has not been canceled, Caterpillar CEO Jim Umpleby said the coronavirus hasn’t yet caused major supply snags, and the company was focusing on executing the plan set in place when he first took over as CEO. In other words, the real fall in retail sales is yet to come, and may be why Umpleby didn’t offer much detail on how the worldwide move to stamp out the virus will change prospects for the business.

    “Our guidance was based on the best information that we had at the time, and if we have any changes to that we’ll do it when we put out our first-quarter results,” Umpleby told Bloomberg in an interview. Translation: expect CAT to pull its entire 2020 guidance in the coming days.

    Fears about the virus’s impact on global growth have helped send shares of the economic bellwether down 38% this year, off to its worst start since 2009.

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    But the worst is yet to come, because the coronavirus is not even the company’s biggest threat: the sudden Saudi oil price war is. CAT reported that oil and gas retail sales fell just 3% (a sixth straight month of declines in the segment), however with the industry now frozen with virtually no new exploration for the foreseeable future, we expect this CAT vertical to plummet to zero next month. Trying to put some lipstick on the pig, CFO Andrew Bonfield said Wednesday that oil-market tumult from the past week will impact the oil and gas business, but said that it’s still too early to tell how strong that may be.


    Tyler Durden

    Thu, 03/12/2020 – 23:05

  • Even The Most Powerful Central Banks Cannot Save Us
    Even The Most Powerful Central Banks Cannot Save Us

    Authored by Ye Xie, macro commentator at Bloomberg

    Even the Most-Powerful Central Banks Cannot Save Us

    First, the European Central Bank tried and failed to calm the market. Then, the Fed brought out the bazooka and it turned out to be a dud.

    What the world’s two most-powerful central banks showed Thursday was that they are powerless in dealing with a bug. That’s bad news for global markets, and China is no exception.

    Literally, there was no place to hide. Gold sold off, along with stocks, credit and oil, for a second day.

    European stocks tumbled the most on record and U.S. investment-grade bond funds suffered unprecedented outflows.

    It happened even as the ECB boosted its QE and liquidity tools, while the Fed resumed its own asset purchase programs.

    What’s more worrying is that the stress is emerging in dollar funding markets as banks and investors scramble for the U.S. currency to hunker down. You can see the dollar hoarding in the widening cross-currency basis swap, and falling CNH forwards.

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    As a result, the dollar rallied and the offshore yuan tumbled the most since December.

    The Fed stepped in quickly Thursday with massive repo operations to alleviate the funding stress. Keep an eye on that to see if it succeeds in calming markets down. If not, the yuan could weaken along with others.

    China clearly is not in the eye of the storm. Yet its currency and equity markets are now down for the year. The problem is that the contagion of the virus is still growing exponentially globally.  The following chart shows how the number of confirmed coronavirus cases in the U.S. is following the same path as Italy.

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    Until other governments start to panic, the worst is yet to come.


    Tyler Durden

    Thu, 03/12/2020 – 22:45

  • Canada's First Lady Tests Positive For The Coronavirus: Live Updates
    Canada’s First Lady Tests Positive For The Coronavirus: Live Updates

    Summary:

    • Scott Gottlieb says US can still avoid “Italy-like” outcome
    • Cuomo closes Broadway, bans all events in NY with over 500 ppl, reduces venue max capacity by 50%
    • NCAA cancels ‘March Madness’
    • F1 Australia Grand Prix to be held without crowd
    • Trump Campaign tells employees to work from home through Monday
    • Maryland & Ohio cancel school
    • Dr. Fauci appears to endorse European travel ban
    • Spain, Italy ban short selling
    • Charles Barkley to self-quarantine
    • UK reports 2 more deaths
    • NYC declares state of emergency
    • Cali bans gatherings with more than 250 ppl
    • China sending a medical team and equipment to Italy
    • Arsenal Manager Mikel Arteta tests positive for Covid-19
    • Disney closes park in Anaheim
    • American Air confirms pilot tested positive for Covid-19
    • Italy closes Catholic churches
    • NBA player apologizes for making light of virus
    • Trudeau and wife to self-quarantine after wife reports flu-like symptoms
    • France death toll climbs to 61
    • Houston closes schools until end of the month
    • Spain death toll climbs to 86
    • Ohio bans gatherings with more than 100 ppl after confirming 5th case
    • Gabon, Ghana confirm first cases of the virus
    • PA. Gov. Tom Wolf shuts down much of Montgomery County
    • 2nd Utah Jazz player tests positive
    • Slovakia closes all borders, international airports
    • NJ cutting off nightclub liquor sales after 10pm
    • Deaths in Italy above 1,000
    • NHL “pauses” play
    • MLB will delay start to 2020 season by 2 weeks
    • Chelsea Football Club player Callum Hudson-Odoi tests positive
    • Dr. Fauci says test shortage is major government ‘failing’
    • Rick Scott 2nd Senator to self-quarantine over virus
    • Senate cancels recess, will stay open next week
    • Reporter claims Gobert was careless in the locker room
    • Premier league to hold emergency talks Friday as clubs push to suspend play
    • 2020 champions league tournament postponed until next year
    • US Major League soccer suspends play
    • Trump says we may need to extend travel ban
    • Reports claim once again that Merkel is ready to whip out the checkbook
    • Goldman asks workers in NY to work from home in ‘staggered shifts’
    • EU officials condemned Trump’s travel ban
    • Trump says ‘markets are going to be fine’
    • Spain has approved a €2.8 billion rescue package
    • Olympic torch lit in front of just 100 spectators
    • La Liga suspends season after Real Madrid player tests positive
    • 3 F1 racers quarantined
    • Blackstone advises portfolio companies to draw down revolving credit lines
    • NHL rumored to be planning a league play suspension as playoffs begin
    • Passenger on JetBlue flight from NY to FLA tests positive for virus
    • Spanish cabinet being tested for coronavirus
    • Scandinavia begins shuttering schools
    • Iran reaches out to 3 million Iranians who may have been infected
    • Market participants wary of dissipating bond market liquidity
    • Global deaths pass 4,600

    *  *  *

    Update (2230ET): A few hours ago, we reported that PM Justin Trudeau and his wife, Sophie Gregoire, had gone into self-quarantine after his wife had exhibited symptoms of the virus after visiting London recently.

    Well, the test results are in. And Gregoire, the first lady of Canada, is positive for Covid-19.

    She and the Prime Minister will be self-isolating for 14 days.

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    As we wait for the Premier League’s emergency tomorrow, news has broke that Chelsea Football Club player Callum Hudson-Odoi has tested positive for the virus and will remain in self-isolation. Callum displayed symptoms on Monday morning, and hasn’t been to the team’s training ground since. The rest of the team and its coaching staff will now self-isolate.

    *  *  *

    Update (2020ET): The Trump Campaign has asked workers to work from home through Monday.

    In other news, Charles Barkley said he plans to self-quarantine after falling ill. He has been tested for the coronavirus, but is awaiting the results.

    *  *  *

    Update (2000ET): Like we mentioned earlier, Arsenal Manager Mikel Arteta has tested positive, and as sports leagues around the world suspend play, the Premier League is reportedly holding emergency crisis talks on Friday, according to the Independent. 

    Many of the clubs owners want play to be shut down and disagree with the decision to continue so far. Some are even pushing for the entire season to be voided.

    Also: In further bad news for the airline industry, American Air has confirmed that one of its pilots tested positive for the virus. And Disney has just announced a decision to close theme parks in Florida and Paris – rounding out most of its biggest parks around the world. They closed Disney Land in California earlier today.

    *  *  *

    Update (1930ET): Seattle became the first major US city to shutter its school system last night, and just a few hours ago, Maryland and Ohio announced state-wide shutdowns of their own.

    Now, the Houston Independent School District, one of the largest in the US with more than 200,000 students, closes all schools until March 30 due to the outbreak.

    At least 17 cases of the virus have been diagnosed in the Houston area, most of them directly related to a group who recently traveled to Egypt.

    Across the US, the coronavirus panic is intensifying, as people continue to hoard supplies, even nonessentials like toilet paper, in a blind panic.

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    Two new African countries reported their first cases of the virus on Thursday, including Gabon and Ghana.

    *  *  *

    Update (1905ET): Spain reports 869 new cases of coronavirus, and 31 new deaths, bringing the national total to 3,146 cases and 86 deaths.

    *  *  *

    Update (1845ET): Chatter form earlier today claiming that Dr. Fauci personally signed off on President Trump’s travel ban has been confirmed.

    • FAUCI SAYS EUROPE TRAVEL RESTRICTIONS RIGHT PUBLIC HEALTH CALL

    The celebrated epidemiologist said during a recent TV appearance that, if Trump hadn’t restricted travel from China, there would have been “many more travel-related cases”.

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    On the Continent, regulators in Italy and Spain have banned short-selling amid a brutal global selloff.

    Walking out of the Capitol building after his hearing, Dr. Fauci stopped to take a few questions from reporters, and clarified that enough tests are now available that any patient whose doctor believes a test is necessary can get one.

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    We mentioned earlier that three Formula-1 racers have tested positive for the virus in Australia. Well, the Australian Grand Prix, the organizers of which were criticized for refusing to taking proper steps to protect spectators and drivers from the virus, will be held without a live crowd.

    One more thing: apparently ‘fake virus news’ is becoming a problem in NYC. What’s wrong? Too many gullible hipsters can’t figure out for themselves whether a tweet from a random, unverified account is a hoax?

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    Finally, in Europe, Arsenal Manager Mikel Arteta has tested positive for Covid-19, the first Premier League player or coach to test positive.

    *  *  *

    Update (1725ET): Maryland and Ohio have cancelled schools across each state, with Maryland shuttering schools until March 27 (two weeks) and Ohio shuttering them for three weeks.

    In addition, Maryland Gov. Larry Hogan directed the Maryland Emergency Management to the highest activation level and issued an executive order that moves the National Guard to a higher state of readiness. The state has only confirmed 12 cases of the virus.

    Here’s the release from the Maryland Superintendent of schools:

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    And the rest of Hogan’s press conference, where he made the announcement.

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    Ohio Gov. Mike DeWine said the decision to close schools and have an “extended spring break” came after consulting with experts, the closure will be “reviewed” at the end of the period.

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    In Italy, catholic churches are set to completely close.

    Rudy Gobert, the first Utah Jazz player to be diagnosed with the virus, took to Instagram on Thursday to thank people for their support and also to apologize for his actions seen in a now-viral video of him earlier this week deliberately touching microphones and recorder during a press conference, in an act of mockery of the viral panic.

    “The first and most important thing is I would like to publicly apologize to the people that I may have endangered. At the time, I had no idea I was even infected. I was careless and make no excuse. I hope my story serves as a warning and causes everyone to take this seriously. I will do whatever I can to support using my experience as way to educate others and prevent the spread of this virus,” he said.

    *  *  *

    Update (1630ET): The NCAA just delivered a huge blow to college sports fans by confirming that it will cancel men’s and women’s “March Madness” tournaments, after earlier confirming that any games associated with the tournament would be played in front of empty crowds.

    Earlier, all of the biggest conferences in the country cancelled their men’s championship tournaments.

    Here’s more from CNBC:

    The NCAA has canceled its March Madness basketball tournaments – and “all remaining winter and spring” championships – as coronavirus fears upend the sports world.

    “This decision is based on the evolving COVID-19 public health threat, our ability to ensure the events do not contribute to spread of the pandemic, and the impracticality of hosting such events at any time during this academic year given ongoing decisions by other entities,” the organization said in a statement.

    Earlier Thursday, major conferences canceled their championship tournaments and sports organizations across the world rolled out fan restrictions and suspensions of play in light of the COVID-19 pandemic.

    The Southeastern Conference, Big Ten Conference, Pac-12 Conference, Big East, Big-12 Conference and Atlantic Coast Conference all canceled their men’s championship tournaments ahead of the NCAA’s announcement. At least two high-profile teams also individually announced their withdrawals from the tournament.

    The decision comes after nearly every major sports league in the country that’s currently active suspended play, and the MLB delayed the start of its season.

    Disney also just announced plans to close Disneyland Park and Disney California adventure in Anaheim.

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    *  *  *

    Update (1615ET): With all of Wall Street in a panic, and officials at JFK scrambling after a passenger aboard a JetBlue flight to Fla. was confirmed positive after taking off, NYC Mayor Bill de Blasio has decided to declare a state of emergency, citing the “intense” increase in the number of confirmed cases in the city, and that the situation is evolving “hourly”.

    “The last 24 hours have been very sobering,” he said. The declaration will allow the city to access emergency funds. However, the mayor insisted this isn’t a run-up to cancelling school. He added that “we want our schools to remain open, we intend for our schools to remain open.” Though after-school sports, PTA meetings, and other activities will be cancelled for the time being.

    As the situation worsens, de Blasio said the city government recognizes the struggles of all New Yorkers during this difficult time.

    “We’re very concerned about people’s loss of livelihood…We’re worried about folks having trouble paying the rent,” de Blasio said.

    The decision comes five days after Gov. Cuomo declared a state-wide emergency.

    Watch the rest of his press conference below:

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    New York is presently battling it out with Washington State for mantle of worst outbreak in the US. They represent the worst outbreaks on their respective coasts right now.

    In an effort to combat ‘fake news’ – always a problem during city-wide emergencies, as we first learned during Hurricane Sandy, the city’s first major natural disaster of the Twitter era – the NYPD tweeted that reports it was planning to shut down the subway were “false”.

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    So far, 96 cases have been confirmed in NYC.

    *  *  *

    Update (1545ET): California is following in New York’s footsteps and cracking down on large “non-essential” gatherings. According to a statement, gatherings with 250+ people must be postponed until the end of March, at the earliest. 

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    LA County took things a step further by banning gatherings of 50+ in publicly-owned buildings.

    Watch the governor’s address below:

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    In other news, China is sending a medical team and supplies to Italy to help them fight the virus, in Beijing’s latest gesture of condescension toward the West.

    *  *  *

    Update (1540ET): Macron is still speaking. Watch the rest of his statement below:

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    *  *  *

    Update (1510ET): As France and Germany scramble to suppress their own national outbreaks while casting a wary eye toward Italy – yet they stubbornly refuse to close borders like other European countries have – French President Emmanuel Macron has just announced that he plans to close schools and universities in the country beginning on Monday.

    France also reported 595 new cases of coronavirus, and 13 new deaths, raising its total to 2,876 cases and 61 dead.

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    Italian officials said earlier allowed Italian citizens to defer mortgage payments due to the outbreak. Macron told citizens that the government would delay a March tax deadline to put more money in the hands of citizens.

    Spain has reported 782 new cases of coronavirus and 31 new deaths so far today, raising the country’s total to 3,059 cases and 86 dead.

    Slovakia, which was one of the last countries in Europe to confirm a case of the virus, announced that it’s planning to close all of its borders to non-residents and close all international airports as part of a drastic ban on international travelers that puts the US travel ban to shame. The country’s decision is a direct blow to the EU’s “open borders” agenda, one Twitter wit noted.

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    The decision to close borders comes just hours after Slovakia, The Czech Republic and Hungary declared state of emergencies over the outbreaks, despite having relatively few cases. Slovakia only has 5 confirmed cases, equivalent to the number of confirmed cases in the US state of Ohio.

    Speaking of Ohio, the state just became the newest US state to ban large gatherings. A few minutes ago, Ohio Governor Mike DeWine said the state is banning gatherings of 100 or more people, with some exceptions, after confirming a fifth case of Covid-19, a 55-year-old man in Trumbull County.

    Finally, MLB said it would delay Opening Day by at least 2 weeks, meaning it will be more than a month from now before we see any MLB pro baseball played in the US.

    Meanwhile…in Congress…

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    *  *  *

    Update (1500ET):  NBC News has just confirmed that MLB plans to announce plans to delay the start of the 2020 season and suspend Spring Training, which we mentioned below.

    *  *  *

    Update (1440ET): Earlier local media reports claimed that the total presumptive positive cases in PA. has climbed to 21, including a doctor at a children’s hospital in Philadelphia. Gov. Tom Wolf announced massive closings in Montgomery County, a suburban county near Philly, after the number of cases in that county climbed to 13, more than half of the state’s total, according to CBS 3 Philly.

    A doctor at Saint Christopher’s Hospital for Children has tested positive at a local lab, and his sample is now being sent to the CDC, according to Drexel University officials. The doctor is an independent physician with admitting privileges at St. Christophers. He was last at the hospital on Feb. 26.

    In other news, the CDC announced Thursday that it has tested 11,000 “specimens”, which doesn’t mean 11,000 people, as most people are tested at least twice. But CNBC also noted that “drive thru testing” in at least one state. In Minnesota, the Mayo Clinic in Rochester has launched “drive thru” testing allowing patients to drop off samples after a phone conversation with a doctor. Patients must be directed by a doctor before their sample will be accepted and tested.

    Read part of the clinic’s statement below:

    Mayo Clinic is conducting a drive-through process in Rochester to collect COVID-19 specimens for testing. Transmission of the coronavirus is increasing nationwide, and other institutions have successfully used the drive-through approach.

    Patients who meet criteria for testing are directed to the location. Mayo Clinic staff collect the specimens, using appropriate precautions, and send them to the Minnesota Department of Health for analysis. This process reduces the need for other critically constrained resources.

    Patients are required to have a phone screening first to determine if testing is appropriate. If approved, patients then will be directed to the drive-through location. There is no additional charge for the drive-through service.

    We’ve also found the clip from today’s Congressional testimony where Dr. Fauci delivered a withering criticism of the US’s virus response.

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    Meanwhile, according to the Washington Post, as of 2:50pmET, the US had 1,281 cases confirmed, and 36 deaths:

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    *  *  *

    Update (1420ET): Gov. Cuomo announced during his daily coronavirus outbreak press update that he would close down NYC’s Broadway district at 5 pm Thursday night for theaters with a capacity of more than 500, and shutting down all events – concerts, conferences etc. – with 500 or more people in the city beginning Friday night. 

    Restrictions on smaller gatherings, the legal capacity on all buildings will be reduced by 50%.

    Watch the rest of his press conference from Albany below:

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    *  *  *

    Update (1352ET): Italy’s civil protection agency has reported yet another unsettling jump in newly confirmed cases and deaths, bringing the death toll within the country above 1,000 deaths, becoming the first country outside China to (officially) top that threshold (we suspect Iran has secretly recorded at least as many).

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    The death total in Italy from the coronavirus climbed to 1,016 from 827, while the number of confirmed cases in Italy climbed to 15,113 from 12,462, marking the fourth straight day with more than 100 deaths and more than 1,000 new cases confirmed.

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    With the new numbers, the country’s mortality rate has climbed to 6.7%.

    *  *  *

    Update (1345ET): Rick Scott just became the second US Senator to self-quarantine after potentially being exposed to the virus.

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    Though Scott said he doesn’t believe he interacted with the individual (the press secretary we noted in an earlier post), he is taking precautions “out of an abundance of caution”.

    *  *  *

    Update (1345ET): Confirming reports from earlier, the NHL just announced that it’s planning to “pause” the 2019-2020 season.

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    *  *  *

    Update (1330ET): As far as we can tell, Jersey City is about to become the first in America to crack down on drinking and partying in the name of fighting the coronavirus.

    More from BBG:

    Jersey City is cutting “larger nightclub” liquor sales after 10 p.m. to reduce the potential of having crowds of people exposed to the new coronavirus, Mayor Stephen Fulop said.

    The state’s second most-populous city, a Wall Street business and residential haven across the Hudson River from Manhattan, had no coronavirus cases as of Thursday, Fulop said at a news conference. Still, he said he was being cautious: limiting City Hall visits to those with appointments, suspending parking-permit sales and renewals and canceling all city-sponsored or permitted events, he said.

    He also asked banquet halls and large restaurants “to be tracking attendance, best as they can” in case health officials must track down contacts with anyone who tests positive for coronavirus.

    The nightclub liquor restrictions will start this weekend, he said.

    This comes after the PM of Italy said last night that bars, restaurants would also be closed as part of the national shut down. But just imagine catching the coronavirus at a skeezy nightclub in Jersey City…oof.

    *  *  *

    Update (1320ET): Major League Baseball is reportedly planning to delay spring training and the start of the 2020 season, per unconfirmed reports. An announcement is expected shortly.

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    The news follows a flurry of tweets like this warning of senior citizens’ exposure.

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    Out of Washington, there are reports that McConnell will keep the Senate open next week and cancel its regular recess. 

    *  *  *

    Update (1320ET): Following in the footsteps of the NBA, MBS, NCAA and sports organizations around the world, the NHL is reportedly preparing to suspend play.

    According to the New York Post, NHL commissioner Gary Bettman reached out to clubs Thursday morning to tell them the regular season would be suspended due to the spread of the coronavirus, a source indicated to The Post. An inter-league call was scheduled for 1 pm to work out details. The news will likely be announced publicly in the coming hours.

    The league already cancelled practices on Thursday and told teams to start preparing for make-up games that could run as late as June.

    Per the NYP, since locker rooms are filled with sweaty equipment, every year teams experience team-wide outbreaks and sometimes more serious illnesses.

    *  *  *

    Update (1250ET): Following reports from earlier in the day claiming that JPM had asked its New York and New Jersey employees to work from home until the outbreak ends, Bloomberg is reporting that Goldman has asked its employees to work from home “in staggered shifts.”

    *  *  *

    Update (1216ET): Canadian Prime Minister Justin Trudeau and his wife are planning to self-quarantine after the PM’s wife, Sophie Gregoire, recently returned from London, where she visited for a speaking engagement, developed a low fever and other symptoms of the virus last night, according to a statement from the PM’s office.

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    She immediately sought medical advice, and is being tested for the virus.

    Though doctors recommended that the prime minister could continue his daily activities while monitoring himself for symptoms, “out of an abundance of caution” (a phrase we’re hearing more and more lately) he has decided to self-quarantine as well.

    The PM will spend Friday and the rest of Thursday doing virtual meetings and briefings at home.

    *  *  *

    Update (1125ET): With testimony before the Committee on Oversight and Reform continuing on Thursday for a second day after Dr. Fauci and other officials were called away, the doctor appeared again on Thursday, and offered some deeply critical words about the administration’s ability to supply enough tests.

    Dr. Anthony Fauci described the response as “a failing” because of the tests.

    • NIH’S FAUCI SAYS CORONAVIRUS TESTING SYSTEM IS NOT “GEARED TO WHAT WE NEED RIGHT NOW” IN U.S., CALLS IT “A FAILING” -CONGRESSIONAL HEARING

    The hearing was abruptly called to recess, but readers can watch it live here when it returns:

    *  *  *

    Update (1115ET): As sports-betting operations and sports fans around the world wait to hear whether the NBA playoffs will be suspended or cancelled, it’s been reported that a second Utah Jazz player has tested positive for the virus.

    The new patient is star guard Donovan Mitchell, who joins teammate Rudy Gobert.

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    The two sick players, pictured together…

    A reporter claimed sources close to the team said Gobert had been ‘careless’ in the lockerroom, after demonstrating his disdain for the public panic around the virus.

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    This would suggest that the virus has been spreading among the teammates.

    At the White House, President Trump said he doesn’t support House Democrats’ plan for the emergency economic package, and accused them of stuffing it with “goodies.”

    He also said that the US may need to extend travel ban for longer, or “we could shorten it.”

    We neglected earlier, but in Australia, three Formula One team members have been placed into isolation amid concerns they may have contracted the coronavirus, stoking more criticism of the decision to go ahead with the Australian Grand Prix, the Guardian reports.

    *  *  *

    Update (1105ET): As Democrats and Republicans duke it out on Capitol Hill over the coronavirus emergency fiscal package, Spain has just approved a €2.8 billion package to support social services in its provinces as the country battles the outbreak. Meanwhile, President Trump is telling reporters that ‘markets are going to be fine’ amid the second bone-shaking, trade-halt-provoking selloff this week.

    Trump also said he will not use his powers under the Stafford Act to declare a national state of emergency, though he didn’t rule it out in the future.

    Italy has also proposed a rescue package of €25 billion, according to reports.

    And in the US, it appears the American professional soccer league is following La Liga and the champions league and suspending play, according to Sports illustrated.

    • MAJOR LEAGUE SOCCER TO SUSPEND ALL PLAY IMMEDIATELY: SI

    *  *  *

    Update (1055ET): Weeks after declaring that nothing would stop Euro 2020 champions league tornament, it appears its organizers are ready to throw in the towel.

    According to media reports, the European soccer league is planning to postpone the 2020 tournament until next year because of the coronavirus.

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    Earlier, La Liga, the Spanish top-flight football club, announced it would follow the NBA by suspending its season. Now, football fans across Europe are about to be very disappointed.

    *  *  *

    Update (1045ET): UK public health officials have reported two more deaths Thursday morning after President Trump exempted the country from the travel ban last night, bringing the death toll to 8, according to the Department of Health and Social Care.

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    Meanwhile, UK coronavirus cases have reached 590, an increase of 134 in the last 24 hours.

    Different news organizations are reporting different death tolls for the UK. Sky News is saying 10, though only 8 have been confirmed by by the DHSC.

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    We also neglected to mention earlier that another lawmaker, Sen. Tom Cotton of Arkansas, has closed his Washington DC office because some of his staff were reportedly potentially exposed to the virus.

    *  *  *

    Update (1030ET): The ceremonial lighting of the Olympic torch was held in Olympia (not the one in Washington State) on Thursday and video has been posted on YouTube for anybody who wants to watch.

    We’re sharing because nobody except 100 “accredited” spectators were allowed to watch the ceremony. Typically, the event draws as many as 12,000 spectators.

    Following rumors they might ask that some of the events be delayed, the Japanese government has said that cancelling the Olympics is impossible, even as sports leagues suspend play.

    *  *  *

    Update (0906ET): Earlier, NYC Mayor Bill de Blasio said New Yorkers need to brace for changes like subway shutdowns amid ‘community spread’ of the virus in the city during an appearance on CNN.

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    Now, reports claim an NYC student has tested positive, and that school district officials are temporarily shutting down two schools. It’s the first confirmed case in the city’s schools. Gov. Cuomo said yesterday that the city and state had decided to keep schools open.  The city almost never closes schools, because thousands of students depend on free and subsidized lunches for food, and would have nowhere else to go.

    • NYC SCHOOLS GET FIRST CORONAVIRUS CASE, TWO BRONX SCHOOLS TO CLOSE – REPORT

    Over in Europe, officials in the Netherlands confirmed that the number of cases has climbed to 614 from 503 yesterday.

    CNBC viewers this morning probably noticed Jim Cramer’s rant about the federal government’s response.

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    *  *  *

    Update (0850ET): Former FDA Director Dr. Scott Gottlieb posted another thread of advice about the outbreak before appearing once again on CNBC’s “Squawk Box” Thursday morning.  In it, he said the outbreak would last for a few more months, and that the US has the tools to mitigate the impact of the virus on both public health and the economy.

    Gottlieb said it’s still possible for the US to avert an “Italy-like” outcome where deaths begin to spiral by improving testing capacity to quickly address the outbreak.

    He also recommended the creation of “surge capacity” in hospitals as an influx of Covid-19 patients hammers hospitals that are already busy due to the wintertime flu and infection season.

    One more thing: if you don’t want to contract the virus, remember this: “social separation works”.

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    According to this analysis, Trump’s latest travel ban is a step in the right direction. But much more needs to be done domestically. 

    *  *  *

    Update (0834ET): Here we go again with this.

    24 hours after Angela Merkel warned that up to 70% of Germans might eventually contract the coronavirus, we’re seeing yet another headline about German fiscal stimulus, though it didn’t do much to lift the market’s mood.

    • GERMANY READY TO DITCH BALANCED BUDGET TO COMBAT CORONAVIRUS

    Of course, this is Germany, and many remain skeptical about deficit spending (even though there probably isn’t a German alive who remembers the Weimar Republic hyperinflationary era).

    But liberals and Merkel have been pushing for some level of expanded spending to boost the economy since late last year. Now, the perfect excuse for more stimulus has fallen in their lap (along with a genuine threat to the economy).

    As Bloomberg points out, Merkel’s decision to support additional spending due to the “exceptional” circumstances created by the outbreak represents a “u-turn” for her party, which for years positioned itself as a guardian of fiscal discipline in Germany.

    Given the threat of an economic recession from the pandemic, Merkel and her economic team are now willing to accept deficit spending to help finance containment measures, according to people with direct knowledge of the government’s economic policy. The virus-triggered crisis is one of the “exceptional circumstances” under the constitutional debt brake that allows for additional borrowing, said the people, who requested not to be named because the discussions are not public. While Merkel’s government is ready to explore additional spending, no decisions have been made on specific measures or an amount. The government did not immediately respond to requests for comment. The change in stance amounts to a u-turn for Merkel’s Christian Democratic-led bloc which for years has upheld fiscal discipline as one of its mantras.

    Some lawmakers have already said they would oppose any decision to suspend debt limits.

    Also remember: During his speech last night, Trump blamed Europe for refusing to close its borders to fight the spread of the virus. His new rules will go into effect Friday at midnight.

    *  *  *

    Update (0822ET): Rumors are flying around (they were mentioned on CNBC earlier, and it looks like BBG just fired off a headline) claiming the NHL might join the NBA in suspending the season just as the playoffs are set to begin. The league is expected to hold a conference call at 11am ET Thursday morning.

    In New York, JP Morgan has finally joined a handful of its peers (including Barclays and Morgan Stanley) in telling its NY employees to work from home because of the virus.

    *  *  *

    Update (0720ET): A passenger on a JetBlue flight from JFK to Palm Peach has been stuck on a runway in Palm Beach for hours after a passenger tested positive for the coronavirus, WPTV reports.

    Flight 253 from JFk, which carried 114 passengers and crew, was stuck at Palm Beach International Airport for more than three horus after landing at around 9 pm last night.

    with 114 passengers and crew aboard, landed at Palm Beach International Airport shortly before 9 p.m. Wednesday but remained on the tarmac until just before 11, when the plane finally proceeded to the gate.

    “The person across the way from me was taken to the back of the plane. He was wearing masks and gloves. His wife was sitting in the same row as me and mentioned to others that he wasn’t feeling well. She said he had gotten a phone call with his test results right before we had taken off, implying that he had a positive test but not actually saying it,” said passenger Scott Rodman.

    State health officials briefed every passenger and crew member aboard the ship, according to an emailed statement to WPTV. Those who sat nearby the Covid-19 patient, who reportedly received a call with his test results just before takeoff, were advised to monitor for symptoms.

    “The person across the way from me was taken to the back of the plane. He was wearing masks and gloves. His wife was sitting in the same row as me and mentioned to others that he wasn’t feeling well. She said he had gotten a phone call with his test results right before we had taken off, implying that he had a positive test but not actually saying it,” said passenger Scott Rodman.

    Florida’s state health department has since completed its “assessment” of the situation.

    Following in the footsteps of the NBA, Spain’s “La Liga” – its top soccer league – has suspended play for at least two weeks. In addition, Real Madrid players have been quarantined after a member of the club’s basketball team tested positive for COVID-19. The soccer and basketball teams train at the same complex and share many of the same equipment, according to local media reports.

    Both teams, plus their staff, have gone into quarantine.

    *  *  *

    Following last night’s Oval Office unveiling of a 30-day travel ban affecting roughly two dozen European countries, though not the UK, which confirmed its 7th death from the outbreak. Notably, the ban will only affect the movement of people (and American citizens are of course exempt) but not trade in goods, as the White House hastily clarified when they saw the market’s initial reaction, and will exempt the UK.

    London was notably silent after the surprise announcement, but in Brussels, the bureaucrats running the EU were somewhat less than pleased. EU leaders slammed President Trump’s “unilateral” travel ban and warned the coronavirus pandemic is an international problem that demands coordinated action (like what Christine Lagarde demanded yesterday?). European Commission President Ursula von der Leyen European Council Leader Charles Michel issued a joint statement on Thursday that highlighted European alarm at the US move. “The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action,” they said, per the FT.

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    Von der Leyen and Michel

    Meeanwhile, Spain’s entire cabinet is being tested for coronavirus, with the results due to be announced on Thursday afternoon, and countries in Scandinavia have begun shutting down schools less than a day after Sweden reported its first virus-related death.

    Notably, the ban leaves out all of Asia, stymieing liberals who were ready to pounce on another “racist” Trump travel ban. Though many are still bellyaching about Trump’s decision to leave out the UK, which is run by Trump’s ‘good friend’ Boris Johnson. But as Rencap’s Charlie Robertson pointed out, Trump’s decision to exempt the UK was based on epidemiological evidence.

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    Across the US, private schools appear to be closing under pressure from parents.

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    This comes after Seattle became the largest city in the US to close its schools over the virus. We’ve heard rumors that Utah is planning to close its public-college campuses.

    But the biggest blow to market confidence last night arrived courtesy of the NBA, which cancelled Wednesday’s matchup between the Utah Jazz and Oklahoma City Thunder, then announced that it would suspend the season for the time being after Rudy Gobert, Utah’s star center, tested positive for the virus, becoming the first American professional athlete to test positive for the virus.

    A few days ago, Gobert infamously made light of the hysteria by ‘touching’ all the microphones in the press room.

    In hindsight, it looks like this might have been a mistake.

    Around the same time, actors and husband-wife duo Tom Hanks and Rita Wilson revealed in an Instagram post that they had also tested positive. The response was pandemonium on social media.

    Moving on to Thursday morning, futures have been limit-down all night once again, just like we saw Sunday into Monday,

    The CDC recommended last night that companies in Silicon Valley and Seattle start implementing mandatory temperature checks for all employees, according to the LA Times.

    Bloomberg reported last night that Blackstone had recommended that its portfolio companies had drawn down on their revolving credit facilities, something that the FT’s Robert Smith pointed out would be an “instant capital hit” to banks.

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    Yesterday, Boeing shocked the market by announcing that it would immediately draw down on its $13.825 billion revolving credit facility to ward off any “liquidity issues,” something that we warned soon after would could represent the beginning of a liquidity crisis for banks, whose shares have already been badly beaten thanks to the Fed’s “emergency” 50bp rate cut and record-low Treasury yields. Now, with their clients in full-on panic mode, it’s hardly surprising that companies want to bulk up their balance sheets for the coming economic storm.

    The only problem, is that this is essentially the equivalent of a corporate bank run…

    …as companies aren’t so much worried about their own future, but the banks’ future, because why else would anyone want to hold cash in their wallet when they can keep it safe and sound in a bank…unless they were worried that it was no longer ‘safe’ to do so.

    Moving from one liquidity risk to another, during the opening of CNBC’s “Squawk Box” Thursday morning, Andrew Ross Sorkin declared that some of his hedge fund sources had been trading notes and hopping on conference calls to discuss strange trading patterns in the 10-Year Treasury. We highlighted some suspicious activity in a post from yesterday.

    Sorkin’s sources are worried about shortages of liquidity that could once again create potentially destabilizing rictions in credit markets.

    For more on this, we’d like to remind readers of a post from a few years back that offers a straightforward explanation of this phenomenon).

    It seems sell-side analysts have already seized on the issue: Bank of America also warned in a research note about deteriorating Treasury market liquidity.

    Looking ahead, will America follow Italy’s lead in the direction of – if not outright national domestic travel bans – but the ‘social distancing’ concept that has been bandied about in recent days. Notably, CNBC was practicing its own ‘social distancing’ with Becky Quick reporting in from New Jersey while Sork and Joe Kernen reported from different locations in NY. Heading into the US trading day, the WHO said 124,519 cases as of Thursday morning. Globally, we’ve seen at least 4,607, with Italy reporting 827 deaths. In the US, the Washington Post counted 1,281 cases, a count that includes as-yet-unconfirmed by the CDC but “presumptively” confirmed in state labs.

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    Washington Post

    In Italy, the country woke up to a national travel ban and mass closures of schools and businesses for the first time. In South Africa, officials reported the first case of local transmission of the coronavirus on Thursday, There are concerns that African health systems could be overwhelmed if local transmission accelerates, which is why reports that surfaced a few minutes ago about a man who just traveled back to the country – after recently visiting New York – apparently tested positive, though it’s not clear if these cases are the same.

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    South Africa’s Health Ministry said a 32-year-old man contracted the virus after contact with a Chinese businessman at a time when China is claiming that its economy is nearly 100% back online after the crisis, CNBC reported. It also reported that the death toll from the collapse of a makeshift quarantine in China has climbed to 29.

    Iran’s health minister said Thursday that a national plan to root out all those who are infected contacted 3.5 million people out of the country’s population of 80 million. Dr Saeed Namaki said 270 patients had been hospitalized after being contacted in accordance with the effort, which began last week.

    Meanwhile, on CNBC, Mohamad El-Erian, who has correctly warned investors to stay away from the market since the most recent selloff began, said there’s nothing the world can do now to prevent a recession as more surprises like the NBA suspending its season are inevitably in store.

    “We are going into a global recession We are going to see a string of sudden economic stops,” said Mohammad El-Erian, an economist at Allianz and formerly Bill Gross’s No. 2 at PIMCO.

    So, instead of the “v”-shaped recovery we were promised, it looks like we’ll be getting the “u” shaped rebound, or possibly even the dreaded “l-shaped” recovery, especially if Trump’s battle over the payroll tax holiday eats up more time before the fiscal stimulus package hits. Others will focus on how long until the NBA restarts the season.


    Tyler Durden

    Thu, 03/12/2020 – 22:35

  • Ohio's Top Health Official Says "We Believe 100,000 People" Already Infected With Covid-19 In State
    Ohio’s Top Health Official Says “We Believe 100,000 People” Already Infected With Covid-19 In State

    Ohio’s top public-health official said during a press conference on Thursday where the state’s governor announced a three-week closure of all schools in the state that her office estimates that as many as 117,000 people in the state have already been infected with the novel coronavirus.

    During the press conference, a clip from which we’ve included below, Department of Health Director Amy Acton said that the virus has likely been spreading in the “community” of Ohio, and that, given the number of weeks it has likely been present, at least 1% of the state’s population likely already have the virus.

    “We know now based on the basic facts of community spread we know now that at the very least 1% of our population is carrying this virus…We have 11.7 million people, so that just  gives you a sense of how this virus spreads, and how it’s spreading quickly,” Acton said.

    She went on to explain that the “logorithmic” rate of infection means that for every person who catches the virus will likely spread it to two or three other people.

    “The choices I make for me and my family may not infect us, but we could infect your grandmother,” she said.

    Gov. Mike Dewine and Dr. Acton explained that they knew they were going to close the schools at some point, but by consulting with experts, they figured that now is “the sweet spot…to act”.

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    To put all this in context: as of Thursday evening, Ohio had five confirmed cases.

    A little shaken up by Dr. Acton’s comment? Now that the doctor herself will likely go viral due to the nature of her comments in this clip, it’s only fitting for her to explain steps to keep your family coronavirus-free.

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    Tyler Durden

    Thu, 03/12/2020 – 22:25

  • The US Navy Is Developing Autonomous Submarines That Can Kill On Their Own
    The US Navy Is Developing Autonomous Submarines That Can Kill On Their Own

    Authored by Aaron Kesel via The Mind Unleashed.com,

    The U.S. Navy is secretly developing armed robot submarines that are controlled by onboard artificial intelligence (AI) which could potentially kill without explicit human control.

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    The Office of Naval Research is involved with the development of an AI system called CLAWS, which the agency describes in budget documents as an autonomous undersea weapon system for clandestine use. CLAWS will “increase mission areas into kinetic effects,” they write.

    According to a report by New Scientist, details of the killer submersible were made available as part of the 2020 budget documents. However, not much more is known.

    Very few details were publicly provided about the “top secret” project beyond the fact it will use sensors and algorithms to carry out complex missions on its own.

    It is expected that CLAWS will be installed on the new Orca class robot submarines that have 12 torpedo tubes which are being developed for the Navy by Boeing. But that is simply speculation. What is known is that the system will be able to think and kill on its own. Although according to New Scientist there are hints by the Navy that this will be the case.

    “The Orca will have well-defined interfaces for the potential of implementing cost-effective upgrades in future increments to leverage advances in technology and respond to threat changes,” the Navy said.

    “The Orca will have a modular payload bay, with defined interfaces to support current and future payloads for employment from the vehicle.”

    Autonomous submarines already exist today and can complete tasks without human involvement. However, they lack intelligence and have limited functionality. Anything more complex than a mere location task requires a human operator to work via a remote communications link.

    The new submarines will have a much greater level of artificial intelligence and be able to perform a wider range of functions without a human controller.

    CLAWS was first revealed in 2018 as part of a U.S. Navy bid to “improve the autonomy and survivability of large and extra-large unmanned underwater vehicles,” according to New Scientist.

    When it was first revealed, there was no mention then of weapons being on the autonomous submarine, only a need for it to have sensors and to be able to make decisions.

    Stuart Russell from the University of California Berkeley told New Scientist it was a “dangerous development” and use of AI. “Equipping a fully autonomous vehicle with lethal weapons is a significant step, and one that risks an accidental escalation in a way that does not apply to sea mines.”

    In “Mind the Gap The Lack of Accountability for Killer Robots,” Human Rights Watch (HRW) poses and important question: what happens when a robot accidentally commits a war crime? The answer thus far is nothing, as there is no accountability.

    “No accountability means no deterrence of future crimes, no retribution for victims, no social condemnation of the responsible party,” said Bonnie Docherty, senior Arms Division researcher at the HRW and the report’s lead author at the time.

    As TMU reported people like Brandon Bryant whom controlled drones for the U.S. military, have a conscience while robots will kill without remorse.  Since 2013, there has been a campaign to Stop Killer Robots encouraging countries to preemptively ban fully autonomous weapons.


    Tyler Durden

    Thu, 03/12/2020 – 22:05

  • Global Liquidation Resumes: Japan Jolted, Crypto Collapses, China Crushed
    Global Liquidation Resumes: Japan Jolted, Crypto Collapses, China Crushed

    It is becoming clearer and clearer that the utter carnage going on in global markets appears to be some massive fund force-liquidating as every asset-class is getting destroyed despite jawboning from The Fed (as well as massive liquidity injections), ECB, Bank of Korea, Bank of Japan, and various politicians around the world.

    After today’s carnage in US and Europe…

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    Things are getting worse…

    Dow futures are down over 400 points… (down 2300 points from the fed spike highs)

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    Japan’s Nikkei 225 is down 10%, the biggest daily drop since the Tsunami almost exactly 9 years ago. This is Japan’s worst week since 2008

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    Chinese stocks are finally catching down to reality…

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    But are still massively outperforming US and Europe since the virus hit..

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    Elsewhere in Asia – total bloodbath:

    • *AUSTRALIA’S BENCHMARK ASX 200 INDEX FALLS 8%

    • *PHILIPPINES STOCK EXCHANGE INDEX EXTENDS DROP TO 10.4%

    • *HANG SENG INDEX FUTURES EXTEND DROP TO 8%

    • *SGX NIFTY INDEX FUTURES DROP AS MUCH AS 9.6% IN SINGAPORE

    • *KOREA 10-YEAR BOND FUTURES DROP BY MOST SINCE AT LEAST 2011

    • *S. KOREA KOSDAQ TRADING HALTED AFTER INDEX DROPS MORE THAN 8%

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    Asian FX markets are crashing…

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    Yuan continues to plummet…

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    Cryptos are utterly collapsing – this is the worst 2 day drop for Bitcoin since April 2013…and it’s crashing on the heaviest volume since Feb 2018

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    Crushing the cryptocurrency back to one-year lows…

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    Gold is also getting flushed…

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    And gold is getting dumped against yen too – BoJ in da house?

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    But bonds are bid. 10Y Yield are down 15bps – which looks like nothing on this chart after such a colossal week…

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    So much for that promise of trillions of dollars of liquidity?


    Tyler Durden

    Thu, 03/12/2020 – 21:50

  • Iran Asks IMF For $5BN Emergency Loan As Death Toll Soars Near 500
    Iran Asks IMF For $5BN Emergency Loan As Death Toll Soars Near 500

    Citing vast shortages of medical supplies and pharmaceuticals due to US-led sanctions, Iran is urging IMF relief as it battles coronavirus to the tune of $5 billion. 

    Days ago Iranian Foreign Minister Javad Zarif accused President Trump on Twitter of “maliciously tightening US’ illegal sanctions with aim of draining Iran’s resources needed in the fight against Covid-19 — while our citizens are dying from it.” Now he’s urging immediate emergency aid:

    Iran has asked the International Monetary Fund (IMF) for emergency funding to help it fight the coronavirus outbreak, which has hit the Islamic Republic hard, Foreign Minister Mohammad Javad Zarif said in a tweet on Thursday.

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    Iranian cabinet members wearing face masks attend their meeting in Tehran, Iran. Source: Iranian Presidency via AP

    As Reuters reports Thursday, Iran’s Central Bank chief Abdolnaser Hemmati revealed in a social media post that “in a letter addressed to the head of IMF, I have requested five billion U.S. dollar from the RFI emergency fund to help our fight against the coronavirus”.

    And Zarif in a follow-up message noted that IMF managing director, Kristalina Georgieva, “has stated that countries affected by #COVID19 will be supported via Rapid Financial Instrument. Our Central Bank requested access to this facility immediately.”

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    Iran remains among the top outbreak epicenters outside China, as cases spike in the Middle East.

    Per new reports confirmed cases in the region have pushed well past 10,000, with most in the Islamic Republic:

    A slew of new coronavirus infections pushed the number of cases in the Middle East well past 10,000 on Thursday – and many of those infected are linked to Iran.

    The Islamic Republic government, which said more than 360 people have died and about 9,000 are infected by the virus, has increasingly come under fire, accused of underrepresenting the impact of the virus on its people.

    Per the AP, the death toll has reached 429 as of later in the day Thursday and is expected to climb further.

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    But at this point the true numbers of infected in Iran are widely believed to be well into the multiple tens of thousands, as the country’s ill-prepared and severely short-on-supplies health system is overwhelmed. 

    Zarif concluded his latest appeal for emergency IMF aid by saying, “Viruses don’t discriminate. Nor should humankind.”


    Tyler Durden

    Thu, 03/12/2020 – 21:45

  • Is South Korea About To Unleash A Neutron Bomb Across Global Stock Markets
    Is South Korea About To Unleash A Neutron Bomb Across Global Stock Markets

    Last June, when stocks were merrily grinding higher without a care in the world, and certainly oblivious of the crash that was about to slam global markets half a year later, we explained why South Korea’s massive autocallable issuance could be “ground zero” of the next vol catastrophe.

    In retrospect it wasn’t: the proverbial “black swan” of the next crisis turned out to be a Chinese black bat, but that doesn’t mean that the world is now safe from what could be a potential volatility tsunami, triggered in South Korea and which sends global markets far lower than where they are now.

    But before we go any further, put your hand up if you know what an autocallable is, and since there are barely any hands in the air, let’s back up.

    As the “world’s most bearish hedge fund manager”, Horseman Global’s Russell Clark explained in January 2019, autocallables, which are fundmentally structured products that are extremely popular with South Korean traders, are best thought of as a service. A bank will offer to sell insurance on the stock market on your behalf, so that you can generate an income from the premiums received. So rather than buying an autocallable, it’s better to think of an investor as posting collateral for a bank to sell puts on their behalf. Typically, the bank will tell the investor what sort of yield they can generate, for a certain level of insurance. For example, a 5% return as long as the S&P 500 does not fall to 2000, from roughly 2900 today.

    Typically, when markets fall, the price of insurance rises, and the bank does not need to sell that much insurance to meet a 5% yield target for an investor. Conversely, when markets rise, insurance prices fall, and banks would need to sell more insurance to meet the target yield. Hence, in normal markets, the risk to clients is balanced. More insurance is sold when market rise as insurance prices are low, and less insurance is sold when market fall as insurance prices rise.

    However, when there are times when this process goes haywire: i) either when a negative gamma feedback loop emerges, similar to what happened in February 2018 with the VIX complex in the US that liquidated 3x levered inverse vol ETNs, or ii) when the market drop is so precipitous that there is a step function lower in the value of the collateral, and local banks flood clients with margin calls, which in turn prompt a forced liquidation of more risk assets, triggering a feedback loop cascade where selling begets more selling, and not just of South Korean assets, but global, as most of the risk assets collateralizing the autocallables universe are not domestic to South Korea.

    We are now deep in scenario II, because shortly after the US suffered its biggest drop since Black Monday 1987, South Korea’s Kospi entered a bear market Friday, while the Kosdaq was halted limit down after tumbling 8%. Furthermore, the Kospi broke below its 200-month average near 1,750 – that’, according to Bloomberg, is a marker that served as a support level during the global financial crisis.

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    The drop was so big that the Bank of Korea reportedly was discussing the need for a special meeting, and would consider “appropriate steps” to stabilize markets, including open-market operations if needed, while closely monitoring bond markets, according to a Bloomberg update.

    However, if Horseman is right, the pain may just be getting started for both retail and institution linvestors facing massive margin calls. Worse, if the long awaited autocallable liquidation cascade is finally triggered, the shockwave that is unleashed in Seoul could rattles global stock markets, resulting in another – potentially even more dire – selling avalanche.

    In a note published today, Horseman’s resurgent CIO, Russell Clarke, also known as the world’s biggest bear whose fund returned a whopping 20% during February’s rout warns that “the continued issuance from Korea suggests that autocallables have not yet been knocked in, and in fact investors are taking advantage of higher volatility to get higher yields.”

    However, there is a limit to everything, and today violent liquidation in South Korea may be just the trigger.

    Below we lay out the latest thoughts and observations from Clark, who waited patiently for years to be proven right on his doomsday predictions, and which are now being validated courtesy of the biggest weekly crash in global stocks since the financial crisis.

    * * *

    Korea and the KOSPI 200 are the spiritual home of autocallables. Historically, the KOSPI 200 was a highly volatile market but the long bull market in semiconductors, combined with rampant volatility selling, caused market volatility in the KOSPI 200 to collapse. Even the collapse in memory prices had little effect on KOSPI 200 volatility in 2019. However, the KOSPI volatility has recently broken out to levels not seen since 2011. (Price as at 10.00 GMT – 12 March 2020)

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    Despite the breakout in volatility there has been no reduction in the issuance of autocallables. In 2015, HSCEI based autocallables were knocked in causing issuance to collapse. The continued issuance from Korea suggests that autocallables have not yet been knocked in, and in fact investors are taking advantage of higher volatility to get higher yields.

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    Meanwhile, the KOSPI 200 is still above levels that have held since 2011. It is likely the most KOSPI 200 strike prices are set somewhere below the 230 price that has held since 2011.

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    Autocallables issued in Korea will often include Euro Stoxx 50 in a “worst-of structures” market. A good proxy for the performance of this strategy is the Euro Stoxx 50 PutWrite Strategy. This has recently deteriorated sharply.

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    The spike in volatility has coincided with a steep decline in the share prices of French banks that structure many of the autocallable products.

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    If autocallables are triggered, then implied volatility should move even higher from current levels. For clearinghouses, the high level of both implied and realised volatility should lead to increased in margins. As a reminder, LCH as per its Q3 2019 disclosures was still running at initial margins at very low levels to variation margins, although both rose significantly. During the strains of Brexit initial margin rose to be multiples of variation margin.

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    One more timely way to monitor margins is to look at initial margins for large index futures. With rising volatility, margins have been increasing even as the S&P falls. To normalise over time we divide the amount of margin for trading the future by contract value. Cost of trading has recently risen to 6.4%, the highest level since 2011.

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    For OTC options, we can use BIS data to get an idea of initial margins. Taking the gross value of margins and dividing it by outstanding notional we can see that values were at a level seen before the global financial crisis and the dot com bubble.

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    Clark’s ominous conclusion: “Market volatility has risen significantly, but margin and collateral in the system still looks too low. Should autocallables break barriers in the KOSPI 200 or the Euro Stoxx 50, then the structurers will turn into volatility buyers, not sellers. Higher volatility leading to margin calls look likely, which could drive the market lower.“

    For much more on autocallables, please read “As Autocallable Issuance Explodes, Is This “Ground Zero” Of The Next Vol Catastrophe“


    Tyler Durden

    Thu, 03/12/2020 – 21:24

  • Goodbye To All That: The Demise Of Globalization And Imperial Pretensions
    Goodbye To All That: The Demise Of Globalization And Imperial Pretensions

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    The decline phase of the S-Curve is just beginning…

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    Globalization and Imperial Pretensions have been decaying for years; now the tide has turned definitively against them. The Covid-19 pandemic didn’t cause the demise of globalization and Imperial Pretensions; it merely pushed the rickety structures over the edge.

    It’s human nature to reckon the current trend will continue running more or less forever, and that temporal, contingent structures are permanent. Globalization flourished because a unique set of conditions created fertile ground for the transfer of production to China and other emerging economies and the global expansion of the magic elixir of skyrocketing consumption, credit.

    Credit-starved economies which are suddenly flooded with credit (for example, China) experience an explosion of investment in production, infrastructure and in business and household consumption.

    In this boost phase of globalization, capital flows from stagnant developed economies to emerging economies to earn higher returns, and production moves to these low-cost economies to take advantage of low labor costs and lax environmental standards.

    It’s a win-win dynamic for credit-starved emerging economies and stagnant developed economies, as the emerging economies get investment capital, jobs and technology transfers while the developed economies get higher profits due to the lower production costs and lower-priced goods and services.

    Put another way: globalization is simply one manifestation of the financialization of the global economy. Developed-world central and private banks create trillions of dollars in fiat currencies that then slosh around the world, seeking the highest return. Whatever can be exploited in the short-term is exploited and then capital moves on, leaving environmental destruction and distorted economies in its wake.

    Alas, the virtuous-cycle boost phase financialization soon burns through all the easy gains and then speculative gains replace productive gains: since over-investment in production has led to over-capacity and near-zero profits, capital flows into speculative gambles and money-pit bridges to nowhere that do little to actually boost the productivity of the real-world economy.

    This transition from investing in higher productivity to pouring money into speculative bets is so gradual that few even recognize the transition until it’s too late. All too quickly the economy becomes dependent not on gains in productivity–the only enduring source of wealth creation– but on speculative gambles paying off.

    Once the economy becomes dependent on speculative bets paying off, central banks and governments rig the roulette wheel to insure the big gamblers always win. This rigging of speculative markets further distorts the economy and society by destroying price discovery and exacerbating soaring wealth inequality.

    As the financial elites become accustomed to “winning” the rigged games, they increase their high-risk gambling, confident that even the highest-risk bets will always pay off. In this universe of moral hazard, it makes sense to borrow as much as possible to plow into the highest-risk bets. Why not maximize one’s gains at the rigged tables?

    This institutionalization of financial folly created an extremely risky structure that is now breaking down. Bets placed with borrowed money are no longer paying off, and so whatever collateral remains must be liquidated to meet margin calls and pay down debt.

    In the boost phase of globalization, it made sense to maximize profits by optimizing the global supply chain for the lowest cost of production and shipping via distant production and just-in-time delivery. The risks of this extreme optimization for profits above all else is now apparent as dependence on production in distant lands is not within our control.

    The apparently risk-free paradise of globalization is actually riddled with potentially catastrophic risks. Every node in this complex network is a potential point of failure, and since redundancy and less tightly bound systems were sacrificed to maximize profits, there is no way to restore the supply chain with a few nips and tucks.

    As for the Imperial Pretensions of both China and the U.S.–these were as dependent on financialization and globalization as global supply chains. China’s Belt and Road Initiative (BRI) exemplifies an era that has already turned to dust, and American pretensions of being able to afford large-scale global meddling are equally embedded in a zeitgeist that has lost its coherence and relevancy.

    The decline phase of the S-Curve is just beginning. Much of what we’ve taken as permanent will melt into air, and that’s far from a negative development.

    My COVID-19 Pandemic Posts

    *  *  *

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    Tyler Durden

    Thu, 03/12/2020 – 21:05

  • Black Thursday: "One Giant Margin Call" Drags Dow Down 10%
    Black Thursday: “One Giant Margin Call” Drags Dow Down 10%

    Rosenberg Research‘s David Rosenberg provides our intro today:

    “The fact that Treasuries, munis, and gold are getting hit tells me that everything is for sale right now. One giant margin call where even the safe-havens aren’t safe anymore. Except for cash.”

    The  Fed unveiled an unprecedented liquidity facility to rescue malfunction Treasury markets from themselves.. but it failed terribly.

    For a few brief moments, as Dow futs exploded 1500 points higher, it looked like it might just work… but no…

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    Stocks puked into the close! Look at Small Caps!!! The Dow was down 10%! This was utter carnage today…

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    This was the biggest daily drop since 1987.

    Additionally, the last four days have seen an 18% crash in the equal-weight S&P – that is more aggressive than during the peak of the financial crisis…

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    As one veteran trader said:

    “this is the market telling The Fed it has to buy stocks.”

    This is what it looks like when what shred of Fed liquidity that was left finally evaporates…

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    Investors are at the most-extreme fear level on record…

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    And as far as The Fed ‘solving’ the liquidity or dollar shortage issues… it utterly failed!

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    Source: Bloomberg

    Trannies and Small Caps are now underwater since Trump was elected…

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    Source: Bloomberg

    The ongoing liquidation of one or many risk-parity funds, as we noted earlier…

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    …appears to be continuing with bonds and stocks both getting dumped as the funds are delevered.

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    Source: Bloomberg

    And the bond-stock correlation has collapsed…

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    Source: Bloomberg

    The S&P remains above the Dec 2018 lows for now, buit blew through the 200-week average that been notable support…

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    Source: Bloomberg

    Europe was a bloodbath:

    • STOXX EUROPE 600 EXTENDS DROP, WORST DAILY LOSS EVER

    • STOXX 600 BANKS INDEX AT RECORD LOW

    • FTSE 100 INDEX DROPS AS MUCH AS 11%, MOST SINCE 1987 CRASH

    • FTSE 100 HITS 12-YEAR LOWS

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    Source: Bloomberg

    Virus-related stocks crashed… again…

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    Source: Bloomberg

    Banks were blitzed…

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    Source: Bloomberg

    VIX exploded higher – to its highest close since Oct 22, 2008…but this time the velocity is far faster

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    The VIX term structure is almost as inverted as it was at the peak of the Lehman crisis…

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    HY Credit was hammered…

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    Source: Bloomberg

    HY Energy credit markets are getting destroyed…

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    Source: Bloomberg

    Investment grade credit is also really ugly – not just the level but the velocity is unprecedented…

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    Source: Bloomberg

    The chaos in Treasury markets – which The Fed hoped to fix with its $4 trillion bazooka – remain as liquidity evaporated again and yields soared into the close, despite equity ugliness…

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    Source: Bloomberg

    A mixed picture across the term structure today with the short-end bid and the long-end dumped (3Y -6bps, 30Y +8bbps)…

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    And once again, yields were puked higher after the 1430 margin call…

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    Source: Bloomberg

    The dollar accelerated higher again today as everything else was sold to grab cash (but did drop on The Fed’s actions)…

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    Source: Bloomberg

    Crypto was clubbed like a baby seal across the board…

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    Source: Bloomberg

    Bitcoin puked to below $6000 intraday, blowing through all it skey technicals…

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    Source: Bloomberg

    Commodities were all smashed today…

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    Source: Bloomberg

    WTI was hit hard today, plunging over 5% and trading as low as $30.02 intraday…

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    Gold was smashed lower today on massive volume as it seems the “liquidate eveything” plan is in play…

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    Finally,  it is notable that this is the first systemic crisis since the European collapse…

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    Source: Bloomberg

    And in case you thought the ‘fortress balance sheet’ banks were going to save the world… the world’s most systemically important banks crashed to record lows today…

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    Source: Bloomberg

    The market is demanding almost 100bps of rate-cuts by The Fed by next week…

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    Source: Bloomberg

    The deer are back!

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    And if none of that worries you – this might. USA’s sovereign credit risk is rising notably…

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    Makes you wonder…


    Tyler Durden

    Thu, 03/12/2020 – 20:45

  • Nightmare Scenario: Iraq Detects Suspected Covid-19 Cases In Overcrowded Refugee Camp
    Nightmare Scenario: Iraq Detects Suspected Covid-19 Cases In Overcrowded Refugee Camp

    War-torn regions of the Middle East remain hugely vulnerable for the spread of Covid-19 due to hundreds of thousands of families packed into often filthy temporary settlements already running low on basic staples for survival. 

    And now a nightmare scenario is unfolding in Iraq as the United Nations has recorded the first suspected coronavirus cases inside an Internally Displaced Persons (IDP) camp.

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    Refugee camp in northern Iraq, file image via The Telegraph.

    The UN Office for the Coordination of Humanitarian Affairs (OCHA) issued an alert in its latest humanitarian report this week, noting also the World Health Organization (WHO) has dispatched additional supplies and medical devices to Iraq amid broader closures of public spaces after at least 71 confirmed cases nationwide.

    But with millions of refugees in the region, especially along the Turkish-Syrian border, and after Erdogan has effectively ‘opened the gates’ on waves of migrants headed to Europe, the spark that could erupt an explosion of outbreaks in camps across the Middle East may have started. 

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

    The alarming new OCHA report reads: 

    The first suspected cases of COVID-19 were documented in an IDP camp in Ninewa; the affected persons were transported to hospital, and a makeshift isolation unit was put in place. Sterilization activities are under way.

    Crucially, this region lies along the Syrian border in Iraq’s northwest, and is near Turkey in a broader border area which has over the past years witnessed entire ‘refugee cities’ erected. 

    Surrounding countries like Kuwait have taken proactive measures for heightened testing along their borders and points of entry, but other regional governments have lagged behind: 

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    The WHO previously said it’s especially concerned of an outbreak among refugee populations in war-torn regions of Iraq and Syria. 

    “Refugees and internally displaced populations across Iraq and Syria have been identified as the most vulnerable groups in the region, should the spread of the virus become a pandemic,” The Guardian reported of recent statements. 

    “Health officials in both countries remain under-equipped to deal with such a a reality that seems more possible with each passing day,” the report added.

    And as Turkey continues to allow and even actively facilitate the passage of refugees and migrants into Greece and other EU states, the Covid-19 crisis currently shutting down entire countries in Europe is set to explode further.


    Tyler Durden

    Thu, 03/12/2020 – 20:45

  • China Faces Interest Rate Dilemma With No Winning Options
    China Faces Interest Rate Dilemma With No Winning Options

    Authored by Mike Shedlock via MishTalk,

    Michael Pettis at China Financial Markets has an interesting chain of Tweets on China’s unsolvable interest rate mess.

    Preemptive Steps Needed to Contain CPI

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    China Daily reports Preemptive Steps Needed to Contain CPI

    China’s consumer price index (CPI), the main gauge of inflation, grew 5.2 percent year-on-year in February, the National Bureau of Statistics said on Tuesday. The growth, in line with market expectations, was slightly lower than 5.4 percent in January. On a monthly basis, consumer prices edged up 0.8 percent.

    Food prices, which account for nearly one-third of weighting in China’s CPI, went up 21.9 percent year-on-year in February, contributing 4.45 percentage points to the rise in the index as the novel coronavirus outbreak disrupted market supplies and demands.

    That the CPI has been above 5 percent for two consecutive months has raised fears that China could face high inflation in the long run, which could have a negative impact on people’s livelihoods that have already been affected by the novel coronavirus epidemic.

    Bank of China Faces a Real Dilemma with Interest Rates

    Hiking rates in the midst of shocks like this are out of the question. There are no preemptive steps to take.

    CPI Inflation is at 5% but bank interest rates are only 1.5%.

    Food production has collapsed, but lower interest rates to stimulate will stimulate the wrong things while hurting consumer savings.

    Lower spreads will hurt bank profits and the Chinese banking system is a basket of nonperforming SOE loans.

    Pettis Tweet Thread on China’s Dilemma

    1. It seems to me that the PBoC faces a real dilemma with interest rates. Thanks to still-soaring food costs CPI inflation in February remained above 5%, well above the deposit rate, with 1-year deposits at 1.50% and average deposits much lower. This means…

    2. …that the value of household savings is being eroded by rising food costs, and this effectively represents a wealth transfer away from households, with poorer households being hit harder (both because of limited savings opportunities and because food is a larger share of…

    3. …their consumption basket). This is exactly the opposite of what Beijing needs if it is to reduce its over-reliance on spurious investment to generate growth. If households have to increase their savings rate in order to make up for the inflation tax, they must spend less…

    4. …on consumption, in which case China needs more investment to generate the same amount of growth. This is why the PBoC doesn’t want to lower the deposit rate. But it cannot raise rates either. Unlike in 2000-11, when banks and corporate/government borrowers were the huge…

    5. …beneficiaries from extremely negative real interest rates, they aren’t this time around. With negative PPI inflation, and a 1-year loan prime rate of 4.05%, manufacturers may in fact be borrowing at very high real rates, especially given that all the inflation is showing…

    6. …up in food prices, whereas the prices of the manufactured goods they produce are stable or even trending down. This probably just means that last year’s collapse in meat production – which is the main source of CPI inflation – is being paid for in part by households, in…

    7. …the form of an erosion in the value of their savings, in part by businesses, in the form of high real borrowing costs, and of course in part by farmers. This makes it very difficult for the PBoC either to raise lending rates or lower deposit rates, and of course it can’t…

    8. …narrow the spread because that would effectively force already-undercapitalized banks to absorb the cost. Once food prices drop we might see a very sharp reversal of wealth transfers from the household sector, but until then the PBoC doesn’t have much space for maneuver.

    Here is the Lead Tweet if you want to see it all on Twitter.

    Inflation or Deflation?

    This was the subject of a debate on Twitter. Many see a round of inflation but I generally see it differently.

    The collapse in demand will take care of shortages except for critical things like food.

    China has a unique problem. Low food production and a soaring CPI in response.

    Unless there is a food production problem in the US, the Fed will not face the same dilemma.

    Exporters Hit Hardest

    The global export powerhouses will get hit the hardest by this.

    China and Germany are at the top of the list.

    Deflationary US Outcome

    I believe a Very Deflationary Outcome Has Begun.

    Prepare for another round of debt deflation, possibly accompanied by a lower CPI especially if one accurately includes home prices instead of rents in the CPI calculation.

    Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse

    I am not blaming the Fed for the coronavirus and these shocks.

    However, I am blaming the Fed for its erroneous inflationary tactics that blew three of the biggest economic bubble in succession: 2000, 2007, 2020.

    Bubbles are inherently deflationary. It’s asset asset bubble deflation that is damaging, not routine price deflation

    “Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated a BIS study.

    For a discussion of the BIS deflation study, please see Historical Perspective on CPI Deflations: How Damaging are They?

    Supply Shock and a Demand Shock Coming Up

    A Supply Shock and a Demand Shock are Coming Up.

    Worth Repeating

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

    Deflation is not really about prices. It’s about the value of debt on the books of banks that cannot be paid back by zombie corporations and individuals.

    75% of Companies Suffer From Coronavirus Supply Chain Disruptions

    The ISM says 75% of Companies Suffer From Coronavirus Supply Chain Disruptions

    Don’t expect inflation out of this except in medical supplies and related items.

    Q. Why?

    A: The demand shock over stock market decline and lost wages has not been felt yet. It soon will.


    Tyler Durden

    Thu, 03/12/2020 – 20:25

  • Massive Monkey Gangs Are Fighting For Food On Thailand Streets As Tourist Food Disappears
    Massive Monkey Gangs Are Fighting For Food On Thailand Streets As Tourist Food Disappears

    Coronavirus isn’t just causing humans to fight in the aisles of Target over toilet paper. Today in “signs of the apocalypse”, hungry monkey gangs are also swarming and fighting – for food – on the streets of Thailand. 

    Monkeys in the country are usually well fed by tourists who visit Central Thailand, but visitors have plummeted as a result of the coronavirus outbreak, which has hit the Asian region hard. 

    The animals shown in a video are reported to be two separate “rival gangs” that dwell in the city, according to the Daily Mail. 

    Half of the monkeys are said to live in the temple areas, while the others live in the city. The two groups don’t usually meet but ended up doing so this past week.

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    The animals are shown wandering separately looking for food, but once one monkey finds a banana, the chase is on. 

    The ferocity of the animals shocked even locals, who are used to seeing the monkeys on a daily basis. One onlooker, who captured video, said: “They looked more like wild dogs than monkeys. They went crazy for the single piece of food. I’ve never seen them this aggressive.”

    The onlooker explained: “I think the monkeys were very, very hungry. There’s normally a lot of tourists here to feed the monkeys but now there are not as many, because of the coronavirus.”

    Hundreds of monkeys are shown in this Daily Mail video fighting over a single banana:

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


    Tyler Durden

    Thu, 03/12/2020 – 20:05

  • Judge Orders Chelsea Manning Released From Jail Following Suicide Attempt
    Judge Orders Chelsea Manning Released From Jail Following Suicide Attempt

    Chelsea Manning was ordered on Thursday to be released from jail, after a federal judge ruled that her testimony against WikiLeaks founder Julian Assange was no longer necessary. The decision comes one day after Manning reportedly attempted to commit suicide while in federal custody in Alexandria, VA. 

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    Judge Anthony Trenga of the Eastern District of Virginia said that because the grand jury was finished deliberating, Manning’s testimony was no longer necessary – ending the former Army analyst’s incarceration which began last May after refusing to appear before the panel and testify against Assange.

    Manning was convicted in 2013 of leaking US military secrets and sentenced to 35 years in military prison at Fort Leavenworth before her sentence was commuted in 2017. Assange, meanwhile, was indicted in 2018 on a federal charge of conspiring with Manning to assist in the transmission of U.S. state secrets to WikiLeaks.

    For refusing to comply with the order to testify, Manning was hit with a $256,000 fine according to The Hill.

    Manning’s publicist, Andy Stepanian, said on Wednesday that his client was recovering in a hospital after the suicide attempt.

    Last month, Manning’s lawyers argued for her release on the grounds that detention was unlawfully punitive and served no purpose.


    Tyler Durden

    Thu, 03/12/2020 – 19:45

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